Exhibit 26 (h) 12
Form of Participation Agreement among
Phoenix Life and Annuity Company,
Lazard Asset Management Securities LLC and
Lazard Retirement Series, Inc.
FORM OF FUND PARTICIPATION AGREEMENT
This Agreement is entered into as of the 25th day of April, 2005, by
and among PHOENIX LIFE AND ANNUITY COMPANY ("Insurance Company"), a life
insurance company organized under the laws of the State of New York, LAZARD
ASSET MANAGEMENT SECURITIES LLC ("Lazard"), a Delaware limited liability company
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 will have the meanings set
forth below:
1.1 "1933 Act" means the Securities Act of 1933, as amended.
1.2 "1940 Act" means the Investment Company Act of 1940, as amended.
1.3 "Board" means Fund's Board of Directors.
1.4 "Business Day" means any day for which the New York Stock
Exchange is open for business and the Portfolios calculate net
asset value per share as described in the Portfolio
Prospectuses and pursuant to applicable law and rules of the
Commission (defined below).
1.5 "Code" means the Internal Revenue Code of 1986, as amended.
1.6 "Commission" means the Securities and Exchange Commission.
1.7 "Contract" means a variable annuity or variable life insurance
contract that uses a Portfolio as an underlying investment
medium.
1.8 "Contract Prospectus" means 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.
1.9 "Contractholder" means any person that is a party to a Contract
with Insurance Company.
1.10 "Disinterested Board Members" mean those members of the Board
that are not deemed to be "interested persons" of Fund, as
defined in the 0000 Xxx.
1.11 "General Account" means the general account of Insurance
Company.
1.12 "IRS" means the Internal Revenue Service.
1.13 "NASD" means the National Association of Securities Dealers,
Inc.
1.14 "Notice" means the notice related to the Order.
1.15 "Order" means Fund's mixed and shared funding exemptive order
of the Commission pursuant to Section 6(c) of the 0000 Xxx.
1.16 "Participants" mean individuals who participate under a group
Contract.
1.17 "Participating Company" means 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 such contracts.
1.18 "Parties" means Insurance Company, Lazard and Fund, on behalf
of itself and each Portfolio, collectively and, each, a "Party".
1.19 "Portfolio Prospectus" means the currently effective prospectus
and statement of additional information with respect to a
Portfolio, including any supplements or amendments thereto.
1.20 "Separate Account" means 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 will remain an insurance company duly organized and
in good standing under applicable law;
(b) it has legally and validly established and will maintain each
Separate Account pursuant to applicable insurance laws and
regulations;
(c) it has registered, or prior to any issuance or sale of the
Contract, will register, and will maintain the registration of
each Separate Account as a unit investment trust under the
1940 Act, to the extent required thereby, 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 will be communicated to Fund);
(d) each Separate Account is and at all times will be eligible to
invest in shares of a Portfolio without such investment
disqualifying Portfolio 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 will be issued exclusively
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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 Lazard
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;
(f) the Contracts are and at all times shall, assuming compliance
by Fund and Lazard with the terms of this Agreement, be treated
as life insurance, endowment or annuity contracts under
applicable provisions of the Code, and it will notify Fund
promptly 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 will continue to be at all times
covered by a blanket fidelity bond or similar coverage, which
will include coverage for larceny and embezzlement and will 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 represents, warrants and covenants 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 will 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 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.
2.3 Insurance Company will not enter into any arrangements, formal
or informal, to permit or facilitate any Contractholder use of
market timing or excessive trading strategies with respect to
Portfolio shares by Contractholders. Insurance Company has
implemented procedures reasonably designed to guard against
market timing of the Funds by Contract holders to monitor for
such activities and will cooperate with Fund's reasonable
requests in taking steps to deter and to detect the use of
market timing or excessive trading strategies by
Contractholders, including providing identity information
(solely for the purpose of deterring and detecting the use of
market timing or excessive trading strategies by
Contractholders) and other information Fund reasonably requests.
