DISTRIBUTION AGREEMENT
BY AND BETWEEN
COMMONWEALTH ANNUITY AND LIFE INSURANCE COMPANY
(FORMERLY ALLMERICA FINANCIAL LIFE INSURANCE AND ANNUITY COMPANY)
AND
SECURITY DISTRIBUTORS, INC.
THIS DISTRIBUTION AGREEMENT ("Agreement") is made as of the 21st day of
November, 2006, by and between COMMONWEALTH ANNUITY AND LIFE INSURANCE COMPANY
(formerly, ALLMERICA FINANCIAL LIFE INSURANCE AND ANNUITY COMPANY), a life
insurance company organized under the laws of the Commonwealth of Massachusetts
("INSURER"), for itself and on behalf of each of its Separate Accounts, as
defined herein, and SECURITY DISTRIBUTORS, INC., a corporation organized and
existing under the laws of the State of Kansas ("SDI" or "UNDERWRITER") (each a
"PARTY"; collectively, the "PARTIES").
RECITALS
WHEREAS, Insurer currently has one or more agreements with VeraVest
Investments, Inc. ("VERAVEST") pursuant to which VeraVest serves as the
exclusive principal underwriter of the Contracts (defined below), and pursuant
to which Insurer performs certain services on behalf of VeraVest in its capacity
as principal underwriter; and
WHEREAS, Insurer has entered into an administrative services arrangement
regarding the Contracts with SDI and Security Benefit Life Insurance Company, an
affiliate of SDI ("SECURITY BENEFIT" or "ADMINISTRATOR"), which arrangement is
memorialized in that certain Work Assignment, dated December 30, 2005, by and
among Insurer, Security Benefit, and SDI (the "WORK ASSIGNMENT"), as
supplemented by the terms and conditions of that certain Third Party
Administrator Agreement (the "TPA AGREEMENT"), dated August 22, 2005, by and
among Security Benefit, SDI, and The Xxxxxxx Xxxxx Group, Inc., an affiliate of
Insurer ("GS GROUP"); and
WHEREAS, Insurer desires to replace VeraVest as the principal underwriter
of the Contracts in light of the proposed cessation of VeraVest's operations;
and
WHEREAS, GS GROUP and Insurer have requested that SDI act as the principal
underwriter of the Contracts, and
WHEREAS, SDI has considered such request in good faith and is willing, as
an accommodation to GS GROUP and Insurer in light of the above-described
administrative
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services arrangement, to serve as the principal underwriter of the Contracts
under the terms and conditions expressly set forth herein.
NOW THEREFORE, in consideration of their mutual covenants and other good
and valuable consideration the receipt and sufficiency the Parties hereby
acknowledge, the Parties agree as follows:
1. DEFINITIONS
Unless otherwise defined herein, the capitalized terms appearing in this
Agreement shall have the following meanings:
(a) "AFFILIATE" -- with respect to a person, any other person controlling,
controlled by, or under common control with, such person.
(b) "APPLICATION" -- an application for a Contract and any other forms
required to be completed before a Contract is issued.
(c) "CONTRACTS" -- the class or classes of variable annuity contracts
issued by the Insurer that are the subject of the Work Assignment, as
supplemented by terms and conditions of the TPA Agreement, and that are set
forth on Schedule 2 to this Agreement as in effect at the Effective Date, and
such other classes of variable insurance products that may be added to Schedule
2 from time to time in accordance with Section 18 of this Agreement, and
including any riders to such Contracts and any other contracts offered in
connection therewith. For purposes of Sections 3 and 14 of this Agreement,
Contracts shall include Premiums for the Contracts.
(d) "DISTRIBUTOR" -- a registered broker-dealer that has entered into a
Service Agreement with Underwriter pursuant to Section 3 of this Agreement.
(e) "EFFECTIVE DATE" -- the effective date of this Agreement shall be
January 1, 2007 or such later date as the Parties may mutually agree upon in
writing.
(f) "EXCHANGE ACT" - the Securities Exchange Act of 1934, as amended.
(g) "FUND"- a mutual fund registered with the SEC as an open-end management
investment company under the 1940 Act and specified on Schedule 1 to this
Agreement as in effect on the Effective Date, and such other investment
companies that may be added to Schedule 1 from time to time in accordance with
Section 18 of this Agreement.
(h) "PREMIUM" -- a payment made under a Contract.
(i) "PROMPTLY" - shall mean as soon as practicable but in no event later
than two (2) business days following the event giving rise to the need for
prompt action.
(j) "PROSPECTUS" -- the prospectus and statement of additional information,
if any, included within a Registration Statement, except that, if the most
recently filed prospectus and statement of additional information filed pursuant
to Rule 497 under the Securities Act
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subsequent to the date on which a Registration Statement became effective
differs from the prospectus and statement of additional information included
within such Registration Statement at the time it became effective, the term
"Prospectus" shall refer to the most recently filed prospectus and statement of
additional information filed under Rule 497 under the Securities Act, from and
after the date on which they each shall have been filed. For purposes of Section
14 of this Agreement, the term "any Prospectus" means any document which is or
at any time was a Prospectus within the meaning of this definition.
(k) "REGISTRATION STATEMENT" -- at any time that this Agreement is in
effect, each currently effective registration statement, or currently effective
post-effective amendment thereto, relating to the Contracts. For purposes of
Section 14 of this Agreement, the term "Registration Statement" means any
document that is or at any time was a Registration Statement within the meaning
of this definition.
(l) "LAWS AND REGULATIONS" -- the Securities Act, the Exchange Act, and the
1940 Act, and the rules and regulations promulgated by the SEC thereunder, as
well as the rules and regulations of the National Association of Securities
Dealers, Inc. ("NASD"). "REGULATIONS," when used alone, shall mean the
regulations promulgated under the specific law or laws referred to.
(m) "REPRESENTATIVE" -- when used with reference to Underwriter or a
Distributor, an individual who is an associated person thereof within the
meaning of the Exchange Act.
(n) "SE2" -- a division of Security Benefit.
(o) "SECURITIES ACT" -- the Securities Act of 1933, as amended.
(p) "SEC" -- the U.S. Securities and Exchange Commission.
(q) "SEPARATE ACCOUNT" - a separate account of the Insurer named on
Schedule 1 hereto that is registered with the SEC and that is used to support
benefits under one or more Contracts.
(r) "SERVICE AGREEMENT" - a service agreement in the form set out in
Schedule 5 hereto.
(s) "SHARES" - shares representing a class or series of a Fund in which a
Subaccount invests.
(t) "SUBACCOUNT" - a subaccount of a Separate Account that invests
exclusively in the shares of a Fund.
(u) "1940 ACT" - the Investment Company Act of 1940, as amended.
2. SALE OF CONTRACTS
(A) STATUS OF PRINCIPAL UNDERWRITER
(i) Insurer, on its behalf and on behalf of each Separate Account, hereby
appoints Underwriter, and Underwriter hereby accepts such appointment, to serve
during the term of this
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Agreement as the exclusive principal underwriter of the Contracts in each state
and other U.S. jurisdiction in which the Contracts may lawfully be offered and
sold. Insurer agrees that at no time shall Underwriter be required by this
Agreement to engage in any efforts to offer, solicit, sell, or negotiate
Contracts. Insurer further agrees that the scope of Underwriter's appointment
shall be limited to servicing currently existing and outstanding Contracts as
well as Contracts that Insurer may in the future be required to issue pursuant
to the terms of such Contracts or as may be expressly agreed to in writing by
the Parties. The activities of Underwriter with respect to the Contracts shall
be limited to those activities expressly enumerated in Schedule 3 hereto.
(ii) Underwriter shall function at all times as, and be deemed to be, an
independent contractor and neither Underwriter, nor any of its officers,
directors, employees, or agents is or shall be an employee of Insurer in the
performance of Underwriter's duties hereunder. Nothing in this Agreement shall
restrict or in any way limit Underwriter from entering into distribution
arrangements with other issuers or investment companies.
(iii) Insurer acknowledges that Underwriter is not licensed as an insurance
agent or producer and that, notwithstanding anything herein to the contrary,
Underwriter shall not be required to perform or undertake any activities for
which such insurance licensing may be required.
(iv) Underwriter shall assist Insurer with Insurer's obligation under Rule
38a-1 under the 1940 Act, to review, no less frequently than annually, the
adequacy of Underwriter's written compliance policies and procedures and the
effectiveness of their implementation, as relevant to Underwriter's provision of
services to the Insurer pursuant to this Agreement, by providing copies of such
policies and procedures to the Insurer's Chief Compliance Officer on an annual
basis, and providing such other assistance to which the Parties may, from time
to time, mutually agree upon in writing.
(v) Notwithstanding anything to the contrary in this Agreement, no
provision of this Agreement shall be construed to relieve the Underwriter or the
Administrator of any obligation under the Work Assignment and/or TPA Agreement.
(B) NO ALTERATION, DISCHARGE, ETC., OF CONTRACTS
Underwriter shall not have authority, and shall not grant authority to
Underwriter Representatives, Distributors, or Distributor Representatives, on
behalf of Insurer: to make, alter, waive, change or discharge any Contract or
other contract entered into pursuant to a Contract; to waive any Contract
forfeiture provision; to extend the time of paying any Premium; to endorse
checks or money orders payable to Insurer, or to receive any monies or Premiums
(except for the sole purpose of forwarding monies or Premiums to Insurer)
without the prior express written consent of the Insurer. Underwriter shall not
expend, nor contract for the expenditure of, the funds of Insurer, except as
otherwise expressly agreed to in writing by Insurer and Underwriter. Underwriter
shall not possess or exercise any authority on behalf of Insurer other than that
expressly conferred on Underwriter by this Agreement or the Work Assignment, as
supplemented by the terms and conditions of the TPA Agreement. To the extent
that Underwriter receives a check payable to Insurer, Underwriter, or an
Affiliate thereof, and all or
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part of such check represents a Premium, Underwriter shall handle such check in
accordance with Section 3(b) hereof.
(C) OPINION OF INSURER'S COUNSEL
The obligations of Underwriter under this Agreement are subject to the
continuing accuracy of the representations and warranties of Insurer contained
in this Agreement, to the performance by Insurer of its obligations hereunder,
and to the condition that (i) prior to the Effective Date of this Agreement,
Underwriter shall have received an opinion of the general counsel, an associate
general counsel or an assistant general counsel of Insurer, such opinion to be
substantially to the effect set forth in Exhibit A hereto; and (ii) upon the
written request of Underwriter, Underwriter shall receive an opinion from the
general counsel, associate general counsel or assistant general counsel to
Insurer, that is reasonably acceptable to Underwriter, such opinion to be
substantially to the effect set forth in Exhibit B hereto.
3. ACTIVITIES, APPLICATIONS, AND PREMIUMS
Underwriter agrees that any activities that it engages in with respect to
the Contracts shall be subject to applicable Laws and Regulations, written
procedures provided by Insurer (provided such procedures do not expand the scope
of the activities required of Underwriter under this Agreement), and the
following:
(a) In connection with its activities with respect to the Contracts,
Underwriter shall only use forms and other materials approved by Insurer.
Insurer shall notify Underwriter of any forms or other documents required by
state law to be used in connection with the servicing of the Contracts.
(b) Insurer agrees that the Prospectus and any forms and other materials
approved by Insurer for use with the Contracts shall direct (or be revised to
direct) the reader to send all Premiums either to Insurer directly or to Insurer
in care of Administrator but in any event not to Underwriter. Should Underwriter
at any time receive a Premium, it shall hold such Premium in a fiduciary
capacity and remit the Premium in full promptly after receipt, together with any
applications, forms, and any other documentation received, to Administrator
unless and until Insurer instructs Underwriter in writing to remit such Premiums
directly to Insurer at the address listed below. Upon inquiry, Underwriter shall
instruct any persons seeking to make Premium payments to Insurer to make checks
in payment of Premiums payable to the order of "Commonwealth Annuity and Life
Insurance Company." Premiums may be transmitted by wire order from Underwriter
to Insurer in accordance with written procedures reasonably agreed upon by the
Parties. All such Premiums shall be the property of Insurer.
(c) Underwriter acknowledges that Insurer shall have the right to reject,
in whole or in part, any Application, but only for reasonable cause and only
after giving prior notice to Underwriter. In the event an Application is
rejected, any Premium submitted therewith shall be returned by Insurer to the
applicant. Insurer shall promptly notify Underwriter and, if applicable, the
Distributor who submitted the Application, of such action. In the event that a
purchaser exercises his or her free look right under their Contract, any amount
to be refunded as provided in such Contract shall be so refunded to the
purchaser by Insurer. Insurer shall notify Underwriter and, if applicable, the
Distributor who solicited the Contract, of such action.
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(d) Insurer acknowledges and agrees that Underwriter has no intention of
making, nor shall Underwriter be obligated to make, any recommendations with
respect to the Contracts, the Separate Accounts, the Subaccounts, or the Funds.
To the extent that Underwriter or Underwriter Representatives make
recommendations, or to the extent required by applicable Laws and Regulations,
Underwriter and Underwriter Representatives will comply with all applicable Laws
and Regulations in the making of such recommendations.
(e) During the term of this Agreement, neither Underwriter nor any
Underwriter Representative shall intentionally encourage a Contract owner to
exchange his or her Contract for any other insurance contract except with
Insurer's consent. Notwithstanding the foregoing sentence, Insurer acknowledges
and agrees that Security Benefit, SDI, and their affiliates currently and in the
future may conduct business relating to, among other things, variable annuities,
variable life insurance, and mutual funds, both proprietary and non-proprietary,
which business is unrelated to the Contracts, and that exchanges of Contracts
may result from these other business activities. Accordingly, this paragraph
shall not preclude Security Benefit, SDI, or their affiliates from soliciting,
providing services or products to, or otherwise doing any business with, any
Contract owner: (i) who is an existing customer of theirs on the Effective,
Date, (ii) who independently contacts Security Benefit, SDI, or their
affiliates, (iii) who responds to a general solicitation of Security Benefit,
SDI, or their affiliates where such general solicitation is made without regard
to the recipients' status as a Contract owner, or (iv) who is contacted by
Security Benefit, SDI, or their affiliates based on information independently
derived without regard to or without use of any confidential information
obtained hereunder.
(f) In the event that Underwriter agrees in writing to solicit, sell, or
negotiate Contracts in the future, no Underwriter Representative shall solicit
the sale of a Contract unless at the time of such solicitation such individual
is:
(i) properly licensed by applicable state insurance and state and federal
securities regulatory authorities; and
(ii) appointed as an insurance agent of Insurer, except as may be otherwise
agreed to by Insurer.
(g) Neither Underwriter nor any Underwriter Representative shall give any
written information or make any written or oral representation in regard to a
Contract that is inconsistent with the then-currently effective Prospectus for
such Contract, or in the then-currently effective prospectus or statement of
additional information for a Fund, or in advertising or other materials given to
Underwriter and approved by Insurer. This provision shall not apply to any
information or representation made in reliance on information supplied by
Insurer.
(h) In the event that Underwriter agrees in writing to solicit, sell, or
negotiate Contracts in the future, neither Underwriter nor any Underwriter
Representative shall offer, attempt to offer, or solicit Applications for the
Contracts or deliver the Contracts, in any state or other jurisdiction where
such offer or solicitation may not be lawfully made.
(i) Following the Parties' execution of this Agreement, Insurer and
Underwriter shall work together and use their best efforts to obtain, on or
before the Effective Date, executed Service Agreements from all Distributors to
whom Insurer desires Underwriter to pay
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commissions pursuant to this Agreement. Such Service Agreements shall bein the
form set out in Schedule 5 hereto, subject to such changes as the Parties may
mutually agree to in writing from time to time. Underwriter shall be obligated
to pay commissions only to Distributors that have entered into Service
Agreements that are currently effective at the time of payment. In no case shall
Underwriter pay or be obligated to pay commissions or other compensation to any
person who is not a registered broker-dealer.
(j) Underwriter shall, from time to time, advise Insurer of any Distributor
Representatives seeking appointments as insurance agents. Insurer shall take
such steps, including the payment of fees, as may be necessary or appropriate to
give effect to such appointments, provided, however, that Insurer, in its sole
discretion, may refuse to appoint or renew the appointment of any Distributor
Representative, and may condition such appointments on the reimbursement by
Distributors of any licensing and/or appointment fees incurred by Insurer in
conjunction with the requested appointment, as well as the payment by
Distributors of a reasonable service fee as determined by Insurer. In the event
Insurer refuses to renew the appointment of a Distributor Representative, it
shall not act except upon ten (10) days prior written notice to Underwriter and
Distributor.
(k) In the event that Underwriter agrees in writing to solicit or sell
Contracts in the future, Underwriter shall, from time to time, advise Insurer of
any Underwriter Representatives seeking appointments as insurance agents.
Insurer shall take such steps, including the payment of fees, as may be
necessary or appropriate to give effect to such appointments, provided, however,
that Insurer, in its sole discretion, may refuse to appoint or renew the
appointment of any Underwriter Representative upon ten (10) days prior written
notice to Underwriter.
(j) The Underwriter shall comply with all applicable laws and regulations
designed to prevent money "laundering", and if required by such laws or
regulations, to share with the Insurer information about individuals, entities,
organizations and countries suspected of possible terrorist or money
"laundering" activities in accordance with Section 314(b) of the USA Patriot
Act. In particular, the Underwriter agrees that, as part of its ongoing
compliance with the USA Patriot Act, it will, from time to time, verify that no
Contract owner, including a principal or beneficial Contract owner, is a
"specially designated national" or a person from an embargoed or "blocked"
country as indicated by the OFAC list of such persons. The Parties acknowledge
that this function is currently, and will be, performed by Administrator under
the Work Assignment.
