EXHIBIT (8)(iii)
PARTICIPATION AGREEMENT
Among
XXXXX XXXXXX CONCERT SERIES INC.,
TRAVELERS INVESTMENT ADVISER, INC.
and
EQUITABLE LIFE INSURANCE COMPANY OF IOWA
THIS AGREEMENT, made as of the 3rd day of February, 1997,
by and among the EQUITABLE LIFE INSURANCE COMPANY OF IOWA
(hereinafter the "Company"), on its own behalf and on behalf of each
segregated asset account of the Company set forth on Schedule A
hereto as may be amended from time to time (each such account
hereinafter referred to as the "Account"), the XXXXX XXXXXX CONCERT
SERIES INC., a Maryland corporation (hereinafter the "Fund"), and
TRAVELERS INVESTMENT ADVISER, INC. (hereinafter the "Adviser"), a
Delaware corporation.
WHEREAS, the Fund engages in business as an open-end management
investment company and is available to act as the investment vehicle
for separate accounts established for variable annuity contracts and,
subject to an order obtained from the Securities and Exchange
Commission (the "SEC"), expects to be available to act as the
investment vehicle for certain qualified pension and retirement plans
("Qualified Plans") and for separate accounts established for
variable life insurance policies (such variable life insurance
policies and variable annuity contracts are herein, collectively, the
"Variable Insurance Products") to be offered by insurance companies
which have entered into participation agreements with the Fund and
the Adviser (hereinafter "Participating Insurance Companies"); and
WHEREAS, the beneficial interests in the Fund are divided into
several series of shares, each representing the interest in a
particular managed portfolio of securities and other assets; and
WHEREAS, the Fund desires to make shares of such managed
portfolios as are listed on Schedule B attached hereto, as such
Schedule B may be amended from time to time hereafter by mutual
written agreement of all the parties hereto, available to the
Company for purchase (each such listed portfolio, a "Portfolio"); and
WHEREAS, the Fund has obtained an order from the SEC, granting
Participating Insurance Companies and variable annuity and variable
insurance separate accounts exemptions from the provisions of
Sections 9(a), 13(a), 15(a), and 15(b) of the Investment Company Act
of 1940, as amended, (hereinafter the "l940 Act") and Rules
6e-2(b)(15) and 6e-3(T)(b)(15) thereunder, to the extent necessary to
permit shares of the Fund to be sold to and held by variable annuity
and variable life insurance separate accounts of both affiliated and
unaffiliated life insurance companies (hereinafter the "Mixed and
Shared Funding Exemptive Order"); and
WHEREAS, the Fund is registered as an open-end management
investment company under the l940 Act and its shares are registered
under the Securities Act of 1933, as amended (hereinafter the "1933
Act"); and
WHEREAS, the Adviser is duly registered as an Investment Adviser
under the Federal Investment Advisers Act of 1940 and any applicable
state securities law; and
WHEREAS, the Company has registered or will register certain
variable life and variable annuity contracts under the 1933 Act; and
WHEREAS, each Account is a duly organized, validly existing
segregated asset account, established by resolution of the Board of
Directors of the Company, on the date shown for such Account on
Schedule A hereto, to set aside and invest assets attributable to one
or more variable life and annuity contracts; and
WHEREAS, the Company, to the extent required under federal law,
has registered or will register each Account as a unit investment
trust under the l940 Act; and
WHEREAS, to the extent permitted by applicable insurance laws
and regulations, the Company intends to purchase shares in the
Portfolios on behalf of each Account to fund certain of the aforesaid
variable life and variable annuity contracts,
NOW, THEREFORE, in consideration of their mutual promises the
Company, the Fund and the Adviser agree as follows:
ARTICLE I. Sale of Fund Shares
-------------------
1.1. The Fund agrees to sell to the Company those shares of the
Fund which each Account orders, executing such orders on a daily
basis at the net asset value next computed after receipt by the Fund
or its designee of the order for the shares of the Fund. For
purposes of this Section l.l, the Company shall be the designee of
the Fund for receipt of such orders from each Account and receipt by
such designee shall constitute receipt by the Fund; provided that the
Fund receives notice of such order by 10:00 a.m. Eastern time on the
next following Business Day. "Business Day" shall mean any day on
which the New York Stock Exchange is open for trading and on which
the Fund calculates its net asset value pursuant to the rules of the
Securities and Exchange Commission.
1.2. The Fund agrees to make its shares available indefinitely
for purchase at the applicable net asset value per share by the
Company and its Accounts on those days on which the Fund calculates
its net asset value pursuant to rules of the SEC and the Fund shall
use reasonable efforts to calculate such net asset value on each day
which the New York Stock Exchange is open for trading.
Notwithstanding the foregoing, the Board of Directors of the Fund
(hereinafter the "Board") may refuse to sell shares of any Portfolio
to any person, or suspend or terminate the offering of shares of any
Portfolio if such action is required by law or by regulatory
authorities having jurisdiction or is, in the sole discretion of the
Board acting in good faith and in light of their fiduciary duties
under federal and any applicable state laws, necessary in the best
interest of the shareholders of such Portfolio.
1.3. The Fund and the Adviser agree that shares of the Fund
will be sold only to Participating Insurance Companies and their
separate accounts and, in accordance with the terms of the Mixed and
Shared Funding Exemptive Order, certain Qualified Plans. No shares
of any Portfolio will be sold to the general public.
