Ex. 99-B.8.15
FUND PARTICIPATION AGREEMENT
between
FUND and ALIAC
Aetna Life Insurance and Annuity Company (the "Company"), the Xxxxxxx
Funds, Inc. (the "Fund") and The Xxxxxxx Co. (the "Distributor") hereby agree to
an arrangement whereby the series of the Fund listed on Schedule A attached
hereto shall be made available to serve as underlying investment media for
Variable Annuity Contracts ("Contracts") to be issued by the Company.
1. Establishment of Accounts; Availability of Fund.
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The Company represents that it has established Variable Annuity Accounts B,
C and D and may establish such other accounts as may be set forth in
Schedule B attached hereto and as may be amended from time to time with the
mutual consent of the parties hereto (the "Accounts"), each of which is a
separate account under Connecticut Insurance law, and has registered or
will register each of the Accounts (except for such Accounts for which no
such registration is required) as a unit investment trust under the
Investment Company Act of 1940 (the "1940 Act"), to serve as an investment
vehicle for the Contracts. Each Contract provides for the allocation of net
amounts received by the Company to an Account for investment in the shares
of one of more specified open-end management investment companies available
through that Account as underlying investment media. Selection of a
particular investment management company and changes therein from time to
time are made by the participant or Contract owner, as applicable under a
particular Contract.
2. Pricing Information; Orders; Settlement.
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(a) The Fund will make Fund shares available to be purchased by the
Company, and will accept redemption orders from the Company, on behalf
of each Account at the net asset value applicable to each order on
those days on which the Fund calculates its net asset value (a
"Business Day"). Fund shares shall be purchased and redeemed in such
quantity and at such time determined by the Company to be necessary to
meet the requirements of those Contracts for which the Fund(s) serve
as underlying investment media, provided, however, that the Board of
Directors of the Fund (hereinafter the "Directors") may upon
reasonable notice to the Company, refuse to sell shares of any series
of the Fund to any person, or suspend or terminate the offering of
shares of any series if such action is required by law or by
regulatory authorities having jurisdiction or is, in the sole
discretion of the Directors, acting in good faith and in the best
interests of the shareholders of any series and is acting in
compliance with their fiduciary obligations under federal and/or any
applicable state laws.
(b) The Fund will provide to the Company closing net asset value, dividend
and capital gain information at the close of trading each day that the
New York Stock Exchange (the "Exchange") is open (each such day a
"Business Day"). The Fund will use its best efforts to provide such
information by 6:30 p.m. Eastern Standard time and will provide such
information in no event later than 7:00p.m. Eastern Standard time on
such Business Day. The Company will send via facsimile or electronic
transmission to the Fund or its specified agent orders to purchase
and/or redeem Fund shares by 10:00 a.m. Eastern Standard Time the
following business day. Payment for net purchases will be wired by the
Company to an account designated by the Fund to coincide with the
order for shares of the Fund.
(c) The Fund hereby appoints the Company as its agent for the limited
purpose of accepting purchase and redemption orders for Fund shares
relating to the Contracts from Contract owners or participants. Orders
from Contract owners or participants received from any distributor of
the Contracts (including affiliates of the Company) by the Company,
acting as agent for the Fund, prior to the close of the Exchange on
any given business day will be executed by the Fund at the net asset
value determined as of the close of the Exchange on such Business Day,
provided that the Fund receives written (or facsimile) notice of such
order by 10 a.m. Eastern Standard Time on the next following Business
Day. Any orders received by the Company acting as agent on such day
but after the close of the Exchange will be executed by the Fund at
the net asset value determined as of the close of the Exchange on the
next business day following the day of receipt of such order, provided
that the Fund receives written (or facsimile) notice of such order by
10 a.m. Eastern Standard Time within two days following the day of
receipt of such order.
(d) Payments for net redemptions of shares of the Fund will be wired by
the Fund to an account designated by the Company on the same Business
Day the Company places an order to redeem Fund Shares. Payments for
net purchases of the Fund will be wired by the Company to an account
designated by the Fund on the same Business Day the Company places an
order to purchase Fund shares. Payments shall be in federal funds
transmitted by wire.
(e) In lieu of applicable provisions set forth in paragraphs 2(a) through
2(d) above, the parties may agree to provide pricing information,
execute orders and wire payments for purchases and redemptions through
National Securities Clearing Corporation's Fund/SERV system in which
case such activities will be governed by the provisions set forth in
an Exhibit to this Agreement.
