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EXHIBIT 8(c)
INDEMNIFICATION AGREEMENT
INDEMNIFICATION AGREEMENT (the "Agreement") made by and between
XXXXXXX XXXXXX INVESTMENTS, INC., a Delaware corporation ("Xxxxxxx Xxxxxx"),
with a principal place of business in Boston, Massachusetts and Farmers New
World Life Insurance Company, a Washington corporation (the "Company"), with a
principal place of business in 3003 77th Avenue, S.E., Mercer Island,
Washington, on behalf of one or more separate accounts of the Company, as set
forth on Schedule A hereto, as it may be amended from time to time, upon
written notice to the Fund in accordance with Paragraph 9 herein (the
"Account").
WHEREAS, Xxxxxxx Xxxxxx has caused to be organized Xxxxxxx Variable
Life Investment Fund (the "Fund"), a Massachusetts business trust created under
a Declaration of Trust dated March 15, 1985, as amended, the beneficial
interest in which is divided into several series, each designated a "Portfolio"
and representing the interest in a particular managed portfolio of securities,
each of which series (except Money Market Portfolio) is divided into two
classes of shares of beneficial interest; and
WHEREAS, the purpose of the Fund is to act as the investment vehicle
for the separate accounts established for variable life insurance policies and
variable annuity contracts to be offered by insurance companies which have
entered into indemnification agreements substantially identical to this
Agreement; and
WHEREAS, the parties desire to express their agreement as to certain
other matters;
NOW THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements hereinafter contained, the parties hereto agree as
follows:
1. Additional Definitions.
For purposes of this Agreement, the following definitions shall apply:
(a) "Shares" means shares of beneficial interest, without par
value, of any class of any Portfolio, now or hereafter created, of the
Fund.
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2. Access to Other Products.
Xxxxxxx Xxxxxx shall permit an Account to participate in any
registered investment company other than the Fund which is intended as the
funding vehicle for insurance products and for which Xxxxxxx Xxxxxx or an
affiliate of Xxxxxxx Xxxxxx acts as investment adviser, on the same basis as
other insurance companies are permitted to participate in such a registered
investment company. This provision shall not require Xxxxxxx Xxxxxx to make
available to the Company shares of any investment company which is organized
solely as the funding vehicle for insurance products offered by a single
insurance company or a group of affiliated insurance companies.
3. Right to Review and Approve Sales Materials.
The Company shall furnish, or shall cause to be furnished, to Xxxxxxx
Xxxxxx or its designee, at least 10 business days prior to its intended use,
each piece of promotional material in which Xxxxxxx Xxxxxx or the Fund is
named. No such material shall be used unless Xxxxxxx Xxxxxx or its designee
shall have approved such use in writing, or 10 business days shall have elapsed
without approval, rejection or objection since receipt by Xxxxxxx Xxxxxx or its
designee of such material.
The Company will provide to Xxxxxxx Xxxxxx at least one complete copy
of all registration statements, prospectuses, profiles, statements of
additional information, reports, solicitations for voting instructions, sales
literature, applications for exemptions, requests for no-action letters, and
all amendments to any of the above, that relate to the Contracts or the
Accounts, promptly after the filing of such document(s) with the SEC or other
regulatory authorities.
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 representation contained
in the registration statement, profiles, prospectus or statement of additional
information for the Fund shares, as such registration statement, profile,
prospectus or statement of additional information may be amended or supplemented
from time to time, or in reports or proxy statements for the Fund, or in sales
literature or other promotional
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material approved by the Fund or its designee or by the Underwriter, except
with the permission of the Fund or the Underwriter or designee of either.
Xxxxxxx Xxxxxx shall furnish, or shall cause to be furnished, to the
Company or its designee, at least 10 business days prior to its intended use,
each piece of promotional material in which the Company or its separate
account(s) is named. No such material shall be used unless the Company or its
designee shall have approved such use in writing, or 10 business days shall
have elapsed without approval, rejection or objection since receipt by the
Company or its designee of such material.
Xxxxxxx Xxxxxx will provide to the Company at least one complete copy
of all registration statements, prospectuses, profiles, SAIs, reports, proxy
statements, sales literature, applications for exemptions, requests for
no-action letters, and all amendments to any of the above, that relate to the
Fund or its shares, promptly after the filing of such document(s) with the SEC
or other regulatory authorities.
