FUND PARTICIPATION AGREEMENT
This Agreement is entered into as of the ___ day of ______, 2002 among New York
Life Insurance and Annuity Corporation, a life insurance company organized under
the laws of the State of Delaware ("Insurance Company"); American Century
Variable Portfolios, Inc. (the "Issuer"), American Century Investment
Management, Inc. (the "Adviser"), American Century Investment Services, Inc.
(the "Distributor"), and American Century Services Corporation (the "Transfer
Agent"), each a "party."
ARTICLE I
DEFINITIONS
1.1 "Act" shall mean the Investment Company Act of 1940, as amended.
1.2 "Board" shall mean the Board of Directors or Trustees, as the case may
be, of the Issuer, which has the responsibility for management and
control of the Issuer.
1.3 "Business Day" shall mean any day on which the New York Stock Exchange
is open for regular trading and on which the Participating Fund
calculates its net asset value per share pursuant to the Rules of the
Commission.
1.4 "Commission" shall mean the Securities and Exchange Commission.
1.5 "Contract" shall mean a variable annuity or life insurance contract
issued by Insurance Company that uses any Participating Fund (as defined
below) as an underlying investment medium. Individuals who participate
under a group Contract are "Participants." The Contracts are listed in
Schedule A to this Agreement, as such Schedule may be amended from time
to time by mutual written consent of each party.
1.6 "Contractholder" shall mean any person that is a party to a Contract
with a Participating Company (as defined below).
1.7 "Disinterested Board Members" shall mean those members of the Board of
the Issuer that are not deemed to be "interested persons" of the Issuer,
as defined by the Act.
1.8 "Participating Companies" shall mean any insurance company (including
Insurance Company) that offers variable annuity and/or variable life
insurance contracts to the public and that has entered into an agreement
with the Issuer.
1.9 "Participating Fund" shall mean each series of mutual fund shares
registered under the Act and issued by the Issuer, as specified in
Schedule A, as such Schedule may be amended from time to time by
agreement of the parties hereto, the shares of which are available to
serve as the underlying investment medium for the Contracts.
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1.10 "Prospectus" shall mean the current prospectus and statement of
additional information of a Fund or, as the case may be, with respect to
a Contract, and any amendments or supplements thereto, all, as most
recently filed with the Commission.
1.11 "Separate Account" shall mean the separate account or accounts
established by Insurance Company in accordance with applicable state
law, delineated on Schedule A, as such Schedule may be amended from time
to time by agreement of the parties hereto by mutual written consent of
each party.
1.12 "Insurance Company's General Account(s)" shall mean the general
account(s) of Insurance Company and its affiliates.
ARTICLE II
REPRESENTATIONS
2.1 Insurance Company represents and warrants that (a) it is an insurance
company duly organized and in good standing under applicable law; (b) it
has legally and validly established the Separate Account pursuant to
applicable insurance law and regulation for the purpose of offering to
the public certain individual and group variable annuity and life
insurance contracts; (c) it has registered the Separate Account as a
unit investment trust under the Act (unless exempt therefrom) to serve
as the segregated investment account for the Contracts; and (d) the
Separate Account is eligible to invest in shares of each Participating
Fund without such investment disqualifying any Participating Fund as an
investment medium for insurance company separate accounts supporting
variable annuity contracts or variable life insurance contracts.
2.2 Insurance Company represents and warrants that (a) the interests under
the Contracts will be registered under the Securities Act of 1933, as
amended ("1933 Act") to the extent required thereby; (b) the Contracts
will be issued and sold in compliance in all material respects with all
applicable federal and state laws; and (c) the sale of the Contracts
shall comply in all material respects with state insurance law
requirements. Insurance Company agrees to notify Distributor promptly of
any investment restrictions imposed by state insurance law and
applicable to the Participating Fund.
2.3 Insurance Company represents and warrants that the income, gains and
losses, whether or not realized, from assets allocated to the Separate
Account are, in accordance with the applicable Contracts, to be credited
to or charged against such Separate Account without regard to other
income, gains or losses from assets allocated to any other accounts of
Insurance Company. Insurance Company represents and warrants that the
assets of the Separate Account are and will be kept separate from
Insurance Company's General Account and any other separate accounts
Insurance Company may have, and will not be charged with liabilities
from any business that Insurance Company may conduct or the liabilities
of any companies affiliated with Insurance Company.
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2.4 The Issuer represents and warrants that it has entered into an agreement
with the Distributor on behalf of each Participating Fund, under which
the Distributor has the right and obligation to make arrangements for
the distribution of each Participating Fund's shares. The Issuer further
represents and warrants that it has authorized the Distributor to enter
into agreements with Participating Companies for the distribution of
fund shares. The Issuer further warrants that, should its agreement with
either the Distributor or the Adviser be terminated for any reason, it
will use good faith efforts to cause the replacement distributor or
investment adviser, as appropriate, to enter into an agreement with the
Company similar to this Agreement.
2.5 The Distributor, together with the Adviser, represents that each
Participating Fund is lawfully organized and validly existing under the
laws of the state of its domicile, that it is registered with the
Commission under the Act as an open-end, management investment company,
that it shall comply with the Act, and that it possesses and shall
maintain all legal and regulatory licenses, approvals, consents and/or
exemptions required for the Participating Fund to operate and offer its
shares as an underlying investment medium for Participating Companies.
2.6 The Distributor, together with the Adviser, represents and warrants that
each Participating Fund is and at all times since its inception has been
qualified as a regulated investment company under Subchapter M of the
Internal Revenue Code of 1986, as amended (the "Code"), that each
Participating Fund will at all times invest money from the Contracts in
such a manner and take such other actions as necessary to qualify as a
regulated investment company under Subchapter M (or any successor or
similar provision), and that the Distributor and the Adviser will make
every effort to maintain such qualification and will notify Insurance
Company immediately upon having a reasonable basis for believing that
the Participating Fund (or series thereof) has ceased to so qualify or
that it might not so qualify in the future.
2.7 The Distributor, together with the Adviser, represents and warrants that
all Participating Fund shares sold pursuant to this Agreement shall be
registered under the 1933 Act to the extent required thereby, duly
authorized for issuance and sold in compliance with this Agreement and,
in all material respects, all applicable federal and state laws and that
the Participating Fund is and shall remain registered under the Act. The
Distributor shall amend the registration statement for its shares under
the 1933 Act and the Act from time to time as required in order to
effect the continuous offering of its shares.
2.8 Insurance Company represents and agrees that the Contracts are
currently, and at the time of issuance will be, treated as life
insurance policies, endowments or annuity contracts, under applicable
provisions of the Code, and that it will make every effort to maintain
such treatment and that it will notify the Distributor and Adviser
immediately upon having a reasonable basis for believing that the
Contracts have ceased to be so treated or that they might not be so
treated in the future. Insurance Company agrees that any prospectus
offering a Contract that in all cases will be a "modified endowment
contract," as that term is defined in Section 7702A of the Code, will
identify such Contract as a modified endowment contract (or policy).
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2.9 Insurance Company agrees that the Distributor shall be permitted
(subject to the other terms of this Agreement) to make shares of each
Participating Fund available to other Participating Companies and
Contractholders.