1.4. The Fund will not sell Fund shares to any insurance
company or separate account unless an agreement containing provisions
substantially the same as Articles I and VII, Section 2.5 of Article
II and Sections 3.4 and 3.5 of Article III of this Agreement is in
effect to govern such sales.
1.5. The Fund agrees to redeem for cash, on the Company's
request, any full or fractional shares of the Fund held by the
Company, executing such requests on a daily basis at the net asset
value next computed after receipt by the Fund or its designee of the
request for redemption. For purposes of Sections 2.10 and 2.11, upon
the payment by the Fund to the Company of the proceeds of such
redemptions, such
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proceeds shall cease to be the responsibility of
the Fund and shall become the responsibility of the Company. For
purposes of this Section 1.5, the Company shall be the designee of
the Fund for receipt of requests for redemption from each Account and
receipt by such designee shall constitute receipt by the Fund;
provided that the Fund receives notice of such request for redemption
by 10:00 a.m. Eastern time on the next following Business Day.
1.6. The Company agrees to purchase and redeem the shares of
each Portfolio offered by the then current prospectus of the Fund in
accordance with the provisions of such prospectus. The Company
agrees that all net amounts available under the variable life and
variable annuity contracts with the form number(s) which are listed
on Schedule C attached hereto and incorporated herein by this
reference, as such Schedule C may be amended from time to time
hereafter by mutual written agreement of all the parties hereto and
which such contracts have been sold pursuant to an Annuity Selling
Agreement dated February 10, 1995, by and between the Company, PFS
Investments Inc. and Primerica Financial Services, Inc. (the
"Contracts"), shall be invested in the Portfolios, in such other
funds advised by the Adviser as may be mutually agreed to in writing
by the parties hereto, or in the Company's general account, provided
that such amounts may also be invested in an investment company other
than the Fund if (a) such other investment company, or series
thereof, has investment objectives or policies that are substantially
different from the investment objectives and policies of the
Portfolios of the Fund; or (b) the Company gives the Fund and the
Adviser 60 days written notice of its intention to make such other
investment company available as a funding vehicle for the Contracts;
or (c) such other investment company was available as a funding
vehicle for the Contracts prior to the date of this Agreement and the
Company so informs the Fund and Adviser prior to their signing this
Agreement; or (d) the Fund or Adviser consents to the use of such
other investment company.
1.7. The Company shall pay for Fund shares on the next Business
Day after an order to purchase Fund shares is made in accordance with
the provisions of Section 1.1 hereof. Payment shall be in federal
funds transmitted by wire. For purposes of Section 2.9 and 2.10,
upon receipt by the Fund of the federal funds so wired, such funds
shall cease to be the responsibility of the Company and shall become
the responsibility of the Fund.
1.8. Issuance and transfer of the Fund's shares will be by book
entry only. Stock certificates will not be issued to the Company or
any Account. Shares ordered from the Fund will be recorded in an
appropriate title for each Account or the appropriate subaccount of
each Account.
1.9. The Fund shall furnish notice (by wire or telephone,
followed by written confirmation) as soon as is reasonably
practicable to the Company of any income, dividends or capital gain
distributions payable on the Fund's shares. The Company hereby
elects to receive all such income dividends and capital gain
distributions as are payable on the Portfolio shares in additional
shares of that Portfolio. The Company reserves the right to revoke
this election and to receive all such income dividends and capital
gain distributions in cash. The Fund shall notify the Company of the
number of shares so issued as payment of such dividends and
distributions.
1.10. The Fund shall make the net asset value per share for
each Portfolio available to the Company on a daily basis as soon as
reasonably practical after the net asset value per share is
calculated (normally 6:30 p.m. Eastern time) and shall use its best
efforts to make such net asset value per share available by 7:00 p.m.
Eastern time. If the Fund provides the Company with the incorrect
share net asset value information, the Company on behalf of the
Account shall be entitled to a prompt adjustment to the number of
shares purchased or redeemed to reflect the correct share net asset
value. Upon a final
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determination that there has been an error in
the calculation of net asset value, dividend or capital gain, the
Fund shall report such error to the Company.
ARTICLE II. Representations and Warranties
------------------------------
2.1. The Company represents and warrants that the Contracts are
or will be registered under the 1933 Act, or qualify for an exemption
therefrom; that the Contracts will be issued and sold in compliance
in all material respects with all applicable Federal and State laws
and that the sale of the Contracts shall comply in all material
respects with state insurance suitability requirements. The Company
further represents and warrants that it is an insurance company duly
organized and in good standing under applicable law and that it has
legally and validly established each Account prior to any issuance or
sale thereof as a segregated asset account under Iowa Code Section
508A.1 and has registered or, prior to any issuance or sale of the
Contracts, will register each Account as a unit investment trust in
accordance with the provisions of the 1940 Act, unless exempt
therefrom, to serve as a segregated investment account for the
Contracts.
2.2. The Fund represents and warrants that Fund shares sold
pursuant to this Agreement shall be registered under the 1933 Act,
shall be duly authorized for issuance and sold in compliance with the
laws of the State of Maryland and all applicable federal and state
securities laws and that the Fund is and shall remain registered
under the 0000 Xxx. The Fund shall amend the Registration Statement
for its shares under the 1933 Act and the 1940 Act from time to time
as required in order to effect the continuous offering of its shares.
