FUND PARTICIPATION AGREEMENT
THIS AGREEMENT made as of the ___ day of ________, , by and between
NAVELLIER VARIABLE INSURANCE SERIES FUND, INC. (the "FUND"), a Maryland
Corporation, NAVELLIER & ASSOCIATES, INC. (the "ADVISER"), a Nevada corporation,
and ______________ (the "LIFE COMPANY"), a life insurance company organized
under the laws of the State of __________.
WHEREAS, the FUND is registered with the Securities and Exchange Commission
("SEC") under the Investment Company Act of 1940, as amended (the "'40 Act"), as
an open-end, diversified management investment company; and
WHEREAS, the FUND is organized as a series fund comprised of several
Portfolios ("Portfolios"), with those currently available being listed on
Appendix A hereto; and
WHEREAS, the FUND was organized to act as the funding vehicle for certain
variable life insurance and/or variable annuity contracts ("Variable Contracts")
offered by life insurance companies through separate accounts ("Separate
Accounts") of such life insurance companies ("Participating Insurance
Companies"); and
WHEREAS, the FUND may also offer its shares to certain qualified pension
and retirement plans ("Qualified Plans"); and
WHEREAS, the FUND will apply for an order from the SEC, granting
Participating Insurance Companies and their separate accounts exemptions from
the provisions of Sections 9(a), 13(a), 15(a) and 15(b) of the '40 Act, and
Rules 6e-2(b)(15) and 6e-3(T)(b)(15) thereunder, to the extent necessary to
permit shares of the Portfolios of the FUND to be sold to and held by
Variable Contract separate accounts of both affiliated and unaffiliated
Participating Insurance Companies and Qualified Plans ("Exemptive Order"); and
WHEREAS, the LIFE COMPANY has established or will establish one or more
separate accounts ("Separate Accounts") to offer Variable Contracts and is
desirous of having the FUND as one of the underlying funding vehicles for such
Variable Contracts; and
WHEREAS, the ADVISER is registered with the SEC as an investment adviser
under the Investment Advisers Act of 1940 and acts as the FUND's investment
adviser; and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the LIFE COMPANY intends to purchase shares of the FUND to fund the
aforementioned Variable Contracts and the FUND is authorized to sell such shares
to the LIFE COMPANY at net asset value;
NOW, THEREFORE, in consideration of their mutual promises, the LIFE
COMPANY, the FUND, and the ADVISER agree as follows:
Article I. SALE OF THE FUND SHARES
1.1 The FUND agrees to make available to the Separate Accounts of the LIFE
COMPANY shares of the selected Portfolios as listed on Appendix B for investment
of purchase payments of Variable Contracts allocated to the designated Separate
Accounts as provided in the FUND's Registration Statement.
1.2 The FUND agrees to sell to the LIFE COMPANY those shares of the
selected Portfolios of the FUND which the LIFE COMPANY orders, executing such
orders on a daily basis at the net asset value next computed after receipt by
the FUND or its designee of the order for the shares of the FUND. For purposes
of this Section 1.2, the LIFE COMPANY shall be the designee of the FUND for
receipt of such orders from the designated Separate Account and receipt by such
designee shall constitute receipt by the FUND; provided that the LIFE COMPANY
receives the order by 4:00 p.m. New York time and the FUND receives notice from
the LIFE COMPANY by telephone or facsimile (or by such other means as the FUND
and the LIFE COMPANY may agree in writing) of such order by 9:00 a.m. New York
time on the next following Business Day. "Business Day" shall mean any day on
which 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.
1.3 The FUND agrees to redeem on the LIFE COMPANY's request, any full or
fractional shares of the FUND held by the LIFE COMPANY, executing such requests
on a daily basis at the net asset value next computed after receipt by the FUND
or its designee of the request for redemption, in accordance with the provisions
of this agreement and the FUND's Registration Statement. For purposes of this
Section 1.3, the LIFE COMPANY shall be the designee of the FUND for receipt of
requests for redemption from the designated Separate Account and receipt by such
designee shall constitute receipt by the FUND; provided that the LIFE COMPANY
receives the request for redemption by 4:00 p.m. New York time and the FUND
receives notice from the LIFE COMPANY by telephone or facsimile (or by such
other means as the FUND and the LIFE COMPANY may agree in writing) of such
request for redemption by 9:00 a.m. New York time on the next following Business
Day.