Xxxxxxx Xxxxxx shall not give any information or make any
representations or statements on behalf of the Company or concerning the
Company, the Account, or the Contracts other than the information or
representation contained in a registration statement, profiles, prospectus or
statement of additional information may be amended or supplemented from time to
time, or in published reports for the Accounts which are in the public domain
or approved by the Company for distribution to Contract owners, or in sales
literature approved by the Company or its designee, except with the permission
of the Company.
4. Sales Organization Meetings.
Representatives of Xxxxxxx Xxxxxx or its designee shall meet with the
sales organizations of the Company at such reasonable times and places as may
be agreed upon by the Company and Xxxxxxx Xxxxxx or its designee for the
purpose of educating sales personnel about the Fund.
5. Administration of Separate Accounts
(a) Administrative services to owners of variable life insurance
policies and/or variable annuity contracts issued by the Company shall be the
responsibility of the Company and shall not be the responsibility of Xxxxxxx
Xxxxxx. Xxxxxxx Xxxxxx recognizes the Company as
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the sole shareholder of Fund Shares issued under the Participation Agreement,
dated as of the ___ day of March, 2000, by and between the Company on behalf of
its separate accounts and the Fund (the "Participation Agreement"). From time
to time, Xxxxxxx Xxxxxx may pay amounts from its past profits to the Company
for providing certain administrative services for the Fund or its Portfolios,
or for providing owners of variable life insurance policies and/or variable
annuity contracts with other services that relate to the Fund. These services
may include, but are not limited to, the services listed in Schedule B. In
consideration of the savings resulting from such arrangement, and to compensate
the Company for its costs, Xxxxxxx Xxxxxx agrees to pay the Company an amount
equal to 15 basis points (.15%) per annum of the average aggregate amount
invested by the Company in the Portfolios under the Participation Agreement.
Payment of such amounts by Xxxxxxx Xxxxxx will not increase the fees paid by
the Fund, the Portfolios or their shareholders.
(b) The parties agree that Xxxxxxx Xxxxxx'x payments to the
Company are for administrative services only and do not constitute payment in
any manner for investment advisory services or for costs of distribution.
(c) For the purposes of computing the administrative fee
reimbursement contemplated hereby, the average aggregate amount invested by the
Company over a one-month period shall be computed by totaling the Company's
aggregate investment (Share net asset value multiplied by total number of
Shares held by the Company) on each business day during the month and dividing
by the total number of business days during each month.
(d) The Company will calculate the reimbursement of
administrative expenses at the end of each calendar quarter until the average
aggregate amount invested by the Company in the Portfolios under the
Participation Agreement reaches $10 million, and at the end of each calendar
month thereafter, and the Company shall send a detailed statement of each such
fee computation to Xxxxxxx Xxxxxx. Xxxxxxx Xxxxxx will make such reimbursement
to the Company within thirty days thereafter.
6. Duration.
This Agreement shall continue in force until terminated in accordance
with the following provisions:
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(a) At the option of the Company or Xxxxxxx Xxxxxx at any time
upon 90 days' notice, unless a shorter time is agreed to by the parties;
(b) Contemporaneously with the termination of the Participation
Agreement;
(c) In the event this Agreement is assigned without the prior
written consent of the Company and Xxxxxxx Xxxxxx. Termination shall be
effective immediately upon such occurrence without notice. Provided, however,
the obligation of each party hereto to indemnify the other party hereto shall
continue with respect to all losses, claims, damages, liabilities or litigation
based upon the acquisition of Shares purchased as the funding vehicle for any
variable life insurance policy or variable annuity contract issued by the
Company or any affiliated insurance company.