The Fund shall register and qualify the shares for sale where
necessary as determined by the Fund or the Adviser in accordance with
the laws of the various states.
2.3. The Fund represents that it is currently qualified as a
Regulated Investment Company under Subchapter M of the Internal
Revenue Code of 1986, as amended, (the "Code") and that it will make
every effort to maintain such qualification (under Subchapter M or
any successor or similar provision) and that it will notify the
Company 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 Company represents that the Contracts are currently
treated as endowment, annuity or life insurance contracts, under
applicable provisions of the Code and that it will make every effort
to maintain such treatment and that it will notify the Fund and the
Adviser 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.
-6-
2.5. The Fund currently does not intend to make any payments to
finance distribution expenses pursuant to Rule 12b-1 under the 1940
Act or otherwise, although it may make such payments in the future.
To the extent that it decides to finance distribution expenses
pursuant to Rule 12b-1, the Fund undertakes to have a board of
directors, a majority of whom are not interested persons of the Fund,
formulate and approve any plan under Rule 12b-1 to finance
distribution expenses.
2.6. The Fund makes no representation as to whether any aspect
of its operations (including, but not limited to, fees and expenses
and investment policies) complies with the insurance laws or
regulations of the various states except that the Fund and the
Adviser represent that their respective operations are and shall at
all times remain in material compliance with the laws of the State of
Maryland to the extent required to perform this Agreement.
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2.7. The Fund represents that it is lawfully organized and
validly existing under the laws of the State of Maryland and that it
does and will comply in all material respects with the 1940 Act.
2.8. The Adviser represents and warrants that the Adviser is
and shall remain duly registered in all material respects under all
applicable federal and state securities laws and that the Adviser
shall perform its obligations for the Fund in compliance in all
material respects with the laws of the State of Maryland and any
applicable state and federal securities laws.
2.9. The Fund and Adviser represent and warrant that all of
their directors, officers, employees, investment advisers, and other
individuals/entities dealing with the money and/or securities of the
Fund are and shall continue to be at all times covered by a blanket
fidelity bond or similar coverage for the benefit of the Fund in an
amount not less than the minimal coverage as required currently by
Rule 17g-1 of the 1940 Act or related provisions as may be
promulgated from time to time. The aforesaid Bond shall include
coverage for larceny and embezzlement and shall be issued by a
reputable bonding company.
2.10. The Company represents and warrants that all if any of
its directors, officers, employees, investment advisers, and other
individuals/entities deal with the money and/or securities of the
Fund they will at all such times be covered by a blanket fidelity
bond or similar coverage for the benefit of the Fund, in an amount
not less than the minimal coverage as required by Rule 17g-1 of the
1940 Act or related provisions as may be promulgated from time to
time. The aforesaid Bond shall include coverage for larceny and
embezzlement and shall be issued by a reputable bonding company.
ARTICLE III. Prospectuses and Proxy Statements; Voting
-----------------------------------------
3.1. The Adviser and the Fund shall provide to the Company such
documentation (including a final copy of the Fund's most current
prospectus as set in type at the Fund's expense) and other assistance
as is reasonably necessary in order for the Company once each year
(or more frequently if the prospectus for the Fund is amended) to
have the prospectus for the Contracts and the Portfolios' prospectus
printed in a combined document with the prospectuses of other funds
invested in by the Account (such printing to be at the Company's
expense except as provided in Section 5.3 hereof).
3.2. The Fund's prospectus shall state that the Statement of
Additional Information ("SAI") for the Fund is available from the
Adviser (or in the Fund's discretion, the Prospectus shall state that
such SAI is available from the Fund), and the Adviser (or the Fund),
at its expense, shall print and provide one copy of such SAI free of
charge to the Company and to any owner of a Contract or prospective
owner who requests such Statement. The Company may make additional
copies of the SAI at its expense.
3.3. The Fund, at its expense, shall provide the Company with
copies of its proxy material, reports to shareholders, and other
communications to shareholders in such quantity as the Company shall
reasonably require for distributing to Contract owners; provided,
however, that the Company shall bear the expenses for the costs of
printing and distributing any proxy material, reports to shareholders
and other communications to shareholders that are prepared at the
request of the Company.
3.4. If and to the extent required by law the Company shall:
(i) solicit voting instructions from Contract owners;
(ii) vote the Fund shares in accordance with instructions
received from Contract owners; and
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(iii) vote Fund shares for which no instructions have been
received in the same proportion as Fund shares of such
Portfolio for which instructions have been received;
so long as and to the extent that the SEC continues to interpret the
1940 Act to require pass-through voting privileges for owners of
Variable Insurance Products. The Company reserves the right to vote
Fund shares held in any segregated asset account in its own right, to
the extent permitted by law. Participating Insurance Companies shall
be responsible for assuring that each of their separate accounts
participating in the Fund calculates voting privileges in a manner
consistent with this Section.
3.5. The Fund will comply with all provisions of the 1940 Act
requiring voting by shareholders.