4. ADMINISTRATION
(a) Insurer or its designee shall administer the Contracts in accordance
with their terms and applicable laws and regulations, such administration to be
performed in all respects at a level commensurate with those standards
prevailing in the variable insurance industry, it being understood and agreed to
by the Parties that during the term of the Work Assignment, Insurer has retained
se2 to administer the Contracts in accordance with the terms and conditions of
the Work Assignment, as supplemented by the terms and conditions of the TPA
Agreement. Neither Insurer nor its officers, directors, employees, or agents
(which, for these purposes shall not include Underwriter Representatives or
Distributor Representatives) shall give any written information or make any
written or oral representation in regard to a Contract that is inconsistent with
the then currently effective Prospectus for such Contract, or the then currently
effective
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prospectus or statement of additional information for a Fund, or in current
advertising or other materials for such Contract that have been authorized by
Underwriter.
(b) Insurer, on behalf of Underwriter, shall prepare and deliver the
confirmations required to be delivered by and in accordance with Rule 10b-10
under the Exchange Act, administrative interpretations thereunder, and any NASD
requirements, it being understood and agreed to by the Parties that during the
term of the Work Assignment, Insurer has retained se2 to process the
confirmations in accordance with the terms and conditions of the Work
Assignment, as supplemented by the terms and conditions of the TPA Agreement.
(c) Insurer, on behalf of Underwriter, shall maintain and preserve, or
cause to be maintained and preserved, such books and records with respect to the
Contracts in accordance with the requirements of Rules 17a-3 and 17a-4 under the
Exchange Act including, to the extent such requirements apply, all books and
records with respect to confirmations provided under Rule 10b-10, it being
understood and agreed to by the Parties that during the term of the Work
Assignment, Insurer has retained se2 to maintain such books and records on
behalf of Insurer in accordance with the terms and conditions of the Work
Assignment, as supplemented by the terms and conditions of the TPA Agreement.
Underwriter acknowledges that such books and records are at all times subject to
inspection by the SEC and the NASD in accordance with Section 17(a) of the
Exchange Act and shall provide copies thereof upon Insurer's request.
(d) Each Party agrees to comply, at a minimum, with all applicable privacy
laws, including those promulgated pursuant to Title V of the Gramm Xxxxx Xxxxxx
Act of 1999. Each Party agrees to maintain physical, electronic and procedural
safeguards designed to protect the security, confidentiality, and integrity of,
and to prevent unauthorized access to or use of, information about Contract
owners and participants under group Contracts ("Customer Information"). In
particular, Underwriter agrees to conduct its activities under this Agreement in
conformity with the Customer Information privacy policies of the Insurer as in
effect from time to time. Each Party acknowledges that any breach of the
foregoing agreements as to the other party would result in immediate and
irreparable harm to such other party for which there would be no adequate remedy
at law and agrees that in the event of such a breach such other party will be
entitled to equitable relief by way of temporary and permanent injunctions, as
well as such other relief as any court of competent jurisdiction shall deem
appropriate.
5. MARKETING
(a) No Contract may be marketed or offered for sale without the
Underwriter's prior written consent. Insurer represents that the Contracts are
not currently being marketed by it and it has no present intention to market the
Contracts.
(b) (i) Underwriter shall have responsibility for controlling the marketing
name, marketing arrangements, and marketing practices respecting the Contracts
and, subject to the effectiveness of the Registration Statement respecting the
Contracts and approval of the Contracts in the states and other jurisdictions,
the timing and commencement of the offering of the Contracts. Underwriter shall
have no responsibility for any marketing materials or activity of any type
respecting the Contracts prior to the Effective Date. (ii) Insurer covenants and
agrees that Insurer, its officers, directors and employees shall not engage in
any unlawful sales practices
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concerning the Contracts, as determined under the federal securities laws or
NASD regulations or other applicable law.
(c) Insurer shall be responsible for the design and preparation of all
promotional, sales and advertising material relating to the Contracts. Insurer
may propose any additional or alternative marketing arrangements for the
Contracts, including any proposed marketing name, arrangements, materials and
practices, which shall be subject to Underwriter's prior review and approval.
(d) No promotional, sales or advertising material regarding the Contracts
may be used by any Party without the approval of the other Party. Prior to any
use with members of the public, the following shall be observed:
(i) Each Party shall provide to the other Party copies of all promotional,
sales, and advertising material developed by such Party, if any, for such
other Party's review and written approval. The Party seeking approval shall
specify to the other Party the date on which it would like to receive such
approval.
(ii) Each Party shall use commercially reasonable efforts to meet the other
Party's schedule for approval and shall act reasonably in connection
therewith.
(iii) Insurer shall be responsible for filing all promotional, sales or
advertising material, whether developed by Underwriter or Insurer, as
required, with any state insurance regulatory authorities.
(iv) Underwriter shall be responsible for filing all promotional, sales or
advertising material, whether developed by Underwriter or Insurer, as
required, with the NASD, and state securities regulatory authorities.
(v) Each Party shall notify the other Party promptly of any comments
provided by the NASD or any securities or insurance regulatory authority on
such material, and will cooperate in resolving and implementing any
comments, as applicable, within the timeframe specified by such regulator,
including any extensions granted.
(vi) Each Party shall deliver to the other Party ten final print copies of
all promotional, sales and advertising material developed by such Party.
The Parties acknowledge that such material, to the extent it identifies or
discusses a Fund, may be subject to review and written approval procedures
implemented by that Fund. Each Party reserves the right, after having approved a
piece of material, to object to further use of such material and may require the
other Party to cease use of such material.
6. COMPENSATION
Insurer shall compensate Underwriter for its services in accordance with
Schedule 4 hereto. The compensation and reimbursement set forth in Schedule 4 is
subject to review and adjustment by the mutual written agreement of the Parties.
Such review and adjustment (if any)
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shall occur no more than once each calendar year. The first such review shall be
for the calendar year beginning January 1, 2008.
7. EXPENSES
(A) INSURER
With respect to this Agreement, Insurer shall pay (or will enter into
arrangements providing that persons other than Insurer shall pay) all expenses
in respect of:
(i) the preparation and filing of each Registration Statement for the
Contracts (including each pre-effective and post-effective amendment
thereto) and the preparation and filing of each Prospectus for the
Contracts (including any preliminary and each definitive Prospectus);
(ii) the preparation, insurance underwriting, issuance, and administration
of the Contracts; provided that Insurer shall not be responsible for
expenses, including the expense of a leased line, incurred by
Underwriter in connection with the service center operated by
Underwriter;
(iii) any registration, qualification, or approval of the Contracts for
offer and sale required under the securities, blue-sky or insurance
laws of any state or other jurisdiction;
(iv) all registration fees for the Contracts payable to the SEC and the
NASD, including but not limited to advertisement review fees, and any
other fees associated with the Contracts;
(v) the printing of the Prospectus for the Contracts (or its pro rata
share of expenses in the event the Prospectuses for the Contracts and
the Funds are printed together in one document) and any supplements
thereto for distribution to existing contract owners and, as between
Fund and Insurer, its pro rata share of expenses of mailing the
Prospectuses for the Contracts and the Funds to existing Contract
owners; and
(vi) any sales compensation paid to Distributors.
(B) UNDERWRITER
With respect to this Agreement, Underwriter shall pay (or will enter into
arrangements providing that persons other than Underwriter shall pay) the
following expenses related to its activities hereunder:
(i) the compensation of Underwriter Representatives and employees if any;
(ii) expenses associated with the registration and training of Underwriter
Representatives and other employees involved in the activities
contemplated by this Agreement; and
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(iii) expenses incurred in connection with its registration as a broker or
dealer or the registration or qualification of its officers,
directors or Representatives under federal and state laws.
(C) OTHER EXPENSES
Other than as specifically provided in this Agreement, Insurer shall pay
all expenses that it incurs in connection with this Agreement and shall
reimburse Underwriter for certain expenses as set forth in Schedule 4. Insurer
agrees that Underwriter is entitled to reimbursement of expenses under this
Section 7(c) in connection with variable annuity and variable life contracts
issued by First Allmerica Financial Life Insurance Company ("FAFLIC") that have
been reinsured by Insurer (the "FAFLIC Contracts") and which are the subject of
a separate distribution agreement between Underwriter and FAFLIC of even date
herewith.. Except as specifically provided above or as otherwise agreed to in
writing by the Parties, Insurer shall not bear any responsibility for any other
expenses of the Underwriter and Underwriter Representatives. Notwithstanding
anything to the contrary herein, no provision of this Agreement shall be
construed to relieve the Insurer, Underwriter or the Administrator of the
obligation to bear expenses under the Work Assignment and/or TPA Agreement, or
otherwise to shift the burden of bearing expenses from the Party(ies) to whom
such expense burdens are assigned under the Work Assignment and/or TPA
Agreement.
8. REPRESENTATIONS AND WARRANTIES OF INSURER
Insurer represents and warrants to Underwriter on the Effective Date that:
(a) Insurer has been duly organized and is validly existing as a
corporation in good standing under the laws of the Commonwealth of Massachusetts
with full power and authority to own, lease, and operate its properties and
conduct its business, and duly qualified to transact the business of a life
insurance company and to issue variable insurance products, except as may be
disclosed in writing to Underwriter.
(b) The execution and delivery of this Agreement and the consummation of
the transactions contemplated herein have been duly authorized by all necessary
corporate action by Insurer, and when so executed and delivered this Agreement
shall be the valid and binding obligation of Insurer enforceable in accordance
with its terms.
(c) The consummation of the transactions contemplated herein, and the
fulfillment of the terms of this Agreement, shall not conflict with, result in
any breach in any material respect of any of the terms and provisions of, or
constitute (with or without notice or lapse of time) a default in any material
respect under, the articles of incorporation or bylaws of Insurer, or any
indenture, agreement, mortgage, deed of trust, or other instrument to which
Insurer is a Party or by which it is bound, or, to the best of Insurer's
knowledge, violate in any material respect any law, any order, rule or
regulation applicable to Insurer of any court or of any federal or state
regulatory body, administrative agency or any other governmental instrumentality
having jurisdiction over Insurer or any of its properties.
(d) Each Separate Account has been registered with the SEC as a unit
investment trust or management investment company to the extent required by and
in accordance with the 1940 Act,
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and interests therein have been registered with the SEC to the extent required
by and in accordance with the Securities Act.
(e) Each Registration Statement relating to the Contracts has been declared
effective by the SEC or has become effective in accordance with the Securities
Act, the 1940 Act, or Regulations thereunder, and Insurer has not received any
notice from the SEC with respect to such Registration Statement pursuant to
Section 8(e) of the 1940 Act and no stop order under the Securities Act has been
issued and no proceeding relating thereto has been instituted or threatened by
the SEC.
(f) Insurer has obtained all necessary or customary orders of exemption or
approval from the SEC to permit the distribution of the Contracts pursuant to
this Agreement and to permit the operation of each Separate Account supporting
such Contracts as contemplated by the applicable Registration Statement, and
such orders either apply to Underwriter, as principal underwriter of the
Contracts to the extent necessary or Insurer will cease to engage in the
activities for which such SEC exemption or approval is required in order to
eliminate the need for such order to apply to Underwriter.
(g) The fees and charges deducted under the Contracts, in the aggregate,
are reasonable in relation to the services rendered, the expenses expected to be
incurred, and the risks assumed by the Insurer and the Insurer has made
representations to the foregoing effect in the Registration Statement relating
to each Contract.
(h) Insurer complies with all other applicable provisions of Section 26 of
the 1940 Act, as if it were trustee or custodian of each Separate Account.
(i) Insurer has filed with the Massachusetts Division of Insurance an
annual statement of its financial condition that indicates that Insurer has
capital and surplus or unassigned surplus of not less than $1 million or such
other amount as prescribed by applicable Laws and Regulations or state insurance
laws and regulations; and Insurer, together with its registered separate
accounts, is supervised and examined periodically by the Massachusetts Division
of Insurance.
(j) Each Registration Statement and the related Prospectus comply in all
material respects with the provisions of all applicable Laws and Regulations,
and neither the Registration Statement nor the Prospectus contains an untrue
statement of a material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, in
light of the circumstances in which they were made; provided, however, that none
of the representations and warranties in this Section 8(j) shall apply to
statements or omissions contained in a Registration Statement or Prospectus that
were made in reliance upon and in conformity with information furnished to
Insurer in writing by Underwriter with respect to Underwriter expressly for use
in such Registration Statement or Prospectus.
(k) Each Separate Account has been duly established by Insurer and conforms
to the description thereof in the Registration Statement and the Prospectus for
each Separate Account.
(l) The forms of the Contracts have been approved to the extent required by
the applicable state insurance departments on the pertinent date of each
Registration Statement.
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(m) The Contracts have been duly authorized by Insurer and conform to the
descriptions thereof in the Registration Statement for the Contracts and the
related Prospectus and, when issued as contemplated by such Registration
Statement, shall constitute legal, validly issued and binding obligations of
Insurer in accordance with their terms.
(n) No other consent, approval, authorization or order of any court or
governmental authority or agency is required for the issuance or sale of the
Contracts, the establishment or operation of the Separate Account, or for the
consummation of the transactions contemplated by this Agreement, that has not
been obtained.
(o) Insurer has at all times properly relied on, and complied with,
applicable no-action or interpretive letters issued by the SEC staff in respect
to any Separate Account registration statement where Insurer has elected not to
(i) update such registration statement and (ii) deliver or cause to be delivered
updated Contract prospectuses to Contract owners or participants.
9. UNDERTAKINGS OF INSURER
To the extent that it is not already obligated to do so under the Work
Assignment or TPA Agreement, Insurer undertakes as follows:
(a) Insurer shall take all action necessary or appropriate to maintain the
registration of the Contracts (or interests therein) and each Separate Account
with the SEC and to maintain any registrations and approvals of the Contracts
and each Separate Account with applicable securities or insurance regulatory
bodies or administrative agencies, and Insurer shall maintain the registration
of the Contracts (or interests therein) and each Separate Account with such
state securities regulatory bodies and any other governmental instrumentalities
as required by applicable law.
(b) Insurer shall take all action necessary or appropriate to cause the
Contracts to comply, and to continue to comply, as annuity or life insurance
contracts under applicable state insurance laws and federal tax laws. In the
event of a change in applicable law that renders it impracticable or impossible
to maintain the Contracts as annuity or life insurance contracts, Insurer shall
consult with Underwriter before taking any action respecting the Contracts.
(c) Insurer shall take all action necessary or appropriate to cause each
Separate Account to comply, and to continue to comply, with the provisions of
the 1940 Act and the Regulations applicable to each Separate Account as a
registered investment company classified as a unit investment trust or
management investment company.
(d) Insurer shall not deduct any amounts from the assets of each Separate
Account or enter into a transaction or arrangement involving the Contracts or
each Separate Account or cause each Separate Account to enter into any such
transaction or arrangement without obtaining any necessary or customary
approvals or exemptions from the SEC or any no-action assurance deemed necessary
from the SEC staff and without ensuring that such approval, exemption or
assurance applies to Underwriter as the principal underwriter for the Contracts,
to the extent necessary or appropriate.
13
(e) Insurer shall provide Underwriter with preliminary drafts of any
amendments to Registration Statements, supplements to Prospectuses, exemptive
applications or no-action requests to be filed with or submitted to the SEC or
its staff in connection with the Contracts, each Separate Account, or both.
Insurer shall provide Underwriter with a reasonable opportunity to review and
comment on such drafts before any such materials are filed with the SEC and
shall make such changes as Underwriter may reasonably request. Insurer shall
furnish Underwriter with copies of any such materials or amendments thereto, as
filed with the SEC, promptly after the filing thereof, and any SEC
communications or orders with respect thereto, promptly after receipt thereof.
Insurer shall maintain and keep on file in its principal executive office any
file memoranda or any supplemental materials referred to in such Registration
Statements, exemptive applications and no-action requests and shall maintain
and, as necessary, amend such memoranda or materials and shall provide or
otherwise make available copies of such memoranda and materials to Underwriter.
(f) Insurer shall notify Underwriter immediately upon discovery or in any
event as soon as possible under the following circumstances:
(i) Of any event which makes any material statement made in the
Registration Statement or the Prospectus untrue in any material
respect or results in a material omission in the Registration
Statement or the Prospectus;
(ii) Of any request by the SEC for any amendment to the Registration
Statement, or any supplement to the Prospectus, or statement of
additional information;
(iii) Of the issuance by the SEC of any notice pursuant to Section 8(e) of
the 1940 Act, any stop order with respect to the Registration
Statement or any amendment thereto, or the initiation of any
proceedings for that purpose or for any other purpose relating to
the registration and/or offering of the Contracts;
(iv) Of any event of the Contracts' or the Separate Account's
noncompliance, including, without limitation, the failure of a Fund
to comply, with the applicable requirements of the Internal Revenue
Code or regulations, rulings, or interpretations thereunder that
could jeopardize the Contracts' status as annuity or life insurance
contracts;
(v) Of any change in applicable state insurance laws or regulations
materially adversely affecting the insurance status of the Contracts
or Underwriter's obligations hereunder with respect to the
Contracts;
(vi) Of any loss or suspension of the approval of the Contracts or
distribution thereof by the securities or insurance regulatory body,
administrative agency, or any other governmental instrumentality of
any state or other jurisdiction, any loss or suspension of Insurer's
certificate of authorization to do business or to issue variable
insurance contracts in such state or jurisdiction, or of the lapse
or termination of the Contracts' or each Separate Account's
registration, approval or clearance in such state or jurisdiction;
(vii) Of any material adverse change in the condition (financial or
otherwise) of Insurer or each Separate Account that would cause the
information in the Registration Statement to be materially
misleading; and
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(viii) Of any event which causes a representation or warranty of Insurer
contained in this Agreement to no longer be true.
(g) Insurer shall notify Underwriter in a reasonably timely manner under
the circumstances:
(i) When a Registration Statement has become effective or any
post-effective amendment with respect to a Registration Statement
becomes effective thereafter;
(ii) When any registration of the Contracts (or interests therein) under
the securities laws has become effective to the extent not yet
obtained as of the Effective Date; and
(iii) When approval of the Contract forms under applicable state insurance
laws has been obtained to the extent not yet obtained as of the
Effective Date.
(h) Insurer shall provide Underwriter access to such records, officers and
employees of Insurer at reasonable times as is necessary to enable Underwriter
to fulfill its obligation, as the underwriter under the Securities Act for the
Contracts and as principal underwriter for each Separate Account under the 1940
Act, to perform due diligence and to use reasonable care.