2.10 The Distributor, together with the Adviser, represents and warrants that
(a) each Participating Fund will at all times invest money from the
Contracts in such a manner as to ensure that the Contracts will be
treated as variable contracts under the Code and the regulations issued
thereunder (or any successor provisions); and (b) each Participating
Fund has since its inception complied and will continue to comply with
Section 817(h) of the Code and Treasury Regulation 1.817-5, and any
Treasury interpretations thereof, relating to the diversification
requirements for variable annuity, endowment, or life insurance
contracts, and any amendments or other modifications or successor
provisions to such Section or Regulation. In the event of a breach of
this Section 2.10 by a Participating Fund, the Distributor and the
Adviser will take all steps necessary to: (a) notify Insurance Company
of such breach, and (b) adequately diversify the Designated Portfolios
so as to achieve compliance within the 30-day grace period afforded by
Regulation 1.817-5.
2.11 The Distributor represents and warrants that no other Participating
Insurance Company has or will purchase shares of any series of such
Participating Fund for any purpose or under any circumstances that would
preclude Insurance Company from "looking through" to the investments of
each series of the Participating Fund in which it invests, pursuant to
the "look-through" rules found in Treasury Regulation 1.817-5.
2.12 The Distributor, together with the Adviser, represents and warrants that
all of its directors, trustees, officers, employees, and other
individuals/entities who deal with the money and/or securities of the
Participating Fund are and shall continue to be at all times covered by
a blanket fidelity bond or similar coverage for the benefit of the
Participating Fund in an amount not less than that required by Rule
17g-1 under the Act. The aforesaid Bond shall include coverage for
larceny and embezzlement and shall be issued by a reputable bonding
company. The Distributor and the Adviser each shall make all reasonable
efforts to see that this bond or another bond containing these same
provisions is always in effect, and each agrees to notify the Insurance
Company in the event such coverage no longer applies.
2.13 Insurance Company represents and warrants that all of its employees and
agents who deal with the money and/or securities of each Participating
Fund are and shall continue to be at all times covered by a blanket
fidelity bond or similar coverage in an amount not less than that
required to be maintained by entities subject to the requirements of
Rule 17g-1 of the Act. The aforesaid Bond shall include coverage for
larceny and embezzlement and shall be issued by a reputable bonding
company. The Insurance Company shall make all reasonable efforts to see
that this bond or another bond containing these same provisions is
always in effect, and agrees to notify the Distributor and the Adviser
in the event such coverage no longer applies.
2.14 The Adviser and the Distributor each represents and warrants that (a) it
is lawfully organized and validly existing under the laws of its state
of organization; (b) in the case of the Adviser, it is registered as an
investment adviser under the Investment Advisers Act of 1940 and, in the
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case of the Distributor, it is registered as a broker-dealer under the
Securities Exchange Act of 1934 and a member of the National Association
of Securities Dealers, Inc.; and (c) it is and will remain duly
registered and licensed in all material respects under all applicable
federal and state laws and shall perform its obligations hereunder in
compliance in all material respects with all applicable federal and
state laws.
2.15 Each party to this Agreement represents and warrants that (a) it has
full power and authority to enter into and perform its obligations under
this Agreement; (b) it has duly taken all necessary steps to authorize
the person signing this Agreement on its behalf to do so and to
authorize the performance of its obligations under this Agreement; and
(c) assuming the accuracy of and compliance with this representation and
warranty by all other parties, this Agreement will be valid, binding on,
and enforceable against such party in accordance with its terms, subject
only to such limitations as apply generally to the rights of creditors,
such as, but not limited to, bankruptcy laws, laws governing the
insolvency of insurance companies and other entities, and principles of
equity.
ARTICLE III
FUND SHARES
3.1 The Company intends to purchase shares of the series of the
Participating Funds on behalf of the Separate Account to fund the
Contracts.
3.2 The Distributor agrees to make shares of the Participating Funds
available for purchase indefinitely at the then applicable net asset
value per share by Insurance Company on behalf of the Separate Account
on each Business Day pursuant to rules of the Commission.
Notwithstanding the foregoing, (a) the Board of Directors of the
Participating Fund may suspend or terminate the offering of shares to
any person, or suspend or terminate the offering of its shares, if such
action is required by law or by regulatory authorities having
jurisdiction or is, in the sole discretion of its Board, acting in good
faith and in light of its fiduciary duties under federal and any
applicable state laws to Participating Fund shareholders including
Insurance Company and the Separate Account, necessary and in the best
interests of the Participating Fund's shareholders; and (b) the
Distributor may suspend its offering of the Participating Funds if it
believes, in its sole discretion, that such suspension is warranted by
market, political, economic or other conditions.
3.3 The Distributor agrees that shares of each Participating Fund will be
sold only to Participating Companies and their separate accounts and to
persons or plans (collectively, Qualified Persons") that represent and
warrant to the Participating Fund that they qualify to purchase shares
of the Participating Fund under Section 817 (h) of the Code, and the
regulations thereunder without impairing the ability of the Separate
Account to consider the portfolio investments of the Participating Fund
as constituting investments of the Separate Account for the purpose of
satisfying the diversification requirements of Section 817(h). Except as
otherwise set forth in this Section 3.3, the Distributor represents that
no shares of any Participating Fund will be sold to the general public.
The Participating Fund shall not sell
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Participating Fund shares to any insurance company or separate account
unless an agreement substantially complying with Articles VI and VII of
this Agreement is in effect to govern such sales, to the extent
required. Insurance Company hereby represents and warrants that it and
the Separate Account are Qualified Persons.
3.4 The Transfer Agent shall redeem for cash, at the Insurance Company's
request, any full or fractional shares held by the Insurance Company on
behalf of the Separate Account, such redemptions to be effected on a
daily basis at net asset value in accordance with Section 3.8 of this
Agreement.
3.5 The Distributor shall make the net asset value per share available to
the Insurance Company on a daily basis as soon as reasonably practicable
after the net asset value per share is calculated in a manner required
or permitted by applicable law, but shall use its best efforts to
provide closing net asset value, dividend and capital gain information
on a per-share basis to Insurance Company by 6:00 p.m. Eastern time on
each Business Day. In the event the Distributor provides the closing net
asset value later than 10:00 p.m. Eastern time on any Business Day, the
Distributor shall work with Insurance Company to, provide Insurance
Company sufficient additional time under Sections 3.7 and 3.8 below for
Insurance Company to place orders for the purchase and redemption of
shares. If the Insurance Company places its purchase or redemption order
within the additional time afforded under the preceding sentence, the
Insurance Company on behalf of the Separate Account, shall be entitled
to the share net asset value computed as of the close of the prior
Business Day (the "effective trade date" as that term is used in Section
3.8 below) regardless of whether the Distributor is able to process
these orders within its regular daily processing cycle for such prior
Business Day). Any material errors in the calculation of net asset
value, dividend and capital gain information shall be reported to
Insurance Company immediately upon discovery.
3.6 (a) The Adviser shall reimburse a Participating Fund (and/or the
Insurance Company) as necessary or appropriate to make the Insurance
Company, its Separate Accounts, and/or Contractholders or Participants,
as the case may be, whole) for any net loss resulting from the
Participating Fund's or its agents' material miscalculation and/or
materially incorrect reporting of a net asset value. Should a material
miscalculation or materially incorrect report by the Participating Fund
or its agents result in a net gain to Contractholders or Participants,
the Insurance Company will consult with the Participating Fund or its
designee as to what, if any, reasonable efforts shall be made to recover
the net gain for the appropriate series of the Participating Fund.