ARTICLE IV. Sales Material and Information
------------------------------
4.1. The Company shall furnish, or shall cause to be furnished,
to the Fund or its designee, each piece of sales literature or other
promotional material in which the Fund, the Adviser, or the Fund's
underwriter is named, at least ten Business Days prior to its use.
No such material shall be used if the Fund or its designee object to
such use within ten Business Days after receipt of such material.
4.2. The Company shall not give any information or make any
representations or statements on behalf of the Fund or concerning the
Fund in connection with the sale of the Contracts other than the
information or representations contained in the registration
statement or prospectus for the Fund shares, 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 its
designee or by the Adviser, except with the permission of the Fund or
the Adviser or the designee of either.
4.3. The Fund, and the Adviser, or its designee shall furnish,
or shall cause to be furnished, to the Company or its designee, each
piece of sales literature or other promotional material in which the
Company and/or its separate account(s), is named at least ten
Business Days prior to its use. No such material shall be used if
the Company or its designee object to such use within ten Business
Days after receipt of such material.
4.4. The Fund and the Adviser shall not give any information or
make any representations on behalf of the Company or concerning the
Company, each Account, or the Contracts other than the information or
representations contained in a registration statement or prospectus
for the Contracts, as such registration statement and prospectus may
be amended or supplemented from time to time, or in published reports
for each Account which are in the public domain or approved by the
Company for distribution to Contract owners, or in sales literature
or other promotional material approved by the Company or its
designee, except with the permission of the Company.
4.5. The Fund will provide to the Company at least one complete
copy of all registration statements, prospectuses, Statements of
Additional Information, reports, proxy statements, sales literature
and other promotional materials, applications for exemptions,
requests for no-action letters, and all amendments to any of the
above, that relate to the Fund or its shares, as soon as is
reasonably practicable after the filing of such document with the SEC
or other regulatory authorities.
4.6. The Company will provide to the Fund at least one complete
copy of all registration statements, prospectuses, Statements of
Additional Information, annual and semi-annual reports,
6
solicitations
for voting instructions, applications for exemptions, requests for no
action letters, and all amendments to any of the above, that relate
to the Contracts or each Account, as soon as is reasonably
practicable after the filing of such document with the SEC or other
regulatory authorities.
4.7. For purposes of this Article IV, the phrase "sales
literature or other promotional material" includes, but is not
limited to, advertisements (such as materials published, or designed
for use in, in a newspaper, magazine, or other periodical, radio,
television, telephone or tape recording, videotape display, signs or
billboards, motion pictures, or other public media), sales literature
(i.e., any written communication distributed or made generally
available to customers or the public, including brochures, circulars,
research reports, market letters, form letters, seminar texts,
reprints or excerpts of any other advertisement, sales literature, or
published article), educational or training materials or other
communications distributed or made generally available to some or all
agents or employees, and registration statements, prospectuses,
Statements of Additional Information, shareholder reports, and proxy
materials.
ARTICLE V. Fees and Expenses
-----------------
5.1. The Fund and Adviser shall pay no fee or other
compensation to the Company under this Agreement, except that if the
Fund or any Portfolio adopts and implements a plan pursuant to Rule
12b-1 to finance distribution expenses, then the underwriter may make
payments to the Company for the Contracts if and in amounts agreed to
by the Adviser in writing and such payments will be made out of
existing fees otherwise payable to the Adviser, past profits of the
Adviser or other resources available to the Adviser, or by the Fund,
to the extent permitted. Currently, no such payments are
contemplated.
5.2. All expenses incident to performance by the Fund under
this Agreement shall be paid by the Fund. Except as provided in
sections 3.1, 3.2, 3.3 and 5.3 hereof, the Fund shall bear the
expenses for the cost of registration and qualification of the Fund's
shares, preparation and filing of the Fund's prospectus and
registration statement, proxy materials and reports, setting the
prospectus in type, setting in type and printing the proxy materials
and reports to shareholders (including, if so elected, the costs of
printing a prospectus that constitutes an annual report), the
preparation of all statements and notices required by any federal or
state law, all taxes on the issuance or transfer of the Fund's
shares.
5.3. The printing and distributing of the prospectus for the
Portfolios (or that portion of a prospectus relating to the
Portfolios should the Company determine to print a combined
prospectus) to existing owners of Contracts shall be at the expense
of the Fund.
ARTICLE VI. Diversification
---------------
6.1. Subject to the following sentence, the Fund will at all
times comply with Section 817(h) of the Code and Treasury Regulation
1.817-5, relating to the diversification requirements for variable
annuity, endowment, or life insurance contracts and any amendments or
other modifications to such Section or Regulations. In the event of
any changes to such Section or Regulations relating to the treatment
of variable contracts, the Company will advise the Fund of such
changes.
ARTICLE VII. Potential Conflicts
-------------------
7.1 The parties to this Agreement acknowledge that the Fund has
filed an application with the SEC to request an order (the "Exemptive
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
7
annuity and variable life insurance
separate accounts of both affiliated and unaffiliated Participating
Insurance Companies and Qualified Plans. It is anticipated that the
Exemptive Order, when and if issued, shall require the Fund and each
Participating Insurance Company to comply with conditions and
undertakings substantially as provided in this Article VII. If the
Exemptive Order imposes conditions on the Company materially
different from those provided for in this Article VII, the conditions
and undertakings imposed by the Exemptive Order shall govern this
Agreement. The Fund will not enter into a participation agreement
with any other Participating Insurance Company unless it imposes the
same conditions and undertakings as are imposed on the Company
hereby.