2.4 Fund, on behalf of each Portfolio where indicated, and Lazard
represent and warrant that:
(a) (i) Fund is and will remain lawfully organized and validly
existing under the laws of Maryland; (ii) each Portfolio has
been duly designated as a series of Fund in accordance with the
laws of Maryland and Fund's organizational documents; (iii) Fund
is and will remain registered with the Commission as an
open-end, management investment company under the 1940 Act; and
(iv) Fund is in material compliance with applicable federal and
state laws.
(b) Portfolio shares are registered under the 1933 Act;
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(c) Fund possesses and will 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 will make every
effort to maintain such qualification, and it will 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 Fund's directors, officers, employees, investment
advisers, and other individuals/entities who deal with the money
and/or securities of Fund are and will continue to be at all
times covered by a blanket fidelity bond or similar coverage,
which will include coverage for larceny and embezzlement and
will 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 0000 Xxx.
2.5 Fund makes no representation as to whether any aspect of its
operations, including without limitation, investment policies,
fees and expenses, complies with the insurance laws of any
state.
2.6 Fund and Lazard represent, warrant and covenant that 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 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 and Lazard will take all reasonable steps to adequately
diversify the Portfolio so as to achieve compliance within the
grace period afforded by Treasury Regulation 1.817-5. If Fund
does not adequately diversify the Portfolio during the grace
period, Fund or Lazard will promptly notify Insurance Company
that the Portfolio has failed to so comply. In addition, Fund or
Lazard will promptly notify Insurance Company if either Fund or
Lazard becomes aware that Insurance Company may be precluded
from "looking through" to the investment of any Portfolio,
pursuant to the "look through" rules in Treasury Regulation
1.817-5. 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 will promptly notify Fund and
Lazard of such assertion or potential claim and will permit Fund
and Lazard 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 Fund and Lazard each represent, warrant and covenant that
Portfolio shares sold pursuant to the Agreement will be (a)
registered under the 1933 Act to the extent required thereby,
(b) duly authorized for issuance and sold in compliance with the
Agreement and, in all material respects, with all applicable
federal and state laws. Fund will amend the registration
statement of Portfolio shares under the 1933 Act and Fund's
registration statement under the 1940 Act from time to time as
required in order to effect the continuous offering of Portfolio
shares.
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2.8 Lazard represents, warrants and covenants that (a) it is and
will remain lawfully organized and validly existing under the
laws of the state of its organization; (b) it is and will remain
registered as a broker-dealer under the Securities Exchange Act
of 1934, as amended, and a member of the NASD; and (c) it is and
will remain duly registered and licensed under all applicable
federal and state laws and will perform its obligations
hereunder in compliance in all material respects with all
applicable federal and state laws.
2.9 Each Party represents, warrants and covenants that (a) it has
full power and authority to enter into and perform its
obligations under this Agreement; (b) it has duly taken all
necessary steps to authorize the person signing this Agreement
on its behalf to do so and to authorize the performance of its
obligations under this Agreement; and (c) assuming the accuracy
of and compliance with this representation, warranty and
covenant by all other Parties, this Agreement will be valid,
binding on, and enforceable against such Party in accordance
with its terms, subject only to such limitations as apply
generally to the rights of creditors, such as, but not limited
to, bankruptcy laws, laws governing the insolvency of insurance
companies and other entities and principles of equity.
2.10 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
will use its best efforts to (a) 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 (b) 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.
2.11 Insurance Company and Fund have adopted and implemented
compliance policies and procedures reasonably designed to guard
against money laundering activities to detect and report
suspicious activities and to comply with the applicable
provisions of the Bank Secrecy Act, as amended by the USA
PATRIOT Act, and any and all regulations thereunder or any
similar money laundering laws or regulations applicable to the
Fund or the Insurance Company, as they may be amended (the "AML
Requirements"). Insurance Company and Fund will notify the other
in the event that this representation ceases to be true.
(a) Insurance Company will ensure the ability of federal examiners
to obtain information and records relating to AML Requirements
and the ability of Lazard and Fund or their agents to inspect
the records and facilities of Insurance Company regarding
compliance with AML Requirements.