(i) Insurer shall use its best efforts to timely file each post-effective
amendment to a Registration Statement, Prospectus, annual reports on Form N-SAR,
and all other reports, notices, statements, and amendments required to be filed
by or for Insurer and each Separate Account with the SEC under any applicable
Regulations. Insurer shall timely file Rule 24f-2 notices required to be filed
by or for Insurer and each Separate Account with the SEC under applicable
Regulations. To the extent there occurs an event or development (including,
without limitation, a change of applicable law, regulation, or administrative
interpretation) warranting an amendment to the Registration Statement or
supplement to the Prospectus, Insurer shall use its best efforts to timely
prepare and file such amendment or supplement with the SEC.
(j) Insurer shall provide Underwriter with as many copies of the Prospectus
(and any amendments or supplements to the Prospectus) as Underwriter may
reasonably request.
(k) Insurer shall deliver to Underwriter, as soon as practicable after it
becomes available, the annual statement for Insurer and for each Separate
Account in the form filed.
(l) Insurer shall furnish to Underwriter without charge promptly after
filing a notice and hyperlink to each Registration Statement and post-effective
amendment thereto, including financial statements and all exhibits not
incorporated therein by reference.
(m) Insurer shall at all times properly rely on, and comply with,
applicable no-action or interpretive letters issued by the SEC staff in respect
of any Separate Account registration statement, where the election has been made
to not (i) update such registration statement and/or (ii) deliver or cause to be
delivered updated Contract prospectuses to Contract owners or participants.
Insurer shall notify Underwriter promptly in the event it becomes necessary to
(1) update such a registration statement by the filing of a post-effective
amendment and/or (2) deliver or cause to be delivered a currently effective
prospectus to a Contract owner or participant of a group Contract.
15
10. REPRESENTATIONS AND WARRANTIES OF UNDERWRITER
Underwriter represents and warrants to Insurer on the Effective Date as follows:
(a) Underwriter has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Kansas with full
power and authority to own, lease, and operate its properties and to conduct its
business, and is in good standing, in each state in which its business so
requires.
(b) The execution and delivery of this Agreement and the consummation of
the transactions contemplated herein have been duly authorized by all necessary
corporate action by Underwriter, and when so executed and delivered this
Agreement shall be the valid and binding obligation of Underwriter enforceable
in accordance with its terms.
(c) The consummation of the transactions contemplated herein, and the
fulfillment of the terms of this Agreement, shall not conflict with, result in
any breach in any material respect of any of the terms and provisions of, or
constitute (with or without notice or lapse of time) a default in any material
respect under, the articles of incorporation or bylaws of Underwriter, or any
indenture, agreement, mortgage, deed of trust, or other instrument to which
Underwriter is a party or by which it is bound, or to the best of Underwriter's
knowledge violate in any material respect any law, or, to the best of
Underwriter's knowledge, any order, rule or regulation applicable to Underwriter
of any court or of any federal or state regulatory body, administrative agency
or any other governmental instrumentality having jurisdiction over Underwriter
or any of its properties.
(d) Underwriter is registered as a broker-dealer under the Exchange Act, is
a member of the NASD, and is duly registered as a broker-dealer under the
securities laws of the states and other jurisdictions to the extent required in
connection with its obligations under this Agreement.
(e) Underwriter is and shall remain during the term of this Agreement in
compliance with Section 9(a) of the 1940 Act.
11. UNDERTAKINGS OF UNDERWRITER
Underwriter undertakes as follows:
(a) Underwriter shall train, supervise, and be solely responsible for the
conduct of its Representatives in connection with their activities relating to
the Contracts, and shall supervise their compliance with applicable rules and
regulations. Except as provided for in section 2(a)(iv) of this Agreement,
Underwriter shall not be responsible under 1940 Act Rule 38a-1 or otherwise for
the compliance program or compliance activities of the Separate Accounts.
(b) Underwriter will use its best efforts to maintain its registration as a
broker-dealer under the Exchange Act and its membership with the NASD, and will
use its best efforts to maintain its registration as a broker-dealer with the
applicable securities authorities where necessary in connection with its
obligations under this Agreement; provided, however, that
16
nothing in this Agreement shall obligate Underwriter to register or maintain its
registration as a broker or dealer if, in the discretion of Underwriter, such
registration is not necessary for its duties under this Agreement.
(c) Underwriter shall be responsible for its own conduct and the
employment, control, and conduct of its officers, employees, and agents and for
injury to such officers, employees, or agents or to others through its officers,
employees, or agents. Underwriter assumes full responsibility for its officers,
employees, and agents under applicable Laws and Regulations and agrees to pay
all employee taxes thereunder.
(d) Underwriter will notify Insurer if its broker-dealer registration or
NASD membership is terminated or if it is the subject of any proceeding that, in
its reasonable judgment, is likely to result in such termination.
(e) Underwriter shall notify Insurer immediately upon discovery or in any
event as soon as possible under the following circumstances:
(i) Of any material adverse change in the condition (financial or
otherwise) of Underwriter that would materially affect Underwriter's
obligations under this Agreement with respect to the Contracts; and
(ii) Of any event which causes a representation or warranty of
Underwriter contained in this Agreement to no longer be true.
(f) The Insurer has agreed to develop, adopt and maintain policies and
procedures regarding transactions in Separate Account units reasonably designed
to complement the disruptive trading policies of various Funds and, from time to
time, to implement procedures regarding transactions in Separate Account units
reasonably designed to effectuate the Funds' procedures for preventing
disruptive trading in Fund shares. In particular, in the event that a Fund or a
Fund's distributor identifies a particular Contract owner (or group Contract
participant) transactions in Separate Account units as directly or indirectly
violating the Fund's disruptive trading policies, the Insurer has agreed, at the
written request of the Fund or its distributor, to restrict or prohibit further
transactions in Account units by such Contract owner (or participants) which
could result in additional purchases and redemptions of shares of the Fund in
violation of the Fund's disruptive trading policies. Underwriter agrees to
follow, and assist the Insurer in following, the policies and procedures adopted
by the Insurer regarding transactions in Separate Account units.
12. RECORDS
Insurer and, subject to Section 4(c) above, Underwriter each shall maintain
such accounts, books, records, and other documents as are required to be
maintained by each of them by applicable Laws and Regulations in connection with
this Agreement and shall preserve such accounts, books, records, and other
documents for the periods prescribed by such Laws and Regulations The accounts,
books, records, and other documents of Insurer, each Separate Account, and
Underwriter as to all transactions hereunder shall be maintained so as to
clearly and accurately disclose the nature and details of the transactions,
including such accounting
17
information as necessary to support the reasonableness of the amounts paid by
Insurer hereunder. Each Party shall have the right to inspect and audit such
accounts, books, records, and other documents of the other Party during normal
business hours upon reasonable written notice to the other Party. Each Party
shall keep confidential all information obtained pursuant to such an inspection
or audit, and shall disclose such information to third parties only upon receipt
of written authorization from the other Party or as otherwise described in
Section 15, below.
13. INVESTIGATIONS AND PROCEEDINGS
(A) COOPERATION
Underwriter and Insurer shall cooperate fully in any federal or state
regulatory investigation or proceeding or judicial proceeding with respect to
Insurer, Underwriter, their Affiliates and their agents, Representatives or
employees to the extent that such investigation or proceeding is in connection
with the Contracts that are the subject of this Agreement. Without limiting the
foregoing, Insurer and Underwriter shall notify each other promptly of any
notice of any regulatory investigation or proceeding or judicial proceeding,
arising in connection with the Contracts that are the subject of this Agreement,
received by either Party with respect to Insurer, Underwriter, or any of their
Affiliates, agents, Representatives, or employees or which may affect Insurer's
or Underwriter's obligations under this Agreement.
(B) CUSTOMER COMPLAINTS
In the event that Underwriter or Insurer receives a substantive complaint
from a Contract owner (or group Contract participant) about the other, each
shall notify the other promptly. In addition, Insurer agrees to provide
Underwriter, upon Underwriter's request (but no more than once per calendar
quarter), a copy of Insurer's complaint log. Insurer shall handle all complaints
other than those that relate to Underwriter in its capacity as principal
underwriter of the Contracts. To the extent a complaint involves or may affect
both Parties, Underwriter and Insurer shall cooperate in investigating such
complaint and any response by either Party to such complaint shall be sent to
the other Party for written approval not less than five business days prior to
its being sent to the customer or any regulatory authority, except that if a
more prompt response is required, the proposed response shall be communicated by
telephone or facsimile. In any event, neither Party shall release any such
response without the other Party's prior written approval.
14. INDEMNIFICATION
(A) BY UNDERWRITER
Underwriter agrees to indemnify and hold harmless Insurer and each of its
directors and officers and each person, if any, who controls Insurer within the
meaning of Section 15 of the Securities Act (collectively, the "Indemnified
Parties" for purposes of this Section 14(a)), against any and all losses,
claims, expenses, damages, liabilities (including amounts paid in settlement
with the written consent of Underwriter) or litigation (including legal and
other expenses) to which the Indemnified Parties may become subject under any
statute or regulation, at common
18
law, or otherwise, insofar as such losses, claims expenses, damages, liabilities
(or actions in respect thereof) or settlements:
(i) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact or omission or alleged
omission to state a material fact required to be stated therein or
necessary in order to make the statements therein not misleading, in
light of the circumstances in which they were made, contained in any
Registration Statement or in any Prospectus, but only to the extent
that such untrue statement or alleged untrue statement or omission
or alleged omission was made in reliance upon and in conformity with
information furnished in writing to Insurer by Underwriter
specifically for use in the preparation of any such Registration
Statement or any amendment thereof or supplement thereto; or
(ii) result because of any use by Underwriter or any Underwriter
Representative of promotional, sales, or advertising material not
authorized by Insurer or any written or oral misrepresentations by
Underwriter or any Underwriter Representative (other than statements
made in reliance on information supplied by Insurer) or any unlawful
sales practices concerning the Contracts by Underwriter or any
Underwriter Representative under applicable Laws and Regulations or
other applicable law, or from the failure to deliver the Prospectus
for the Funds to the extent required in connection with any offer by
Underwriter or Underwriter Representative of a Contract to a
prospective purchaser; or
(iii) result from any claims by agents or Representatives or employees of
Underwriter for commissions or other compensation or remuneration of
any type; or
(iv) arise out of or result from any material breach by Underwriter or
any Underwriter Representative of any provision of this Agreement.
This indemnification shall be in addition to any liability that Underwriter
may otherwise have; provided, however, that no Indemnified Party shall be
entitled to indemnification pursuant to this provision if such loss, claim,
expense, damage, liability or litigation is due to the willful misfeasance, bad
faith, or gross negligence in the performance of such Indemnified Party's duties
or by reason of such Indemnified Party's reckless disregard of obligations and
duties under this Agreement or to Insurer.
Underwriter shall not be liable under this indemnification provision with
respect to any claim made against an Indemnified Party unless such Indemnified
Party shall have notified Underwriter in writing within a reasonable time after
the summons or other first legal process giving information of the nature of the
claim shall have been served upon such Indemnified Party (or after such
Indemnified Party shall have received notice of such service on any designated
agent), but failure to notify Underwriter of any such claim shall not relieve
Underwriter from any liability which it may have to the Indemnified Party
against whom such action is brought otherwise than on account of this
indemnification provision. In case any such action is brought against the
Indemnified Party, Underwriter will be entitled to participate, at its own
expense, in the defense thereof. Underwriter also shall be entitled to assume
the defense thereof, with counsel reasonably satisfactory to the Indemnified
Party named in the action. After notice from Underwriter to such Party of
Underwriter's election to assume the defense thereof, the Indemnified Party
shall bear the fees and expenses of any additional legal counsel retained by it,
19
and Underwriter will not be liable to such Party under this Agreement for any
legal or other expenses subsequently incurred by such Party independently in
connection with the defense thereof other than reasonable costs of
investigation.
Underwriter agrees to promptly notify Insurer of the commencement of any
litigation or proceedings against it or a Fund or any of Underwriter's
directors, officers, employees or agents in connection with the sale of any
Contracts.
(B) BY INSURER
Insurer agrees to indemnify and hold harmless Underwriter and each of its
directors and officers and each person, if any, who controls Underwriter within
the meaning of Section 15 of the Securities Act (collectively, the "Indemnified
Parties" for purposes of this Section 14(b)), against any and all losses, claims
expenses, damages, liabilities (including amounts paid in settlement with the
written consent of Insurer) or litigation (including legal and other expenses)
to which the Indemnified Parties may become subject under any statute or
regulation, at common law, or otherwise, insofar as such losses, claims
expenses, damages, liabilities (or actions in respect thereof) or settlements:
(i) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact or omission or alleged
omission to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, in light of
the circumstances in which they were made, contained in any
Registration Statement or in any Prospectus; provided that Insurer
shall not be liable in any such case to the extent that such loss,
liability, damage, claim or expense arises out of, or is based upon,
an untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with
information furnished in writing to Insurer by Underwriter or its
affiliates specifically for use in the preparation of any such
Registration Statement or any amendment thereof or supplement
thereto; or
(ii) result because of the terms of any Contract or because of any
material breach by Insurer or any of its officers, directors,
employees or agents (which, for these purposes, shall not include
Underwriter or Underwriter Representatives) of any provision of any
Contract; or
(iii) result because of any use by Underwriter or any Underwriter
Representative of promotional, sales and/or advertising material
prepared by Insurer or any written or oral misrepresentations by
Insurer, its officers, directors, employees, or agents (which, for
these purposes, shall not include Underwriter Representatives); or
(iv) arise out of or result from any material breach by Insurer of any
provision of this Agreement; or
(v) arise out of or result from any matter, activity, event, or
occurrence relating to the Contracts or any Fund which first arose
before the Effective Date, including without limitation any act or
omission of: VeraVest or its officers, directors, agents; any
broker-dealer or insurance agent offering or selling the Contracts
and its officers,
20
directors, agents, associated persons; and any investment adviser
offering advice in connection with the Contracts;
(vi) arise out of or result from any claim or allegation by or on behalf
of any Distributor or Distributor Representative insofar as such
claim or allegation is based on an assertion that the compensation
paid to the Distributor in respect of the Contracts is incorrect;
provided that indemnification under this 14(b)(vi) shall not in any
way nullify or otherwise affect any right, cause of action or
indemnification available to the Insurer under the TPA Agreement or
Work Assignment.
(vii) arise out of or result from Insurer's reliance on, or failure to
comply with, applicable no-action or interpretive letters issued by
the SEC staff, in connection with the election not to (1) update any
Separate Account Registration statement by the filing of a
post-effective amendment and/or (2) deliver or cause to be delivered
a currently effective Contract prospectus to a Contract owner or
group participant.
This indemnification shall be in addition to any liability that Insurer may
otherwise have; provided, however, that no Indemnified Party shall be entitled
to indemnification pursuant to this provision if such loss, claim, expense,
damage, liability or litigation is due to the willful misfeasance, bad faith, or
gross negligence in the performance of such Indemnified Party's duties or by
reason of such Indemnified Party's reckless disregard of obligations and duties
under this Agreement or to Underwriter.
Insurer shall not be liable under this indemnification provision with
respect to any claim made against an Indemnified Party unless such Indemnified
Party shall have notified Insurer in writing within a reasonable time after the
summons or other first legal process giving information of the nature of the
claim shall have been served upon such Indemnified Party (or after such
Indemnified Party shall have received notice of such service on any designated
agent), but failure to notify Insurer of any such claim shall not relieve
Insurer from any liability which it may have to the Indemnified Party against
whom such action is brought otherwise than on account of this indemnification
provision. In case any such action is brought against the Indemnified Party,
Insurer will be entitled to participate, at its own expense, in the defense
thereof. Insurer also shall be entitled to assume the defense thereof, with
counsel reasonably satisfactory to the Indemnified Party named in the action.
After notice from Insurer to such Party of Insurer's election to assume the
defense thereof, the Indemnified Party shall bear the fees and expenses of any
additional legal counsel retained by it, and Insurer will not be liable to such
Party under this Agreement for any legal or other expenses subsequently incurred
by such Party independently in connection with the defense thereof other than
reasonable costs of investigation.
Insurer agrees to promptly notify Underwriter of the commencement of any
litigation or proceedings against it or any of its directors, officers,
employees or agents where Underwriter is named as a party. In addition, Insurer
agrees to provide Underwriter, upon Underwriter's request (but no more than once
per calendar quarter), a log of the litigation or proceedings against it or any
of its directors, officers, employees or agents in connection with the sale of
any Contract.
21
(C) SURVIVAL OF INDEMNIFICATION
The indemnification provisions contained in this Section 14 shall remain
operative in full force and effect, regardless of (1) any investigation made by
or on behalf of Insurer or Underwriter or by or on behalf of any controlling
person thereof, (2) delivery of any Contracts and Premiums therefor, (3) any
termination of this Agreement, or (4) change of control or acquisition of
substantially all the assets of the indemnifying Party. A successor by law or by
acquisition of Underwriter or Insurer, as the case may be, shall be entitled to
the benefits of the indemnification provisions contained in this Section 14.
15. CONFIDENTIAL AND PROPRIETARY INFORMATION
At all times throughout the term of this Agreement, and following any
termination or expiration of this Agreement, each Party and all of its
respective Affiliates, and each officer, director, shareholder, employee or
agent thereof, shall maintain the confidentiality of (i) this Agreement, (ii)
the transactions and other matters contemplated herein, (iii) any proprietary or
other information provided by one Party to the other Party to facilitate the
transactions contemplated herein, provided that this obligation of
confidentiality shall not apply to: (i) disclosures required to be made to any
regulatory bodies, administrative agencies, or other governmental
instrumentalities or disclosures deemed by such Party to be desirable to
disclose to any such entity; (ii) disclosures made to attorneys, accountants and
other representatives in order to assist in the consummation of the transactions
and other matters contemplated herein; (iii) disclosures otherwise required by
applicable law; or (iv) disclosures to which the other Party consents; provided
further that, with respect to the immediately foregoing clauses (i) and (iii),
any Party that makes such a disclosure shall so notify the other Party prior to
or simultaneously with making such disclosure to the extent reasonably
practicable; and provided further that, with respect to the foregoing clause
(ii), a Party shall make disclosures regarding this Agreement and the
transactions contemplated herein only to such Party's attorneys, accountants and
other third party representatives who agree to keep such information
confidential in accordance with this Section.