7.2 The Company will report any potential or existing conflicts
promptly to the Board, and in particular whenever contract owner
voting instructions are disregarded, and recognizes that it shall be
responsible for assisting the Board in carrying out its
responsibilities in connection with the Exemptive Order. The Company
agrees to carry out such responsibilities with a view to the
interests of contract owners.
7.3. If it is determined by a majority of the Board, or a
majority of its disinterested directors that a material
irreconcilable conflict exists, the Company and other Participating
Insurance Companies shall, at their expense and to the extent
reasonably practicable (as determined by a majority of the
disinterested trustees), take whatever steps are necessary to remedy
or eliminate the irreconcilable material conflict, including but not
limited to: (1) withdrawing the assets allocable to some or all of
the separate accounts from the Fund or any Portfolio and reinvesting
such assets in a different investment medium, including (but not
limited to) another Portfolio of the Fund, or submitting the question
whether such segregation should be implemented, to a vote of all
affected Contract owners and, as appropriate, segregating the assets
of any appropriate group (i.e., annuity contract owners, life
insurance contract owners, or variable contract owners of one or more
Participating Insurance Companies) that votes in favor of such
segregation, or offering to the affected contract owners the option
of making such a change; and (2) establishing a new registered
management investment company or managed separate account.
7.4 If a material irreconcilable conflict arises as a result of
a decision by the Company to disregard contract owner voting
instructions and said decision represents a minority position or
would preclude a majority vote by all contract owners having an
interest in the Fund, the Company may be required, at the Board's
election, to withdraw the Account's investment in the Fund.
7.5 For purposes of this Article VII, a majority of the
disinterested directors shall determine whether or not any proposed
action adequately remedies any irreconcilable material conflict, but
in no event shall the Fund be required to bear the expense of
establishing a new funding medium for any Contract. The Company
shall not be required by this Article VII 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 contract owners materially adversely
affected by the irreconcilable material conflict. In the event that
the Board determines that any proposed action does not adequately
remedy any irreconcilable material conflict, then the Company will
withdraw the Account's investment in the Fund and terminate this
Agreement within six (6) months after the Board informs the Company
in writing of the foregoing determination, provided, however, that
such withdrawal and termination shall be limited to the extent
required by any such material irreconcilable conflict as determined
by a majority of the disinterested members of the Board.
7.6. If and to the extent that Rule 6e-2 and Rule 6e-3(T) are
amended, or Rule 6e-3 is adopted, to provide exemptive relief from
any provision of the Act or the rules promulgated thereunder with
respect to mixed or shared funding (as defined in the Mixed and
Shared Funding Exemptive Order) on terms and conditions materially
different from those contained in the Shared Funding Exemptive Order,
then (a) the
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Fund and/or the Participating Insurance Companies, as
appropriate, shall take such steps as may be necessary to comply with
Rules 6e-2 and 6e-3(T) as amended, and Rule 6e-3, as adopted, to the
extent such rules are applicable; and (b) Sections 3.4, 3.5, 7.1,
7.2, 7.3, 7.4 and 7.5 of this Agreement shall continue in effect only
to the extent that terms and conditions substantially identical to
such Sections are contained in such Rule(s) as so amended or adopted.
ARTICLE VIII. Indemnification
---------------
8.1. Indemnification By The Company
------------------------------
8.1(a). The Company agrees to indemnify and hold harmless
the Fund and each of its directors and officers and each person,
if any, who controls the Fund within the meaning of Section 15
of the 1933 Act (collectively, the "Indemnified Parties" for
purposes of this Section 8.1) against any and all losses,
claims, damages, liabilities (including amounts paid in
settlement with the written consent of the Company) or
litigation (including legal and other expenses), to which the
Indemnified Parties may become subject under any statute,
regulation, at common law or otherwise, insofar as such losses,
claims, damages, liabilities or expenses (or actions in respect
thereof) or settlements are related to the sale or acquisition
of the Fund's shares or the Contracts and:
(i) arise out of or are based upon any untrue
statements or alleged untrue statements of any material
fact contained in the Registration Statement or prospectus
for the Contract or contained in the Contracts or sales
literature for the Contracts (or any amendment or
supplement to any of the foregoing), or arise out of or are
based upon the omission or the alleged omission to state
therein a material fact required to be stated therein or
necessary to make the statements therein not misleading,
provided that this agreement to indemnify shall not apply
as to any Indemnified Party if such statement or omission
or such alleged statement or omission was made in reliance
upon and in conformity with information furnished to the
Company by or on behalf of the Fund for use in the
Registration Statement or prospectus for the Contracts 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
(ii) arise out of or as a result of statements or
representations (other than statements or representations
contained in the Registration Statement, 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
(iii) arise out of any untrue statement or
alleged untrue statement of a material fact contained in a
Registration Statement, 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 if such a
statement or omission was made in reliance upon information
furnished to the Fund by or on behalf of the Company; or
(iv) arise as a result of any failure by the
Company to provide the services and furnish the materials
under the terms of this Agreement; or
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(v) arise out of or result from any material
breach of any representation and/or warranty made by
the Company in this Agreement or arise out of or result from
any other material breach of this Agreement by the Company.
