EXHIBIT (8)(k)
PARTICIPATION AGREEMENT
AMONG
XXXXXXX XXXXX LIFE INSURANCE COMPANY,
XXXXX NEW YORK VENTURE FUND, AND
XXXXX DISTRIBUTORS, LLC
THIS AGREEMENT, dated as of the 28th day of August, 2002, by and
among Xxxxxxx Xxxxx Life Insurance Company (the "Company"), an Arkansas life
insurance company, on its own behalf and on behalf of each segregated asset
account of the Company set forth on Schedule A hereto as may be amended from
time to time (hereinafter referred to individually and collectively as the
"Account"), Xxxxx New York Venture Fund (the "Fund"), a Maryland corporation,
and Xxxxx Distributors, LLC (the "Underwriter"), a Delaware company.
WHEREAS, the shares of beneficial interests of the Fund are divided
into several series of shares, each designated a "Portfolio" and representing
the interest in a particular managed portfolio of securities and other assets;
WHEREAS, the Fund is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended, (the "1940 Act")
and shares of the Portfolios are registered under the Securities Act of 1933,
as amended (the "1933 Act");
WHEREAS, Xxxxx Selected Advisers, L.P. (the "Adviser"), a Colorado
limited partnership, which serves as investment adviser to the Fund, is duly
registered as an investment adviser under the Investment Advisers Act of 1940,
as amended;
WHEREAS, the Underwriter, which serves as distributor to the Fund, is
registered as a broker-dealer with the Securities and Exchange Commission (the
"SEC") under the Securities Exchange Act of 1934, as amended (the "1934 Act"),
and is a member in good standing of the National Association of Securities
Dealers, Inc. (the "NASD");
WHEREAS, the Account is duly established and maintained as a
segregated asset account, duly established by the Company, on the date shown
for such Account on Schedule A hereto, to set aside and invest assets
attributable to variable annuity contracts set forth in Schedule A hereto, as
it may be amended from time to time by mutual written agreement (the
"Contracts");
WHEREAS, each Portfolio issues shares to the general public and to
the separate accounts of insurance companies ("Participating Insurance
Companies") to fund variable annuity contracts sold to certain qualified
pension and retirement plans;
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WHEREAS, the Company intends to purchase shares of other open-end
management investment companies that offer shares to the general public to
fund the Contracts;
WHEREAS, the Fund and the Underwriter know of no reason why shares in
any Portfolio may not be sold to Participating Insurance Companies to fund
variable annuity contracts sold to certain qualified pension and retirement
plans; and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares in the Portfolios (and
classes thereof) listed in Schedule B hereto, as it may be amended from time
to time by mutual written agreement (the "Designated Portfolios") on behalf of
the Account to fund the aforesaid Contracts, and the Underwriter is authorized
to sell such shares in the Designated Portfolios, and classes thereof, to the
Account at net asset value.
NOW, THEREFORE, in consideration of their mutual promises, the
Company, the Fund, and the Underwriter agree as follows:
ARTICLE I. Sale of Fund Shares
1.1. The Fund has granted to the Underwriter exclusive authority
to distribute the Fund's shares, and has agreed to instruct, and has so
instructed, the Underwriter to make available to the Company for purchase on
behalf of the Account Fund shares of the Designated Portfolios and classes
thereof listed on Schedule B to this Agreement (the "Shares"). Pursuant to
such authority and instructions, and subject to Article IX hereof, the
Underwriter agrees to make the Shares available to the Company for purchase on
behalf of the Account, such purchases to be effected at net asset value in
accordance with Section 1.3 of this Agreement. Notwithstanding the foregoing,
the Board of Trustees of the Fund (the "Board") may suspend or terminate the
offering of Shares of any Designated Portfolio or class thereof, if such
action is required by law or by regulatory authorities having jurisdiction or
if, in the sole discretion of the Board acting in good faith and in light of
its fiduciary duties under federal and any applicable state laws, suspension
or termination is necessary in the best interests of the shareholders of such
Designated Portfolio.
1.2. The Fund shall redeem, at the Company's request, any full or
fractional Shares held by the Company on behalf of the Account, such
redemptions to be effected at net asset value in accordance with Section 1.3
of this Agreement. Notwithstanding the foregoing, (i) the Company shall not
redeem Shares attributable to Contract owners except in the circumstances
permitted in Section 9.3 of this Agreement, and (ii) the Fund may delay
redemption of Shares of any Designated Portfolio to the extent permitted by
the 1940 Act, and any rules, regulations, or orders thereunder.