(f) Each party has the right to rely on information or confirmations
provided by the other party (or by any affiliate of the other party),
and shall not be liable in the event that an error is a result of any
misinformation supplied by the other party
(g) The Fund and Distributor shall indemnify and hold the Company
harmless, from the effective date of this Agreement, against any
amount the Company is required to pay
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to Contract owners or participants due to: (i) an incorrect
calculation of a Fund's daily net asset value, dividend rate, or
capital gains distribution rate or (ii) incorrect or late reporting of
the daily net asset value, dividend rate, or capital gain distribution
rate of a Fund, upon written notification by the Company, with
supporting data, to Distributor. In addition, the Fund or the
Distributor shall be liable to the Company for systems and out of
pocket costs incurred by the Company in making a Contract owners's or
a participant's account whole, if such costs or expenses are a result
of the Fund's or the Distributor's failure to provide timely or
correct net asset values, dividend and capital gains or financial
information and if such information is not corrected by 4:00 p.m.
Eastern Standard time of the next business day after releasing such
incorrect information provided the incorrect NAV as well as the
correct NAV for each day that the error occurred is provided. If a
mistake is caused in supplying such information or confirmations,
which results in a reconciliation with incorrect information, the
amount required to make a Contract owner's or a participant's account
whole shall be borne by the party providing the incorrect information,
regardless of when the error is corrected.
(h) The Company agrees to purchase and redeem the shares of the series of
the Fund named in Schedule A offered by the then current prospectus
and statement of additional information of the Fund in accordance with
the provisions of such prospectus and statement of additional
information.
3. Fees.
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In consideration of services provided by the Company under this Agreement,
the Fund or Distributor shall pay fees to the Company as set forth in
Schedule C.
4. Expenses.
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(a) Except as otherwise provided in this Agreement, all expenses incident
to the performance by the Fund under this Agreement shall be paid by
the Fund, including the cost of registration of Fund shares with the
Securities and Exchange Commission (the "SEC") and in states where
required. The Fund and Distributor shall pay no fee or other
compensation to the Company under this Agreement, and the Company
shall pay no fee or other compensation to the Fund or Distributor,
except as provided herein and in Schedule C attached hereto and made a
part of this Agreement as may be amended from time to time with the
mutual consent of the parties hereto. All expenses incident to
performance by each party of its respective duties under this
Agreement shall be paid by that party, unless otherwise specified in
this Agreement.
(b) The Fund or the Distributor shall provide to the Company, at the
location designated by the Company, periodic fund reports to
shareholders and other materials that are required by law to be sent
to Contract owners or participants. In addition, the Fund or the
Distributor shall provide the Company with a sufficient quantity of
its prospectuses, statements of additional information and any
supplements to any of
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these materials, to be used in connection with the offerings and
transactions contemplated by this Agreement
(c) The Fund or Distributor shall provide the company with a sufficient
quantity of its proxy material that is required to be sent to Contract
owners or participants. The cost associated with proxy preparation,
group authorization letters, programming for tabulation and necessary
materials (including postage) will be paid by the Fund or Distributor.
5. Representations.
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(a) The Company agrees that it and its agents shall not, without the
written consent of the Fund or the Distributor, make representations
concerning the Fund, or its shares except those contained in the then
current prospectuses and in current printed sales literature approved
by the Fund or the Distributor.
(b) The Fund and Distributor represent and warrant that (i) they have
examined and tested their systems and made reasonable inquiry of their
business partners and other entities with whom they conduct business
with respect to Year 2000 problems and (ii) their ability to perform
their obligations under this Agreement will not be materially
interrupted or disrupted as a result of any business interruptions or
other business problems relating to specific dates or days before,
during and after the Year 2000. This representation and warranty does
not extend to any interruption or disruption caused solely by any act
or omission of the Company.
6. Termination.
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This agreement shall terminate as to the sale and issuance of new
Contracts:
(a) at the option of either the Company, the Distributor or the Fund, upon
sixty days advance written notice to the other parties;
(b) at the option of the Company, upon one week advance written notice to
the Distributor and the Fund, if Fund shares are not available for any
reason to meet the requirement of Contracts as determined by the
Company. Reasonable advance notice of election to terminate shall be
furnished by Company;
(c) at the option of either the Company, the Distributor or the Fund,
immediately upon institution of formal proceedings against the
broker-dealer or broker-dealers marketing the Contracts, the Account,
the Company, the Fund or the Distributor by the National Association
of Securities Dealers, Inc. (the "NASD"), the SEC or any other
regulatory body;
(d) upon the determination of the Accounts to substitute for the Fund's
shares the shares of another investment company in accordance with the
terms of the applicable
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Contracts. The Company will give 60 days written notice to the Fund
and the Distributor of any decision to replace the Fund's shares;
(e) upon assignment of this Agreement, unless made with the written
consent of all other parties hereto;
(f) if Fund shares are not registered, issued or sold in conformance with
Federal law or such law precludes the use of Fund shares as an
underlying investment medium for Contracts issued or to be issued by
the Company. Prompt notice shall be given by the appropriate party
should such situation occur.