Should a material miscalculation or materially incorrect report by the
Participating Fund or its agents result in a net gain to the Insurance
Company or a Separate Account (such net gain to be calculated after
taking into account any monies paid by Insurance Company to
Contractholders or Participants), the Transfer Agent shall be entitled
to debit an appropriate number of full or fractional shares from the
account of the Insurance Company or the Separate Account (as
appropriate) equal to the amount of such net gain.
(b) The Participating Fund, the Adviser, and the Insurance Company
each agree to promptly notify the others upon discovery of a potentially
material miscalculation or materially incorrect report. For purposes of
this Section 3.6, the determination of what constitutes a material
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miscalculation or materially incorrect reporting shall be made by the
Distributor and the Participating Fund's Board of Directors or its
designee as stated in the pricing policy adopted by the Participating
Fund's Board of Directors. The Participating Fund or its designee shall
furnish the Insurance Company with a copy of the Participating Fund's
policies on materiality of pricing and shall promptly notify Insurance
Company in writing of any changes thereto. .
3.7 At the end of each Business Day, Insurance Company will use the
information described in Sections 3.2 and 3.5 to calculate the unit
values of the Separate Account for the day. Using this unit value,
Insurance Company will process the day's Separate Account transactions
received by it by the close of regular trading on the floor of the New
York Stock Exchange (currently 4:00 p.m. Eastern time) to determine the
net dollar amount of each Participating Fund's shares that will be
purchased or redeemed at that day's closing net asset value per share.
The net purchase or redemption orders will be transmitted to the
Transfer Agent by Insurance Company by 10:00 a.m. Eastern time on the
Business Day next following Insurance Company's receipt of that
information. Subject to Sections 3.8 and 3.9, all purchase and
redemption orders for Insurance Company's General Accounts shall be
effected at the net asset value per share of each Participating Fund
next calculated after receipt of the order by the Participating Fund or
its Transfer Agent.
3.8 The Distributor appoints Insurance Company as each Participating Fund's
agent for the limited purpose of accepting orders for the purchase and
redemption of Participating Fund shares on behalf of the Separate
Account (but not with respect to any shares that may be held in the
Insurance Company's General Account). The Transfer Agent will execute
orders at the applicable net asset value per share determined as of the
close of trading on the day of receipt of such orders by Insurance
Company acting as agent ("effective trade date"), provided that the
Transfer Agent receives notice of such orders by 10:00 a.m. Eastern time
on the next following Business Day and, if such orders request the
purchase of Participating Fund shares, the conditions specified in
Section 3.9, as applicable, are satisfied. A redemption or purchase
request that does not satisfy the conditions specified above and in
Section 3.9, as applicable, will be, at Distributor's option, either (a)
executed at the net asset value per share computed on the effective
trade date, and if the failure to satisfy the conditions in Section 3.9
was not the result of an act or omission of either the Adviser, the
Distributor, the Transfer Agent or the Issuer, the Insurance Company
shall be responsible for reimbursing the Distributor or the
Participating Funds for reasonable interest costs resulting from such
delay, or (b) executed at the net asset value next computed following
receipt of payment in accordance with the requirements of this Section
and Section 3.9. Insurance Company represents and warrants that all
orders submitted by the Insurance Company for execution on the effective
trade date shall be solely for the purpose of, and in an amount
reasonably necessary to adjust its ownership of, a Participating Fund's
shares to properly support the portion of its Contract liabilities and
obligations that are attributable to that Participating Fund and that
such adjustments will be made solely to reflect one or more of the
following: (a) bona fide specific or standing orders or instructions
received from Contractholders or Participants prior to the close of
regular trading on the New York Stock Exchange on the effective trade
date (the "effective time"), (b) the deduction of charges as of said
effective time under the terms of the Contracts from amounts
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allocated to that Participating Fund, and (c) payment of annuity
benefits or death benefits based on that Participating Fund's net asset
value as of said effective time.
3.9 In the event of net purchases of a Participating Fund's shares,
Insurance Company will pay for such purchases by wiring Federal Funds to
such Participating Fund's designated custodial account on the day the
order is transmitted. Insurance Company shall make all reasonable
efforts to transmit to the applicable Participating Fund payment in
Federal Funds by 12:00 p.m. Eastern time on the Business Day the
Transfer Agent receives the notice of the order pursuant to Sections 3.7
and 3.8. The Transfer Agent will execute such orders at the applicable
net asset value per share determined as of the close of trading on the
effective trade date if the Participating Fund receives payment in
Federal Funds by 6:00 p.m. Eastern time on the Business Day the Transfer
Agent receives the notice of the order pursuant to Sections 3.7 and 3.8.
3.10 In the event of net redemptions, the Transfer Agent shall pay the
Insurance Company for shares of each Participating Fund redeemed by
12:00 p.m. Eastern time on the next Business Day after it receives the
redemption request from the Insurance Company pursuant to Sections 3.7
and 3.8 above, except that, the Issuer reserves the right to settle
redemption transactions within the time period set forth in the
applicable Participating Fund's then-current prospectus and in
accordance with applicable law. Payment of redemption proceeds shall be
made in federal funds transmitted by wire to an account designated by
the Insurance Company.
3.11 The Distributor has the obligation to ensure that each Participating
Fund's shares are registered with applicable federal agencies at all
times.
3.12 The Transfer Agent will confirm each purchase or redemption order made
by Insurance Company. Issuance and transfer of Participating Fund shares
will be by book entry only. No share certificates will be issued to
Insurance Company. Insurance Company will record shares ordered from a
Participating Fund in an appropriate ledger for the corresponding
account.
3.13 The Transfer Agent shall credit Insurance Company with the appropriate
number of shares.
3.14 On each ex-dividend date of a Participating Fund or, if not a Business
Day, on the first Business Day thereafter, the Distributor shall
communicate by wire or telephone followed by written confirmation to
Insurance Company the amount of dividend and capital gain, if any, per
share. The Insurance Company hereby elects to receive all such dividends
and distributions as are payable on any shares in the form of additional
shares. The Insurance Company reserves the right, on its behalf and on
behalf of the Separate Account, to revoke this election at any time and
to receive all dividends and capital gains distributions in cash. The
Distributor shall, on the day after the ex-dividend date or, if not a
Business Day, on the first Business Day thereafter, notify Insurance
Company of the number of shares so issued.
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ARTICLE IV
STATEMENTS AND REPORTS
4.1 The Issuer or its designee shall provide monthly statements of account
as of the end of each month for all of Insurance Company's accounts by
the fifteenth (15th) Business Day of the following month.
4.2 The Distributor shall timely distribute to Insurance Company printed
copies of the Participating Fund's Prospectuses, proxy materials,
notices, periodic reports and other printed materials (which are
customarily provided to shareholders of each Participating Fund) in
quantities as Insurance Company may from time to time request for
distribution to each Contractholder and Participant. Insurance Company
may elect to print the Participating Fund's prospectus and/or its
statement of additional information in combination with other fund
companies' prospectuses and statements of additional information, which
are also offered in Insurance Company's insurance product at their own
cost. If requested by Insurance Company, the Distributor shall provide
such documents (including a "camera-ready" copy of such documents as set
in type, a diskette in the form sent to the financial printer, or an
electronic copy of the documents in a format suitable for posting on the
Insurance Company's website, all as Insurance Company may reasonably
request) and such other assistance as is reasonably necessary in order
for Insurance Company to have prospectuses, Statements of Additional
Information, supplements, proxy statements, and annual / semi-annual
reports for the Contracts and the Funds printed together in a single
document or posted on Insurance Company's website. The parties agree
that the prospectus and periodic reports for the Participating Fund will
describe only the Participating Fund and will not name or describe any
other Funds or Fund shares. Insurance Company shall be responsible for
ensuring that any Fund documents posted on Insurance Company's website
contain the most recent versions of the documents as provided to the
Insurance Company by the Issuer or its agent.