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1.3. Purchase and Redemption Procedures
(a) The Fund hereby appoints the Company as an agent of
the Fund for the limited purpose of receiving purchase and redemption requests
on behalf of the Account (but not with respect to any Fund shares that may be
held in the general account of the Company) for the Shares made available
hereunder, based on allocations of amounts to the Account or subaccounts thereof
under the Contracts and other transactions relating to the Contracts or the
Account. All transactions in Account shares shall be executed through the
Omnibus Accounts of Company's affiliate Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx,
Inc. ("Omnibus Accounts"). Receipt of any such request (or relevant
transactional information therefor) on any day the New York Stock Exchange is
open for trading and on which the Fund calculates its net asset value pursuant
to the rules of the SEC (a "Business Day") by the Company as such limited agent
of the Fund prior to the time that the Fund ordinarily calculates its net asset
value as described from time to time in the Fund Prospectus (which as of the
date of execution of this Agreement is 4:00 p.m. Eastern Time) shall constitute
receipt by the Fund on that same Business Day, provided that the Fund receives
notice of such request by 11 a.m. Eastern Time on the next following Business
Day. Company will provide to the Fund or its designee via the NSCC Fund SERV DCC
& S platform (which utilizes the "as of" record layout within Fund/SERV) one or
more files detailing the instructions received with respect to each Plan prior
to 4:00 p.m. ET on the prior Business Day for each of the Funds. If for any
reason Xxxxxxx Xxxxx is unable to transmit the file(s) with respect to any
Business Day, Xxxxxxx Xxxxx will notify the Fund or its designee by 11:00 a.m.
ET on the next following Business Day.
(b) The Company shall pay for Shares on the same day
that it notifies the Fund of a purchase request for such Shares. Payment for
Shares shall be made in federal funds transmitted to the Fund via the NSCC
Fund/SERV DCC&S platform to be received by the Fund by 6:30 p.m. Eastern Time
on the day the Fund is notified of the purchase request for Shares (unless the
Fund determines and so advises the Company that sufficient proceeds are
available from redemption of Shares of other Designated Portfolios effected
pursuant to redemption requests tendered by the Company on behalf of the
Account). Upon receipt of federal funds transmitted via the NSCC Fund/SERV
DCC&S platform, such funds shall cease to be the responsibility of the Company
and shall become the responsibility of the Fund. Notwithstanding any provision
of this Agreement to the contrary, for purchase and redemption instructions
with respect to any Shares, Company and the Fund will settle the purchase and
redemption transactions referred to herein, via the NSCC Fund/SERV platform
settlement process on the next Business Day following the effective trade
date. The Fund will provide to Company a daily transmission of positions and
trading activity taking place in the Omnibus Accounts using Company's
affiliate's proprietary Inventory Control System ("ICS").
(c) Payment for Shares redeemed by the Account or the
Company shall be made in federal funds transmitted via the NSCC Fund/SERV DCC&S
platform to the Company or any other designated person on the next Business Day
after the Fund is properly notified of the
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redemption order of such Shares (unless redemption proceeds are to be applied
to the purchase of Shares of other Designated Portfolios in accordance with
Section 1.3(b) of this Agreement), except that the Fund reserves the right to
redeem Shares in assets other than cash and to delay payment of redemption
proceeds to the extent permitted under Section 22(e) of the 1940 Act and any
Rules thereunder, and in accordance with the procedures and policies of the
Fund as described in the then current prospectus. The Fund shall not bear any
responsibility whatsoever for the proper disbursement or crediting of
redemption proceeds by the Company; the Company alone shall be responsible for
such action.
(d) Any purchase or redemption request for Shares held
or to be held in the Company's general account shall be effected at the
closing net asset value per share next determined after the Fund's receipt of
such request as set forth in Section 1.3(a) herein.
1.4. The Fund shall use its best efforts to make the closing net
asset value per Share for each Designated Portfolio available to the Company
by 6:30 p.m. Eastern Time each Business Day via the NSCC Profile 1 platform,
and in any event, as soon as reasonably practicable after the closing net
asset value per Share for such Designated Portfolio is calculated, and shall
calculate such closing net asset value, including any applicable daily
dividend factor, in accordance with the Fund's Prospectus. In the event the
Fund is unable to make the 6:30 p.m. deadline stated herein, it shall provide
additional time for the Company to place orders for the purchase and
redemption of Shares. Such additional time shall be equal to the additional
time that the Fund takes to make the closing net asset value available to the
Company. Neither the Fund, any Designated Portfolio, the Underwriter, nor any
of their affiliates shall be liable for any information provided to the
Company pursuant to this Agreement which information is based on incorrect
information supplied by the Company to the Fund or the Underwriter. Any
material error in the calculation or reporting of the closing net asset value,
including any applicable daily dividend factor per Share shall be reported
immediately upon discovery to the Company. In such event the Company shall be
entitled to an adjustment to the number of Shares purchased or redeemed to
reflect the correct closing net asset value, including any applicable daily
dividend factor per Share and the Fund shall bear the cost of correcting such
errors. Any error of a lesser amount shall be corrected in the next Business
Day's net asset value per Share.
1.5. Notwithstanding anything to the contrary contained in this
Agreement, the Fund will make available for purchase by the Company, on its
behalf and on behalf of the Account a class of shares available at net asset
value which are not subject to a contingent deferred sales charge or
redemption fee. In addition, no exchange fees will be applicable to shares of
the Funds purchased by the Company, on its behalf and on behalf of the
Account. The Fund shall furnish notice (via the NSCC Profile II platform) to
the Company as soon as reasonably practicable of any income dividends or
capital gain distributions payable on any Shares. The form of payment of
dividends and capital gains distributions will be determined in accordance
with the Company's operational procedures in effect at the time of the payment
of such dividend or distribution. At this time, the Company, on its behalf and
on behalf of the Account, hereby elects to receive all such dividends and
distributions as are payable on any Shares in the form of cash. Company will
reinvest a portion or all of the cash proceeds for additional Shares of that
Designated Portfolio through a trade processed via the NSCC
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platform. The Company reserves the right, on its behalf and on behalf of the
Account, to revoke this election and to receive all such dividends and capital
gain distributions in the form of additional Shares of that Designated
Portfolio. The Fund shall notify the Company promptly of the number of Shares
so issued as payment of such dividends and distributions. All transactions of
Account shares contemplated herein shall be executed through the Omnibus
Accounts.