(b) Insurance Company will provide Fund with such information,
representations and certifications regarding compliance with
AML Requirements as Fund may reasonably request.
(c) Insurance Company will notify Fund if any of Insurance
Company's representations with respect to compliance with AML
Requirements cease to be true.
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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 on each Business Day, 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, including Insurance Company and the Separate
Accounts.
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 Subject to the provisions of this Agreement, Fund agrees to
sell to Insurance Company those shares of the Portfolios that
Insurance Company, on behalf of the Separate Accounts, orders,
and agrees to redeem for cash, on Insurance Company's request,
any full or fractional shares of Portfolio held by Insurance
Company on behalf of the Separate Accounts executing such
orders and requests in the manner set out in Schedule 2
hereto.
3.4 Except as noted in this Article III, Fund and Insurance
Company agree that orders and related payments to purchase and
redeem Portfolio shares will be processed in the manner set
out in Schedule 2 hereto.
(a) Insurance Company represents that it has adopted, and will at
all times during the term of this Agreement maintain, procedures
("Late Trading Procedures") reasonably designed to ensure that
any and all orders relating to the purchase, sale or exchange of
Portfolio shares communicated by Insurance Company to Fund or
its agent to be treated in accordance with Schedule 2 as having
been received on a Business Day have been received by Insurance
Company by the Close of Trading (as defined in Schedule 2) on
such Business Day and were not modified after the Close of
Trading, and that all orders received from Contractholders but
not rescinded by the Close of Trading were communicated to Fund
or its agent as received for that Business Day.
(b) Each transmission of Share orders by Insurance Company shall
constitute a representation by Insurance Company that such
orders are accurate and complete and relate to orders received
by Contract Distributor by the Close of Trading on the Business
Day for which the order is to be priced and that such
transmission includes all orders relating to Portfolio shares
received from Contractholders but not rescinded by the Close of
Trading.
(c) Insurance Company will provide Fund with (i) a copy of the
Late Trading Procedures and (ii) such certifications and
representations regarding the Late Trading Procedures as Fund
may reasonably request. Insurance Company will ensure the
ability of appropriate regulatory authorities to obtain
information and records relating to the Late Trading Procedures
and permit Lazard and Fund or their agents upon reasonable
request to
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inspect the records and facilities of Insurance Company
regarding compliance with the Late Trading Procedures.
3.5 Fund will confirm each purchase or redemption order made by
Insurance Company. Transfer of Portfolio shares will be by
book entry only. No share certificates will be issued to
Insurance Company. Shares ordered from Fund will be recorded
in an appropriate title for Insurance Company, on behalf of
each Separate Account or the General Account.
3.6 Fund will 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 on the ex-dividend date of the
Fund, or, if not a Business Day, on the first Business Day
thereafter. 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. Fund will, on the day after the payable date or, if not
a Business Day, on the first Business Day thereafter, notify
Insurance Company of the number of shares so issued. Insurance
Company reserves the right, on its behalf and on behalf of its
Separate Accounts, to revoke this election and to receive all
dividends and capital gain distributions in cash.
ARTICLE IV.
STATEMENTS AND REPORTS
4.1 Fund will 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 will provide
Insurance Company, free of charge, 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 will
provide Portfolio Prospectuses in "camera ready" and/or "web
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
or a document combining Portfolio Prospectuses with prospectuses
of other funds in which the Contracts may invest. The expenses
of such printing will be apportioned between Insurance Company,
on the one hand, and the Fund (with respect to existing Contract
owners) or Lazard (with respect to prospective Contract owners)
in proportion to the number of pages of the Contract Prospectus
(borne by Insurance Company) and the Portfolio Prospectus (borne
by the Fund).
(c) Fund or its designee will 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.
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(d) The form of the Portfolio Prospectuses provided to Insurance
Company will be the final form of Portfolio Prospectus as
filed with the Commission, which form will include only those
Portfolios identified on Schedule 1.