16. DURATION AND TERMINATION OF THIS AGREEMENT
(A) TERM
This Agreement shall become effective upon the Effective Date and shall
remain in effect until terminated as provided for herein.
(B) TERMINATION
This Agreement may be terminated at any time, on six months' written
notice, without the payment of any penalty, by Underwriter or Insurer.
(C) TERMINATION UPON ASSIGNMENT
This Agreement shall not be assigned by a Party without the prior written
consent of the other Party, which consent shall not be unreasonably withheld,
denied, delayed, or conditioned.
22
Any permitted assignment or subcontracting shall not relieve a Party of any
responsibility with regard to its obligations under this Agreement.
(D) TERMINATION UPON MATERIAL BREACH
This Agreement may be terminated at the option of either Party to this
Agreement by notice of termination to the other Party upon the other Party's
material breach of any provision of this Agreement or of any representation made
in this Agreement, unless such breach has been cured within 10 days after
receipt of notice of breach from the non-breaching Party or some other
reasonable time as may be proposed by the breaching Party and consented to in
writing by the non-breaching Party in its sole discretion.
(E) TERMINATION UPON WORK ASSIGNMENT TERMINATION
This Agreement shall terminate automatically and concurrently with the
termination of the Work Assignment.
(F) EFFECT OF TERMINATION
Upon termination of this Agreement all authorizations, rights and
obligations shall cease except: (i) the obligation to settle accounts hereunder,
including commissions, if any, on Premiums subsequently received for Contracts
in effect at the time of termination or issued pursuant to Applications received
by Insurer prior to termination; and (ii) the obligations contained in Sections
6, 7, 8, 9, 12, 13, 14, and 15 hereof.
17. AMENDMENT OF THIS AGREEMENT
No provision of this Agreement may be changed, waived, discharged, or
terminated except by an instrument in writing signed by the Party against which
enforcement of the change, waiver, discharge, or termination is sought.
18. EXHIBITS AND SCHEDULES; AMENDMENTS THERETO
The Exhibits and Schedules referred to in this Agreement form an integral
part of this agreement and are incorporated herein. All references to an
"Exhibit" or "Schedule" to this Agreement shall mean such Exhibit or Schedule as
in effect on the Effective Date, as the same may be amended from time to time by
mutual written agreement of the Parties. The provisions of this Agreement shall
be equally applicable to each such class of Contracts, Separate Accounts,
Subaccounts, and Funds that may be added to the Schedules, unless the context
otherwise requires.
19. MISCELLANEOUS
(A) CAPTIONS; INCLUSIVE TERMS
The captions in this Agreement are included for convenience of reference
only, and in no way define or limit any of the provisions hereof or otherwise
affect their construction or effect.
23
All references to "including" or words of similar import shall mean without
limitation, unless expressly provided otherwise.
(B) COUNTERPARTS
This Agreement may be executed simultaneously in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
(C) RIGHTS, REMEDIES, ETC., ARE CUMULATIVE
The rights, remedies, and obligations contained in this Agreement are
cumulative and are in addition to any and all rights, remedies, and obligations,
at law or in equity, which the Parties are entitled to under state and federal
laws. Failure of either Party to insist upon strict compliance with any of the
conditions of this Agreement shall not be construed as a waiver of any of the
conditions, but the same shall remain in full force and effect. No waiver of any
of the provisions of this Agreement shall be deemed, or shall constitute, a
waiver of any other provisions, whether or not similar, nor shall any waiver
constitute a continuing waiver.
(D) ENTIRE AGREEMENT; INTERPRETATION; JURISDICTION
This Agreement constitutes the whole agreement between the Parties with
respect to the subject matter hereof, and supersedes all prior oral or written
understandings, agreements or negotiations between the Parties with respect to
such subject matter. No prior writings by or between the Parties with respect to
the subject matter hereof shall be used by either Party in connection with the
interpretation of any provision of this Agreement. This Agreement is the result
of arm's length negotiations between the Parties and shall be construed to have
been drafted by both Parties such that any ambiguities in the Agreement shall
not be construed against any Party. This Agreement shall be construed and its
provisions interpreted under and in accordance with the internal laws of the
state of New York without giving effect to principles of conflict of laws.
(E) SEVERABILITY
This is a severable Agreement. In the event that any provision of this
Agreement would require a Party to take action prohibited by applicable federal
or state law or prohibit a Party from taking action required by applicable
federal or state law, then it is the intention of the Parties that such
provision shall be enforced to the extent permitted under the law, and, in any
event, that all other provisions of this Agreement shall remain valid and duly
enforceable as if the provision at issue had never been a part hereof.
(F) REGULATION
This Agreement shall be subject to the provisions of applicable Regulations
from time to time in effect, including such exemptions from the 1940 Act as the
SEC may grant, and the terms hereof shall be interpreted and construed in
accordance therewith. Without limiting the generality of the foregoing, the term
"assigned" shall not include any transaction exempted from Section 15(b)(2) of
the 1940 Act.
24
(G) FORCE MAJEURE
No Party shall be liable for damages due to delay or failure to perform any
obligation under this Agreement where such delay or failure results directly or
indirectly from circumstances beyond the control and without the fault or
negligence of such Party.
20. NOTICE, CONSENT, AND REQUEST
Any notice, consent or request required or permitted to be given by either
Party to the other shall be deemed sufficient if sent by facsimile transmission
followed by Federal Express or other overnight carrier, or if sent by registered
or certified mail, postage prepaid, addressed by the Party giving notice to the
other Party at the following address (or at such other address for a Party as
shall be specified by like notice):
if to Insurer:
Commonwealth Annuity and Life Insurance Company
000 Xxxxxxxx Xxxx
Xxxxx 000
Xxxxxxxxxxxx, XX 00000-0000
Attn: Xxx-Xxx Xxxxx
if to Underwriter:
Security Distributors, Inc.
One Security Benefit Place
Topeka, Kansas 66636
Attn: General Counsel
Copy to Security Benefit Corporation:
One Security Benefit Place
Topeka, Kansas 66636
Attn: General Counsel
[The remainder of this page is intentionally left blank.]
25
IN WITNESS WHEREOF, Insurer and Underwriter have each duly executed this
Agreement as of the day and year first above written.
SECURITY DISTRIBUTORS, INC.
By Its Authorized Officer
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------
Title: President
Date: November 21, 2006
COMMONWEALTH ANNUITY AND LIFE INSURANCE COMPANY
By Its Authorized Officer
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------------
Xxxxxxx X. Xxxxxxx
Title: President and Chief Executive Officer
Date: November 21, 2006
26
EXHIBIT A
This exhibit is an integral part of the Agreement to which it relates.
FORM OF OPINION PURSUANT TO SECTION 2(c)(i)
Security Distributors, Inc.
One Security Benefit Xxxxx
Xxxxxx, Xxxxxx 00000.
Executives:
You have requested my opinion with respect to certain matters in connection with
the Distribution Agreement dated as of _______, 2006 (the "Agreement") entered
into between you ("Underwriter) and Commonwealth Annuity and Life Insurance
Company (formerly Allmerica Financial Life Insurance and Annuity Company)
("Insurer"). The Agreement relates to your service as principal underwriter with
respect to certain variable insurance contracts, described more specifically in
one or more registration statements, as amended, on Form [N-4/N-6] filed with
the Securities and Exchange Commission ("SEC"), File No.(s) _______. All
capitalized terms contained herein not otherwise defined shall have the meaning
assigned to them in the Agreement.I am of the following opinion: (1) Insurer has
been duly organized and is validly existing as a corporation in good standing
under the laws of the Commonwealth of Massachusetts with full power and
authority to own, lease and operate its properties and conduct its business, and
is duly qualified to transact the business of a life insurance company and to
issue variable insurance products.
(2) The execution and delivery of the Agreement and the consummation of the
transactions contemplated therein have been duly authorized by all necessary
corporate action by Insurer, and when so executed and delivered the Agreement
shall be the valid and binding obligation of Insurer enforceable in accordance
with its terms.
(3) The consummation of the transactions contemplated by the Agreement, and
the fulfillment of its terms, shall not conflict with, result in any breach of
any of the terms and provisions of, or constitute (with or without notice or
lapse of time) a default under, the articles of incorporation or bylaws of
Insurer, or to the best of our knowledge, any indenture, agreement, mortgage,
deed of trust, or other instrument to which Insurer is a party or by which it is
bound, or violate any law, or, to the best of our knowledge, any order, rule or
regulation applicable to Insurer of any court or of any federal or state
regulatory body, administrative agency or any other governmental instrumentality
having jurisdiction over Insurer or any of its properties.
(4) Insurer has filed with the SEC all statements, notices, and other
documents required for registration of the Contracts and each Separate Account
under the provisions of the 1940 Act and the Securities Act and/or the
Regulations thereunder;
(5) There are no contracts or documents of Insurer or relating to the
Contracts or each Separate Account which are required to be filed as exhibits to
the Registration Statement by the Securities Act, the 1940 Act or the
Regulations which have not been so filed.
(6) The Registration Statement has been declared effective by the SEC or
has become effective in accordance with all applicable Regulations.
27
(7) Insurer has not received any notice from the SEC with respect to the
Registration Statement pursuant to Section 8(e) of the 1940 Act and no stop
order under the Securities Act has been issued and no proceeding therefor has
been instituted or threatened by the SEC.
(8) Insurer has obtained all necessary or customary orders of exemption or
approval from the SEC to permit the distribution of the Contracts pursuant to
the Agreement and to permit the operation of each Separate Account as
contemplated in the related Prospectus, and such orders either apply to
Underwriter, as principal underwriter of the Contracts to the extent necessary
or Insurer has ceased to engage in the activities for which such SEC exemption
or approval is required in order to eliminate the need for such order to apply
to Underwriter.
(9) The Registration Statement and the related Prospectus comply in all
material respects with the required provisions of the Securities Act, the 1940
Act and the rules and regulations thereunder.
(10) I have no reason to believe that the Registration Statement (other
than any financial statements included therein and any statements or omissions
made in reliance upon information furnished in writing to the Company by the
Distributor or a Fund for use in the preparation of the Registration Statement,
as to which no opinion is rendered), at the time it became effective, contained
an untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, in light of the circumstances under which they were made, nor do I
have any reason to believe that the Prospectus (other than any financial
statements included therein and any statements or omissions made in reliance
upon information furnished to the Company in writing by the Distributor or a
Fund for use in the preparation of the Registration Statement or Prospectus, as
to which no opinion is rendered), as amended or supplemented as of the date
hereof, contains an untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(11) The Separate Account has been duly established by Insurer and conforms
to the description thereof in the Registration Statement and the Prospectus for
each Separate Account.
(12) The form of the Contracts has been approved to the extent required by
the Massachusetts Division of Insurance.
(13) The Contracts have been duly authorized by Insurer and conform to the
descriptions thereof in the Registration Statement for the Contracts and the
related Prospectus and, when issued as contemplated by the Registration
Statement, shall constitute legal, validly issued and binding obligations of
Insurer in accordance with their terms.
(14) The Contracts and each Separate Account have been duly registered with
the state securities regulatory bodies, administrative agencies, or any other
governmental instrumentality with which the Contracts or Separate Account must
be registered, to the extent such registration requirements apply.
(15) To the best of my knowledge, no other consent, approval,
authorization, or order of any court or governmental authority or agency is
required for the issuance or sale of the Contracts, the establishment or
operation of each Separate Account, or for the consummation of the transactions
contemplated by the Agreement, that has not been obtained.
28
(16) To the best of my knowledge, Insurer has at all times properly relied
on, and complied with, applicable no-action or interpretive letters issued by
the SEC staff in respect to any Separate Account registration statement where
Insurer has elected not to (i) update such registration statement and (ii)
deliver or cause to be delivered updated Contract prospectuses to Contract
owners or participants.
Very truly yours,
By:
---------------------------------
Name:
Title: [General Counsel, Associate
General Counsel or Assistant
General Counsel]
COMMONWEALTH ANNUITY AND LIFE
INSURANCE COMPANY
Date: ___________________
29
EXHIBIT B
This exhibit is an integral part of the Agreement to which it relates.
FORM OF OPINION PURSUANT TO SECTION 2(c)(ii)
Security Distributors, Inc.
One Security Benefit Xxxxx
Xxxxxx, Xxxxxx 00000.
Executives:
You have requested my opinion with respect to certain matters in connection with
the Distribution Agreement dated as of _______, 2006 (the "Agreement") entered
into between you ("Underwriter) and Commonwealth Annuity and Life Insurance
Company (formerly Allmerica Financial Life Insurance and Annuity Company)
("Insurer"). The Agreement relates to your service as principal underwriter with
respect to certain variable insurance contracts, described more specifically in
one or more registration statements, as amended, on Form [N-4/N-6] filed with
the Securities and Exchange Commission ("SEC"), File No.(s) _______. All
capitalized terms contained herein not otherwise defined shall have the meaning
assigned to them in the Agreement.
I am of the following opinion:
(1) Insurer has been duly organized and is validly existing as a
corporation in good standing under the laws of the Commonwealth of Massachusetts
with full power and authority to own, lease and operate its properties and
conduct its business, and is duly qualified to transact the business of a life
insurance company and to issue variable insurance products.
(2) There are no contracts or documents of Insurer or relating to the
Contracts or each Separate Account which are required to be filed as exhibits to
the Registration Statement by the Securities Act, the 1940 Act or the
Regulations which have not been so filed.
(3) The Registration Statement has been declared effective by the SEC or
has become effective in accordance with all applicable Regulations.
(4) Insurer has not received any notice from the SEC with respect to the
Registration Statement pursuant to Section 8(e) of the 1940 Act and no stop
order under the Securities Act has been issued and no proceeding therefor has
been instituted or threatened by the SEC.
(5) The Registration Statement and the related Prospectus comply in all
material respects with the required provisions of the Securities Act, the 1940
Act and the rules and regulations thereunder.
(6) I have no reason to believe that the Registration Statement (other than
any financial statements included therein and any statements or omissions made
in reliance upon information furnished in writing to the Company by the
Distributor or a Fund for use in the preparation of the Registration Statement,
as to which no opinion is rendered), at the time it became effective, contained
an untrue statement of a material fact or omitted to state a material fact
required to be
30
stated therein or necessary to make the statements therein not misleading, in
light of the circumstances under which they were made, nor do I have any reason
to believe that the Prospectus (other than any financial statements included
therein and any statements or omissions made in reliance upon information
furnished to the Company in writing by the Distributor or a Fund for use in the
preparation of the Registration Statement or Prospectus, as to which no opinion
is rendered), as amended or supplemented as of the date hereof, contains an
untrue statement of a material fact or omits to state a material fact necessary
in order to make the statements therein, in light of the circumstances under
which they were made, not misleading.
(7) The Separate Account has been duly established by Insurer and conforms
to the description thereof in the Registration Statement and the Prospectus for
each Separate Account.
(8) The form of the Contracts has been approved to the extent required by
the Massachusetts Division of Insurance.
(9) The Contracts have been duly authorized by Insurer and conform to the
descriptions thereof in the Registration Statement for the Contracts and the
related Prospectus and, when issued as contemplated by the Registration
Statement, shall constitute legal, validly issued and binding obligations of
Insurer in accordance with their terms.
Very truly yours,
By:
---------------------------------
Name:
Title: [General Counsel, Associate
General Counsel or Assistant
General Counsel]
COMMONWEALTH ANNUITY AND LIFE
INSURANCE COMPANY
Date: ____________________
31
SCHEDULE 1
SEPARATE ACCOUNTS AND FUNDS AVAILABLE UNDER THE CONTRACTS
This schedule is an integral part of the Agreement to which it relates.