1.6. Issuance and transfer of Shares shall be by book entry only
and executed through the Omnibus Accounts. Stock certificates will not be
issued to the Company or the Account. Purchase and redemption orders for Fund
shares shall be recorded in an appropriate ledger for the Account or the
appropriate subaccount of the Account.
1.7 Fund Information.
(a) The Fund will provide (or cause to be provided) to Company the
information set forth in Schedule C hereto. In addition, notwithstanding
anything contained in this Agreement to the contrary, the Fund hereby agrees
that Company may use such information in communications prepared for the
Contracts, including, but not limited to, application, marketing, sales and
other communications materials. The Fund will provide timely notification to
Company of any change to the information described in Part I of Schedule C
including without limitation any change to the CUSIP number or symbol
designation of a Fund. Such notification shall be given to Company at least
ten (10) Business Days prior to the effective date of the change or the effect
of the change with respect to transactions by the Account in any affected Fund
shall be delayed for a reasonable time following notification hereunder.
(b) Notwithstanding anything to the contrary in this Agreement, upon
request, the Fund will provide Company with prospectuses, proxy materials,
financial statements, reports and other materials relating to each Fund in
sufficient quantity for each Contract owner invested in the Fund.
(c) With the exception of (i) listings of product offerings; (ii)
materials in the public domain (e.g., magazine articles and trade
publications); and (iii) materials used by on an internal basis only, Company
agrees not to furnish or cause to be furnished to any third parties or to
display publicly or publish any information or materials relating to the
Funds, except such materials and information as may be distributed to Company
by Fund or approved for distribution by Fund upon Company's request.
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ARTICLE II. Representations and Warranties
2.1. The Company represents and warrants that the Contracts (a)
are, or prior to issuance will be, registered under the 1933 Act, or (b) are
not registered because they are properly exempt from registration under the
1933 Act or will be offered exclusively in transactions that are properly
exempt from registration under the 1933 Act. The Company further represents
and warrants that the Contracts will be issued and sold in compliance in all
material respects with all applicable federal securities and state securities
and insurance laws and that the sale of the Contracts shall comply in all
material respects with state insurance suitability requirements. The Company
further represents and warrants that it is an insurance company duly organized
and in good standing under applicable law, that it has legally and validly
established the Account prior to any issuance or sale thereof as a segregated
asset account under Arkansas insurance laws, and that it (a) has registered
or, prior to any issuance or sale of the Contracts, will register the Account
as a unit investment trust in accordance with the provisions of the 1940 Act
to serve as a segregated investment account for the Contracts, or
alternatively (b) has not registered the Account in proper reliance upon an
exclusion from registration under the 1940 Act. The Company shall register and
qualify the Contracts or interests therein as securities in accordance with
the laws of the various states only if and to the extent deemed advisable by
the Company.
2.2. The Fund represents and warrants that Shares sold pursuant
to this Agreement shall be registered under the 1933 Act, duly authorized for
issuance and sold in compliance with applicable state and federal securities
laws and that the Fund is and shall remain registered under the 0000 Xxx. The
Fund shall amend the registration statement for its shares under the 1933 Act
and the 1940 Act from time to time as required in order to effect the
continuous offering of its shares. The Fund shall register and qualify the
shares for sale in accordance with the laws of the various states only if and
to the extent deemed advisable by the Fund, the Adviser, or the Underwriter.
2.3. The Fund and the Underwriter agree to comply with any
applicable state insurance laws or regulations (including the furnishing of
information not otherwise available to the Company which is required by state
insurance law to enable the Company to obtain the authority needed to issue
the Contracts in any applicable state, and including cooperating with the
Company in any filings of sales literature for the Contracts), to the extent
notified thereof in writing by the Company.
2.4. The Fund represents that it is lawfully organized and
validly existing under the laws of the State of Maryland and that it does and
will comply in all material respects with the 1940 Act.
2.6. The Underwriter represents and warrants that it is a member
in good standing of the NASD and is registered as a broker-dealer with the
SEC. The Underwriter further represents that it will sell and distribute the
Fund shares in accordance with any applicable state and federal securities
laws.
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2.7. The Fund and the Underwriter represent and warrant that all
of their trustees/directors, officers, employees, investment advisers, and
other individuals or entities dealing with the money and/or securities of the
Fund are and shall continue to be at all times covered by a blanket fidelity
bond or similar coverage for the benefit of the Fund in an amount not less
than the minimum coverage as required currently by Rule 17g-1 of the 1940 Act
or related provisions as may be promulgated from time to time. The aforesaid
bond shall include coverage for larceny and embezzlement and shall be issued
by a reputable bonding company.