4.3 The Distributor will provide to Insurance Company at least one complete
copy of all registration statements, Prospectuses, reports, proxy
statements, sales literature and other promotional materials, and all
amendments to any of the above, that relate to the Participating Fund or
its shares, as soon as practicable after the filing of such document
with the Commission or other regulatory authorities.
5.2 Insurance Company will provide to Distributor at least one copy of all
registration statements, Prospectuses, reports, proxy statements, sales
literature and other promotional materials, and all amendments to any of
the above, that relate to the Contracts or the Separate Account, as soon
as practicable after the filing of such document with the Commission.
5.3 Each party will provide the other parties with any applications for
exemptions and requests for no-action letters if: (1) such application
or request for no-action letter is, in the opinion of the party who
authored the document, relevant to any of the other parties, or (2) if
such application or request for no-action letter is requested by any
other party.
4.6 Insurance Company will provide the Distributor on a semi-annual basis,
or more frequently as reasonably requested by the Distributor, with a
current tabulation of the number of existing Contractholders of
Insurance Company whose Contract values are invested in the
Participating
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Funds. This tabulation will be sent to the Distributor in the form of a
letter signed by a duly authorized officer of the Insurance Company
attesting to the accuracy of the information contained in the letter.
ARTICLE V
EXPENSES
5.1 All expenses and costs of each Participating Fund, including but not
limited to management fees, administrative expenses and legal and
regulatory costs, will be included in the determination of the
Participating Fund's daily net asset value per share.
5.2 Expenses associated with the preparation, filing and distribution of
registration statements, prospectuses, supplements, annual and
semi-annual reports, proxy statements and voting instructions and
specified sales material and other material listed in Schedule B shall
be paid for in accordance with the cost allocations set forth in
Schedule B.
5.3 The Distributor may pay Insurance Company, or the broker-dealer acting
as principal underwriter for the Insurance Company's Contracts, for
distribution and other services related to the Shares of the
Participating Fund pursuant to any distribution plan adopted by the
Participating Fund in accordance with Rule 12b-2 under the Act, subject
to the terms and conditions of an agreement between the Participating
Fund's principal underwriter for the Insurance Company's Contracts, as
applicable, related to such plan.
5.4 Adviser shall reimburse Insurance Company for the costs associated with
substituting the securities of a registered investment company for the
shares of any Participating Fund that has discontinued or intends to
discontinue the offering of its shares to existing or prospective
Contractholders, or with respect to which Insurance Company determines
to terminate the Agreement pursuant to Sections 10.2(b) through 10.2(g)
hereof. The costs of such substitution shall include, without
limitation, reasonable legal fees for obtaining any required Commission
order approving such substitution, and expenses for printing and
distributing any prospectus supplement or other disclosure of the
substitution or elimination of the Participating Fund as an investment
vehicle.
5.5 Except as otherwise expressly provided in this Agreement, each party
agrees to bear all expenses incident to performance by the party under
this Agreement.
ARTICLE VI
EXEMPTIVE RELIEF
6.1 Insurance Company has reviewed a copy of the order dated February 25,
1988 of the Commission under Section 6(c) of the Act (Rel. No. IC-16287;
812-6937) with respect to each Participating Fund, and, in particular,
has reviewed the conditions to the relief set forth in the related
notice of application published by the Commission. Insurance Company
agrees to report any potential or existing conflicts promptly to the
relevant Participating Fund's Board, and, in
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particular, whenever Contract voting instructions are disregarded, and
recognizes that it will be responsible for assisting the Board in
carrying out its responsibilities under such application. Insurance
Company agrees to carry out such responsibilities with a view to the
interests of existing variable life and annuity contract owners and
participants.
6.2 Each Participating Fund's Board will monitor the Participating Fund for
the existence of any material irreconcilable conflict between the
interests of the variable life and annuity contract owners and
participants of all separate accounts and all other persons investing in
the Participating Fund. A material irreconcilable conflict may arise for
a variety of reasons, including: (a) an action by any state insurance
regulatory authority; (b) a change in applicable federal or state
insurance, tax, or securities laws or regulations, or a public ruling,
private letter ruling, no-action or interpretative letter, or any
similar action by insurance, tax, or securities regulatory authorities;
(c) an administrative or judicial decision in any relevant proceeding;
(d) the manner in which the investments of any Participating Fund are
being managed; (e) a difference in voting instructions given by variable
annuity contract and variable life insurance contract owners; (f) a
decision by an insurer to disregard the voting instructions of contract
owners; or (g) if applicable, a decision by a qualified pension or
retirement plan to disregard the voting instructions of its
participants. The Distributor shall promptly inform Insurance Company if
a Participating Fund's Board determines that a material irreconcilable
conflict exists and the implications thereof.
6.3 If a majority of the Board, or a majority of Disinterested Board
Members, determines that a material irreconcilable conflict exists with
regard to contract owner or participant investments in a Participating
Fund, the Board shall give prompt notice to all Participating Companies
and any other Participating Fund. If the Board determines that Insurance
Company is responsible for causing or creating said conflict, Insurance
Company shall at its sole cost and expense, and to the extent reasonably
practicable (as determined by a majority of the Disinterested Board
Members), take such action as is necessary to remedy or eliminate the
material irreconcilable conflict. Such necessary action may include, but
shall not be limited to:
(a) Withdrawing the assets allocable to the Separate Account
from the Participating Fund and reinvesting such assets
in another Participating Fund (if applicable) or a
different investment medium, or submitting the question
of whether such segregation should be implemented to a
vote of all affected contract owners and participants
and, as appropriate, segregating the assets of any
appropriate group (e.g., annuity contract owners, life
insurance contract owners, or variable contract owners
of one or more Participating Insurance Companies) that
votes in favor of such segregation, or offering to the
effected contract owners the option of making such a
change; and/or
(b) Establishing a new registered management investment
company or managed separate account.
6.4 If a material irreconcilable conflict arises as a result of a decision
by Insurance Company to disregard Contractholder or Participant voting
instructions and said decision represents a minority
11
position or would preclude a majority vote by all contract owners and
participants having an interest in a Participating Fund, Insurance
Company may be required, at the Board's election, to withdraw the
investments of the Separate Account in that Participating Fund and
terminate this Agreement with respect to the Account (at the Company's
expense), provided however that such withdrawal and termination shall be
limited to the extent required by the foregoing material irreconcilable
conflict as determined by a majority of the disinterested members of the
Board.6.5 If a material irreconcilable conflict arises because a
particular state insurance regulator's decision applicable to the
Insurance Company conflicts with the majority of other state regulators,
then the Insurance Company will withdraw the affected Separate Account's
investment in the Participating Fund and terminate this Agreement with
respect to such Fund (at the Company's expense) within six (6) months
after the Board informs the Insurance Company in writing that it has
determined that such decision has created a material irreconcilable
conflict; provided, however, that such withdrawal and termination shall
be limited to the extent required by the foregoing material
irreconcilable conflict as determined by a majority of the disinterested
members of the Board. Until the end of the foregoing six (6) month
period, the Participating Fund shall continue to accept and implement
orders by the Insurance Company for the purchase (and redemption) of
shares of the Fund. The responsibility to take such action shall be
carried out with a view only to the interest of the Contractholders and
Participants.