7. Indemnification.
(a) The Company agrees to indemnify and hold harmless Xxxxxxx
Xxxxxx and each of its directors and officers and each person, if any, who
controls Xxxxxxx Xxxxxx within the meaning of Section 15 of the Securities Act
of 1933 (the "Act") or any person controlled by or under common control with
Xxxxxxx Xxxxxx ("affiliate") against any and all losses, claims, damages,
liabilities or litigation (including legal and other expenses) to which Xxxxxxx
Xxxxxx or such directors, officers or affiliate may become subject under the
Act, under any other statute, at common law or otherwise, arising out of the
acquisition of any Shares by any person which (i) may be based upon any
wrongful act by the Company, any of its employees or representatives, any
affiliate of or any person acting on behalf of the Company or a principal
underwriter of its insurance products, or (ii) may be based upon any untrue
statement or alleged untrue statement of a material fact contained in a
registration statement or prospectus covering Shares or any amendment thereof
or supplement thereto or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading if such statement or omission was made in reliance upon
information furnished to Xxxxxxx Xxxxxx or the Fund by the Company, provided,
however, that in no case (i) is the Company's indemnity in favor of a director
or officer or any other person deemed to protect such director or officer or
other person against any liability to which any such person would otherwise be
subject by reason of willful misfeasance, bad faith, or gross negligence in the
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performance of his duties or by reason of his reckless disregard of obligations
and duties under this Agreement or (ii) is the Company to be liable under its
indemnity agreement contained in this Paragraph 7 with respect to any claim
made against Xxxxxxx Xxxxxx or any person indemnified unless Xxxxxxx Xxxxxx or
such person, as the case may be, shall have notified the Company in writing
pursuant to Paragraph 9 within a reasonable time after the summons or other
first legal process giving information of the nature of the claims shall have
been served upon Xxxxxxx Xxxxxx or upon such person (or after Xxxxxxx Xxxxxx or
such person 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 Xxxxxxx Xxxxxx or any
person against whom such action is brought otherwise than on account of the
indemnity agreement contained in this Paragraph 7. The Company shall be
entitled to participate, at its own expense, in the defense, or, if it so
elects, to assume the defense of any suit brought to enforce any such
liability, but, if it elects to assume the defense, such defense shall be
conducted by counsel chosen by it and satisfactory to Xxxxxxx Xxxxxx, its
officers and directors, or to any affiliates, defendant or defendants in the
suit. In the event that the Company elects to assume the defense of any such
suit and retain such counsel, Xxxxxxx Xxxxxx, such officers and directors or
affiliates, defendant or defendants in the suit, shall bear the fees and
expenses of any additional counsel retained by them, but, in case the Company
does not elect to assume the defense of any such suit, the Company will
reimburse Xxxxxxx Xxxxxx, such officers and directors or affiliates, defendant
or defendants in such suit, for the reasonable fees and expenses of any counsel
retained by them. The Company agrees promptly to notify Xxxxxxx Xxxxxx pursuant
to Paragraph 9 of the commencement of any litigation or proceedings against it
or any of its directors or officers in connection with the issue and sale of
any Shares.
(b) Xxxxxxx Xxxxxx 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 Act or any person
controlled by or under common control with the Company ("affiliate") against
any and all losses, claims, damages, liabilities or litigation (including legal
and other expenses) to which it or such directors, officers or affiliate may
become subject under the Act, under any other statute, at common law or
otherwise, arising out of the acquisition of
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any Shares by any person which (i) may be based upon any wrongful act by
Xxxxxxx Xxxxxx, any of its employees or representatives, any affiliate of or
any person acting on behalf of Xxxxxxx Xxxxxx or a principal underwriter of the
Fund, (ii) may be based upon any untrue statement or alleged untrue statement
of a material fact contained in a registration statement, profile or prospectus
covering Shares or any amendment thereof or supplement thereto or the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading if such
statement or omission was made in reliance upon information furnished to the
Fund or the Company by Xxxxxxx Xxxxxx, or (iii) may be based upon a materially
incorrect or untimely calculation or reporting of the daily net asset value per
share or dividend or capital gain distribution rate; provided, however, that in
no case (i) is Xxxxxxx Xxxxxx'x indemnity in favor of a director or officer or
any other person deemed to protect such director or officer or other person
against any liability to which any such person would otherwise be subject by
reason of willful misfeasance, bad faith, or gross negligence in the
performance of his duties or by reason of his reckless disregard of obligations
and duties under this Agreement or (ii) is Xxxxxxx Xxxxxx to be liable under
its indemnity agreement contained in this Paragraph 7 with respect to any
claims made against the Company or any person indemnified unless the Company or
such person as the case may be, shall have notified Xxxxxxx Xxxxxx in writing
pursuant to Paragraph 9 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 it or upon such director, officer or controlling person (or
after the Company or such director, officer or controlling person shall have
received notice of such service on any designated agent), but failure to notify
Xxxxxxx Xxxxxx of any claim shall not relieve it from any liability which it
may have to the Company or any person against whom such action is brought
otherwise than on account of its indemnity agreement contained in this
Paragraph 7. Xxxxxxx Xxxxxx will be entitled to participate at its own expense
in the defense, or, if it so elects, to assume the defense of any suit brought
to enforce any such liability, but if Xxxxxxx Xxxxxx elects to assume the
defense, such defense shall be conducted by counsel chosen by it and
satisfactory to the Company, its directors, officers or affiliates, defendant
or defendants, in the suit. In the event Xxxxxxx Xxxxxx elects to assume the
defense of any such suit and retain such counsel, the
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Company, its directors, officers or affiliates, defendant or defendants in the
suit, shall bear the fees and expenses of any additional counsel retained by
them, but, in case Xxxxxxx Xxxxxx does not elect to assume the defense of any
such suit, it will reimburse the Company or such directors, officers or
affiliates, defendant or defendants in the suit, for the reasonable fees and
expenses of any counsel retained by them. Xxxxxxx Xxxxxx agrees promptly to
notify the Company pursuant to Paragraph 8 of the commencement of any
litigation or proceedings against it or any of its officers or directors in
connection with the issuance or sale of any Shares.