ARTICLE III. Prospectuses and Proxy Statements; Voting
3.1. The Underwriter shall provide the Company with as many
copies of the Fund's current prospectus describing the Designated Portfolios
listed on Schedule B as the Company may reasonably request. The Fund or the
Underwriter shall bear the expense of printing copies of the current
prospectus for the Fund that will be distributed to existing Contract owners,
and the Company shall bear the expense of printing copies of the Contract's
prospectus that are used in connection with offering the Contracts issued by
the Company. If requested by the Company in lieu thereof, the Fund shall
provide such documentation (including a final copy of the new prospectus on
diskette at the Fund's or Underwriter's expense) and other assistance as is
reasonably necessary in order for the Company once each year (or more
frequently if the prospectus for the Fund is amended) to have the prospectus
for the Contracts and the Fund's prospectus printed together in one document
(such printing of the Fund's prospectus for existing Contract owners to be at
the Fund's or Underwriter's expense).
3.2. The Fund's prospectus shall state that the current Statement
of Additional Information ("SAI") for the Fund is available, and the
Underwriter (or the Fund), at its expense, shall provide a reasonable number
of copies of such SAI free of charge to the Company for itself and for any
owner of a Contract who requests such SAI.
3.3. The Fund shall provide the Company with information
regarding the Fund's expenses, which information may include a table of fees
and related narrative disclosure for use in any prospectus or other
descriptive document relating to a Contract.
3.4. The Fund, at its or the Underwriter's expense, shall provide
the Company with copies of its proxy material, reports to shareholders, and
other communications to shareholders in such quantity as the Company shall
reasonably require for distributing to Contract owners.
3.5. The Company shall:
(i) solicit voting instructions from Contract owners;
(ii) vote the Shares in accordance with instructions
received from Contract owners; and
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(iii) vote Shares for which no instructions have been
received in the same proportion as Shares of such
portfolio for which instructions have been
received,
so long as and to the extent that the SEC continues to interpret the 1940 Act
to require pass-through voting privileges for variable contract owners or to
the extent otherwise required by law. The Company will vote Shares held in any
segregated asset account in the same proportion as Shares of such portfolio
for which voting instructions have been received from Contract owners, to the
extent permitted by law.
ARTICLE IV. Sales Material and Information
4.1. The Company shall furnish, or shall cause to be furnished,
to the Fund or its designee, each piece of sales literature or other
promotional material that the Company develops and in which the Fund (or a
Designated Portfolio thereof) or the Adviser or the Underwriter is named. No
such material shall be used until approved by the Fund or its designee. The
Fund or its designee will be deemed to have approved such sales literature or
promotional material unless the Fund or its designee objects or provides
comments to the Company within ten (10) Business Days after receipt of such
material. The Fund or its designee reserves the right to reasonably object to
the continued use of any such sales literature or other promotional material
in which the Fund (or a Designated Portfolio thereof) or the Adviser or the
Underwriter is named, and no such material shall be used if the Fund or its
designee so object.
4.2. The Company shall not give any information or make any
representations or statements on behalf of the Fund or concerning the Fund or
the Adviser or the Underwriter in connection with the sale of the Contracts
other than the information or representations contained in the registration
statement or profiles or prospectus or SAI for the Fund shares, as such
registration statement and profiles and prospectus or SAI may be amended or
supplemented from time to time, or in reports or proxy statements for the
Fund, or in sales literature or other promotional material approved by the
Fund or its designee or by the Underwriter, except with the permission of the
Fund or the Underwriter or the designee of either.
4.3. The Fund and the Underwriter, or their designee, shall
furnish, or cause to be furnished, to the Company, each piece of sales
literature or other promotional material that it develops and in which the
Company, and/or its Account, is named. No such material shall be used until
approved by the Company. The Company will be deemed to have approved such
sales literature or promotional material unless the Company objects or
provides comments to the Fund, the Underwriter, or their designee within ten
Business Days after receipt of such material. The Company reserves the right
to reasonably object to the continued use of any such sales literature or
other promotional material in which the Company and/or its Account is named,
and no such material shall be used if the Company so objects.
4.4. The Fund and the Underwriter shall not give any information
or make any representations on behalf of the Company or concerning the
Company, the Account, or the
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Contracts other than the information or representations contained in a
registration statement and prospectus (which shall include an offering
memorandum, if any, if the Contracts issued by the Company or interests
therein are not registered under the 1933 Act), or SAI for the Contracts, as
such registration statement, prospectus, or SAI may be amended or supplemented
from time to time, or in published reports for the Account which are in the
public domain or approved by the Company for distribution to Contract owners,
or in sales literature or other promotional material approved by the Company
or its designee, except with the permission of the Company.
4.5. The Fund will provide to the Company at least one complete
copy of all registration statements, prospectuses, SAIs, reports, proxy
statements, sales literature and other promotional materials, applications for
exemptions, requests for no-action letters, and all amendments to any of the
above, that relate to the Fund or its shares, promptly after the filing of
such document(s) with the SEC or other regulatory authorities.
4.6. The Company will provide to the Fund at least one complete
copy of all registration statements, prospectuses (which shall include an
offering memorandum, if any, if the Contracts issued by the Company or
interests therein are not registered under the 1933 Act), SAIs, reports,
solicitations for voting instructions, sales literature and other promotional
materials, applications for exemptions, requests for no-action letters, and
all amendments to any of the above, that relate to the Contracts or the
Account, promptly after the filing of such document(s) with the SEC or other
regulatory authorities. The Company shall provide to the Fund and the
Underwriter any complaints received from the Contract owners pertaining to the
Fund or the Designated Portfolio.