4.3 Fund will provide Insurance Company with at least one complete
copy of all registration statements, Portfolio Prospectuses,
periodic reports and proxy statements, sales literature and
other promotional materials, and all applications for exemptive
orders and requests for no-action letters that are relevant to a
Separate Account and all amendments to any of the above that
relate to the Fund or its shares, contemporaneous with the
filing of such documents with the Commission or other regulatory
authorities, or, if such materials are not filed,
contemporaneously with first use.
4.4 Fund will 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. If requested by Insurance Company in
lieu thereof, Fund will provide at Fund's expense such
documentation (including a final copy of Fund's proxy
statements, periodic reports to shareholders, and other
communications to shareholder, as set in type or in camera ready
and/ or web ready copy) and other assistance as reasonably
necessary for Insurance Company to print such shareholder
communications for distribution to Contractholders and
Participants.
4.5 Insurance Company will 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 contemporaneously with the
filing of such documents with the Commission or other
regulatory authorities, or, if such materials are not filed,
contemporaneously with first use. Insurance Company will
provide to Fund and Lazard 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.
(a) Lazard may pay the Insurance Company's 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 the Insurance Company's contract
distributor and Lazard related to such plan.
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ARTICLE VI.
EXEMPTIVE RELIEF
6.1 Fund acknowledges that Board will monitor Fund for the existence
of any material irreconcilable conflict between the interests of
the contractholders of Participating Company separate accounts
investing in Fund, including material irreconcilable conflicts
arising by reason of (a) an action by any state insurance
regulatory authority; (b) a change in applicable federal or
state insurance, tax or securities laws or regulations, or a
public ruling, private letter ruling, no-action or interpretive
letter, or any similar action by insurance, tax or securities
regulatory authorities; (c) and administrative or judicial
decision in any relevant proceeding; (d) the manner in which the
investments of any Portfolio are being managed; (e) a difference
in voting instructions given by contractholders of different
Participating Companies; or (f) a decision by a Participating
Company to disregard voting instructions of its contractholders.
6.2 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 will
report any potential or existing conflicts of which it is aware
promptly to the Board.
6.3 Insurance Company will 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. No less than annually, Insurance Company will
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.
6.4 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 will 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
will 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 to remedy or
eliminate the irreconcilable material conflict. Such necessary
action may include, but will 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.
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6.5 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.
6.6 For the purpose of this Article, a majority of the Disinterested
Board Members will determine whether any proposed action
adequately remedies any material irreconcilable conflict, but in
no event will Fund or Lazard or any other investment adviser of
Fund be required to bear the expense of establishing a new
funding medium for any Contract. Insurance Company will 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.
6.7 The Board's determination of the existence of a material
irreconcilable conflict and its implications will be made
known promptly and in writing to Insurance Company.
6.8 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 will relieve Insurance Company of its
obligations under, or otherwise affect the operations of, this
Article VI.
ARTICLE VII.
VOTING OF PORTFOLIO SHARES
7.1 Insurance Company will 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, will 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 will be responsible for
assuring that the Separate Account determines voting
privileges in a manner consistent with other Participating
Companies. Insurance Company will 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. Insurance Company
reserves the right to vote Fund shares held in any segregated
account for its own account, to the extent permitted by law.
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 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, will 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. Article VI of
this Agreement will continue in effect only to the extent that
terms and conditions substantially identical to Article VI are
contained in such Rules as so amended or adopted if Fund is
otherwise required to continue to comply with the conditions of
the Order.
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7.3 Fund and Insurance Company each agree that it will comply with
all applicable provisions of the 1940 Act, the regulations
thereunder, Commission orders and Commission staff
interpretations regarding pass-through voting.
7.4 Insurance Company agrees that it will not, without prior written
notice to Fund and Lazard, solicit, introduce or encourage
Contractholders or Participants to change or supplement Fund's
investment adviser.
ARTICLE VIII.
MARKETING
8.1 Fund or its designee will 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 will be borne by Insurance Company in
accordance with Articles IV and V of this Agreement.