VEL ACCOUNT
Xxxxxxx Xxxxx Capital Growth Fund
Xxxxxxx Sachs Core Fixed Income Fund
Xxxxxxx Xxxxx Equity Index Fund
Xxxxxxx Sachs Government Income Fund
Xxxxxxx Xxxxx Growth Opportunities Fund
Xxxxxxx Sachs International Equity Fund
Xxxxxxx Xxxxx Mid Cap Value Fund
Xxxxxxx Sachs Money Market Fund
Xxxxxxx Xxxxx Structured U.S. Equity Fund
AIM V.I. Global Health Care Fund
AllianceBernstein Large Cap Growth Portfolio
Delaware VIP International Value Equity Series
Fidelity VIP Asset Manager(SM) Portfolio
Fidelity VIP Equity-Income Portfolio
Fidelity VIP Growth Portfolio
Fidelity VIP High Income Portfolio
Fidelity VIP Index 500 Portfolio
Fidelity VIP Money Market Portfolio
Fidelity VIP Overseas Portfolio
FT VIP Franklin Large Cap Growth Securities Fund (Class 2)
FT VIP Franklin Small-Mid Cap Growth Securities Fund (Class 2)
Janus Aspen Large Cap Growth Portfolio
X. Xxxx International Stock Portfolio
32
VEL II ACCOUNT
Xxxxxxx Xxxxx Capital Growth Fund
Xxxxxxx Sachs Core Fixed Income Fund
Xxxxxxx Xxxxx Equity Index Fund
Xxxxxxx Sachs Government Income Fund
Xxxxxxx Xxxxx Growth Opportunities Fund
Xxxxxxx Sachs International Equity Fund
Xxxxxxx Xxxxx Mid Cap Value Fund
Xxxxxxx Sachs Money Market Fund
Xxxxxxx Xxxxx Structured U.S. Equity Fund
AIM V.I. Global Health Care Fund
AllianceBernstein Large Cap Growth Portfolio
Delaware VIP International Value Equity Series
Fidelity VIP Asset Manager(SM) Portfolio
Fidelity VIP Equity-Income Portfolio
Fidelity VIP Growth Portfolio
Fidelity VIP High Income Portfolio
Fidelity VIP Overseas Portfolio
FT VIP Franklin Large Cap Growth Securities Fund (Class 2)
FT VIP Franklin Small-Mid Cap Growth Securities Fund (Class 2)
Janus Aspen Large Cap Growth Portfolio
X. Xxxx International Stock Portfolio
33
VEL III ACCOUNT
Xxxxxxx Sachs Capital Growth Fund
Xxxxxxx Xxxxx Core Fixed Income Fund
Xxxxxxx Sachs Equity Index Fund
Xxxxxxx Xxxxx Government Income Fund
Xxxxxxx Sachs Growth Opportunities Fund
Xxxxxxx Xxxxx International Equity Fund
Xxxxxxx Sachs Mid Cap Value Fund
Xxxxxxx Xxxxx Money Market Fund
Xxxxxxx Sachs Structured U.S. Equity Fund
AIM V.I. Global Health Care (Series I Shares)
AllianceBernstein Large Cap Growth (Class B)
Delaware VIP International Value Equity Series
Fidelity VIP Asset Manager Portfolio
Fidelity VIP Equity-Income Portfolio
Fidelity VIP Growth Portfolio
Fidelity VIP High Income Portfolio
Fidelity VIP Overseas Portfolio
FT VIP Franklin Large Cap Growth Securities Class 2
FT VIP Franklin Small-Mid Cap Growth (Class 2)
Janus Aspen Large Cap Growth (Service Shares)
X. Xxxx Price International Stock
34
SEPARATE ACCOUNT III
Xxxxxxx Sachs Capital Growth Fund
Xxxxxxx Xxxxx Core Fixed Income Fund
Xxxxxxx Sachs Equity Index Fund
Xxxxxxx Xxxxx Government Income Fund
Xxxxxxx Sachs Growth Opportunities Fund
Xxxxxxx Xxxxx International Equity Fund
Xxxxxxx Sachs Mid Cap Value Fund
Xxxxxxx Xxxxx Money Market Fund
Xxxxxxx Sachs Structured U.S. Equity Fund
AIM V.I. Basic Value (Series II)
AIM V.I. Large Cap Growth Fund (Series II)
AIM V.I. Capital Appreciation (Series I)
AIM V.I. Capital Appreciation (Series II)
AIM V.I. Capital Development Growth (Series II)
AIM V.I. Core Equity (Series II)
AIM V.I. Global Health Care (Series I)
AllianceBernstein Global Technology (Class B)
AllianceBernstein Growth and Income (Class B)
AllianceBernstein Large Cap Growth (Class B)
AllianceBernstein Small/Mid-Cap Value (Class B)
AllianceBernstein Value (Class B)
Fidelity VIP Contrafund Portfolio (Service Class 2)
Fidelity VIP Equity-Income Portfolio
Fidelity VIP Equity-Income Portfolio (Service Class 2)
Fidelity VIP Growth Portfolio
Fidelity VIP Growth Portfolio (Service Class 2)
Fidelity VIP High Income Portfolio
Fidelity VIP Mid Cap Portfolio (Service Class 2)
Fidelity VIP Overseas Portfolio
Fidelity VIP Value Strategies Portfolio (Service Class 2)
FT VIP Franklin Large Cap Growth Securities (Class 2)
FT VIP Franklin Small Cap Value Securities (Class 2)
FT VIP Franklin Small-Mid Cap Growth Securities Class 2
FT VIP Mutual Shares Securities Class 2
FT VIP Xxxxxxxxx Foreign Securities (Class 2)
Janus Aspen Large Cap Growth Service Shares (Service Shares)
MFS(R) Mid Cap Growth (Service Class)
MFS(R) New Discovery (Service Class)
MFS(R) Total Return (Service Class)
MFS(R) Utilities (Service Class)
Xxxxxxxxxxx Balanced Fund/VA (Service Shares)
Xxxxxxxxxxx Capital Appreciation Fund/VA (Service Shares)
Xxxxxxxxxxx Global Securities Fund/VA(Service Shares)
Xxxxxxxxxxx High Income Fund/VA (Service Shares)
Xxxxxxxxxxx Main Street Fund/VA (Service Shares)
X. Xxxx Price International Stock
35
SELECT SEPARATE
ACCOUNT II
Xxxxxxx Xxxxx Capital Growth Fund
Xxxxxxx Sachs Core Fixed Income Fund
Xxxxxxx Xxxxx Equity Index Fund
Xxxxxxx Sachs Government Income Fund
Xxxxxxx Xxxxx Growth Opportunities Fund
Xxxxxxx Sachs International Equity Fund
Xxxxxxx Xxxxx Mid Cap Value Fund
Xxxxxxx Sachs Money Market Fund
Xxxxxxx Xxxxx Structured U.S. Equity Fund
AIM V.I. Capital Appreciation Series (Series I)
AIM V.I. Global Health Care Series I (b)
AllianceBernstein Growth and Income (Class B)
AllianceBernstein Large Cap Growth (Class B)
Fidelity VIP Equity-Income Portfolio
Fidelity VIP Growth Portfolio
Fidelity VIP High Income Portfolio
FT VIP Franklin Small-Mid Cap Growth (Class 2)
FT VIP Mutual Shares Securities (Class 2)
Janus Aspen Large Cap Growth (Service Shares)
X. Xxxx Price International Stock
36
INHEIRITAGE ACCOUNT
Xxxxxxx Sachs Capital Growth Fund
Xxxxxxx Xxxxx Core Fixed Income Fund
Xxxxxxx Sachs Equity Index Fund
Xxxxxxx Xxxxx Government Income Fund
Xxxxxxx Sachs Growth Opportunities Fund
Xxxxxxx Xxxxx International Equity Fund
Xxxxxxx Sachs Mid Cap Value Fund
Xxxxxxx Xxxxx Money Market Fund
Xxxxxxx Sachs Structured U.S. Equity Fund
AIM V.I. Capital Appreciation Fund (Series I)
AIM V.I. Global Health Care (Series I)
AllianceBernstein Growth and Income (Class B)
AllianceBernstein Large Cap Growth (Class B)
Delaware VIP International Value Equity
Fidelity VIP Asset Manager Portfolio
Fidelity VIP Equity-Income Portfolio
Fidelity VIP Growth Portfolio
Fidelity VIP High Income Portfolio
Fidelity VIP Overseas Portfolio
FT VIP Franklin Large Cap Growth Securities Fund (Class 2)
FT VIP Franklin Small-Mid Cap Growth Fund (Class 2)
FT VIP Mutual Shares Securities Fund (Class 2)
Janus Aspen Large Cap Growth (Service Shares)
X. Xxxx Price International Stock
37
GROUP VEL ACCOUNT
Xxxxxxx Sachs Capital Growth Fund
Xxxxxxx Xxxxx Core Fixed Income Fund
Xxxxxxx Sachs Equity Index Fund
Xxxxxxx Xxxxx Government Income Fund
Xxxxxxx Sachs Growth Opportunities Fund
Xxxxxxx Xxxxx International Equity Fund
Xxxxxxx Sachs Mid Cap Value Fund
Xxxxxxx Xxxxx Money Market Fund
Xxxxxxx Sachs Structured U.S. Equity Fund
AIM V.I. Capital Appreciation Fund (Series I)
AIM V.I. Core Equity Fund (Series I)
AIM V.I. High Yield Fund (Series I)
AIM V.I. Total Return Fund (Series I)
Xxxxx American Leveraged AllCap
Alger American Small Capitalization
AllianceBernstein Global Technology (Class B)
AllianceBernstein Growth and Income (Class B)
Delaware VIP Balanced Series
Delaware VIP Capital Reserves Series
Delaware VIP Cash Reserves Series
Delaware VIP Emerging Markets Series
Delaware VIP Growth Opportunities Series
Delaware VIP High Yield Series
Delaware VIP International Value Equity Series
Delaware VIP REIT Series
Delaware VIP Select Growth Series
Delaware VIP Small Cap Value Series
Delaware VIP Trend Series
Delaware VIP U.S. Growth Series
Delaware VIP Value (a) Series
Fidelity VIP Asset Manager(SM) Portfolio
Fidelity VIP Contrafund Portfolio
Fidelity VIP Equity-Income Portfolio
Fidelity VIP Growth Portfolio
Fidelity VIP High Income Portfolio
Fidelity VIP Index 500 Portfolio
Fidelity VIP Overseas Portfolio
FT VIP Xxxxxxxxx Foreign Securities Fund (Class 2)
Janus Aspen Mid Cap Growth (Service Shares)
Janus Worldwide Growth (Service Shares)
PVIT Total Return Portfolio II
X. Xxxx Price International Stock
Xxx Xxxxxx UIF Core Plus Fixed Income
38
SEPARATE ACCOUNT IMO
Xxxxxxx Xxxxx Capital Growth Fund
Xxxxxxx Sachs Core Fixed Income Fund
Xxxxxxx Xxxxx Equity Index Fund
Xxxxxxx Sachs Government Income Fund
Xxxxxxx Xxxxx Growth Opportunities Fund
Xxxxxxx Sachs International Equity Fund
Xxxxxxx Xxxxx Mid Cap Value Fund
Xxxxxxx Sachs Money Market Fund
Xxxxxxx Xxxxx Structured U.S. Equity Fund
AIM V.I. Basic Value Fund (Series II)
AIM V.I. Large Cap Growth Fund (Series II)
AIM V.I. Capital Appreciation Fund (Series II)
AIM V.I. Capital Development (Series II)
AIM V.I. Core Equity (Series II)
AIM V.I. Dynamics Fund (Series I)
AIM V.I. Global Health Care (Series I)
AllianceBernstein Global Technology (Class B)
AllianceBernstein Growth and Income (Class B)
AllianceBernstein Large Cap Growth (Class B)
AllianceBernstein Small/Mid-Cap Value (Class B)
AllianceBernstein Value (Class B)
Delaware VIP Growth Opportunities Series (Service Class)
Delaware VIP International Value Equity Series (Service Class)
Fidelity VIP Asset Manager(SM) Portfolio (Service Class 2)
Fidelity VIP Contrafund Portfolio
Fidelity VIP Contrafund Portfolio (Service Class 2)
Fidelity VIP Equity-Income Portfolio
Fidelity VIP Growth Portfolio
Fidelity VIP Growth & Income Portfolio
Fidelity VIP Growth Opportunities Portfolio (Service Class 2)
Fidelity VIP High Income Portfolio
Fidelity VIP Mid Cap Portfolio
Fidelity VIP Mid Cap Portfolio (Service Class 2)
Fidelity VIP Overseas Portfolio
Fidelity VIP Value Strategies Portfolio (Service Class 2)
FT VIP Franklin Growth and Income Securities (Class 2)
FT VIP Franklin Large Cap Growth Securities (Class 2)
FT VIP Franklin Small Cap Value Securities (Class 2)
FT VIP Franklin Small-Mid Cap Growth Securities Fund (Class 2)
FT VIP Mutual Shares Securities Fund (Class 2)
FT VIP Xxxxxxxxx Foreign Securities Fund (Class 2)
MFS(R) Mid Cap Growth Series(Service Class)
MFS(R) New Discovery Series (Service Class)
MFS(R) Total Return Series (Service Class)
MFS(R) Utilities Series(Service Class)
Xxxxxxxxxxx Balanced Fund/VA(Service Shares)
Xxxxxxxxxxx Capital Appreciation Fund/VA (Service Shares)
Xxxxxxxxxxx Global Securities Fund/VA (Service Shares)
Xxxxxxxxxxx High Income Fund/VA (Service Shares)
Xxxxxxxxxxx Main Street Fund/VA (Service Shares)
Pioneer Emerging Markets VCT Portfolio Class II
Pioneer Fund VCT Portfolio (Class II)
Pioneer High Yield VCT Portfolio (Class II)
Pioneer Real Estate Shares VCT Portfolio (Class II)
DWS Technology VIP (Class A)
DWS Equity 500 Index VIP (Class A)
DWS SMALL CAP INDEX VIP(Class A)
DWS Dreman Financial Services VIP (Class A)
X. Xxxx Price International Stock
39
SEPARATE ACCOUNT FUVUL
Xxxxxxx Sachs Money Market Fund
AIM V.I. Capital Appreciation (Series I Shares)
AIM V.I. Core Equity (Series I Shares)
Alger American Growth
Xxxxx American Leveraged AllCap
Alger American Small Capitalization
Dreyfus Socially Responsible Growth Fund, Inc
Dreyfus VIF Appreciation
Dreyfus VIF Quality Bond
Evergreen VA Balanced (b)
Evergreen VA Special Values
Federated American Leaders II
Federated High Income Bond II
Federated Prime Money II
FT VIP Xxxxxxxxx Foreign Securities (Class 2)
FT VIP Xxxxxxxxx Global Asset Allocation (Class 2)
MFS(R) Investors Trust Series
MFS(R) Utilities Series
Xxxxxxxxxxx Core Bond Fund (b)
Xxxxxxxxxxx Main Street Fund/VA
Xxxxxxxxxxx Main Street Small Cap Fund/VA
40
SEPARATE ACCOUNT KGC
AIM V.I. Utilities Fund
Xxxxx American Balanced Portfolio
Alger American Leveraged AllCap Portfolio
Credit Suisse Trust Emerging Markets Portfolio
Credit Suisse Trust Global Small Cap Portfolio
Dreyfus IP MidCap Stock Portfolio
Dreyfus Socially Responsible Growth Fund, Inc.
DWS Equity 500 Index VIP
DWS Capital Growth VIP
DWS Global Opportunities VIP
DWS Growth & Income VIP
DWS Health Care VIP
DWS International VIP
DWS Balanced VIP
DWS Blue Chip VIP
DWS Core Fixed Income VIP
DWS Xxxxx Venture Value VIP
DWS Dreman Financial Services VIP
DWS Dreman High Return Equity VIP
DWS Dreman Small Cap Value VIP
DWS Global Thematic VIP
DWS Government & Agency Securities VIP
DWS High Income VIP
DWS International Select Equity VIP
DWS Janus Growth and Income VIP
DWS Janus Growth Opportunities VIP
DWS Large Cap Value VIP
DWS MFS Strategic Value VIP
DWS Mid Cap Growth VIP
DWS Money Market VIP
DWS Oak Strategic Equity VIP
DWS Salomon Aggressive Growth VIP
DWS Small Cap Growth VIP
DWS Strategic Income VIP
DWS Technology VIP
DWS Xxxxxx Mid Cap Growth VIP
SEPARATE ACCOUNT KG
AIM V.I. Utilities Fund
Xxxxx American Balanced Portfolio
Alger American Leveraged AllCap Portfolio
Credit Suisse Trust Emerging Markets Portfolio
Credit Suisse Trust Global Small Cap Portfolio
Dreyfus IP MidCap Stock Portfolio
Dreyfus Socially Responsible Growth Fund, Inc.