(c) Xxxxxxx Xxxxxx agrees to indemnify and hold harmless the
Company and each of its directors and officers against any and all losses,
claims, damages, liabilities or litigation arising from the imposition of
additional federal income taxes on the Company or any policyholder and/or
contract holder solely as a result of a Final Determination that any Portfolio
has failed (x) to comply with the diversification requirements of section
817(h) of the Internal Revenue Code of 1986, as amended (the "Code"), relating
to the diversification requirements for variable annuity, endowment and life
insurance contracts, or (y) to qualify as a regulated investment company within
the meaning of section 851 of the Code; provided, however, that (i) Xxxxxxx
Xxxxxx shall have no liability under this Paragraph 7(c) if such failure is
caused by a third party who is not an employee or agent of Xxxxxxx Xxxxxx
(e.g., the Fund's custodian or another service provider), and (ii) in no case
is Xxxxxxx Xxxxxx'x indemnity under this Paragraph 7(c) deemed to protect any
person against any liability to which that person would otherwise be subject by
reason of willful misfeasance, bad faith or gross negligence in the performance
of that person's duties or by reason of reckless disregard by that person of
obligations under this Agreement.
The Company agrees that if the Internal Revenue Service asserts in
writing in connection with any governmental audit or review of the Company or,
to the Company's knowledge, of any policyholder and/or contract holder, that
any Portfolio has failed to comply with the diversification requirements of
section 817(h) of the Code or the Company otherwise becomes aware of any facts
that could give rise to any claim against Xxxxxxx Xxxxxx as a result of such a
failure or alleged failure, (i) the Company shall promptly notify Xxxxxxx
Xxxxxx pursuant to Paragraph 9 of such assertion or potential claim; (ii) the
Company shall consult with Xxxxxxx
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Xxxxxx as to how to minimize any liability that may arise as a result of such
failure or alleged failure; (iii) the Company shall use its best efforts to
minimize any liability of Xxxxxxx Xxxxxx for indemnification resulting from
such failure, including, without limitation, demonstrating, pursuant to
Treasury Regulations Section 1.817-5(a) (2), to the Commissioner of the
Internal Revenue Service that such failure was inadvertent; provided, however,
this Paragraph 7(c) shall not be construed to require the Company to jeopardize
its or any policyholder's and/or contract holder's standing or position with
respect to any such failure or alleged failure; (iv) the Company shall permit
Xxxxxxx Xxxxxx and its legal and accounting advisors to participate in any
conferences, settlement discussions or other administrative or judicial
proceedings or contests (including judicial appeals thereof) with the Internal
Revenue Service, any policyholder and/or contract holder or any other claimant
regarding any claims that could give rise to indemnification by Xxxxxxx Xxxxxx
as a result of such a failure or alleged failure; (v) any written materials to
be submitted by the Company to the Internal Revenue Service, any policyholder
and/or contract holder or any other claimant in connection with any of the
foregoing proceedings or contests (including, without limitation, any such
materials to be submitted to the Internal Revenue Service pursuant to Treasury
Regulations Section 1.817-5(a) (2)), shall be provided by the Company to
Xxxxxxx Xxxxxx (together with any supporting information or analysis, but
excluding any privileged materials) at least 5 business days prior to the day
on which such proposed materials are to be submitted; (vi) the Company shall
provide Xxxxxxx Xxxxxx and its advisors with such cooperation as Xxxxxxx Xxxxxx
shall reasonably request (including, without limitation, by permitting Xxxxxxx
Xxxxxx and its accounting and legal advisors to review the relevant books and
records of the Company) in order to facilitate Xxxxxxx Xxxxxx'x review of any
written submissions provided to it pursuant to the preceding clause or its
assessment of the validity or amount of any claim against it arising from such
a failure or alleged failure; (vii) the Company shall not with respect to any
claim of the IRS or any policyholder and/or contract holder that would give
rise to a claim for indemnification against Xxxxxxx Xxxxxx (a) compromise or
settle any claim, (b) accept any adjustment on audit, or (c) forego any
allowable judicial appeals, without the express written consent of Xxxxxxx
Xxxxxx, which shall not be unreasonably withheld, provided that the Company
shall not be required to appeal any adverse judicial
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decision unless Xxxxxxx Xxxxxx shall have provided an opinion of independent
counsel to the effect that a reasonable basis (consistent with Formal Opinion
85-352 of the American Bar Association) exists for taking such appeal; and
(viii) Xxxxxxx Xxxxxx shall have no liability as a result of such failure or
alleged failure if the Company fails to comply with any of the foregoing
clauses (i) through (vii). Should Xxxxxxx Xxxxxx refuse to give its written
consent to any compromise or settlement of any claim or liability hereunder,
the Company may, in its discretion, authorize Xxxxxxx Xxxxxx to act in the name
of the Company in, and to control the conduct of, such conferences,
discussions, proceedings, contests or appeals and all administrative or
judicial appeals thereof, and in that event Xxxxxxx Xxxxxx shall bear the fees
and expenses associated with the conduct of the proceedings that it is so
authorized to control.