8.2 Insurance Company will designate certain persons or entities
that will have the requisite licenses to solicit applications
for the sale of Contracts. No representation is made as to the
number or amount of Contracts that are to be sold by Insurance
Company.
8.3 Insurance Company will furnish, or will cause to be furnished,
to Fund each piece of Insurance Company's sales literature or
other promotional material in which Fund, Lazard or Fund's
investment adviser or administrator is named, at least five
(5) Business Days prior to its use. No such material will be
used unless Fund and Lazard or their respective designees
approve such material in writing.
8.4 Fund will furnish, or will cause to be furnished, to Insurance
Company each piece of Fund's or Lazard'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 will be used unless
Insurance Company approves such material in writing.
8.5 Insurance Company will not give any information or make any
representations or statements on behalf of Fund, Lazard or the
Fund's investment adviser 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 or Lazard or their designees.
8.6 Fund and Lazard and their affiliates and agents will not 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 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,
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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 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 agrees to indemnify and hold harmless Fund,
Lazard, 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 reasonable 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) (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 Insurance
Company will not 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, or alleged materially
untrue statement or alleged material omission made in any
Account document which materially untrue statement or material
omission or alleged materially untrue statement or alleged
material omission was made in reliance upon and in conformity
with written information furnished by or on behalf of such
Indemnified Party 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
or alleged materially untrue statement or alleged material
omission was made in
12
reliance upon and in conformity with information furnished to
Fund or Lazard by or on behalf of Insurance Company 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 not made in reliance upon and in conformity
with information furnished to Fund or Lazard by or on behalf
of Insurance Company specifically for use therein and on which
Insurance Company has reasonably relied) or wrongful conduct
of Insurance Company or its respective agents and persons
under their respective control with respect to the sale and
distribution of Contracts or Portfolio shares;
(d) arise out of any material breach of any representation,
warranty and/or covenant made by Insurance Company in this
Agreement, or arise out of or result from any other material
breach of this Agreement by Insurance Company;
(e) 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 account of Insurance Company's
affiliates.
(f) arise out of Insurance Company's incorrect calculation and/or
incorrect or untimely reporting of net purchase or net
redemption orders.
9.2 Fund and Lazard agree to indemnify and hold harmless Insurance
Company and each of its respective directors, trustees,
general members, officers, employees, agents and each person,
if any, who controls Insurance Company 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 Lazard will 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 or alleged materially
untrue statement or alleged material omission made in any
Portfolio document which materially untrue statement or material
omission or alleged materially untrue statement or alleged
material omission was made in reliance upon and in conformity
with information furnished by or on behalf of such Indemnified
Party specifically for use therein or otherwise for use in
connection with the sale of the Contracts or Portfolio shares;
(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 or alleged materially untrue
statement or alleged material omission was made in reliance upon
and in conformity with written information
13
furnished to Insurance Company by or on behalf of Fund or Lazard
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 not made in reliance upon an din conformity
with information furnished to Insurance Company by or on
behalf of Fund or Lazard specifically for use therein and on
which Fund or Lazard have reasonably relied) or wrongful
conduct of Fund or Lazard or their respective agents and
persons under their respective control with respect to the
sale and distribution of Contracts or Portfolio shares;
(d) arise out of any material breach of any representation,
warranty and/or covenant made by Fund or Lazard in this
Agreement, or arise out of or result from any other material
breach of this Agreement by Fund or Lazard; or
(e) arise out incorrect or untimely calculation and/or reporting
of the daily net asset value, dividend rate or capital gain
distribution rate of a Portfolio; provided, however, that
Losses arising out of incorrect calculation of daily net asset
value shall be determined in accordance with paragraph 7 of
Schedule 2.
9.3 In no event will any Party be liable for any consequential,
incidental, special or indirect damages.