DWS Equity 500 Index VIP
DWS Capital Growth VIP
DWS Global Opportunities VIP
DWS Growth & Income VIP
DWS Health Care VIP
DWS International VIP
DWS Balanced VIP
DWS Blue Chip VIP
DWS Core Fixed Income VIP
DWS Xxxxx Venture Value VIP
DWS Dreman Financial Services VIP
DWS Dreman High Return Equity VIP
DWS Dreman Small Cap Value VIP
DWS Global Thematic VIP
DWS Government & Agency Securities VIP
DWS High Income VIP
DWS International Select Equity VIP
DWS Janus Growth and Income VIP
DWS Janus Growth Opportunities VIP
DWS Large Cap Value VIP
DWS MFS Strategic Value VIP
DWS Mid Cap Growth VIP
DWS Money Market VIP
DWS Oak Strategic Equity VIP
DWS Salomon Aggressive Growth VIP
DWS Small Cap Growth VIP
DWS Strategic Income VIP
DWS Technology VIP
DWS Xxxxxx Mid Cap Growth VIP
Janus Aspen Growth and Income
Janus Aspen Large Cap Growth
41
SEPARATE ACCOUNT VA-P
Pioneer America Income VCT Portfolio
Pioneer Balanced VCT Portfolio
Pioneer Emerging Markets VCT Portfolio
Pioneer Equity Income VCT Portfolio
Pioneer Europe VCT Portfolio
Pioneer Fund VCT Portfolio
Pioneer Growth Shares VCT Portfolio
Pioneer High Yield VCT Portfolio
Pioneer International Value VCT Portfolio
Pioneer Mid Cap Value VCT Portfolio
Pioneer Money Market VCT Portfolio
Pioneer Real Estate Shares VCT Portfolio
Pioneer Small Cap Value VCT Portfolio
Pioneer Small Company VCT Portfolio
Pioneer Strategic Income VCT Portfolio
AIM V.I. Capital Appreciation Fund
AllianceBernstein Global Technology Portfolio (Class B)
AllianceBernstein Large Cap Growth Portfolio (Class B)
Delaware VIP Growth Opportunities Series (Service Class)
Delaware VIP Select Growth Series (Service Class)
FT VIP Franklin Small-Mid Cap Growth Securities Fund (Class 2)
FT VIP Xxxxxxxxx Foreign Securities Fund (Class 2)
FT VIP Xxxxxxxxx Global Asset Allocation Fund (Class 2)
Xxx Xxxxxx LIT Emerging Growth Portfolio (Class I Shares)
42
SEPARATE ACCOUNT VA-K
Xxxxxxx Sachs Capital Growth Fund
Xxxxxxx Xxxxx Core Fixed Income Fund
Xxxxxxx Sachs Equity Index Fund
Xxxxxxx Xxxxx Government Income Fund
Xxxxxxx Sachs Growth Opportunities Fund
Xxxxxxx Xxxxx International Equity Fund
Xxxxxxx Sachs Mid Cap Value Fund
Xxxxxxx Xxxxx Money Market Fund
Xxxxxxx Sachs Structured U.S. Equity Fund
AIM V.I. Capital Appreciation (Series I Shares)
AIM V.I. Basic Value Fund (Series II Shares)
AIM V.I. Large Cap Growth Fund (Series I Shares)
AIM V.I. Capital Appreciation Fund (Series I Shares)
AIM V.I. Core Equity Fund (Series I Shares)
AIM V.I. Dynamics Fund (Series I Shares)
AIM V.I. Global Health Care Fund (Series I Shares)
AIM V.I. Capital Development Fund (Series II Shares)
AllianceBernstein Global Technology (Class B)
AllianceBernstein Growth and Income Portfolio (Class B)
AllianceBernstein Growth (Class B)
AllianceBernstein Large Cap Growth Portfolio (Class B)
AllianceBernstein Small/Mid-Cap Value Portfolio (Class B)
AllianceBernstein Value Portfolio (Class B)
Delaware VIP International Value Equity Series
Delaware VIP Growth Opportunities Series (Service Class)
Delaware VIP Select Growth (Service Class)
DWS Government & Agency Securities VIP
DWS Technology Growth VIP
DWS Dreman Financial Services VIP
DWS Equity 500 Index VIP
DWS Small Cap Index VIP
Xxxxx Xxxxx VT Floating-Rate Income Fund
Fidelity VIP Asset Manager(SM) Portfolio
Fidelity VIP Equity-Income Portfolio
Fidelity VIP Growth Portfolio
Fidelity VIP High Income Portfolio
Fidelity VIP Overseas Portfolio
Fidelity VIP Contrafund(R) Portfolio (Service Class 2)
Fidelity VIP Growth & Income Service Class 2
Fidelity VIP Growth Opportunities Portfolio (Service Class 2)
Fidelity VIP Mid Cap Portfolio (Service Class 2)
Fidelity VIP Value Strategies Portfolio (Service Class 2)
FT VIP Franklin Growth and Income Securities Fund (Class 2)
FT VIP Franklin Large Cap Growth Securities Fund (Class 2)
FT VIP Franklin Small Cap Value Securities Class 2
FT VIP Franklin Small-Mid Cap Growth Securities Fund (Class 2)
FT VIP Mutual Shares Securities Fund (Class 2)
FT VIP Xxxxxxxxx Developing Markets Securities Class 2
FT VIP Xxxxxxxxx Foreign Securities Fund (Class 2)
Janus Aspen Forty (Service Shares)
Janus Aspen Growth and Income Portfolio (Service Shares)
Janus Aspen International Growth (Service Shares)
Janus Aspen Large Cap Growth Portfolio (Service Shares)
Janus Aspen Mid Cap Growth (Service Shares)
MFS(R) Variable Insurance Trust(SM)
MFS(R) Mid Cap Growth Series (Service Class)
MFS(R) New Discovery Series (Service Class)
MFS(R) Total Return Series (Service Class)
MFS(R) Utilities Series (Service Class)
Xxxxxxxxxxx Balanced Fund/VA (Service Shares)
Xxxxxxxxxxx Capital Appreciation Service Shares
Xxxxxxxxxxx Global Securities Service Shares
Xxxxxxxxxxx High Income Service Shares
Xxxxxxxxxxx Main Street Service Shares
Pioneer Emerging Markets VCT Portfolio (Class II)
Pioneer Fund VCT (Class II)
Pioneer Real Estate Shares VCT Portfolio (Class II)
X. Xxxx Price International Stock Portfolio
43
SEPARATE ACCOUNT VA-K
- DELAWARE MEDALLION ANNUITY CONTRACTS
DELAWARE VIP TRUST
Delaware VIP Balanced Series
Delaware VIP Capital Reserves Series
Delaware VIP Cash Reserve Series
Delaware VIP Emerging Markets Series
Delaware VIP Global Bond Series
Delaware VIP Growth Opportunities Series
Delaware VIP High Yield Series
Delaware VIP International Value Equity Series
Delaware VIP REIT Series
Delaware VIP Select Growth Series
Delaware VIP Small Cap Value Series
Delaware VIP Trend Series
Delaware VIP U.S. Growth Series
Delaware VIP Value Series
AIM V.I. Growth (Series I Shares)
AIM V.I. High Yield Series I (Series I Shares)
AIM V.I. High Yield Fund (Series I Shares)
AIM V.I. International Growth Fund (Series I Shares)
AIM V.I. Premier Equity (Series I Shares)
Xxxxx American Leveraged AllCap Portfolio (Class O)
Xxxxx American MidCap Growth Portfolio (Class O)
Xxxxx American Small Capitalization Portfolio (Class O)
AllianceBernstein VARIABLE PRODUCTS SERIES FUND, INC. (CLASS B)
AllianceBernstein Global Technology Portfolio (Class B)
AllianceBernstein Growth and Income Portfolio (Class B)
AllianceBernstein Growth Portfolio (Class B)
AllianceBernstein Large Cap Growth Portfolio (Class B)
FT VIP Franklin Small-Mid Cap Growth Securities Fund (Class 2)
FT VIP Mutual Shares Securities Fund (Class 2)
FT VIP Xxxxxxxxx Foreign Securities Fund (Class 2)
FT VIP Xxxxxxxxx Growth Securities Fund (Class 2)
Pioneer Emerging Markets VCT Portfolio (Class II)
Pioneer Mid Cap Value VCT Portfolio (Class II)
44
ALLMERICA SELECT SEPARATE ACCOUNT
Xxxxxxx Xxxxx Variable Insurance Trust (Service Shares)
Xxxxxxx Sachs Capital Growth Fund
Xxxxxxx Xxxxx Core Fixed Income Fund
Xxxxxxx Sachs Equity Index Fund
Xxxxxxx Xxxxx Government Income Fund
Xxxxxxx Sachs Growth Opportunities Fund
Xxxxxxx Xxxxx International Equity Fund
Xxxxxxx Sachs Mid Cap Value Fund
Xxxxxxx Xxxxx Money Market Fund
Xxxxxxx Sachs Structured U.S. Equity Fund
AIM V.I. Capital Appreciation (Series I Shares)
AIM V.I. Capital Appreciation Series II
AIM V.I. Large Cap Growth Fund (Series I Shares)
AIM V.I. Large Cap Growth Fund (Series II Shares)
AIM V.I. Capital Appreciation Fund (Series I Shares)
AIM V.I. Capital Development Fund (Series II Shares)
AIM V.I. Core Equity Fund (Series I Shares)
AIM V.I. Dynamics Fund (Series I Shares)
AIM V.I. Global Health Care Fund (Series I Shares)
AIM V.I. Core Equity Fund (Series I Shares)
AIM V.I. Core Equity Fund (Series II Shares)
AIM V.I. Basic Value Fund (Series II Shares)
AIM V.I. Capital Development Fund (Series II Shares)
AllianceBernstein Large Cap Growth Portfolio (Class A)
AllianceBernstein Large Cap Growth Portfolio (Class B)
AllianceBernstein Global Technology Portfolio (Class B)
AllianceBernstein Growth and Income Portfolio (Class B)
AllianceBernstein Small/Mid Cap Value Portfolio (Class B)
AllianceBernstein Value Portfolio (Class B)
DWS Small Cap Index VIP
DWS Dreman Financial Services VIP
DWS Technology Growth VIP
Xxxxx Xxxxx VT Floating-Rate Income Fund
Xxxxx Xxxxx VT Worldwide Health Sciences Fund
Fidelity VIP Contrafund(R) Portfolio
Fidelity VIP Contrafund(R) Portfolio (Service Class 2)
Fidelity VIP Equity-Income Portfolio
Fidelity VIP Equity-Income Portfolio (Service Class 2)
Fidelity VIP Growth Portfolio
Fidelity VIP Growth Portfolio (Service Class 2)
Fidelity VIP Growth & Income Portfolio
Fidelity VIP Growth & Income Portfolio (Service Class 2)
Fidelity VIP High Income Portfolio
Fidelity VIP High Income Portfolio (Service Class 2)
Fidelity VIP Mid Cap Portfolio
Fidelity VIP Mid Cap Portfolio (Service Class 2)
Fidelity VIP Value Strategies Portfolio (Service Class 2)
FT VIP Franklin Large Cap Growth Securities Fund (Class 2)
FT VIP Franklin Small Cap Value Securities Fund (Class 2)
FT VIP Franklin Small-Mid Cap Growth Securities Fund (Class 2)
FT VIP Mutual Shares Securities Fund (Class 2)
FT VIP Xxxxxxxxx Foreign Securities Fund (Class 2)
Janus Aspen Growth and Income Portfolio (Service Shares)
Janus Aspen International Growth Portfolio (Service Shares)
Janus Aspen Large Cap Growth Portfolio (Service Shares)
Janus Aspen Mid Cap Growth Portfolio (Service Shares)
MFS(R) Mid Cap Growth Series (Service Class)
MFS(R) New Discovery Series (Service Class)
MFS(R) Total Return Series (Service Class)
MFS(R) Utilities Series (Service Class)
Xxxxxxxxxxx Balanced Fund/VA (Service Shares)
Xxxxxxxxxxx Capital Appreciation Fund/VA (Service Shares)
Xxxxxxxxxxx Global Securities Fund/VA (Service Shares)
Xxxxxxxxxxx High Income Fund/VA (Service Shares)
Xxxxxxxxxxx Main Street Fund/VA (Service Shares)
Pioneer Fund VCT Portfolio (Class II)
Pioneer Real Estate Shares VCT Portfolio (Class II)
X. Xxxx Price International Stock Portfolio
45
FULCRUM SEPARATE ACCOUNT
Xxxxxxx Xxxxx Core Fixed Income Fund
Xxxxxxx Sachs Equity Index Fund
Xxxxxxx Xxxxx Growth Opportunities Fund
Xxxxxxx Sachs International Equity Fund
Xxxxxxx Xxxxx Money Market Fund
AIM V.I. Core Equity (Series I)
Delaware VIP Balanced Series
Delaware VIP Small Cap Value Series
Gabelli Capital Asset
Lazard Retirement International Equity
MFS(R) Emerging Growth Series
MFS(R) Investors Trust Series
Xxxxxxxxxxx Aggressive Growth Fund/VA
Xxxxxxxxxxx Main Street Fund/VA
OM Large Cap Growth Concentrated (b)
Last revised: November 21, 2006
46
SCHEDULE 2
CONTRACTS
This schedule is an integral part of the Agreement to which it relates.
Schedule 2A Insurance Contracts - Annuity Contracts*
POLICY FORM MARKETING OR PRODUCT NAME
----------- -------------------------
A3001-75 75 series elective pay
A3002-75 75 series elective pay
A3003-75 75 series single pay
A3004-75 75 series single pay
A3005-75 75 Elect Payment Fixed
A3006-75 75 Elect Payment Fixed
X0000-00 Xxxxxxxx XXX (single pay)
A3012-79 78/79 series elective pay
A3013-79 78/79 series elective pay
A3014-79 78/79 series single pay
A3015-79 78/79 series single pay
A3018-91 Exec Annuity Plus 91 (3)
A3019-92 Delaware Medallion I
A3020-92 Allmerica Select Resource I
A3021-93 Exec Annuity Plus 93
A3022-93 Delaware Medallion II
A3023-95 Pioneer Vision 1
X0000-00 Xxxxxxxxx Xxxxxxxxx, Xxxxxxxxx Select
Resources II, Delaware Medallion III, Pioneer
Vision 0, Xxxxxxx Xxxxxxx Xxxxx
X0000-00 Xxxxxxx Gateway Custom
A3027-98 Xxxxxx Advisor, Pioneer C- Vision, Select
Charter
A3028-99 Delaware Golden Medallion, Pioneer Xtra
Vision, Xxxxxxx Gateway Plus, Select Reward
A3029-99 Allmerica Immediate Advantage
A3030-99 Allmerica Value Generation, Directed Advisory
Solutions
A3031-99 Allmerica Select Acclaim
A3035-00 Xxxxxx SBD with EDB, Xxxxxxx Gateway Incentive
A3036-01 Allmerica Premier Choice
----------
* This list shall be deemed to include applications, specification pages,
state variations, certificates, binders and administrative forms that are
included and part of the Insurance Contracts. Certain forms, riders and
endorsements may have different or no form numbers and may have been filed
for different distribution channels and products. Therefore, the letter
prefix and numeric suffix to the form numbers can vary. This list shall be
deemed to include those variations.
47
A3037-02 Allmerica Optim-L
A3038-02 Gateway Plus II
AVA-FP-67 67 series elective pay
AVA-FP-69 69 series elective pay
AVA-SP-67 67 series single pay
AVA-SP-69 69 series single pay
AVA-ST-67 67 series stipulated pay
VFR - 68 67 series group elective (GA)
VFS - 68 67 series group elective (GB), Flexible Fixed(84-92)
RIDERS AND ENDORSEMENTS*
LIBERALIZATION OF LIVING BENEFIT
SURRENDER CHARGES OR (ACCELERATED DEATH PREMIUM TAX
DEATH BENEFITS WITHDRAWAL RIGHTS BENEFIT) ENDORSEMENT
---------------------------------------------------------------------------------------------------
3134-79 3260-99 3290-01 3309-02 3167-82 VAB9-94 3230-92
3197-84 3263-99 3291-00 3311-02 3168-82 2001-91 3232-92
3198-84 3264-99 3292-00 3312-02 3169-82 246-92 3240-92
3231-92 3265-99 3293-00 3313-02 3170L-88 249-94 3241-92
3235-92 3266-99 3303-02 3314-02 3173L-88 3242-92
3249-96 3271-99 3304-02 3315-02 3174L-90 Annuitization 3243-92
3260-99 3272-99 3305-02 3316-02 3239-96 A3104-74
3301-00 3273-99 3306-02 3317-02 3244-96 A3259-99 XXX Endorsement
3240-01 3288-00 3307-02 3318-02 A3268-99 3199-92
3241-01 3289-01 3308-02 A3269-99 3261-98
TSA Endorsement - 3166-81 and 3250-96
MISCELLANEOUS
--------------------------------------------------------------------------------
3150-80 Guaranteed Interest on General Account
3181-83 Qualified Annuities - Separate Account Usage
3183-83 Qualified Annuities - Separate Account Usage
3184-83 Non-Qualified Annuities - Separate Account Usage
3201-84 General Endorsement - SEC Exemption 27(c)(i)
3214-85 Loan Privilege
3215-85 Loan Privilege
3237-93 Elective Payment Endorsement
3245-96 Waiver of Surrender Charges
3246-96 Disability Rider/Waiver of Surrender
3247-96 Disability Rider/Waiver of Surrender
3248-96 Living Benefits Rider
3252-97 HO/BIP
3262-99 15 Day Money Market Endorsement
END 4002-98 NY Automatic Reallocation Endorsement
3267-99 MAF: Rider
3270-99 APR Rider
3274-99 Group/Employee Endorsement
3275-99 Group/Employee Endorsement
3276-99 Qualified Contracts Endorsements
3297-00 Group Policy Endorsement
3298-00 Xxxxxx Value Enhancement Endorsement
3319-99 Discount Rider
8054-95 Name Change
----------
* This list shall be deemed to include applications, specification pages,
state variations, certificates, binders and administrative forms that are
included and part of the Insurance Contracts. Certain forms, riders and
endorsements may have different or no form numbers and may have been filed
for different distribution channels and products. Therefore, the letter
prefix and numeric suffix to the form numbers can vary. This list shall be
deemed to include those variations.
48
Schedule 2B Insurance Contracts - Variable Life Contracts*
(continued)
POLICY FORM MARKETING NAME
----------- --------------
1018-87 VEL 87
1018-91 XXX 00
0000-00 XXX 00
0000-00 XXX PG/VEL Plus
1026-94 Select Variable Inheritage
1027-95 Select Life
1029P-94 Group VEL
1029C-94
1030-96 Agency SPVUL 2nd-to-die, Agency SPVUL Single Life,
Select SPVUL 2nd to-die, Select SPVUL Single Life,
SPL II
0000-00 XXX, XXX, Xxxxxxx XXX, Select Life Plus, VEL 2001
1034-99 Survivorship VUL
RIDERS AND ENDORSEMENTS*
LIVING BENEFIT
(ACCELERATED GUARANTEED DEATH OTHER
DEATH BENEFIT) WAIVER OF PREMIUM BENEFITS RIDERS INSURED RIDER EXCHANGE OPTION RIDERS
---------------------------------------------------------------------------------------------------
END 239-91 1074-86 1091-97 1067-86 1069-87
1089-95 1086-94 1099-97 1081-94 1090-95
6005-96 CL1086-99 10490 1088-95 VEOP-94
CL1089-99 TA1094-97 CL1099-99 CL1088-99 1084-94
TA1101-98 XXXX-00 XX0000-00 XXXX-00
TA1093-97 1085-94 TA1098-97 FUIT 1088-99 Children's Insurance Riders
VAB9-94 FUIT 1086-99 FUIT 1099-99 1068-84
2001-91 250-95 1068-95
246-92 TA1096-97
249-94 1082-94
----------
* This list shall be deemed to include applications, specification pages,
state variations, certificates, binders and administrative forms that are
included and part of the Insurance Contracts. Certain forms, riders and
endorsements may have different or no form numbers and may have been filed
for different distribution channels and products. Therefore, the letter
prefix and numeric suffix to the form numbers can vary. This list shall be
deemed to include those variations.