4.7. The Fund will provide the Company with as much notice as is
reasonably practicable of any proxy solicitation for any Designated Portfolio,
and of any material change in the Fund's registration statement, particularly
any change resulting in a change to the registration statement or prospectus
for any Account. The Fund will work with the Company so as to enable the
Company to solicit proxies from Contract owners, or to make changes to its
prospectus or registration statement, in an orderly manner. The Fund will make
reasonable efforts to attempt to have changes affecting Contract prospectuses
become effective simultaneously with the annual updates for such prospectuses.
4.8. For purposes of this Article IV, the phrase "sales
literature and other promotional materials" includes, but is not limited to,
any of the following that refer to the Fund or any affiliate of the Fund:
advertisements (such as material published, or designed for use in, a
newspaper, magazine, or other periodical, radio, television, telephone or tape
recording, videotape display, signs or billboards, motion pictures, or other
public media), sales literature (i.e., any written communication distributed
or made generally available to customers or the public, including brochures,
circulars, reports, market letters, form letters, seminar texts, reprints or
excerpts of any other advertisement, sales literature, or published article),
educational or training materials or other communications distributed or made
generally available to some or all agents or employees, and registration
statements, prospectuses, SAIs, shareholder reports, proxy
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materials, and any other communications distributed or made generally
available with regard to the Fund.
ARTICLE V. Fees and Expenses
5.1. All expenses incident to performance by the Fund under this
Agreement shall be paid by the Fund. The Fund shall see to it that all its
shares are registered and authorized for issuance in accordance with
applicable federal law and, if and to the extent deemed advisable by the Fund,
in accordance with applicable state laws prior to their sale. The Fund shall
bear the expenses for the cost of registration and qualification of the Fund's
shares, preparation and filing of the Fund's prospectus and registration
statement, proxy materials and reports, setting the prospectus in type,
setting in type and printing the proxy materials and reports to shareholders
(including the costs of printing a prospectus that constitutes an annual
report), the preparation of all statements and notices required by any federal
or state law, and all taxes on the issuance or transfer of the Fund's shares.
5.2. The Company shall bear the expenses of distributing the
Fund's prospectus to owners of Contracts issued by the Company and of
distributing the Fund's proxy materials and reports to such Contract owners.
ARTICLE VI. Diversification and Qualification
6.1. The Fund represents that it is or will be qualified as a
Regulated Investment Company under Subchapter M of the Code, and that it will
maintain such qualification (under Subchapter M or any successor or similar
provisions) and that it will notify the Company immediately upon having a
reasonable basis for believing that it has ceased to so qualify or that it
might not so qualify in the future.
ARTICLE VII. Indemnification
7.1. Indemnification By the Company
7.1(a). The Company agrees to indemnify and hold harmless
the Fund and the Underwriter and each of its trustees/directors and officers,
and each person, if any, who controls the Fund or the Underwriter within the
meaning of Section 15 of the 1933 Act or who is under common control with the
Underwriter (collectively, the "Indemnified Parties" for purposes of this
Section 7.1) against any and all losses, claims, damages, liabilities
(including amounts paid in settlement with the written consent of the Company)
or litigation (including legal and other expenses), to which the Indemnified
Parties may become subject under any statute or regulation, at common law or
otherwise, insofar as such losses, claims, damages, liabilities or expenses
(or actions in respect thereof) or settlements:
(i) arise out of or are based upon any untrue statement
or alleged untrue statements of any material fact contained
in the registration statement, prospectus
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(which shall include a written description of a Contract
that is not registered under the 1933 Act), or SAI for the
Contracts or contained in sales literature for the Contracts
(or any amendment or supplement to any of the foregoing), or
arise out of or are based upon the omission or the alleged
omission to state therein a material fact required to be
stated therein or necessary to make the statements therein
not misleading, provided that this agreement to indemnify
shall not apply as to any Indemnified Party if such
statement or omission or such alleged statement or omission
was made in reliance upon and in conformity with information
furnished to the Company by or on behalf of the Fund for use
in the registration statement, prospectus or SAI for the
Contracts or in the Contracts or sales literature (or any
amendment or supplement) or otherwise for use in connection
with the sale of the Contracts or Fund shares; or
(ii) arise out of or as a result of statements or
representations (other than statements or representations
contained in the registration statement, prospectus, SAI, or
sales literature of the Fund not supplied by the Company or
persons under its control) or wrongful conduct of the
Company or its agents or persons under the Company's
authorization or control, with respect to the sale or
distribution of the Contracts or Fund Shares; or
(iii) arise out of any untrue statement or alleged untrue
statement of a material fact contained in a registration
statement, prospectus, SAI, or sales literature of the Fund
or any amendment thereof or supplement thereto or the
omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the
statements therein not misleading if such a statement or
omission was made in reliance upon information furnished to
the Fund by or on behalf of the Company; or
(iv) arise as a result of any material failure by the
Company to provide the services and furnish the materials
under the terms of this Agreement (including a failure,
whether unintentional or in good faith or otherwise, to
comply with the qualification requirements specified in
Section 6.1 of this Agreement); or
(v) arise out of or result from any material breach of
any representation and/or warranty made by the Company in
this Agreement or arise out of or result from any other
material breach of this Agreement by the Company;
as limited by and in accordance with the provisions of Sections 7.1(b) and
7.1(c) hereof.