6.6 For the purpose of this Article, a majority of the Disinterested Board
Members shall determine whether or not any proposed action adequately
remedies any irreconcilable material conflict, but in no event will any
Participating Fund be required to bear the expense of establishing a new
funding medium for any Contract. Insurance Company shall not be required
by this Article to establish a new funding medium for any Contract if an
offer to do so has been declined by vote of a majority of the contract
owners or participants materially adversely affected by the
irreconcilable material conflict In the event that the Board determines
that any proposed action does not adequately remedy any material
irreconcilable conflict, then the Company will withdraw the Account's
investment in the Fund and terminate this Agreement within six (6)
months after the Board informs the Company in writing of the foregoing
determination; provided, however, that such withdrawal and termination
shall be limited to the extent required by any such material
irreconcilable conflict as determined by a majority of the disinterested
members of the Board.
6.7 If and to the extent any Mixed and Shared Funding Order or any amendment
thereto contains terms and conditions different from Article VI of this
Agreement, then the Fund and/or the Participating Insurance Companies,
as appropriate, shall take such steps as may be necessary to comply with
the Mixed and Shared Funding Exemptive Order, and this Article VI shall
be deemed to incorporate such new terms and conditions, and any term or
condition of this Article VI that is inconsistent therewith shall be
deemed to be succeeded thereby. If and to the extent that Rule 6e-2 and
Rule 6e-3(T) are amended, or Rule 6e-3 under the Act is adopted, to
provide exemptive relief from any provision of the Act or the rules
promulgated thereunder with respect to mixed or shared funding (as
defined in the Mixed and Shared Funding Exemptive Order) on terms and
conditions materially different from those contained in the Mixed and
Shared Funding Exemptive Order, then (a) the Fund and/or the
Participating Insurance Companies as appropriate, shall take such steps
as may be necessary to comply with Rules 6e-2 and 6e-3(T), as amended,
and Rule 6e-3, as adopted, to the extent such rules are applicable; and
(b) this
12
Article VI shall be deemed to incorporate such new terms and conditions,
and any term or condition of this Article VI that is inconsistent
therewith, shall be deemed to be succeeded thereby.
ARTICLE VII
VOTING OF PARTICIPATING FUND SHARES
7.1 The Distributor shall, in accordance with Section 4.2 of this Agreement,
provide Insurance Company with copies, at no cost to Insurance Company,
of the Participating Fund's proxy material, reports to shareholders and
other communications to shareholders in such quantity as Insurance
Company shall reasonably require for distribution to Contractholders or
Participants.
If and to the extent required by law or any applicable order referenced
to in Section 6.1 above, Insurance Company shall:
(a) solicit voting instructions from Contractholders or
Participants on a timely basis and in accordance with
applicable law;
(b) vote the Participating Fund shares attributable to
Contractholders or Participants in accordance with
instructions received from them, or if no instructions
have been received, in the same proportion as
Participating Fund shares in the same Separate Account
for which instructions have been received; and
(c) vote Participating Fund shares in the Insurance Company
General Account in the same proportion as voting
instructions are received for such shares in all of
Insurance Company's Separate Accounts.
Insurance Company agrees to be responsible for assuring that voting the
Participating Fund shares for the Separate Account is conducted in a
manner consistent with other Participating Companies.
7.2 The Distributor will ensure that each Participating Fund will comply
with all provisions of the Act requiring voting by shareholders.
ARTICLE VIII
MARKETING AND REPRESENTATIONS
8.1 The Distributor shall periodically furnish Insurance Company with the
following documents, in quantities as Insurance Company may reasonably
request:
(a) Current Prospectus and any supplements thereto of each
Participating Fund; and
(b) Other marketing materials.
13
Expenses for the production of such documents shall be borne by
Insurance Company in accordance with Section 5.2 of this Agreement.
8.2 Insurance Company shall designate certain persons or entities that shall
have the requisite licenses to solicit applications for the sale of
Contracts. No representation is made as to the number or amount of
Contracts that are to be sold by Insurance Company. Insurance Company
shall comply with all applicable federal and state laws in connection
with the marketing of the Contracts.
8.3 Insurance Company shall furnish, or shall cause to be furnished, to each
applicable Participating Fund or its designee, each piece of sales
literature or other promotional material in which the Participating Fund
or the Adviser or Distributor is named, at least fifteen Business Days
prior to its use. Insurance Company shall not use such material, unless
the Participating Fund or its designee approves such material. Such
approval (if given) must be in writing and shall be presumed not given
if not received within ten Business Days after receipt of such material.
Each applicable Participating Fund or its designee, as the case may be,
shall use all reasonable efforts to respond within ten days of receipt.
The Participating 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 Participating Fund or the Adviser is
named and no such material shall be used if the Participating Fund or
its designee so objects.
8.4 Insurance Company shall not give any information or make any
representations or statements on behalf of a Participating Fund or
concerning a Participating Fund in connection with the sale of the
Contracts other than the information or representations contained in the
registration statement or Prospectus of, or in reports or proxy
statements for, the applicable Participating Fund, or in sales
literature or other promotional material approved under Section 8.3 of
this Agreement.
8.5 The Adviser, the Distributor or their respective designees shall
furnish, or shall cause to be furnished, to Insurance Company, each
piece of the Participating Fund's sales literature or other promotional
material in which Insurance Company, the Separate Account or any
Contract is named, at least fifteen Business Days prior to its use. No
such material shall be used by any party, including a Participating
Fund, unless Insurance Company approves such material. Such approval (if
given) must be in writing and shall be presumed not given if not
received within ten Business Days after receipt of such material.
Insurance Company shall use all reasonable efforts to respond within ten
days of receipt. The Insurance Company reserves the right to reasonably
object to the continued use of any such sales literature or other
promotional material in which the Insurance Company is named and no such
material shall be used if the Insurance Company or its designee so
objects.
8.6 The Adviser, and the Distributor shall not, in connection with the sale
of Participating Fund shares, give any information or make any
representations on behalf of Insurance Company or concerning Insurance
Company, the Separate Account, or the Contracts other than the
information or representations contained in a registration statement or
prospectus for the Contracts, or in published reports for the Separate
Account that are in the public domain or
14
approved by Insurance Company for distribution to Contractholders or
Participants, or in sales literature or other promotional material
approved under Section 8.5 of this Agreement. The Fund and the Adviser
and Distributor shall comply with all applicable federal and state laws
in connection with any efforts they make, directly or indirectly, to
promote sales of the Fund's shares.
8.7 For purposes of this Agreement, the phrase "sales literature or other
promotional material" includes, without limitation, 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 (such as any written communication distributed
or made generally available to customers or the public, including
brochures, circulars, research reports, market letters, form letters,
seminar texts, or reprints or excerpts of any other advertisement, sales
literature, or published article), educational or training materials or
other communications distributed or made generally available to some or
all agents or employees, prospectuses, statements of additional
information, shareholder reports and proxy materials, and any other
material constituting sales literature or advertising under National
Association of Securities Dealers, Inc. rules, the Act or the 0000 Xxx.
8.8 The Distributor will provide the Insurance Company with as much notice
as is reasonably practicable of any proxy solicitation, and of any
material change in any Participating Fund's registration statement,
particularly any change that could result in a change to the
registration statement or Prospectus for any Separate Account or
Contract. The Distributor will work with the Insurance Company so as to
enable the Insurance Company to solicit proxies from Contractholders and
Participants, or to make changes to its Prospectus or registration
statement, in an orderly manner. The Distributor will make reasonable
efforts to attempt to have changes affecting Contract Prospectuses
become effective simultaneously with the annual updates for such
prospectuses.