49
TERM LIFE REFUND OF SALES
INSURANCE LOAD/EXCHANGE TO TERM GUARANTEED ACCIDENTAL DEATH
RIDERS* INSURANCE OPTION INSURABILITY RIDER BENEFITS 1035 EXCHANGE RIDERS
------------------------------------------------------------------------------------------------
1103-99 END 268-97 1066-86 1063-83 8056-96
CL1103-99 END 270-97 1087-95 1080-94 TA1102-98
1105P-00 END 283-99P TA1097-97 CL1089-99
1078-92 UGIR-94
1092-96 1083-94
MISCELLANEOUS
--------------------------------------------------------------------------------
230-86 Under 18 Non-Smoker Notice
236-88 Limitation of Liability
237-90 Interest Rate
238-90 Interest Rate
241-91 War Exclusion
242-91 Increase and Earn Exchange
243-91 EL & Endorsement
244-91 Guideline Premium Sum Insured
247-93 VEL & Payor Endorsement
251-95 Minimum Sum Insured Table Endorsement
257-95 Group Variable Universal Life
259-96 Cash Value Test
269-97 Cash Value Accumulation Test
295-01 Loan Interest Endorsement (1033-99)
296-01 Loan Interest Endorsement (1034-99)
289-00 Group Private Placement Endorsement
290-00 Group Private Placement Endorsement
291-00 Policy Loan and Death Benefit Endorsement
293-01 Policy Loan and Partial Withdrawal Endorsement
1079-94 Four Year Term Rider
1076-89 Policy Split Option
1104-99 Survivor Term
END 260-96 Preferred Loan Provision
END 264-96 TSA Endorsement
END 263-96 Paid Up Insurance Benefit
252-95 Name Change
----------
* The list in Schedule 2 shall be deemed to include applications,
specification pages, state variations, certificates, binders and
administrative forms that are included and part of the Insurance Contracts.
Certain forms, riders and endorsements may have different or no form
numbers and may have been filed for different distribution channels and
products. Therefore, the letter prefix and numeric suffix to the form
numbers can vary. This list shall be deemed to include those variations.
Last revised: November 21, 2006
* This list shall be deemed to include applications, specification pages,
state variations, certificates, binders and administrative forms that are
included and part of the Insurance Contracts. Certain forms, riders and
endorsements may have different or no form numbers and may have been filed
for different distribution channels and products. Therefore, the letter
prefix and numeric suffix to the form numbers can vary. This list shall be
deemed to include those variations.
50
SCHEDULE 3
UNDERWRITING ACTIVITIES
This schedule is an integral part of the Agreement to which it relates.
The following is a list of underwriting activities that Underwriter shall
perform or cause to be performed on its behalf:
- Payment of trail commissions and commissions on subsequent payments to
Distributors that have executed Service Agreements with Underwriter
- Naming in and review and sign off on Contract registration statements
- Approving any marketing materials used by Insurer, including Insurer's
website postings
- Review of Separate Account pricing and processing requirements and
related written procedures.
- Issuance of confirmations with respect to Contract transactions
For the sake of clarity, Underwriter shall not perform or bear any
responsibility for any activities not specifically enumerated above,
including without limitation any payments of commissions or other
compensation to persons other than Distributors that have executed
Service Agreements with Underwriter, any activities for which
licensing as an insurance agent would be required, or any Rule 38a-1
or other compliance program or activities for the Separate Accounts.
Last revised: November 21, 2006
51
SCHEDULE 4
COMPENSATION SCHEDULE
This schedule is an integral part of the Agreement to which it relates.
A. REIMBURSEMENT OF DUE DILIGENCE AND OTHER EXPENSES. As contemplated by Section
7(c) of the Agreement, Insurer shall reimburse Underwriter for Underwriter's
expenses incurred in conducting due diligence and implementing this Agreement,
including:
1. Internal attorney and compliance time for due diligence and
Agreement drafting and negotiation.
2. External counsel costs for due diligence and Agreement drafting
and negotiation.
3. Investigation and incorporation of business processes required,
establishment of required records, project management and related
work.
4. All mailing and production work and costs, including printing,
paper, postage and mailing, relating to notification to (i)
Contract owners, (ii) FAFLIC Contract owners and (iii)
Distributors.
5. Related travel and expenses.
Underwriter's internal costs shall be billed at established time and
materials rate set forth in the Work Assignment. Underwriter shall pass
through (i.e., no xxxx-up) to Insurer Underwriter's external legal fees,
travel and expenses. Underwriter shall invoice Insurer for these expenses
and Insurer shall pay such invoice within 30 days of receipt.
B. ONGOING FEES AND REIMBURSEMENTS. Insurer shall pay Underwriter for its
services as contemplated in Section 6 of the Agreement and reimburse Underwriter
for expenses as contemplated in Section 7(c) of the Agreement as follows:
1. A monthly fee of $7,500 for recurring daily processing, including:
(a) All routine recurring daily processing; daily financial
accounting and reconciliation, money movement and balancing
between Underwriter and Insurer, and daily compliance activities;
and
(b) Financial reporting related activities including journal entries,
financial statements, quarterly FOCUS filings.
(c) Underwriter shall invoice Insurer for the monthly fee and Insurer
shall pay such invoice within 30 days of receipt. The monthly fee
in B.1 above is subject to being increased by Underwriter on the
same terms set forth in section 8.6, Increases to Fees and
Charges, in the TPA Agreement. No such increase shall occur prior
to December 31, 2007. For the avoidance of doubt, it is
acknowledged that the annual review and adjustment of
compensation and reimbursement set forth in Section 6 of the
Agreement is separate from the increase to the monthly fee as
contemplated in B.1(c) of this Schedule 4.
52
2. Non-routine, periodic, annual servicing identifiable or allocable to the
Contracts or the FAFLIC Contracts billed at time and material rates as set forth
in Schedule F to the Work Assignment. Such non-routine periodic services
include, but are not limited to:
(a) Annual internal and external financial and operational audits;
(b) Preparation and review of annual regulatory filings including
taxes, NASD filings, registration statement updates;
(c) Regulatory examinations;
(d) Complaint handling; and
(e) Litigation
3. Out of Pocket expenses identifiable or allocable to the Contracts or the
FAFLIC Contracts (including, without limitation, expenses for services provided
by entities Underwriter has retained (Underwriter's outside counsel for example)
in furtherance of the services contemplated in 2 above).
Last revised: November 21, 2006
53
SCHEDULE 5
FORM OF SERVICE AGREEMENT
This schedule is an integral part of the Agreement to which it relates.
SERVICE SECURITY DISTRIBUTORS, INC.
AGREEMENT One Security Benefit Place
Topeka, Kansas 66636
This Service Agreement (this "Agreement"), effective as of [January 1, 2007]
(the "Effective Date"), by and between Security Distributors, Inc., a Kansas
corporation (herein "SDI"), whose Principal Office is located at One Security
Xxxxxxx Xxxxx, Xxxxxx, Xxxxxx 00000, Commonwealth Annuity and Life Insurance
Company, First Allmerica Financial Life Insurance Company and
________________________ (herein the "Broker-Dealer").
WITNESSETH:
WHEREAS, Broker-Dealer previously entered into a Sales or Service Agreements
with VeraVest Investments, Inc. (herein "VeraVest") (formerly known as Allmerica
Investments, Inc.) for the sales and service of Contracts (defined below) issued
by Commonwealth Annuity and Life Insurance Company (herein "Commonwealth")
(formerly known as Allmerica Financial Life Insurance and Annuity Company)
and/or First Allmerica Financial Life Insurance Company (herein "First
Allmerica") and VeraVest subsequently terminated the Sales or Service Agreement;
and
WHEREAS, certain Registered Representatives of the Broker-Dealer were formerly
affiliated with a broker-dealer which sold and serviced Contracts issued by
Commonwealth and/or First Allmerica and/or certain Registered Representatives of
the Broker-Dealer have acquired clients who own such Contracts; and
WHEREAS, such Registered Representatives are desirous of servicing those
Commonwealth and/or First Allmerica Contractholders who are their clients and,
if applicable, who were their clients while they were affiliated with their
prior broker-dealer; and
WHEREAS, the Insurance Companies are willing to consent to such Contractholders
being serviced by such Registered Representatives only if the Broker-Dealer
agrees to supervise the activities of such Registered Representatives related to
such Contractholders; and
WHEREAS, the Broker-Dealer agrees to provide appropriate supervision of its
Registered Representatives related to such Contractholders, subject to the terms
and conditions set forth in this Agreement;
54
NOW THEREFORE, the parties hereto agree as follows:
SDI, subject to the terms and conditions set forth in this Agreement, authorizes
and appoints the Broker-Dealer to service existing Contracts through its
Registered Representatives. The Broker-Dealer accepts this authorization and
appointment and agrees to the terms and conditions set forth below.
DEFINITIONS INSURANCE COMPANIES - All Contracts have been issued by
Commonwealth Annuity and Life Insurance Company (herein
"Commonwealth") (formerly known as Allmerica Financial
Life Insurance and Annuity Company) and/or First
Allmerica Financial Life Insurance Company (herein "First
Allmerica") (herein collectively referred to as the
"Insurance Companies").
The Home Office of Commonwealth is 000 Xxxxxxxx Xxxx,
Xxxxxxxxxxxx, XX 00000.
The Home Office of First Allmerica is 000 Xxxxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxxxxxxxx 00000.
However, all Contracts issued by Commonwealth are being
administered on behalf of Commonwealth by se2, a division
of Security Benefit Life Insurance Company (the
"Administrator") and all Contracts issued by First
Allmerica and reinsured by Commonwealth are being
sub-administered by Administrator. Accordingly, for the
purposes of these Contracts, all mail intended for
Commonwealth or First Allmerica should be directed to
Commonwealth in care of the Administrator at 0000 XX 0xx
Xxxxxx, Xxxxxx, Xxxxxx 00000-0000.
CONTRACTS - The variable annuity and variable life
insurance contracts of the Insurance Companies to be
serviced by Registered Representatives of the
Broker-Dealer, for which SDI has been appointed the
principal underwriter.
REGISTERED REPRESENTATIVES - Individuals affiliated with
the Broker-Dealer who are licensed as life insurance
agents in those jurisdictions where Contracts are to be
serviced and who are also duly registered with the
National Association of Securities Dealers, Inc. (herein
the "NASD") in compliance with the '34 Act.
VERAVEST - VeraVest Investments, Inc. (formerly known as
Allmerica Investments, Inc.) was the exclusive
distributor and principal underwriter for the Contracts
when they were initially sold and was replaced by SDI,
effective November 1, 2006.
'33 ACT - The Securities Act of 1933, as amended.
55
'34 ACT - The Securities Exchange Act of 1934, as
amended.
RELATIONSHIP SECTION 1. The Broker-Dealer agrees that it is and shall
OF PARTIES continue to act at all times as an independent contractor
while this Agreement remains in force. Nothing in this
Agreement will be construed to create the relationship of
employer and employee between SDI or either Insurance
Company and the Broker-Dealer, or any of its employees,
agents or Registered Representatives. The Broker-Dealer
and each Registered Representative will be free to
exercise their independent judgment as to the time, place
and manner of servicing Contracts underwritten by the
Insurance Companies. However, the Broker-Dealer and its
Registered Representatives shall have no authority to act
on behalf of SDI or the Insurance Companies in a manner
which does not conform to applicable statutes,
ordinances, or governmental regulations or to reasonable
rules adopted from time to time by SDI or the Insurance
Companies.
LIMITATIONS ON SECTION 2. The Broker-Dealer understands and agrees that
AUTHORITY this Agreement is being entered into solely for the
purpose of permitting Registered Representatives of the
Broker-Dealer to service existing Contracts issued by the
Insurance Companies and that neither said Registered
Representatives nor the Broker-Dealer shall solicit or
accept any new variable annuity or variable life
insurance Contract applications on behalf of the
Insurance Companies.
LICENSING AND SECTION 3. SDI hereby authorizes the Broker-Dealer to
APPOINTMENT OF recommend Registered Representatives for appointment by
REGISTERED the Insurance Companies as life insurance agents and only
REPRESENTATIVES individuals so recommended shall be appointed. SDI shall
arrange for the Insurance Companies to apply for life
insurance agent appointments in the appropriate
jurisdictions for such recommended Registered
Representatives. PROVIDED, HOWEVER, that the Insurance
Companies shall only appoint a Registered Representative
as their life insurance agent if the Broker-Dealer agrees
(i) to reimburse the appointing Insurance Company for any
licensing and/or appointment fees the Insurance Company
may incur in conjunction with the requested appointment;
and (ii) to pay a reasonable servicing fee, to be
determined by the appointing Insurance Company.
If a Registered Representative is no longer to be treated
as the agent of record on a Contract, the Broker-Dealer
shall promptly notify SDI and the issuing Insurance
Company in writing and, within thirty (30) business days
of such notice, identify a Registered Representative who
will act as the successor agent of record.
56
Notwithstanding the foregoing, the Insurance Companies,
in their sole and absolute discretion, reserve the right
to refuse to appoint any proposed Registered
Representative and/or to terminate with or without cause
any Registered Representative who has been appointed by
the Insurance Companies.
AGREEMENTS BY SECTION 4. The Broker-Dealer agrees that at all times
THE BROKER- when performing its duties under this Agreement that it
DEALER shall be duly registered as a securities broker-dealer
under the '34 Act, be a member in good standing of the
NASD, and be duly licensed or registered as a securities
broker-dealer in each jurisdiction where such licensing
or registration is required in connection with the
servicing of the Contracts or the supervision of
Registered Representatives who service the Contracts.
The Broker-Dealer agrees that at all times when
performing its duties under this Agreement that it shall
be duly licensed and appointed as a life insurance agent
in each jurisdiction in which it intends to perform
hereunder.
The Broker-Dealer shall be responsible for carrying out
its obligations under this Agreement in continued
compliance with the NASD Conduct Rules, federal and state
securities laws and regulations, and state insurance laws
and regulations. The Broker-Dealer and its Registered
Representatives are not authorized to make any
representations concerning a Contract other than those
contained in the Contract prospectus or in such sales
literature or advertising materials as may be authorized
by SDI.
The Broker-Dealer hereby agrees not to use or distribute,
in writing or electronically, any sales literature or
advertising material relating to the Contracts, unless
the specific item has been provided by SDI or has first
been approved for use in writing by SDI. SDI reserves the
right to recall any sales material provided by it at any
time for any reason, and the Broker-Dealer shall promptly
comply with any such request for the return of such
material and shall not use any such material thereafter.
Additionally, the Broker-Dealer shall promptly return all
sales material related to the Contracts promptly upon
termination of this Agreement. On and after the Effective
Date, Broker-Dealer agrees to use no sales material
relating to the Contracts provided to it by Xxxx Xxxx.
The Broker-Dealer agrees that it shall be fully
responsible for ensuring that no person shall service
Contracts on behalf of the Insurance Companies until such
person is appropriately licensed, registered and
otherwise qualified to service Contracts under applicable
state and federal insurance and securities laws.
57
The Broker-Dealer agrees to train, supervise and be
solely responsible for the conduct of its Registered
Representatives in the servicing of the Contracts and for
the supervision as to their strict compliance with SDI's
rules and procedures, the NASD Conduct Rules, and
applicable rules and regulations of any other
governmental or other agency that has jurisdiction over
the servicing of the Contracts.
The Broker-Dealer shall take reasonable steps to ensure
that its Registered Representatives shall not make
investment or other recommendations to a Contract owner
in the absence of reasonable grounds to believe that the
recommendation is suitable for such owner. Such
determination will be based upon, but will not be limited
to, information furnished to a Registered Representative
after reasonable inquiry of such owner concerning the
owner's age, insurance and investment objectives, other
security holdings, financial situation and needs. Upon
request by SDI or the Insurance Companies, the
Broker-Dealer agrees to promptly provide a copy of its
current written suitability procedures to SDI or the
Insurance Companies. The Broker-Dealer agrees that
neither SDI's nor the Insurance Companies' request for a
copy of the Broker-Dealer's suitability procedures
transfers the suitability responsibility to SDI or the
Insurance Companies.
The Broker-Dealer agrees on its own behalf, and on behalf
of the Registered Representatives, to comply with any
trading restrictions/requirements of the mutual funds or
other investment vehicles underlying the Contracts.
Further, in the event the Insurance Companies or SDI is
the subject of an information request by an underlying
fund in accordance with Rule 22c-2 under the Investment
Company Act of 1940, Broker-Dealer agrees to cooperate
fully and to provide such information as Insurance
Companies or SDI reasonably requests in respect of such
information request. If requested by a fund,
Broker-Dealer agrees to execute instructions to restrict
or prohibit further purchases or exchanges of fund shares
by Registered Representatives and/or customers of
Registered Representatives.
The Broker-Dealer shall ensure that its Registered
Representatives conduct their business with respect to
the Contracts at all times as follows:
(a) A Registered Representative shall not service
Contracts in any jurisdiction until such Registered
Representative is properly trained and, if required
under applicable law, is licensed and appointed as a
life insurance agent in such jurisdiction.
(b) A Registered Representative shall utilize only that
sales literature and advertising material approved
in writing by SDI; a Registered Representative may
use other sales material only with the express
written authorization of SDI.
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Broker/Dealer shall be solely responsible for any
payments to Registered Representatives of any commissions
for servicing of the Contracts and shall indemnify,
defend and hold SDI and Insurance Companies harmless from
any and all actions, proceedings or claims by Registered
Representatives in respect of such commissions.
CERTAIN AGREEMENTS SECTION 5. SDI agrees that at all times while this
BY SDI Agreement remains in force that it shall be a registered
broker-dealer under the '34 Act and be a member in good
standing of the NASD.
During the term of this Agreement, SDI will provide to,
or cause to be provided to, the Broker-Dealer, without
charge to the Broker/Dealer, as many copies of the
prospectus(es) for the Contracts (and any amendments, or
supplements thereto) and the current prospectus(es) for
any underlying fund(s) as the Broker-Dealer may
reasonably request. Upon termination of the Agreement,
any prospectuses and other materials and supplies
furnished by SDI to the Broker-Dealer shall be promptly
returned to SDI.
Commonwealth (or its designee) agree to promptly notify
the Broker-Dealer of newly declared effective
prospectus(es) for the Contracts and any amendments or
supplements thereto.
ILLUSTRATIONS SECTION 6. The Broker-Dealer and its Registered
Representatives will not furnish any Contract owner with
an illustration of the financial or other aspects of a
Contract unless the same has been furnished by the
Insurance Companies.
ACCOUNTING SECTION 7. In accordance with the rules of the Insurance
FOR FUNDS Companies, the Broker-Dealer will account for and remit
COLLECTED immediately to the Administrator all funds received or
collected for or on behalf of either Insurance Company
without deduction for any commissions, or other claim the
Broker-Dealer or any Registered Representative may have
against Insurance Company, Xxxx Xxxx, SDI, the
Administrator, or any of their respective affiliates, and
will make such reports and file such substantiating
documents and records as the Insurance Companies may
reasonably require.