1.4 The FUND shall furnish, on or before the ex-dividend date, notice to
the LIFE COMPANY of any income dividends or capital gain distributions payable
on the shares of any Portfolio of the FUND. The LIFE COMPANY hereby elects to
receive all such income dividends and capital gain distributions as are payable
on a Portfolio's shares in additional shares of the Portfolio. The FUND shall
notify the LIFE COMPANY or its designee of the number of shares so issued as
payment of such dividends and distributions.
1.5 The FUND shall make the net asset value per share for the selected
Portfolio(s) available to the LIFE COMPANY on a daily basis as soon as
reasonably practicable after the net asset value per share is calculated but
shall use its best efforts to make such net asset value available by 6:30 p.m.
New York time. If the FUND provides the LIFE COMPANY with materially incorrect
share net asset value information through no fault of the LIFE COMPANY, the LIFE
COMPANY on behalf of the Separate Accounts, shall be entitled to an adjustment
to the number of shares purchased or redeemed to reflect the correct share net
asset value. Any material error in the calculation of net asset value per share,
dividend or capital gain information shall be reported promptly upon discovery
to the LIFE COMPANY.
1.6 At the end of each Business Day, the LIFE COMPANY shall use the
information described in Section 1.5 to calculate Separate Account unit values
for the day. Using these unit values, the LIFE COMPANY shall process each such
Business Day's Separate Account transactions based on requests and premiums
received by it by the close of trading on the floor of the New York Stock
Exchange (currently 4:00 p.m. New York time) to determine the net dollar amount
of the FUND shares which shall be purchased or redeemed at that day's closing
net asset value per share. The net purchase or redemption orders so determined
shall be transmitted to the FUND by the LIFE COMPANY by 9:00 a.m. New York Time
on the Business Day next following the LIFE COMPANY's receipt of such requests
and premiums in accordance with the terms of Sections 1.2 and 1.3 hereof.
1.7 If the LIFE COMPANY's order requests the purchase of the FUND shares,
the LIFE COMPANY shall pay for such purchase by wiring federal funds to the FUND
or its designated custodial account on the day the order is transmitted by the
LIFE COMPANY. If the LIFE COMPANY's order requests a net redemption resulting in
a payment of redemption proceeds to the LIFE COMPANY, the FUND shall use its
best efforts to wire the redemption proceeds to the LIFE COMPANY by the next
Business Day, unless doing so would require the FUND to dispose of Portfolio
securities or otherwise incur additional costs. In any event, proceeds shall be
wired to the LIFE COMPANY within three Business Days or such longer period
permitted by the '40 Act or the rules, orders or regulations thereunder and the
FUND shall notify the person designated in writing by the LIFE COMPANY as the
recipient for such notice of such delay by 3:00 p.m. New York Time the same
Business Day that the LIFE COMPANY transmits the redemption order to the FUND.
If the LIFE COMPANY's order requests the application of redemption proceeds from
the redemption of shares to the purchase of shares of another Fund advised by
the ADVISER, the FUND shall so apply such proceeds the same Business Day that
the LIFE COMPANY transmits such order to the FUND.
1.8 The FUND agrees that all shares of the Portfolios of the FUND will be
sold only to Participating Insurance Companies which have agreed to participate
in the FUND to fund their Separate Accounts and/or to Qualified Plans, all in
accordance with the requirements of Section 817(h)(4) of the Internal Revenue
Code of 1986, as amended ("Code") and Treasury Regulation 1.817-5. Shares of the
Portfolios of the FUND will not be sold directly to the general public.