8.1(b). The Company shall not be liable under this
indemnification provision with respect to any losses, claims,
damages, liabilities or litigation incurred or assessed against
an Indemnified Party as such may arise from 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 or
duties under this Agreement or to the Fund, whichever is
applicable.
8.1(c). The Company shall not be liable under this
indemnification provision with respect to any claim made against
an Indemnified Party unless such Indemnified Party shall have
notified the Company in writing within a reasonable time after
the summons or other first legal process giving information of
the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have
received notice of such service on any designated agent), but
failure to notify the Company of any such claim shall not
relieve the Company from any liability which it may have to the
Indemnified Party against whom such action is brought otherwise
than on account of this indemnification provision. In case any
such action is brought against the Indemnified Parties, the
Company shall be entitled to participate, at its own expense, in
the defense of such action. The Company also shall be entitled
to assume the defense thereof, with counsel satisfactory to the
party named in the action. After notice from the Company to
such party of the Company's election to assume the defense
thereof, the Indemnified Party shall bear the fees and expenses
of any additional counsel retained by it, and the Company will
not be liable to such party under this Agreement for any legal
or other expenses subsequently incurred by such party
independently in connection with the defense thereof other than
reasonable costs of investigation.
8.1(d). The indemnification provided by this Section 8.1
shall survive the termination of this Agreement and shall be in
addition to any other liability the Company may have.
8.2. Indemnification by the Adviser
------------------------------
8.2(a). The Adviser agrees to indemnify and hold harmless
the Company and each of its directors and officers and each
person, if any, who controls the Company within the meaning of
Section 15 of the 1933 Act (collectively, the "Indemnified
Parties" for purposes of this Section 8.2) against any and all
losses, claims, damages, liabilities (including amounts paid in
settlement with the written consent of the Adviser) or
litigation (including legal and other expenses) to which the
Indemnified Parties may become subject under any statute, at
common law or otherwise, insofar as such losses, claims,
damages, liabilities or expenses (or actions in respect thereof)
or settlements:
(i) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact
contained in the Registration Statement or prospectus or
sales literature of the Fund (or any amendment or
supplement to any of the foregoing), or arise out of or are
based upon the omission or the alleged omission to state
therein a material fact required to be stated therein or
necessary to make the statements therein not misleading,
provided that this agreement to indemnify shall not apply
as to any Indemnified Party if such statement or omission
or such alleged statement or omission was made in reliance
upon and in conformity with information furnished to the
Adviser or Fund by or on behalf
10
of the Company for use in
the Registration Statement or prospectus for the Fund or in
sales literature (or any amendment or supplement) or
otherwise for use in connection with the sale of the
Contracts or Fund shares; or
(ii) arise out of or as a result of statements or
representations (other than statements or representations
contained in the Registration Statement, prospectus or
sales literature for the Contracts not supplied by the
Adviser or persons under its control) or wrongful conduct
of the Fund or Adviser or persons under their control; or
(iii) arise out of any untrue statement or alleged
untrue statement of a material fact contained in a
Registration Statement, prospectus or sales literature
covering the Contracts, or any amendment thereof or
supplement thereto, or the omission or alleged omission to
state therein a material fact required to be stated therein
or necessary to make the statement or statements therein
not misleading, if such statement or omission was made in
reliance upon information furnished to the Company by or on
behalf of the Fund; or
(iv) arise as a result of (a) any failure by the Fund
to provide the services and furnish the material under the
terms of this Agreement; or (b) a failure to comply with
Article VI of this Agreement with respect to
diversification requirements; or (c) failure to qualify as
a regulated investment company under Subchapter M of the
Code; or
(v) arise out of or result from any material breach
of any representation and/or warranty made by the Adviser
or the Fund in this Agreement or arise out of or result
from any other material breach of this Agreement by the
Adviser or the Fund.
8.2(b). The Adviser shall not be liable under this
indemnification provision with respect to any losses, claims,
damages, liabilities 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 or to the Company or Account,
whichever, is applicable.
8.2(c). The Adviser shall not be liable under this
indemnification provision with respect to any claim made against
an Indemnified Party unless such Indemnified Party shall have
notified the Adviser in writing within a reasonable time after
the summons or other first legal process giving information of
the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have
received notice of such service on any designated agent), but
failure to notify the Adviser of any such claim shall not
relieve the Adviser from any liability which it may have to the
Indemnified Party against whom such action is brought otherwise
than on account of this indemnification provision. In case any
such action is brought against the Indemnified Parties, the
Adviser will be entitled to participate, at its own expense, in
the defense thereof. The Adviser also shall be entitled to
assume the defense thereof with counsel satisfactory to the
party named in the action. After notice from the Adviser to
such party of the Adviser's election to assume the defense
thereof, the Indemnified Party shall bear the fees and expenses
of any additional counsel retained by it, and the Adviser will
not be liable to such party under this Agreement for any legal
or other expenses subsequently incurred by such party
independently in connection with the defense thereof other than
reasonable costs of investigation.
8.2(d). The indemnification provided by this Section 8.2
shall survive the termination of this Agreement and shall be in
addition to any other liability the Fund or Adviser may have.
11
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 New York.