7.1(b). The Company shall not be liable under this
indemnification provision with respect to any losses, claims, damages,
liabilities or litigation to which an Indemnified Party would otherwise be
subject by reason of such Indemnified Party's willful misfeasance, bad faith,
or gross negligence in the performance of such Indemnified Party's duties or
by reason of such Indemnified Party's reckless disregard of its obligations or
duties under this Agreement.
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7.1(c). The Company shall not be liable under this
indemnification provision with respect to any claim made against an
Indemnified Party unless such Indemnified Party shall have notified the
Company in writing within a reasonable time after the summons or other first
legal process giving information of the nature of the claim shall have been
served upon such Indemnified Party (or after such Indemnified Party shall have
received notice of such service on any designated agent), but failure to
notify the Company of any such claim shall not relieve the Company from any
liability which it may have to the Indemnified Party against whom such action
is brought otherwise than on account of this indemnification provision. In
case any such action is brought against an Indemnified Party, the Company
shall be entitled to participate, at its own expense, in the defense of such
action. The Company also shall be entitled to assume the defense thereof, with
counsel satisfactory to the party named in the action. After notice from the
Company to such party of the Company's election to assume the defense thereof,
the Indemnified Party shall bear the fees and expenses of any additional
counsel retained by it, and the Company will not be liable to such party under
this Agreement for any legal or other expenses subsequently incurred by such
party independently in connection with the defense thereof other than
reasonable costs of investigation.
7.1(d). The Indemnified Parties will promptly notify the
Company of the commencement of any litigation or proceedings against them in
connection with the issuance or sale of the Fund shares or the Contracts or
the operation of the Fund.
7.2. Indemnification by the Underwriter
7.2(a). The Underwriter agrees to indemnify and hold
harmless the Company and each of its directors and officers and each person,
if any, who controls the Company within the meaning of Section 15 of the 1933
Act (collectively, the "Indemnified Parties" for purposes of this Section 7.2)
against any and all losses, claims, damages, liabilities (including amounts
paid in settlement with the written consent of the Underwriter) 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, damages, liabilities or expenses (or actions
in respect thereof) or settlements:
(i) arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact contained
in the registration statement or profile or prospectus or
SAI or sales literature of the Fund (or any amendment or
supplement to any of the foregoing), or arise out of or are
based upon the omission or the alleged omission to state
therein a material fact required to be stated therein or
necessary to make the statements therein not misleading,
provided that this agreement to indemnify shall not apply as
to any Indemnified Party if such statement or omission or
such alleged statement or omission was made in reliance upon
and in conformity with information furnished to the
Underwriter or the Fund by or on behalf of the Company for
use in the registration statement, profile, prospectus or
SAI for the Fund or in sales literature (or any
12
amendment or supplement) or otherwise for use in connection
with the sale of the Contracts or Fund shares; or
(ii) arise out of or as a result of statements or
representations (other than statements or representations
contained in the registration statement, prospectus, SAI or
sales literature for the Contracts not supplied by the
Underwriter or persons under their control) or wrongful
conduct of the Fund or the Underwriter or persons under
their control, with respect to the sale or distribution of
the Contracts or Fund shares; or
(iii) arise out of any untrue statement or alleged untrue
statement of a material fact contained in a registration
statement, prospectus, SAI or sales literature covering the
Contracts, or any amendment thereof or supplement thereto,
or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to
make the statement or statements therein not misleading, if
such statement or omission was made in reliance upon
information furnished to the Company by or on behalf of the
Fund or the Underwriter; or
(iv) arise as a result of any failure by the Fund or the
Underwriter to provide the services and furnish the
materials under the terms of this Agreement (including a
failure of the Fund, whether unintentional or in good faith
or otherwise, to comply with the qualification requirements
specified in Section 6.1 of this Agreement); or
(v) arise out of or result from any material breach of
any representation and/or warranty made by the Fund or the
Underwriter in this Agreement or arise out of or result from
any other material breach of this Agreement by the Fund or
the Underwriter; or
(vi) arise out of or result from the materially
incorrect or untimely calculation or reporting of the daily
net asset value per share or dividend or capital gain
distribution rate;
as limited by and in accordance with the provisions of Sections 7.2(b) and
7.2(c) hereof.
7.2(b). The Underwriter shall not be liable under this
indemnification provision with respect to any losses, claims, damages,
liabilities or litigation to which an Indemnified Party would otherwise be
subject by reason of such Indemnified Party's willful misfeasance, bad faith,
or gross negligence in the performance or such Indemnified Party's duties or
by reason of such Indemnified Party's reckless disregard of obligations and
duties under this Agreement or to the Company or the Account, whichever is
applicable.