ARTICLE IX
INDEMNIFICATION
9.1 Insurance Company agrees to indemnify and hold harmless each
Participating Fund, the Adviser, the Distributor, the Transfer Agent and
their respective affiliates, and each of their directors, trustees,
officers, employees, agents and each person, if any, who controls any of
the foregoing entities or persons within the meaning of Section 15 of
the 1933 Act (collectively, the "Indemnified Parties" for purposes of
Section 9.1 of this Agreement), against any and all losses, claims,
damages or liabilities, investigations or litigation (including any
amounts reasonably paid by the Participating Fund, the Adviser, the
Distributor or the Transfer Agent as necessary to make Contractholders
and Participants whole, and reasonable, legal and other expenses
reasonably incurred in connection with any amounts paid in settlement
of, any action, suit, proceeding or asserted claim) to which the
Indemnified Parties may become subject, under the 1933 Act or otherwise
(collectively, a "Loss"), insofar as such Loss is related to the sale or
acquisition of the Contracts, the purchase or redemption of
Participating Fund shares in
15
connection with the Contracts, or the actions or operations of the
Insurance Company or the Separate Account in connection with the
performance of this Agreement, and:
(i) arises out of or is based upon any untrue
statement or alleged untrue statement of any material
fact contained in the registration statement,
Prospectus, sales literature or other promotional
material with respect to the Contracts or the Separate
Account;
(ii) arises out of or is based upon any omission or
alleged omission to state in the registration statement,
Prospectus, sales literature or other promotional
material with respect to the Contracts or the Separate
Account a material fact required to be stated therein or
necessary to make the statements therein not misleading;
(iii) arises out of or is based upon any untrue
statement or alleged untrue statement of any material
fact contained in information furnished in writing by
Insurance Company for use in the registration statement,
Prospectus or sales literature or other promotional
material of the Participating Fund or arises out of or
is based upon the omission or alleged omission to state
in such information a material fact required to be
stated therein or necessary to make the statements
therein, in the context in which they are published in
such documents, not misleading;
(iv) arises out of or as a result of wrongful
conduct, statements or representations (other than
statements or representations referred to in clauses
(i), (ii) or (iii) of this Section 9.1) of Insurance
Company or its agents, with respect to the sale and
distribution of Contracts for which the respective
Participating Fund's shares are an underlying
investment;
(v) arises out of or results from any material
breach by Insurance Company of a representation or
warranty made by the Insurance Company in this
Agreement;
(vi) arises out of Insurance Company's incorrect
calculation and/or untimely reporting of net purchase or
redemption orders; or
(vii) arises out of or results from any other material
breach of this Agreement, by Insurance Company.
Insurance Company will reimburse any legal or other expenses reasonably
incurred by any Indemnified Party in connection with investigating or
defending any such Loss; provided, however, that notwithstanding
anything else in this Section 9.1, Insurance Company will not be liable
under this Section 9.1 to the extent that any Loss arises out of or is
based upon any untrue statement or omission or alleged untrue statement
of omission made in conformity with written information furnished to
Insurance Company by the Participating Fund, the Adviser, the
16
Distributor or the Transfer Agent for use in one or more of the
documents referred to in clause (i) of this Section 9.1 or approved
under Section 8.3 of this Agreement..
9.2 The Adviser, the Distributor and the Transfer Agent agree to indemnify
and hold harmless the Insurance Company and each of its directors,
officers, employees, agents, and each person, if any, who controls the
Insurance Company within the meaning of Section 15 of the 1933 Act
(collectively, the "Indemnified Parties" for purposes of this Section
9.2) against any losses, claims, damages, liabilities, investigations,
or litigation (including any amounts reasonably paid by Insurance
Company as necessary to make Contractholders and Participants whole, and
reasonable legal and other expenses reasonably incurred in connection
with, and any amounts paid in settlement of, any action, suit,
proceeding or asserted claim) to which the Indemnified Parties become
subject, under the 1933 Act or otherwise (collectively a "Loss"),
insofar as such Loss is related to the sale or acquisition of the
Contracts, the purchase or redemption of Participating Fund shares in
connection with the Contracts, or the actions or operations of a
Participating Fund in connection with the performance of this Agreement,
and:
(i) arises out of or is based upon any untrue
statement or alleged untrue statement of any material
fact contained in the registration statement,
Prospectus, sales literature or other promotional
materials of a Participating Fund;
(ii) arises out of or is based upon the omission or
alleged omission to state in the registration statement,
Prospectus, sales literature or other promotional
materials of the Participating Fund any material fact
required to be stated therein or necessary to make the
statements therein not misleading;
(iii) arises out of or is based upon any untrue
statement or alleged untrue statement of any material
fact contained in information furnished in writing by
the Adviser (whether on behalf of the Participating Fund
or otherwise) for use in the registration statement,
Prospectus, sales literature or other promotional
materials with respect to the Separate Account or the
Contracts or arises out of or is based upon the omission
or the alleged omission to state in such information a
material fact required to be stated therein or necessary
to make the statements made therein, in the context in
which they are published in such documents, not
misleading;
(iv) arises out of or results from any material
breach by the Adviser, the Distributor or the Transfer
Agent of a representation or warranty made by the
Adviser in this Agreement; or
(v) arises out of or results from any other material
breach of this Agreement by the Adviser, the Distributor
or the Transfer Agent.
17
The Adviser, the Distributor and the Transfer Agent will reimburse any
legal or other expenses reasonably incurred by any Indemnified Party in
connection with investigating or defending any such Loss; provided,
however, that, notwithstanding anything else in this Section 9.2, the
Adviser, the Distributor and the Transfer Agent will not be liable under
this Section 9.2 to the extent that any such Loss arises out of or is
based upon any untrue statement or omission made in conformity with
written information furnished to a Participating Fund, the Adviser, the
Distributor or the Transfer Agent by the Insurance Company for use in
one or more of the documents referred to in clause (i) of this Section
9.2.
9.3 Promptly after receipt by an indemnified party under this Article of
notice of the commencement of any investigation, litigation or
proceedings against the indemnified party or its officers or directors
in connection with this Agreement, the issuance or sale of the Fund
shares, the Contracts or the operation of the Separate Account, or
operation of the Fund shares, such indemnified party will notify the
indemnifying party of the commencement thereof. The omission to so
notify the indemnifying party will not relieve the indemnifying party
from any liability under this Article IX, except to the extent that the
omission results in a failure of actual notice to the indemnifying party
and such indemnifying party is damaged solely as a result of the failure
to give such notice. In case any such action is brought against any
indemnified party, and it notified the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to
participate therein and assume the defense thereof, with counsel
satisfactory to such indemnified party, and to the extent that the
indemnifying party has given notice to such effect to the indemnified
party and is performing its obligations under this Article, the
indemnifying party shall not be liable for any legal or other expenses
subsequently incurred by such indemnified party in connection with the
defense thereof, other than reasonable costs of investigation.
Notwithstanding the foregoing, in any such proceeding, any indemnified
party shall have the right to retain its own counsel, but the fees and
expenses of such counsel shall be at the expense of such indemnified
party unless (i) the indemnifying party and the indemnified party shall
have mutually agreed to the retention of such counsel or (ii) the named
parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation
of both parties by the same counsel would be inappropriate due to actual
or potential differing interests between them. The indemnifying party
shall not be liable for any settlement of any proceeding effected
without its written consent.