9.2. This Agreement shall be subject to the provisions of the
1933, 1934 and 1940 acts, and the rules and regulations and rulings
thereunder, including such exemptions from those statutes, rules and
regulations as the SEC may grant (including, but not limited to, the
Shared Funding Exemptive Order) and the terms hereof shall be
interpreted and construed in accordance therewith.
ARTICLE X. Term and Termination
--------------------
10.1. The Agreement is effective as of the date hereof and will
remain in effect until terminated in accordance with the provisions
herein.
10.2. This Agreement shall terminate:
(a) at the option of any party upon 180 days advance
written notice to the other parties unless otherwise agreed in a
separate written agreement among the parties; or
(b) at the option of the Company if shares of the
Portfolios delineated in Schedule 2 are not reasonably available to
meet the requirements of the Contracts as determined by the Company;
provided, however, that such termination shall only apply to the
Portfolio(s) not reasonably available. Prompt notice of the election
to terminate for such cause shall be furnished by the Company; or
(c) at the option of the Fund 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 administration of the Contracts, the operation of the
Account, or the purchase of the Fund shares, the expected or
anticipated ruling, judgment or outcome of which would, in the Fund's
reasonable judgment, materially impair the Company's ability to
perform its obligation 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 department or any other regulatory
body, the expected or anticipated ruling, judgment or outcome of
which would, in the Company's reasonable judgment, materially impair
the Fund's ability to perform its obligation and duties hereunder; or
(e) at the option of the Company or the Fund upon receipt
of any necessary regulatory approvals and/or the vote of the contract
owners having an interest in the Account (or any subaccount) to
substitute the shares of another investment company for the
corresponding Portfolio shares of the Fund in accordance with the
terms of the Contracts for which those Portfolio shares had been
selected to serve as the underlying investment media. The Company
will give 30 days' prior written notice to the Fund of the date of
any proposed vote or other action taken to replace the Fund's shares;
or
(f) at the option of the Company or the Fund upon a
determination by a majority of the Fund Board, or a majority of the
disinterested Fund Board members, that an irreconcilable material
conflict exists among the interests of (i) all contractowners of
variable insurance products of all separate accounts or (ii) the
interests of the Participating Insurance Companies investing in the
Fund as delineated in Article VII of this Agreement; or
12
(g) at the option of the Company if 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 that the Fund may fail to so qualify; or
(h) at the option of the Company if the Fund fails to
meet the diversification requirements specified in Article VI hereof;
or
(i) at the option of any party to this Agreement, upon
another party's material breach of any provision of this Agreement;
or
(j) at the option of the Company, if the Company
determines in its sole judgment exercised in good faith, that either
the Fund or the Adviser has suffered a material adverse change in its
business, operations or financial condition since the date of this
Agreement or is the subject of material adverse publicity and such
material adverse change or material adverse publicity is likely to
have a material adverse impact upon the business and operations of
the Company; or
(k) at the option of the Fund or Adviser, if the Fund or
Adviser respectively, shall determine in its sole judgment exercised
in good faith, that the Company has suffered a material adverse
change in its business, operations or financial condition since the
date of this Agreement or is the subject of material adverse
publicity and such material adverse change or material adverse
publicity is likely to have a material adverse impact upon the
business and operations of the Fund or Adviser; or
(l) at the option of the Fund in the event any of the
Contracts are not issued or sold in accordance with applicable
federal and/or state law. Termination shall be effective immediately
upon such occurrence without notice, or
(m) automatically upon its assignment by any party without
the other parties' prior written consent; or
(n) in the event the Fund's shares are not registered,
issued or sold in accordance with applicable state or federal law, or
such law precludes the use of such shares for the underlying
investment medium of variable contracts issued or to be issued by the
Company. Termination shall be effective immediately upon such
occurrence without notice.
10.3. Notice Requirement
------------------
(a) In the event that any termination of this Agreement
is based upon the provisions of Article VII such prior written notice
shall be given in advance of the effective date of termination as
required by such provisions.
(b) In the event that any termination of this Agreement
is based upon the provisions of Sections 10.2(b)- (d) or 10.2(g) -
(i), prior written notice of the election to terminate this Agreement
for cause shall be furnished by the party terminating the Agreement
to the non-terminating parties, with said termination to be effective
upon receipt of such notice by the non-terminating parties.
(c) In the event that any termination of this Agreement
is based upon the provisions of Sections 10.2(j) or 10.2(k), prior
written notice of the election to terminate this Agreement for cause
shall
13
be furnished by the party terminating this Agreement to the non-
terminating parties. Such prior written notice shall be given by the
party terminating this Agreement to the non-terminating parties at
least 30 days before the effective date of termination.
10.4. It is understood and agreed that the right to terminate
this Agreement pursuant to Section 10.2(a) may be exercised for any
reason or for no reason.
10.5. Effect of Termination
---------------------
(a) Notwithstanding any termination of this Agreement
pursuant to Section 10.2 of this Agreement, the Fund may, at its
option, or in the event of termination of this Agreement by the Fund
or the Adviser pursuant to Section 10.2(a) of this Agreement, the
Company may require the Fund and the Adviser to, continue to make
available additional shares of the Fund for so long after the
termination of this Agreement as the Fund or the Company, if the
Company is so requiring, 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").