7. Continuation of Agreement.
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Termination as the result of any cause listed in Section 6 shall not affect
the Fund's obligation to furnish its shares to Contracts then in force for
which its shares serve or may serve as the underlying medium unless such
further sale of Fund shares is prohibited by law or the SEC or other
regulatory body.
8. Advertising Materials; Filed Documents.
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(a) Advertising and sales literature with respect to the Fund prepared by
the Company or its agents for use in marketing its Contracts will be
submitted to the Fund or its designee for review before such material
is submitted to any regulatory body for review, distributed to the
public, or used in connection with any Account or Contract.. No such
material shall be used if the Fund or its designee reasonably object
to such use in writing, transmitted by facsimile within five business
days after receipt of such material.
(b) The Fund will provide additional copies of its financials as soon as
available to the Company and at least one complete copy of all
registration statements, prospectuses, statements of additional
information, annual and semi-annual reports, proxy statements and all
amendments or supplements to any of the above that relate to the
series of the Fund named in Schedule A promptly after the filing of
such document with the SEC or other regulatory authorities. At the
Distributor's request, the Company will provide to the Distributor at
least one complete copy of all registration statements, prospectuses,
statements of additional information, annual and semi-annual reports,
proxy statements, and all amendments or supplements to any of the
above that relate to the Account promptly after the filing of such
document with the SEC or other regulatory authority.
(c) The Fund or the Distributor will provide via Excel spreadsheet
diskette format or in electronic transmission to the Company at least
quarterly portfolio information necessary to update Fund profiles
within seven business days following the end of each quarter.
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9. Proxy Voting.
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(a) The Company shall provide pass-through voting privileges on Fund
shares held by registered separate accounts to all Contract owners and
participants to the extent the SEC continues to interpret the 1940 Act
as requiring such privileges. The Company shall provide pass-through
voting privileges on Fund shares held by unregistered separate
accounts to all Contract owners.
(b) The Company will distribute to Contract owners and participants, as
appropriate, all proxy material furnished by the Fund and will vote
Fund shares in accordance with instructions received from such
Contract owners and participants. If and to the extent required by
law, the Company, with respect to each group Contract and in each
Account, shall vote Fund shares for which no instructions have been
received in the same proportion as shares for which such instructions
have been received. The Company and its agents shall not oppose or
interfere with the solicitation of proxies for Fund shares held for
such Contract owners and participants.
10. Indemnification.
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(a) The Company agrees to indemnify and hold harmless the Fund and the
Distributor, and its directors, officers, employees, agents and each
person, if any, who controls the Fund or its Distributor within the
meaning of the Securities Act of 1933 (the "1933 Act") against any
losses, claims, damages or liabilities to which the Fund or any such
director, officer, employee, agent, or controlling person may become
subject, under the 1933 Act or otherwise, insofar as such losses,
claims, damages, or liabilities (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Registration
Statement, prospectus or sales literature of the Company or arise out
of or are based upon the omission or the alleged omission to state
therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, or arise out of or as a
result of conduct, statements or representations (other than
statements or representations contained in the prospectuses or sales
literature of the Fund) of the Company or its agents, with respect to
the sale and distribution of Contracts for which Fund shares are the
underlying investment. The Company will reimburse any legal or other
expenses reasonably incurred by the Fund or any such director,
officer, employee, agent, investment Distributor, or controlling
person in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that the
Company will not be liable in any such case to the extent that any
such loss, claim, damage or liability arises out of or is based upon
(i) an untrue statement or omission or alleged omission made in such
Registration Statement or prospectus in conformity with written
materials furnished to the Company by the Fund specifically for use
therein or (ii) the willful misfeasance, bad faith, or gross
negligence by the Fund or Distributor in the performance of its duties
or the Fund's or Distributor's reckless disregard of obligations or
duties under this Agreement or to the
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Company, whichever is applicable. This indemnity agreement will be in
addition to any liability which Company may otherwise have.