A successor by law of the parties to this Agreement shall be entitled to
the benefits of the indemnification contained in this Article IX. The
provisions of this Article IX shall survive termination of this
Agreement.
18
ARTICLE X
COMMENCEMENT AND TERMINATION
10.1 This Agreement shall be effective as of the date hereof and shall
continue in force until terminated in accordance with the provisions
herein.
10.2 This Agreement shall terminate without penalty as provided for by any of
the following:
(a) As to any Participating Fund, at the option of any party to this
Agreement, at any time upon 90 days' notice to the other parties
to this Agreement, unless a different time is agreed to by all
of the parties.
(b) As to any Participating Fund, at the option of Insurance
Company, if shares of that Participating Fund are not reasonably
available to meet the requirements of the Contracts as
determined by Insurance Company. Prompt notice of election to
terminate shall be furnished by Insurance Company, said
termination to be effective upon receipt of such notice by all
other parties to this Agreement.
(c) As to a Participating Fund, at the option of any party to this
Agreement, upon the institution of formal proceedings against
any other party to this Agreement by the Commission, National
Association of Securities Dealers, Inc. or any other regulatory
body, the expected or anticipated ruling, judgment or outcome of
which would, in the terminating party's reasonable judgment,
materially impair that other party's ability to meet and perform
its obligations and duties hereunder. Prompt notice of election
to terminate shall be furnished by the terminating party to all
other parties, with said termination to be effective upon
receipt of notice by all such parties.
(d) As to a Participating Fund, at the option of any party to this
Agreement, if that party shall determine, in its sole judgment
reasonably exercised in good faith, that any other party to this
Agreement (or any affiliate of such party) has suffered a
material adverse change in its business or financial condition
or is the subject of material adverse publicity and such
material adverse change or material adverse publicity is likely
to have a material adverse impact upon the business and
operation of the terminating party. Such terminating party shall
notify each other party in writing of such determination and its
intent to terminate this Agreement, and, if, after considering
the actions taken by the entity suffering the adverse change or
adverse publicity and any other changes in circumstances since
the giving of such notice, such determination of the terminating
party shall continue to apply on the sixtieth (60th) day after
such notice has been received by all other parties, such,
sixtieth day shall be the effective date of termination.
(e) As to a Participating Fund, upon termination of the Investment
Advisory Agreement between that Participating Fund and Adviser
or its successors unless each other party to this Agreement
specifically approves the selection of a new Participating
Fund's investment adviser. The terminating party shall give
notice of such termination to all other parties, and the
termination shall be effective as of a date specified in the
notice,
19
which shall be not more than 180 days after such notice has been
received by all such other parties. The Issuer shall promptly
furnish notice of termination of the Adviser to each other party
to this Agreement.
(f) As to a Participating Fund, at the option of any other party to
this Agreement, in the event that (i) Participating Fund ceases
to qualify as a regulated investment company under subchapter M
or any successor provision or fails to comply with the Section
817(h) diversification requirements specified in Sections 2.10
and 2.11 hereof, or if such other party reasonably believes that
the Participating Fund may fail to so qualify or comply; or (ii)
the Participating Fund's shares are not registered, issued or
sold in accordance with applicable federal law, or such law
precludes the use of such shares as the underlying investment
medium of Contracts issued or to be issued by Insurance Company.
The terminating party shall deliver notice to all other parties
to this Agreement. The notice shall specify the effective date
of the termination, which shall in no event be earlier than when
all of such notices have been received by all other parties.
(g) At the option of the Distributor, the Adviser or the Transfer
Agent upon a determination by the Fund's Board in good faith and
in light of its fiduciary duties under federal and any
applicable state laws to Participating Fund's shareholders,
including Insurance Company and the Separate Account, that such
termination is necessary and in the best interests of
shareholders of that Participating Fund. The terminating party
shall deliver notice to all other parties to this Agreement. The
notice shall specify the effective date of the termination,
which shall in no event be earlier than when all of such notices
have been received by all other parties.
(h) At the option of the Distributor, the Adviser or the Transfer
Agent if the Contracts cease to qualify as annuity contracts,
endowments or life insurance policies, as applicable, under the
Code, or if such terminating party reasonably believes that the
Contracts may fail to so qualify. The terminating party shall
deliver notice to all other parties to this Agreement. The
notice shall specify the effective date of the termination,
which shall in no event be earlier than when all of such notices
have been received by all other parties.
(i) At the option of any party to this Agreement, upon another
party's breach of any material provision of this Agreement. The
terminating party shall deliver notice of such breach to all
other parties to this Agreement. The termination shall be
effective thirty days after the notice has been received by all
such parties, but only if the breaching party shall not have
cured the breach, in all material respects, by the end of that
30-day period.
(j) At the option of the Distributor, the Adviser or the Transfer
Agent, if the Contracts are not registered, issued or sold in
accordance with applicable federal and/or state law.
(k) At the option of the Insurance Company, upon any substitution of
the shares of another investment company or series thereof for
shares of the Fund.
(l) Termination by mutual written agreement of the parties to this
Agreement.
20
10.3 Notwithstanding any termination of this Agreement pursuant to Section
10.2 hereof, the Issuer and the Distributor shall, at the option of the
Insurance Company, continue to make available additional shares of each
Participating Fund pursuant to the terms and conditions of this
Agreement as provided below, for all Contracts in effect on the
effective date of termination of this Agreement (hereinafter referred to
as "Existing Contracts"). Specifically, without limitation, the owners
of the Existing Contracts or Insurance Company, whichever shall have
legal authority to do so, shall be permitted to reallocate investments
in that Participating Fund, redeem investments in that Participating
Fund and/or invest in that Participating Fund upon the making of
additional purchase payments under the Existing Contracts. If such
Participating Fund shares continue to be made available after such
termination, the provisions of this Agreement shall remain in effect,
and thereafter either the Participating Fund or Insurance Company may
terminate the Agreement as to that Participating Fund, as so continued
pursuant to this Section 10.3, upon prior written notice to the other
party, such notice to be for a period that is reasonable under the
circumstances but, if given by the Participating Fund, need not be for
more than six months.
10.4 Termination of this Agreement as to any one Participating Fund shall not
be deemed a termination as to any other Participating Fund.
10.5 The parties hereto agree to cooperate and give reasonable assistance to
one another in taking all necessary and appropriate steps for the
purpose of ensuring that a Separate Account owns no shares of a
Participating Fund after the effective date of this Agreement's
termination with respect to such shares or, if such ownership following
termination cannot be avoided, that the duration thereof is as brief as
reasonably practicable. Such steps may include, for example, combining
the affected Separate Account with another Separate Account,
substituting other fund shares for those of the affected Participating
Fund, or otherwise terminating participation by the Contracts in such
Participating Fund.
ARTICLE XI
AMENDMENTS
11.1 Any changes in the terms of this Agreement shall be made by agreement in
writing among all parties to this Agreement.
21
ARTICLE XII
NOTICE
12.1 Each notice required by this Agreement shall be given by certified mail,
return receipt requested, or next day delivery to the appropriate
parties at the following addresses, or such other address as a party may
from time to time specify in writing to the other parties:
Insurance Company: New York Life Insurance and Annuity Corporation
00 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Rock, Senior Vice President
Issuer: American Century Variable Portfolios, Inc.