Specifically, without limitation, if the Fund so elects to make
available additional shares of the Fund or if the Company is so
requiring, the owners of the Existing Contracts shall be permitted to
reallocate investments in the Fund, redeem investments in the Fund
and/or invest in the Fund upon the making of additional purchase
payments under the Existing Contracts. The parties agree that this
Section 10.5 shall not apply to any terminations under Article VII
and the effect of such Article VII terminations shall be governed by
Article VII of this Agreement.
(b) In the event of a termination of this Agreement
pursuant to Section 10.2 of this Agreement, the Fund shall promptly
notify the Company whether the Fund will continue to make available
shares of the Fund after such termination, except that, with respect
to a termination by the Fund or the Adviser pursuant to
Section 10.2(a) of this Agreement, the Company shall promptly notify
the Fund whether it wishes the Fund to continue to make available
additional shares of the Fund. If shares of the Fund continue to be
made available after such termination, the provisions of this
Agreement shall remain in effect except for Section 10.2(a) and
thereafter the Fund or the Company may terminate the Agreement, as so
continued pursuant to this Section 10.5 upon written notice to the
other party, such notice to be for a period that is reasonable under
the circumstances.
(c) In determining whether to make available additional
Fund shares, the Fund shall act in good faith, giving due
consideration to the interest of the existing shareholders, including
holders of the existing Contracts.
10.6. Except (a) as necessary to implement contractowner
initiated or approved transactions, or (b) as required by state
insurance laws or regulations (a "Legally Required Redemption"), the
Company shall not redeem Fund shares attributable to the Contracts
(as opposed to Fund shares attributable to the Company's assets held
in the Account), and the Company shall not prevent contractowners
from allocating payments to a Portfolio that was otherwise available
under the Contracts, until 90 days after the Company shall have
notified the Fund or Adviser of its intention to do so. Upon
request, the Company will promptly furnish to the Fund and Adviser
the opinion of counsel for the Company (which counsel shall be
reasonably satisfactory to the Fund and the Adviser) to the effect
that a particular redemption is a Legally Required Redemption.
14
ARTICLE XI. 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:
Xxxxx Xxxxxx Concert Series Inc.
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxxxx X. Xxxxx, Secretary
If to the Company:
Equitable Life Insurance Company of Iowa
000 Xxxxxx Xxxxxx
Xxx Xxxxxx, Xxxx 00000
Attn: Xxxx X. Xxxxxxxx, Secretary
If to the Adviser:
Travelers Investment Adviser, Inc.
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxxxx X. Xxxxx, General Counsel
ARTICLE XII. Miscellaneous
-------------
12.1. All persons dealing with the Fund must look solely to
the property of the Fund for the enforcement of any claims against
the Fund as neither the Board, officers, agents or shareholders
assume any personal liability for obligations entered into on behalf
of the Fund.
12.2. Subject to the requirement of legal process and
regulatory authority, each party hereto shall treat as if
confidential the names and addresses of the owners of the Contracts
and all information reasonably identified as confidential in writing
by any other party hereto and, except as permitted by this Agreement
shall not disclose, disseminate or utilize such names and addresses
and other confidential information until such time as it may come
into the public domain without the express written consent of the
affected party.
12.3. The captions in this Agreement are included for
convenience of reference only and in no way define or delineate any
of the provisions hereof or otherwise affect their construction or
effect.
12.4. This Agreement may be executed simultaneously in two or
more counterparts, each of which taken together shall constitute one
and the same instrument.
12.5. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the
remainder of the Agreement shall not be affected thereby.
12.6. Each party hereto shall cooperate with each other party
and all appropriate governmental authorities (including without
limitation the SEC, the NASD and state insurance regulators) and
shall
15
permit such authorities reasonable access to its books and
records in connection with any investigation or inquiry relating to
this Agreement or the transactions contemplated hereby.
12.7. The rights, remedies and obligations contained in this
Agreement are cumulative and are in addition to any and all rights,
remedies and obligations, at law or in equity, which the parties
hereto are entitled to under state and federal laws.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed in its name and on its behalf by its duly
authorized representative and its seal to be hereunder affixed hereto
as of the date specified below.
EQUITABLE LIFE INSURANCE COMPANY OF IOWA
By its authorized officer
By: /s/Xxxxxx X. May
-----------------------
Title: Senior Vice President
--------------------
Date:
---------------------
XXXXX XXXXXX CONCERT SERIES INC.
By its authorized officer
By: /s/Xxxxx X. XxXxxxxx
-----------------------
Title: Chairman of the Board
--------------------
Date:
---------------------
TRAVELERS INVESTMENT ADVISER, INC.
By its authorized officer
By: /s/Xxxxx X. Xxxxxxx
-----------------------
Title: Senior Vice President
--------------------
Date:
---------------------
16
Schedule A
Asset Accounts of the Company Date Estab.
Equitable Life Insurance Company 1/24/94
of Iowa Separate Account A
17
Schedule B
Select High Growth Portfolio
Select Growth Portfolio
Select Balanced Portfolio
Select Conservative Portfolio
Select Income Portfolio
18
Schedule C
Accounts Form No.
Equitable Life Insurance Company of Iowa VA100-1/94
Individual Flexible Purchase Payment
Deferred Variable Fixed Annuity Contract
19