For purposes of this Paragraph 7(c), "Final Determination" shall mean,
with respect to any claim, a settlement of such claim (including the acceptance
of an adjustment proposed by the Internal Revenue Service) or a decision of a
court of competent jurisdiction with respect to such claim that has become
final after either the (i) exhaustion of allowable appeals or (2) expiration of
the time to take any such appeal with respect to the claim.
8. Massachusetts Law to Apply.
This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of The Commonwealth of
Massachusetts.
9. 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 Xxxxxxx Xxxxxx:
Xxxxxxx Xxxxxx Investments, Inc.
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
(000) 000-0000
Attn: Xxxxxxx X. Xxxxxx
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If to the Company:
Farmers New World Life Insurance Company
0000 - 00xx Xxxxxx, X.X.
Xxxxxx Xxxxxx, Xxxxxxxxxx 00000
Attn: C. Xxxx Xxxxxx, President
with a copy to:
X. Xxxxxxx Close
Vice President and General Counsel
Farmers New World Life Insurance Company
0000 Xxxxxxxx Xxxxxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
10. Miscellaneous.
The captions in the 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. This Agreement may be
executed simultaneously in two or more counterparts, each of which taken
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed in its name and behalf by its duly authorized
representative and its seal to be hereunder affixed hereto as of the 14 day
of April, 2000.
SEAL XXXXXXX XXXXXX INVESTMENTS, INC.
By: /s/ XXXXXXX X. XXXXXX
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Managing Director
SEAL FARMERS NEW WORLD LIFE INSURANCE COMPANY
By: /s/ XXXX X. XXXXXX
----------------------------------
Name: Xxxx X. Xxxxxx
Title: Assistant Vice President &
Secretary
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SCHEDULE A
NAME OF SEPARATE ACCOUNT AND DATE
ESTABLISHED BY BOARD OF DIRECTORS
Farmers Annuity Separate Account A (4/6/99)
Farmers Variable Life Separate Account A (4/6/99)
A-1
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SCHEDULE B
ADMINISTRATION SERVICES PERFORMED BY
FARMERS NEW WORLD LIFE INSURANCE COMPANY FOR THE
XXXXXXX VARIABLE LIFE INVESTMENT FUND
Maintenance of books and records
Maintain an inventory of shares purchased to assist transfer agent in recording
issuance of shares.
- Perform miscellaneous accounting services to assist transfer agent in
recording transfers of shares (via net purchase orders).
- Reconciliation and balancing of the separate account at the Fund level
in the general ledger and reconciliation of cash accounts at general
account.
Purchase orders
- Determination of net amount of cash flow into the Fund.
- Reconciliation and deposit of receipts at Fund (wire order) and
confirmation thereof.
Redemption orders
- Determination of net amount required for redemptions by Fund.
- Notification to Fund of cash required to meet payments.
- Cost of share redemptions.
Reports
- Periodic information reporting to the Fund.
- Distribution of annual and semi-annual shareholder reports (to
existing contract owners)
Fund-related contract owner services
- Mailing and printing costs associated with dissemination of the Fund
prospectus and SAI to existing contract owners.
- Telephonic support for contract owners with respect to inquiries about
the Fund (not including information about performance or related to
sales).
Other administrative support
- Sub-accounting services.
- Providing other administration services to the Fund as mutually agreed
between the Company and the Fund.
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- Relieving the Fund of other usual and incidental administration
services provided to individual shareholders.
- Preparation of report to third party reporting services.
B-2