1.9 The FUND may refuse to sell shares of any Portfolio to any person, or
suspend or terminate the offering of the shares of or liquidate any Portfolio of
the FUND if such action is required by law or by regulatory authorities having
jurisdiction or is, in the sole discretion of the Board of Trustees of the
FUND (the "Board"), acting in good faith and in light of its duties under
federal and any applicable state laws, deemed necessary, desirable or
appropriate and in the best interests of the shareholders of such Portfolios.
1.10 Issuance and transfer of Portfolio shares will be by book entry
only. Stock certificates will not be issued to the LIFE COMPANY or the Separate
Accounts. Shares ordered from Portfolio will be recorded in appropriate book
entry titles for the Separate Accounts.
Article II. REPRESENTATIONS AND WARRANTIES
2.1 The LIFE COMPANY represents and warrants that it is an insurance
company duly organized and in good standing under the laws of
___________________ and that it has legally and validly established each
Separate Account as a segregated asset account under such laws, and that
___________________, the principal underwriter for the Variable Contracts, is
registered as a broker-dealer under the Securities Exchange Act of 1934 (the
"'34 Act").
2.2 The LIFE COMPANY represents and warrants that it has registered or,
prior to any issuance or sale of the Variable Contracts, will register each
Separate Account as a unit investment trust ("UIT") in accordance with the
provisions of the '40 Act and cause each Separate Account to remain so
registered to serve as a segregated asset account for the Variable Contracts,
unless an exemption from registration is available.
2.3 The LIFE COMPANY represents and warrants that the Variable Contracts
will be registered under the Securities Act of 1933 (the "'33 Act") unless an
exemption from registration is available prior to any issuance or sale of the
Variable Contracts and that the Variable Contracts will be issued and sold in
compliance in all material respects with all applicable federal and state laws
and further that the sale of the Variable Contracts shall comply in all material
respects with applicable state insurance law suitability requirements.
2.4 The LIFE COMPANY represents and warrants that the Variable Contracts
are currently and at the time of issuance will be treated as life insurance,
endowment or annuity contracts under applicable provisions of the Code, that it
will maintain such treatment and that it will notify the FUND immediately upon
having a reasonable basis for believing that the Variable Contracts have ceased
to be so treated or that they might not be so treated in the future.
2.5 The LIFE COMPANY represents and warrants that it has reserved the right
to suspend or limit the rights of Variable Contract owners to transfer Contract
values between Portfolios. The LIFE COMPANY will not waive such right without
prior notice to the FUND. The LIFE COMPANY agrees that it will consult with the
FUND at the FUND's request from time to time on problems arising from frequent
or rapid transfer among Portfolios and that the LIFE COMPANY will impose
reasonable restrictions on transferees to or from the Portfolios as reasonably
requested by the FUND.
2.6 The FUND represents and warrants that the Fund shares offered and sold
pursuant to this Agreement will be registered under the '33 Act and sold in
accordance with all applicable federal and state laws, and the FUND shall be
registered under the '40 Act prior to and at the time of any issuance or sale of
such shares. The FUND, subject to Section 1.9 above, shall amend its
registration statement under the '33 Act and the '40 Act from time to time as
required in order to effect the continuous offering of its shares. The FUND
shall register and qualify its shares for sale in accordance with the laws of
the various states only if and to the extent deemed advisable by the FUND.
2.7 The FUND represents and warrants that each Portfolio will comply with
the diversification requirements set forth in Section 817(h) of the Code, and
the rules and regulations thereunder, including without limitation Treasury
Regulation 1.817-5, and will notify the LIFE COMPANY immediately upon having a
reasonable basis for believing any Portfolio has ceased to comply or might not
so comply and will immediately take all reasonable steps to adequately diversify
the Portfolio to achieve compliance.
2.8 The FUND represents and warrants that each Portfolio invested in by the
Separate Account will be treated as a "regulated investment company" under
Subchapter M of the Code, and will notify the LIFE COMPANY immediately upon
having a reasonable basis for believing it has ceased to so qualify or might not
so qualify in the future.