0000 Xxxx Xxxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
Attn: Xxxxx X. Xxxx, Esq.
Investment Adviser: American Century Investment Management, Inc.
0000 Xxxx Xxxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
Attn: Xxxxx X. Xxxx, Esq.
Distributor: American Century Investment Services, Inc.
0000 Xxxx Xxxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
Attn: Xxxxx X. Xxxx, Esq.
Transfer Agent: American Century Services Corporation
0000 Xxxx Xxxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
Attn: Xxxxx X. Xxxx, Esq.
Notice shall be deemed to be given on the date of receipt by the
addressees as evidenced by the mailing receipt.
ARTICLE XIII
MISCELLANEOUS
13.1 This Agreement has been executed on behalf of the Issuer by the
undersigned officer of the Issuer in his capacity as an officer of the
Issuer. The obligations of this Agreement shall only be binding upon the
Issuer and shall not be binding upon any director, trustee, officer or
shareholder of the Issuer individually, it being understood that this
provision does not excuse or otherwise relieve any person from any
obligations or responsibility that such person may have acting in
another capacity (e.g., Adviser, Distributor, etc.). It is agreed that
the obligations of
22
the Funds are several and not joint, that no Fund shall be liable for
any amount owing by another Fund and that the Funds have executed one
instrument for convenience only.
13.2 This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the
same instrument.
13.3 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.
13.4 Each party hereto shall cooperate with each other party and all
appropriate governmental authorities (including without limitation the
Commission, the National Association of Security Dealers, Inc., 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 contemplated
hereby.
13.5 The rights, remedies and obligations contained in this Agreement are
cumulative and are in addition to any and all rights, remedies,
obligations, at law or in equity, which the parties hereto are entitled
under federal and state laws.
13.6 This Agreement or any of the rights and obligations hereunder may not be
assigned by any party (and any such assignment shall be null and void)
without the prior consent of all parties hereto.
13.7 The schedules to this Agreement (each, a "Schedule," collectively, the
"Schedules") form an integral part hereof and are incorporated herein by
reference. The Parties may agree in writing to amend the Schedules from
time to time. References herein to any Schedule are to the Schedule then
in effect, taking into account any amendments thereto.
23
ARTICLE XIV
LAW
14.1 This Agreement shall be construed and provisions hereof interpreted
under and in accordance with the internal laws of the State of Maryland,
without giving effect to principles of conflict of laws.
ARTICLE XV
FOREIGN TAX CREDITS
15.1 Issuer agrees to notify Insurance Company concerning any decision to
either elect or not elect to pass through the benefit of any foreign tax
credits to the Participating Fund's shareholders pursuant to Section 853
of the Code.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement to be duly
executed and attested as of the date first above written.
NEW YORK LIFE INSURANCE AND
ANNUITY CORPORATION
By: ________________________
Its: _______________________
Attest:_____________________
AMERICAN CENTURY VARIABLE
PORTFOLIOS, INC.
By: ________________________
Its: _______________________
Attest:_____________________
AMERICAN CENTURY INVESTMENT
MANAGEMENT, INC.
By: ________________________
Its: _______________________
Attest:_____________________
24
AMERICAN CENTURY INVESTMENT
SERVICES, INC.
By: ________________________
Its: _______________________
Attest:_____________________
AMERICAN CENTURY SERVICES CORPORATION
By: ________________________
Its: _______________________
Attest:_____________________
25
SCHEDULE A
SEPARATE ACCOUNTS, CONTRACTS AND PORTFOLIOS SUBJECT TO THE PARTICIPATION
AGREEMENT
Separate Accounts and Associated Contracts
Name of Separate Account and Date Names of Contracts Funded by Separate
Established by Board of Directors Account and Form Numbers Thereof
--------------------------------- --------------------------------
NYLIAC Variable Universal Life Separate Variable Universal Life #793-90
Account-I Survivorship Variable Universal Life #797-150
June 4, 1993 Variable Universal Life 2000 #799-90
Single Premium Variable Universal Life #301-95
Pinnacle Variable Universal Life #300-80 and #300-82
Pinnacle Survivorship Variable Universal Life #300-81 and #300-83
NYLIAC Corporate Sponsored Variable Universal Life Corporate Sponsored Variable Universal Life #796-40
Separate Account-I Corporate Executive Series Variable Universal Life #300-40
May 24, 1996
NYLIAC Variable Annuity LifeStages Flexible Premium Variable
Separate Account-I Annuity (The Original) #993-190
October 15, 1992
NYLIAC Variable Annuity LifeStages Flexible Premium Variable
Separate Account-II Annuity (The Original) #993-190
October 15, 1992
NYLIAC Variable Annuity LifeStages Variable Annuity #995-190
Separate Account-III MainStay Plus Variable Annuity #999-190
November 30, 1994 (Supersedes (998-190)
New LifeStages Flexible Premium Variable Annuity #000-190
LifeStages Premium Plus Variable Annuity #200-195
LifeStages Access Variable Annuity #200-090
MainStay Access Variable Annuity #200-090
MainStay Premium Plus Variable Annuity #200-190
PARTICIPATING FUNDS OFFERED BY THE ISSUER TO INSURANCE COMPANY
AMERICAN CENTURY VP VALUE FUND (CLASS II)
AMERICAN CENTURY VP INTERNATIONAL FUND (CLASS II)
2
SCHEDULE B
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INSURANCE COMPANY DISTRIBUTOR
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Preparing and filing the Separate Account's ("Accounts") Preparing and filing the Fund's registration statement
registration statement
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Text composition for Account prospectuses and supplements Text composition for Fund prospectuses and supplements
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Text alterations of Account prospectuses and Account supplements Text alterations of Fund prospectuses and Fund supplements
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Printing Account prospectuses and supplements and Fund A camera or web ready Fund prospectus and printing of Fund
prospectuses and supplements for prospective Contractholders and prospectuses for existing Contract Owners that invest in the
Participants ("Contract Owners") Fund
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Text composition and printing Account statements of additional Text composition and printing Fund SAIs
information ("SAIs")
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Mailing and distributing Account SAIs to Contract Owners upon Mailing and distributing Fund SAIs to Contract Owners upon
request by Contract Owners request by Contract Owners
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Mailing and distributing Account prospectuses and Account Text composition and printing of annual and semi-annual
supplements to Contract Owners of record as required by federal reports for the Fund to existing Contract Owners that invest
securities laws and mailing and distributing account and Fund in the Funds.
prospectuses and supplements to prospective purchasers
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Text composition (Account), printing, mailing, and distributing Text composition and printing of proxy statements and voting
annual and semi-annual reports for Account instruction solicitation materials to Contract Owners with
respect to proxies related to the Fund.
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Mailing and distributing annual and semi-annual reports for the
Fund to existing Contract Owners that invest in the Funds.
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Mailing, distributing, and tabulation of proxy statements
and voting instruction solicitation materials to Contract
Owners with respect to proxies related to the Fund.
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Text composition, printing, mailing, distributing, and
tabulation of proxy statements and voting instruction
solicitation materials to Contract Owners with respect to
proxies related to the Account
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(Page 2 of 2)
SCHEDULE B (CONTINUED)
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Preparation, printing and distributing sales material and
advertising relating to the Funds contained in Contract
advertising and sales materials and filing such materials with
and obtaining approval from, the Commission, the National
Association of Securities Dealers, Inc., any state insurance
regulatory authority. and any other appropriate regulatory
authority, to the extent required.
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