7.2(c). The Underwriter shall not be liable under this
indemnification provision with respect to any claim made against an
Indemnified Party unless such Indemnified Party shall
13
have notified the 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 the Underwriter of any such claim shall not
relieve the 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, the Underwriter will be entitled to
participate, at its own expense, in the defense thereof. The Underwriter also
shall be entitled to assume the defense thereof, with counsel satisfactory to
the party named in the action. After notice from the Underwriter to such party
of the Underwriter's election to assume the defense thereof, the Indemnified
Party shall bear the fees and expenses of any additional counsel retained by
it, and the 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.
7.2(d). The Indemnified Party will promptly notify the
Underwriter of the commencement of any litigation or proceedings against it or
any of its officers or directors in connection with the issuance or sale of
the Contracts or the operation of the Account.
ARTICLE VIII. Applicable Law
8.1. This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the State of New York.
8.2. This Agreement shall be subject to the provisions of the
1933, 1934, and 1940 Acts, and the rules and regulations and rulings
thereunder, including such exemptions from those statutes, rules, and
regulations as the SEC may grant and the terms hereof shall be interpreted and
construed in accordance therewith.
ARTICLE IX. Termination
9.1. This Agreement shall continue in full force and effect until
the first to occur of:
(a) termination by any party, for any reason with
respect to some or all Designated Portfolios, by
three (3) months advance written notice delivered
to the other parties; or
(b) termination by the Company by written notice to the
Fund and the Underwriter based upon the Company's
determination that shares of the Fund are not
reasonably available to meet the requirements of
the Contracts; or
(c) termination by the Company by written notice to the
Fund and the Underwriter in the event any of the
Shares are not registered, issued, or
14
sold in accordance with applicable state and/or
federal law or such law precludes the use of such
Shares as the underlying investment media of the
Contracts issued or to be issued by the Company; or
(d) termination by the Fund or the Underwriter in the
event that formal administrative proceedings are
instituted against the Company by the NASD, the
SEC, the Insurance Commissioner, or like official
of any state or any other regulatory body regarding
the Company's duties under this Agreement or
related to the sale of the Contracts, the operation
of any Account, or the purchase of the Shares;
provided, however, that the Fund or the Underwriter
determines in its sole judgment exercised in good
faith, that any such administrative proceedings
will have a material adverse effect upon the
ability of the Company to perform its obligations
under this Agreement; or
(e) termination by the Company in the event that formal
administrative proceedings are instituted against
the Fund or the Underwriter by the NASD, the SEC,
or any state securities or insurance department, or
any other regulatory body; provided, however, that
the Company determines in its sole judgment
exercised in good faith, that any such
administrative proceedings will have a material
adverse effect upon the ability of the Fund or the
Underwriter to perform its obligations under this
Agreement; or
(f) termination by the Company by written notice to the
Fund and the Underwriter with respect to any
Designated Portfolio in the event that such
Portfolio ceases to qualify as a Regulated
Investment Company under Subchapter M as specified
in Section 6.1 hereof, or if the Company reasonably
believes that such Portfolio may fail to so qualify
or comply; or
(g) termination by the Fund or the Underwriter by
written notice to the Company, if the Fund or the
Underwriter respectively, shall determine, in their
sole judgment exercised in good faith, that the
Company has suffered a material adverse change in
its business, operations, financial condition, or
prospects since the date of this Agreement or is
the subject of material adverse publicity; or
(h) termination by the Company by written notice to the
Fund and the Underwriter, if the Company shall
determine, in its sole judgment exercised in good
faith, that the Fund, the Adviser, or the
Underwriter has suffered a material adverse change
in its business, operations, financial condition,
or prospects since the date of this Agreement or is
the subject of material adverse publicity; or
15
(i) termination by the Company upon any substitution of
the shares of another investment company or series
thereof for Shares in accordance with the terms of
the Contracts, provided that the Company has given
at least 45 days prior written notice to the Fund
and the Underwriter of the date of substitution.
9.2. Notwithstanding any termination of this Agreement, the Fund
and the Underwriter shall, at the option of the Company, continue to make
available additional Shares pursuant to the terms and conditions of this
Agreement, for all Contracts in effect on the effective date of termination of
this Agreement (hereinafter referred to as "Existing Contracts"), unless the
Underwriter requests that the Company seek an order pursuant to Section 26(c)
of the 1940 Act to permit the substitution of other securities for the Shares.
The Underwriter agree to split the cost of seeking such an order, and the
Company agrees that it shall reasonably cooperate with the Underwriter and
seek such an order upon request. Specifically, the owners of the Existing
Contracts may be permitted to reallocate investments in the Fund, redeem
investments in the Fund, and/or invest in the Fund upon the making of
additional purchase payments under the existing Contracts (subject to any such
election by the Underwriter). The parties agree that this Section 9.2 shall
not apply to any terminations under Section 9.1(i) of this Agreement.
9.3. The Company shall not redeem Shares attributable to the
Contracts (as opposed to Shares attributable to the Company's assets held in
the Account) except (i) as necessary to implement Contract owner initiated or
approved transactions, (ii) as required by state and/or federal laws or
regulations or judicial or other legal precedent of general application
(hereinafter referred to as a "Legally Required Redemption"), (iii) upon 45
days prior written notice to the Fund and Underwriter, as permitted by an
order of the SEC pursuant to Section 26(c) of the 1940 Act, but only if a
substitution of other securities for the Shares is consistent with the terms
of the Contracts, or (iv) as permitted under the terms of the Contract. Upon
request, the Company will promptly furnish to the Fund and the Underwriter
reasonable assurance that any redemption pursuant to clause (ii) above is a
Legally Required Redemption. Furthermore, except in cases where permitted
under the terms of the Contacts, the Company shall not prevent Contract owners
from allocating payments to a Portfolio that was otherwise available under the
Contracts without first giving the Fund or the Underwriter 45 days notice of
its intention to do so.