9.4 Notwithstanding anything herein to the contrary, in no event
shall Fund or Lazard 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 9.5) of notice of the commencement of
any action which may result in Losses, such Indemnified Party
will, if a claim in respect thereof is to be made against the
indemnifying party under this Article ("Indemnifying Party" for
purposes of this Section 9.5), notify Indemnifying Party of the
commencement thereof. The failure to so notify will 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 will 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 will 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 will
have the right to retain its own counsel, but the fees and
expenses of such counsel will be at its expense unless (a)
Indemnifying Party and Indemnified Party will 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
14
same counsel would be inappropriate due to actual or potential
differing interests between them. Indemnifying Party will not be
liable for any settlement of any proceeding effected without its
written consent.
(b) No party will 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 will be
entitled to the benefits of the indemnification contained in
this Article IX.
ARTICLE X.
COMMENCEMENT AND TERMINATION
10.1 This Agreement will be effective as of the date first written
above and will continue in force until terminated in accordance
with the provisions herein.
10.2 This Agreement will 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 will furnish
prompt written notice of election to terminate and termination
will be effective upon receipt of written notice by the other
Parties;
(c) at the option of any Party other than Fund, in the event that
(i) the Portfolio ceases, after the passage of any applicable
grace period, to qualify as a regulated investment company under
Subchapter M of the Code or any successor provision or fails to
comply with the diversification requirements of Section 817(h)
of the Code specified in Section 2.5 of this Agreement, or if
such terminating Party reasonably believes that the Portfolio
may fail to so qualify or comply or (ii) the Portfolio's shares
are not registered, issued or sold in accordance with applicable
federal law, or such law precludes the use of such shares as the
underlying investment medium of Contracts issued or to be issued
by Insurance Company; notice of termination will be delivered by
the terminating Party to all other Parties and will specify the
effective date of termination, which will in no event be earlier
than when all of such notices have been received by all other
Parties;
(d) at the option of Insurance Company upon the institution of
formal proceedings against Fund or Lazard or their respective
affiliates by the Commission or the NASD 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 will be furnished with termination to be
effective as specified therein;
15
(e) at the option of Fund upon the institution of formal proceedings
against Insurance Company or its 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 will
be furnished with termination to be effective as specified
therein;
(f) upon termination of the Investment Management Agreement between
Fund, on behalf of its Portfolios, and Lazard or its successors
unless Insurance Company specifically approves the selection of
a new investment adviser for the Portfolios; notice of
termination will be delivered by the terminating Party to all
other Parties and will specify the effective date of
termination, which will in no event be more than 180 days after
such notices will have been received by all other Parties; Fund
will promptly furnish notice of termination of the Investment
Management Agreement to each other Party;
(g) at the option of Fund upon a determination by the Board in good
faith and in light of its fiduciary duties to the Portfolios'
shareholders (including, without limitation, Insurance Company
and the Separate Accounts) under federal and any applicable
state laws that it is no longer advisable and in the best
interests of shareholders for Fund to continue to operate
pursuant to this Agreement; notice of termination shall be
effective upon notice by Fund to Insurance Company of such
termination will be delivered by Fund to all other Parties and
will specify the effective date of termination which will in no
event be earlier than when all of such notices have been
received by all other Parties;
(h) at the option of any Party, if that Party will determine, in its
sole judgment reasonably exercised in good faith, that any other
Party has suffered a material adverse change in its business or
financial condition 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 operation of the terminating Party, such
terminating Party will notify each other Party in writing of
such determination and its intent to terminate this Agreement,
and, if after considering the actions taken by the entity
suffering the adverse change or publicity and any other changes
in circumstances since the giving of such notice, such
determination of the terminating Party will continue to apply on
the thirtieth day after such notice has been received by all
other Parties, such thirtieth day will be the effective date of
termination;
(i) upon assignment (as defined in the 0000 Xxx) of this Agreement,
unless made with the written consent of the non-assigning
Parties;
(j) at the option of Insurance Company, upon any substitution of
the shares of another investment company or series thereof for
shares of Fund in accordance with the terms of the Contracts,
provided that Insurance Company has given at least forty-five
days prior written notice to Fund and Lazard of the date of
substitution; or
(k) at the option of any Party, upon another Party's breach of any
material representation, warranty, covenant or other provision
of this Agreement; notice of termination will be delivered by
the terminating Party to all other Parties and will be
effective thirty days after the notice has been received by
all other Parties, but only if the breaching Party has not
cured the breach, in all material respects, by the end of that
thirty day period and will specify the effective date of
termination which will in no event be earlier than when all of
such notices have been received by all other Parties.