INDEMNIFICATION SECTION 8. The Broker-Dealer shall indemnify, defend and
hold the Insurance Companies, SDI, the Administrator and
their officers, directors, employees and agents, and any
of their respective affiliates, harmless from any
liability arising from any act or omission of the
Broker-Dealer, any affiliate of the Broker-Dealer or any
of their officers, directors, life insurance agents,
employees or Registered Representatives, including but
not limited to, any fines, penalties, reasonable
attorney's fees, costs of settlement, damages or
financial loss. The Broker-Dealer expressly authorizes
the Insurance
59
Companies and SDI, without precluding them from
exercising any other remedy they may have, to charge
against all compensation due or to become due to the
Broker-Dealer under this Agreement, any monies paid on
any liability incurred by the Insurance Companies or SDI
by reason of any such act or omission of the
Broker-Dealer, any affiliate of the Broker-Dealer, or any
of their officers, directors, life insurance agents,
employees or Registered Representatives.
Commonwealth or First Allmerica, whichever Insurance
Company issued the affected Contract or Contracts, shall
indemnify, defend and hold the Broker-Dealer, SDI and
their officers, directors, insurance agents, employees
and Registered Representatives harmless from any
liability arising from any act or omission of such
Insurance Company, any affiliate of such Insurance
Company or any of its officers, directors or employees,
including but not limited to, any fines, penalties,
reasonable attorney's fees, costs of settlement, damages
or financial loss.
The indemnifications provided by this Section 8 shall
survive termination of this Agreement.
COMMISSION SECTION 9. If a Contract owner rescinds a Contract or
REFUNDS exercises a right to surrender a Contract for return of
all payments made, the Broker-Dealer will repay the
issuing Insurance Company the amount of any commissions
received by the Broker-Dealer on the Contract within 10
days of receipt of a written or facsimile request for
repayment or at the option of SDI, to the extent
permitted by law, SDI may deduct any such amount to be
repaid from any compensation payable under this
Agreement, whether such compensation is now due or
hereafter becomes due.
BASIS OF SECTION 10. While this Agreement remains in force, the
COMPENSATION Insurance Companies on behalf of SDI agree to pay the
Broker-Dealer commissions, if any, payable on Contracts
(a) serviced by Registered Representatives affiliated
with the Broker-Dealer and (b) for which Broker-Dealer is
the broker/dealer of record as demonstrated by the
Administrator's records. Any commissions payable shall be
calculated and paid pursuant to the terms and conditions
of the sales agreement in force between VeraVest
(formerly, Allmerica Investments, Inc.) and the
broker-dealer with which the Registered Representative
was affiliated at the time the Contract was sold as such
sales agreement may have been amended from time to time
and as may be amended hereafter pursuant to Section 16 of
this Agreement. The Broker-Dealer agrees to pay the
servicing Registered Representative in accordance with
its compensation arrangement with the Registered
Representative.
Notwithstanding the foregoing, the Broker-Dealer
understands and agrees that
60
no commissions or other compensation shall be payable on
annuity payments received by SDI or the Insurance
Companies on or after May 1, 2003 on Select variable
annuity Contracts* serviced by Registered Representatives
affiliated with the Broker-Dealer.
*The term "Select variable annuity Contracts" means and
includes the following variable annuity Contracts issued
by the Insurance Companies:
a. Allmerica Select Resource
b. Allmerica Select Resource II
c. Allmerica Select Acclaim
d. Allmerica Select Reward
e. Allmerica Select Charter
f. Allmerica Select Optim-L
Notwithstanding the foregoing, the Broker-Dealer
understands and agrees that no commissions or other
compensation shall be payable on annuity payments
received by SDI or the Insurance Companies on or after
May 1, 2004 on Partner variable annuity Contracts**
serviced by Registered Representatives affiliated with
the Broker-Dealer.
**The term "Partner variable annuity Contracts" means and
includes the following variable annuity Contracts issued
by the Insurance Companies:
a. Delaware Medallion I, II and III and Golden
Medallion Variable Annuity Contracts;
b. Pioneer Vision, Vision 2, XtraVision and
C-Vision Variable Annuity Contracts;
x. Xxxxxxx Gateway Advisor, Gateway Custom,
Gateway Plus, Gateway Elite, Gateway Incentive
and Gateway Incentive EDB Variable Annuity
Contracts; and
d. Fulcrum FD Variable Annuity Contracts.
TIME OF PAYMENT SECTION 11. A payment will not be considered made until
OF COMMISSIONS it has been received by the Administrator at the address
noted in the Definitions section. On payments made,
commissions, if any, will be paid at regular intervals in
accordance with the rules of the Insurance Companies and
SDI.
TERMINATION SECTION 12. This Agreement shall automatically terminate
immediately and without notice upon the Broker-Dealer
ceasing to comply with any of the terms and conditions of
this Agreement or upon the dissolution, bankruptcy or
insolvency of the Broker-Dealer.
61
Whether or not there is a breach of this Agreement, the
Broker-Dealer or SDI may terminate this Agreement by
giving ten (10) days' written notice to the other party
at any time during the first year hereof, and by giving
thirty (30) days' written notice after the expiration of
the first year hereof.
Upon termination of this Agreement all authorizations,
rights and obligations shall cease, except for (i) the
indemnifications provided in Section 8 (ii) the
obligation to pay any compensation due on the date of
termination and (iii) the provisions of Section 9
relative to commission refunds. Except as provided in the
preceding sentence, no further compensation shall be paid
after termination of this Agreement.
RIGHT OF SET-OFF SECTION 13. SDI and the Insurance Companies will have a
lien on any compensation payable under this Agreement,
whether or not such compensation is now due or hereafter
becomes due, and may apply any such monies to the
satisfaction of indebtedness to SDI or to either
Insurance Company to the extent permitted by law. The
foregoing right of set-off on the part of SDI and the
Insurance Companies shall not prevent all or any of them
from pursuing any other means or remedies available to
them to recover any such indebtedness.
NON-WAIVER OF SECTION 14. Waiver of any breach of any provision of this
BREACH Agreement will not be construed as a waiver of the
provision or of the right of SDI to enforce said
provision thereafter.
ASSIGNABILITY SECTION 15. This Agreement is not transferable. Without
the written consent of SDI and the Insurance Companies,
no rights or interest in or to any compensation payable
hereunder will be subject to assignment, and any
attempted assignment, sale or transfer of any such
compensation without such written consents will
immediately make this Agreement void and be a release to
SDI and to the Insurance Companies in full of any and all
of their obligations hereunder.
RESERVATION OF SECTION 16. SDI reserves the right at any time, and from
RIGHT TO CHANGE time to time, to change prospectively the terms and
conditions of this Agreement, including but not limited
to, the rates of commissions. Any change will become
effective on the date specified in a notice or, if later,
10 days after the notice is given to the Broker-Dealer.
However, the requirement to give advance notice shall not
apply if the change becomes necessary or expedient by
reason of legislation or the requirements of any
governmental body and, in the opinion of SDI, it is not
reasonably possible to meet the 10 day requirement.
Changes will not be retroactive and changes in commission
rates will apply only to annuity payments made on or
after the effective date of the change.
COMPLAINTS AND SECTION 17. The Broker-Dealer, SDI and the Insurance
INVESTIGATIONS Companies agree to
62
cooperate fully in any customer complaint, insurance or
securities regulatory proceeding or judicial proceeding
with respect to the Broker-Dealer, SDI, the Insurance
Companies, their affiliates or their Registered
Representatives to the extent that any such customer
complaint or proceeding is in connection with Contracts
serviced under this Agreement. Without limiting the
foregoing:
(a) The Broker-Dealer will be notified promptly by SDI or
the Insurance Companies of any written customer complaint
or notice of any regulatory inquiry, or audit or judicial
proceeding of which they become aware including the
Broker-Dealer or any Registered Representative which may
be related to any Contract covered by this Agreement. The
Broker-Dealer will promptly notify the Insurance
Companies and SDI of any written customer complaint or
notice of any regulatory inquiry, or audit or judicial
proceeding received by the Broker-Dealer including the
Broker-Dealer or any of its Registered Representatives
which may be related to any Contract covered by this
Agreement.
(b) Any response by the Broker-Dealer to a customer
complaint or regulatory inquiry or audit arising out of
the conduct of its registered representatives or the
activities of the Broker-Dealer associated with the
Contracts covered under this Agreement must be sent to
the applicable Insurance Company and to SDI not less than
five business days prior to the response being sent to
the customer or regulatory authority, except that if a
more prompt response is required, the proposed response
shall be communicated by telephone or facsimile
transmission.
CONFIDENTIALITY SECTION 18. SDI and the Insurance Companies each agree
that the names and addresses of all customers of the
Broker-Dealer and of any company or person affiliated
with the Broker-Dealer, and the names and addresses of
any Registered Representatives of the Broker-Dealer which
may come to the attention of SDI exclusively as a result
of the Broker-Dealer's servicing of the Contracts covered
by this Agreement and not from any independent source,
are confidential and shall not be used by SDI, the
Insurance Companies, or any company or person affiliated
with SDI or the Insurance Companies, nor divulged to any
party for any purpose whatsoever, except as may be
necessary in connection with the servicing of the
Contracts covered by this Agreement, and any agreement
pursuant to which an affiliate of SDI provides
administration services for or relating to the Contracts,
including responses to specified requests to the
Insurance Companies for service by Contract owners or
efforts to prevent the replacement of such Contracts or
to encourage the exercise of options under the terms of
the Contracts. Except as noted above, in no event shall
the names and addresses of such customers and Registered
Representatives be furnished by SDI to any other company
or person, including but not limited to, any of their
managers, registered representatives,
63
or brokers who are not Registered Representatives of the
Broker-Dealer. The intent of this section is that SDI,
the Insurance Companies or companies or persons
affiliated with them shall not utilize, or permit to be
utilized, their knowledge of the Broker-Dealer or of any
affiliated companies which is derived exclusively as a
result of the relationships created through the servicing
of the Contracts.
Confidential information will not include any information
or material, or any element thereof, to the extent any
such information or material, or any element thereof:
(i) has been previously published or is published
hereafter, unless such publication is a breach
of this Agreement or a similar confidentiality
or non-disclosure agreement;
(ii) was already known to the receiving party prior
to being disclosed by or obtained from the
other party;
(iii) has been or is hereafter rightfully received
by the receiving party from a third person
(other than the other party) without
restriction or disclosure and without breach
of this Agreement; or
(iv) has been independently developed by the
receiving party.
In addition, notwithstanding the foregoing provisions of
this Section 18, nothing herein shall prohibit SDI, the
Insurance Companies or any company or person affiliated
with SDI or the Insurance Companies from (i) seeking
business relationships and entering into separate sales
agreements with Registered Representatives of the
Broker-Dealer if the names of said Registered
Representatives were obtained from independent sources
and not exclusively as a result of SDI's relationship
with the Broker-Dealer created by this Agreement; (ii)
from entering into separate sales agreements with
Registered Representatives of the Broker-Dealer upon the
request and at the initiation of said Registered
Representatives; (iii) divulging the names and addresses
of any such customers, Registered Representatives, or
other companies or persons described above in this
section in connection with any customer complaint or
insurance, securities or other regulatory proceeding,
examination or investigation or in connection with any
other legal process or (iv) providing information
requested by or on behalf of an underlying fund as
contemplated in Rule 22c-2 under the Investment Company
Act of 1940.
PRIVACY SECTION 19. Each party hereto agrees to comply with the
privacy laws affecting it, including compliance with the
privacy requirements imposed under the Xxxxx-Xxxxx-Xxxxxx
Act (P.L. 102-106), and agrees further not to
64
take any action to cause another party to violate such
privacy laws. If the applicable privacy laws change, the
parties shall take such action as is necessary to comply
with the law as it then exists. SDI and the Insurance
Companies agree to disclose or use the non public
personal financial information (as such term is defined
in Xxxxx-Xxxxx-Xxxxxx) of the Contract owners only to
carry out the terms and conditions of this Agreement or
as permitted by applicable law. The Broker-Dealer agrees
to disclose or use any information it receives from SDI
or the Insurance Companies in connection with this
Agreement that is nonpublic personal information only to
carry out the terms and conditions of this Agreement.
In addition, each party hereto shall maintain an
information security program designed to: (i) insure the
security and confidentiality of nonpublic personal
information; (ii) protect against any anticipated threats
or hazards to the security or integrity of such
information; and (iii) protect against unauthorized
access to or use of such information. Each party shall
notify the other party promptly upon the discovery of any
loss, unauthorized access, disclosure or unauthorized use
of such nonpublic personal information.
ANTI-MONEY SECTION 20. Each party agrees to comply with the
LAUNDERING compliance and reporting provisions imposed under the USA
Patriot Act (2001) (the "Patriot Act"). The Broker-Dealer
hereby represents that it: has established an Anti-Money
Laundering Program that complies in all material respects
with the Patriot Act and other applicable anti-money
laundering laws and regulations; knows and verifies the
identity of its customers; maintains records regarding
the identity of each customer for at least five years
following account termination; and screens all new
customers against the Office of Foreign Assets Control
("OFAC") control list. The Broker-Dealer understands that
under the Patriot Act additional anti-money laundering
regulations may become effective from time to time and
agrees to take such action as may be necessary to comply
with any new or additional anti-money laundering
regulations.
BONDING SECTION 21. The Broker-Dealer agrees that at all times
while this Agreement remains in force that it shall be
covered by a blanket fidelity bond, including coverage
for larceny and embezzlement, issued by a reputable
bonding company. Such bond shall be, at a minimum, of the
form, type and amount required under NASD rules, endorsed
to extend coverage to transactions relating to the
Contracts. SDI may require evidence, satisfactory to it,
that such coverage is in force and the Broker-Dealer
shall give prompt written notice to SDI of any notice of
cancellation of the bond or change of coverage. Upon the
failure or inability of the Broker-Dealer to obtain or
renew such bond, this Agreement shall terminate at SDI's
discretion upon notice by SDI.
NOTICE SECTION 22. Whenever this Agreement requires a notice to
be given, the requirement shall be considered to have
been met, (a) in the case of notice to
65
the Insurance Companies, if delivered or mailed postage
prepaid to the applicable Insurance Company's Home Office
as specified in the "Definitions" section, or such other
address as may be specified in writing to Broker-Dealer,
(b) in the case of notice to SDI, if delivered or mailed
postage prepaid to the address specified in the opening
paragraph of this Agreement (to the attention of SDI's
General Counsel), or such other address as may be
specified in writing to Broker-Dealer, and (c) in the
case of Broker-Dealer, if delivered or mailed postage
prepaid at the address specified on the signature page of
this Agreement.
GOVERNING LAW SECTION 23. This Agreement shall be governed by and
construed in accordance with the laws of the United
States, the State of
New York (without regard to its
choice of law provisions), and the rules of the NASD, as
applicable.
SEVERABILITY SECTION 24. The provisions of this Agreement are
severable, and if any provision of this Agreement is
found to be invalid, such provision shall not affect any
other provision of this Agreement that can be given
effect without the invalid provision.
ARBITRATION SECTION 25. All claims and controversies arising out of
or related to this Agreement, except actions for
equitable relief pending an arbitration award, shall be
submitted to binding arbitration in Topeka, Kansas (or
such other location as may be agreeable to all the
parties to the arbitration) in accordance with the Code
of Arbitration procedure of the NASD, if the NASD accepts
jurisdiction, and, if not, by a panel of three neutral
arbitrators under the Commercial Arbitration Rules of the
American Arbitration Association. Judgement upon an award
of the arbitrators may be entered and enforced in any
court having jurisdiction. The parties to such dispute
will equally share the fees and expenses of the
arbitrators. The parties agree that the prevailing party
in any such arbitration, as determined by the
arbitrators, shall be entitled to reasonable attorneys'
fees.
LIMITATION ON Section 26. In no event shall (a) SDI's aggregate
LIABILITY liability to Broker-Dealer under this Agreement exceed
the amount of commissions paid to such Broker-Dealer in
the twelve months preceding the claim giving rise to such
liability (b) SDI be liable to Broker-Dealer for any
indirect, punitive, special, exemplary, incidental or
consequential damages, even if advised of the possibility
of such damages. The limitations of this Section 26 shall
apply, regardless of whether the claim giving rise to
such liability sounds in breach of contract, tort or
otherwise. If more than one claim is made by
Broker-Dealer under this Agreement in any twelve month
period, any amounts paid in respect of the first claim
shall reduce the amount available for subsequent
66
claims in such twelve month period.
CAPTIONS SECTION 27. Captions are used for informational purposes
only and no caption shall be construed to affect the
substance of any provision of this Agreement.
COUNTERPARTS SECTION 28. 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.
EFFECTIVENESS; SECTION 29. This Agreement contains the entire contract
ENTIRE CONTRACT; between the parties. Upon execution it will replace all
PRIOR AGREEMENTS previous agreements between the Broker-Dealer, SDI,
VeraVest and the Insurance Companies, or any of them,
relating to the servicing of the Contracts. It is hereby
understood and agreed that any other agreement or
representation, commitment, promise or statement of any
nature, whether oral or written, relating to or
purporting to relate to the relationship of the parties
is hereby rendered null and void.
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IN WITNESS WHEREOF, the parties have executed this Agreement in duplicate to
take effect on the Effective Date.
[SIGNATURE PAGE FOLLOWS]
For: Commonwealth Annuity and For: First Allmerica Financial
Life Insurance Company Life Insurance Company
By: By:
------------------------------------ ---------------------------------
Name: Name:
---------------------------------- -------------------------------
Title: Title:
--------------------------------- ------------------------------
Date: Date:
---------------------------------- -------------------------------
For: For: Security Distributors, Inc.
___________________________________
Name of Broker-Dealer
By: By:
------------------------------------ ---------------------------------
Name: Name:
----------------------------------- -------------------------------
Title: Title:
--------------------------------- ------------------------------
Date: Date:
---------------------------------- -------------------------------
Address for notice:
_______________________
_______________________
_______________________
Last revised: November 21, 2006
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