9.4. Notwithstanding any termination of this Agreement, each
party's obligation under Article VII to indemnify the other parties shall
survive.
ARTICLE X. Notices
Any notice shall be sufficiently given when sent by registered or
certified mail to the other party at the address of such party set forth below
or at such other address as such party may from time to time specify in
writing to the other party.
If to the Fund: Xxxxx New York Venture Fund
0000 Xxxx Xxxxxx Xxxx, Xxxxx 000
00
Xxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxx
If to the Company: Xxxxx X. Xxxxxxxx, Esq.
Senior Vice President and General Counsel
Xxxxxxx Xxxxx Life Insurance Company
0 Xxxxxx Xxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
If to the Underwriter: Xxxxx Distributors, LLC
0000 Xxxx Xxxxxx Xxxx, Xxxxx 000
Xxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxx
ARTICLE XI. Miscellaneous
11.1. All persons dealing with the Fund must look solely to the
property of the Fund, and in the case of a series company, the respective
Designated Portfolios listed on Schedule B hereto as though each such
Designated Portfolio had separately contracted with the Company and the
Underwriter for the enforcement of any claims against the Fund. The parties
agree that neither the Board, officers, agents, or shareholders of the Fund
assume any personal liability or responsibility for obligations entered into
by or on behalf of the Fund.
11.2. Subject to the requirements of legal process and regulatory
authority, each party hereto shall treat as confidential the names and
addresses of the owners of the Contracts and all information reasonably
identified as confidential in writing by any other party hereto and, except as
permitted by this Agreement, shall not disclose, disseminate or utilize such
names and addresses and other confidential information without the express
written consent of the affected party until such time as such information has
come into the public domain.
11.3. The captions in this Agreement are included for convenience
of reference only and in no way define or delineate any of the provisions
hereof or otherwise affect their construction or effect.
11.4. This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
11.5. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of the
Agreement shall not be affected thereby.
11.6. Each party hereto shall cooperate with each other party and
all appropriate governmental authorities (including without limitation the
SEC, the NASD, and state insurance regulators) and shall permit such
authorities reasonable access to its books and records in connection with any
investigation or inquiry relating to this Agreement or the transactions
17
contemplated hereby. Notwithstanding the generality of the foregoing, each
party hereto further agrees to furnish the Arkansas Insurance Commissioner
with any information or reports in connection with services provided under
this Agreement which such Commissioner may request in order to ascertain
whether the variable contract operations of the Company are being conducted in
a manner consistent with the Arkansas variable annuity laws and regulations
and any other applicable law or regulations.
11.7. The rights, remedies, and obligations contained in this
Agreement are cumulative and are in addition to any and all rights, remedies,
and obligations, at law or in equity, which the parties hereto are entitled to
under state and federal laws.
11.8. This Agreement or any of the rights and obligations hereunder
may not be assigned by any party without the prior written consent of all
parties hereto.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed in its name and on its behalf by its duly authorized
representative and its seal to be hereunder affixed hereto as of the date
specified below.
XXXXXXX XXXXX LIFE INSURANCE COMPANY:
By its authorized officer
By:
-------------------------------------
Name: Xxxx X. Xxxxx
Title: Vice President & Secretary
Date:
-----------------------------------
18
XXXXX NEW YORK VENTURE FUND:
By its authorized officer
By:
-------------------------------------
Name: Xxxxxxx X. Xxxx
Title: Vice President
Date:
-----------------------------------
XXXXX DISTRIBUTORS, LLC:
By its authorized officer
By:
-------------------------------------
Name: Xxxxxxx X. Xxxx
Title: President
Date:
-----------------------------------
19
SCHEDULE A
SEPARATE ACCOUNTS OF THE COMPANY
Xxxxxxx Xxxxx Life Variable Annuity Separate Account D
Dated: August 28, 2002
SCHEDULE B
DESIGNATED PORTFOLIOS AND CLASSES
Xxxxx New York Venture Fund Class A CUSIP 000000000
Dated: August 28, 2002
SCHEDULE C
FUND MATERIALS
PART I. Fund Description
- The Fund will provide to Company or a common service provider
designated by Company within ten (10) days of the end of each month,
the Fund's average annual return for the 1, 5, and 10 year periods
ending the current month on a Net Asset Value basis.
- The Fund will provide to Company a description of the Fund including
holdings, portfolio composition, largest sectors and geographical
allocation and a statement of objective in a mutually acceptable
format.
Part II. Fund Information and Materials
The Fund will provide to Company the following information and
materials on an as needed basis, as requested by Company:
- A supply of materials relating to the Funds (prospectuses,
quarterly reports and other brochures) to include with
contract application sales, marketing and communication
materials.
- Specific investment performance information that may be
requested that cannot be obtained from the prospectus. This
would include specific calculations on various performance
parameters and will require an aggressive turnaround time
(usually 5 business days).