16
Any such termination pursuant to this Article X will not affect the
operation of Articles V or IX of this Agreement and such expense and
indemnification provisions will survive any termination of this
Agreement. The Parties agree that any termination pursuant to Article
VI will be governed by that Article.
10.3 Notwithstanding any termination of this Agreement, Fund and
Lazard may, at the option of Insurance Company, continue to make
available additional Portfolio shares pursuant to the 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, the owners of the Existing
Contracts or Insurance Company, whichever will have legal
authority to do so, will 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. The availability
of additional shares hereunder will be subject to the
restrictions and limitations set forth in this Agreement as
applicable.
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 will 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 will be given by
certified mail, return receipt requested, to the appropriate
Parties at the following addresses:
Insurance Company: Phoenix Life and Annuity Company
One American Row, H-G
P. O. Box 5056
Hartford, Connecticut 06102-5056
Attention: Xxxx X. X'Xxxxxxx
with a copy to: Phoenix Life and Annuity Company
One American Row, H-11
P. O. Xxx 0000
Xxxxxxxx, Xxxxxxxxxxx 00000-0000
Attention: General Counsel
17
Fund: Lazard Retirement Series, Inc.
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxxxx
Lazard: Lazard Asset Management Securities LLC
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxx, Esq.
with a copy to: Stroock & Stroock & Xxxxx LLP
000 Xxxxxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Notice will 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 will constitute one
and the same instrument.
ARTICLE XIV.
LAW
14.1 This Agreement will 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.
18
PHOENIX LIFE AND ANNUITY COMPANY
By: /s/
--------------------------------
Attest:/s/ Senior Vice President
-------------------
LAZARD RETIREMENT SERIES, INC.
By: /s/
---------------------------------
Attest: /s/
-------------------
LAZARD ASSET MANAGEMENT SECURITIES LLC
By: /s/
----------------------------------------
Attest: /s/
-------------------
19
SCHEDULE 1
Portfolios
----------
Lazard Retirement Small Cap Portfolio
Separate Accounts
-----------------
Phoenix Life and Annuity Variable Universal Life Account
SCHEDULE 2
PORTFOLIO SHARE ORDER PROCESSING
--------------------------------
PRICING
-------
1. Each Business Day, Fund will 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 will calculate each
Separate Account's unit values. Using this unit value, Insurance
Company will 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. Orders that Insurance
Company receives from Contractholders by the close of regular trading
(the "Close of Trading") on the New York Stock Exchange (the "NYSE")
(usually 4:00 p.m., Eastern time) on each Business Day will be treated
by Fund and Insurance Company as though received on that Business Day.
Orders that Insurance Company receives after the Close of Trading will
be treated by Fund and Insurance Company as though received on the next
Business Day. All orders are subject to acceptance or rejection in the
sole discretion of Lazard or Fund or its agent, and orders will be
effective only upon receipt in proper form.
4. Insurance Company will 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 will 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 will use its
best efforts to notify Fund in advance of any unusually large purchase
or redemption orders.
5. Fund will 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 will 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 will be deemed to constitute such
representation and warranty by Insurance Company unless the order
specifically states to the contrary. Otherwise, Fund will treat orders
attributable to unregistered Separate Account Contracts in the same
manner as orders for the General Account.
7. Fund will 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 will be reported promptly upon
discovery to Insurance Company.
PAYMENT
-------
9. Insurance Company will 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 will
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 will pay for any net redemption order by wiring the redemption
proceeds to Insurance Company on the same Business Day 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 requesting the application of proceeds from the redemption of one
Portfolio's shares to the purchase of another Portfolio's shares, Fund
will so apply such proceeds the same Business Day that Insurance
Company transmits such order to Fund.
2