(b) The Fund and the Distributor agree to indemnify and hold harmless the
Company and its directors, officers, employees, agents and each
person, if any, who controls the Company within the meaning of the
1933 Act against any losses, claims, damages or liabilities to which
the Company or any such director, officer, employee, agent or
controlling person may become subject, under the 1933 Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained
in the Registration Statement, prospectuses or sales literature of the
Fund or arise out of or are based upon the omission or the alleged
omission to state therein a material fact required to be stated
therein or material fact required to be stated therein or necessary to
make the statements therein not misleading. The Fund will reimburse
any legal or other expenses reasonably incurred by the Company or any
such director, officer, employee, agent, or controlling person in
connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that the Fund will not
be liable in any such case to the extent that any such loss, claim,
damage or liability arises out of or is based upon an untrue statement
or omission or alleged omission made in such Registration Statement or
prospectuses which are in conformity with written materials furnished
to the Fund by the Company specifically for use therein.
(c) Promptly after receipt by an indemnified party hereunder of notice of
the commencement of action, such indemnified party will, if a claim in
respect thereof is to be made against the indemnifying party
hereunder, notify the indemnifying party of the commencement thereof;
but the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party
otherwise than under this Section 10. In case any such action is
brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party
will be entitled to participate therein and, to the extent that it may
wish to, assume the defense thereof, with counsel satisfactory to such
indemnified party, and after notice from the indemnifying party to
such indemnified party of its election to assume the defense thereof,
the indemnifying party will not be liable to such indemnified party
under this Section 10 for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation.
11. Miscellaneous.
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(a) Amendment and Waiver. Neither this Agreement, nor any provision
hereof, may be amended, waived, discharged or terminated orally, but
only by an instrument in writing signed by all parties hereto.
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(b) Notices. All notices and other communications hereunder shall be given
or made in writing and shall be delivered personally, or sent by
telex, telecopier or registered or certified mail, postage prepaid,
return receipt requested, or recognized overnight courier service to
the party or parties to whom they are directed at the following
addresses, or at such other addresses as may be designated by notice
from such party to all other parties.
To the Company:
Aetna Life Insurance and Annuity Company
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxx, Counsel
To the Fund:
The Xxxxxxx Fund, Inc.
World Trade Center Baltimore, 00xx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx Xxxxxx Xxxx
To the Distributor:
The Xxxxxxx Co.
World Trade Center Baltimore, 00xx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx Xxxxxx Xxxx
Any notice, demand or other communication given in a manner prescribed in
this subsection (b) shall be deemed to have been delivered on receipt.
(c) Successors and Assigns. This agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective permitted
successors and assigns.
(d) Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one
agreement, and any party hereto may execute this Agreement by signing
any such counterpart.
(e) Severability. In case any one or more of the provisions contained in
this Agreement should be invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining
provisions contained herein shall not in any way be affected or
impaired thereby.
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(f) Entire Agreement. This Agreement constitutes the entire agreement and
understanding between the parties hereto and supersedes all prior
agreement and understandings relating to the subject matter hereof.
(g) Governing Law. This Agreement shall be governed and interpreted in
accordance with the laws of the State of Connecticut.
(h) Non Exclusivity. It is understood by the parties that this Agreement
is not an exclusive arrangement in any respect.
(i) Confidentiality. The terms of this Agreement and the Schedules thereto
will be held confidential by each party except to the extent that
either party or its counsel may deem it necessary to disclose such
terms.
12. Limitation on Liability of Directors, etc.
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This agreement has been executed on behalf of the Fund by the undersigned
officer of the Fund in his or her capacity as an officer of the Fund. The
obligations of this agreement shall be binding upon the assets and property
of the Fund only and shall not be binding on any Director, officer or
shareholder of the Fund individually.
IN WITNESS WHEREOF, the undersigned have executed this Agreement by their
duly authorized officers effective as of the 1st day of May, 2000.
AETNA LIFE INSURANCE AND ANNUITY COMPANY
By: /s/ Xxxxxx X. XxXxxxx
Name: Xxxxxx X. XxXxxxx
Title: V.P.
THE XXXXXXX FUND, INC.
By: /s/ Xxxxxx X. Xxxxxxx, Xx.
Name: Xxxxxx X. Xxxxxxx, Xx.
Title: President
THE XXXXXXX CO.
By: /s/ Xxxxxx X. Xxxxxxx, Xx.
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Name: Xxxxxx X. Xxxxxxx, Xx.
Title: President
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Schedule A
List of Series Available
Xxxxxxx DEM Equity (Institutional Shares)
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Schedule B
(For any future separate accounts--See Section 1)
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