2.9 The ADVISER represents and warrants that it is and will remain duly
registered and licensed in all material respects under all applicable federal
and state securities laws and shall perform its obligations hereunder in
compliance in all material respects with any applicable state and federal laws.
Article III. PROSPECTUS AND PROXY STATEMENTS
3.1 The FUND shall prepare and be responsible for filing with the SEC and
any state regulators requiring such filing all shareholder reports, notices,
proxy materials (or similar materials such as voting instruction solicitation
materials), prospectuses and statements of additional information of the FUND.
The FUND shall bear the costs of registration and qualification of shares of the
Portfolios, preparation and filing of the documents listed in this Section 3.1
and all taxes and filing fees to which an issuer is subject on the issuance and
transfer of its shares.
3.2 At least annually, the FUND or its designee shall provide the LIFE
COMPANY, free of charge, with as many copies of the current prospectus,
statements of additional information, annual and semi-annual reports and proxy
statements for the shares of the Portfolios as the LIFE COMPANY may reasonably
request for distribution to existing Variable Contract owners whose Variable
Contracts are funded by such shares. The FUND or its designee shall provide the
LIFE COMPANY, at the LIFE COMPANY's expense, with as many copies of the current
prospectus for the shares as the LIFE COMPANY may reasonably request for
distribution to prospective purchasers of Variable Contracts. If requested by
the LIFE COMPANY in lieu thereof, the FUND or its designee shall provide such
documentation (including a "camera ready" copy of the new prospectus as set in
type or, at the request of the LIFE COMPANY, as a diskette in the form sent to
the financial printer) and other assistance as is reasonably necessary in order
for the parties hereto once a year (or more frequently if the prospectus for the
shares is supplemented or amended) to have the prospectus for the Variable
Contracts and the prospectus for the FUND shares printed together in one
document. The expenses of such printing will be apportioned between the LIFE
COMPANY and the FUND in proportion to the number of pages of the Variable
Contract and the FUND prospectus, taking account of other relevant factors
affecting the expense of printing, such as covers, columns, graphs and charts;
the FUND to bear the cost of printing the FUND prospectus portion of such
document for distribution only to owners of existing Variable Contracts funded
by the FUND shares and the LIFE COMPANY to bear the expense of printing the
portion of such documents relating to the Separate Account; provided, however,
LIFE COMPANY shall bear all printing expenses of such combined documents where
used for distribution to prospective purchasers or to owners of existing
Variable Contracts not funded by the shares. In the event that the LIFE COMPANY
requests that the FUND or its designee provide the FUND's prospectus in a
"camera ready" or diskette format, the FUND shall be responsible for providing
the prospectus in the format in which it is accustomed to formatting
prospectuses and shall bear the expense of providing the prospectus in such
format (e.g. typesetting expenses), and the LIFE COMPANY shall bear the expense
of adjusting or changing the format to conform with any of its prospectuses.
3.3 The FUND will provide the LIFE COMPANY with at least one complete copy
of all prospectuses, statements of additional information, annual and
semi-annual reports, proxy statements, exemptive applications and all amendments
or supplements to any of the above that relate to the Portfolios promptly after
the filing of each such document with the SEC or other regulatory authority. The
LIFE COMPANY will provide the FUND with at least one complete copy of all
prospectuses, statements of additional information, annual and semi-annual
reports, proxy statements, exemptive applications and all amendments or
supplements to any of the above that relate to a Separate Account promptly after
the filing of each such document with the SEC or other regulatory authority.
Article IV. SALES MATERIALS
4.1 The LIFE COMPANY will furnish, or will cause to be furnished, to the
FUND and the ADVISER, each piece of sales literature or other promotional
material in which the FUND or the ADVISER is named, at least fifteen (15)
Business Days prior to its intended use. No such material will be used if the
FUND or the ADVISER objects to its use in writing within ten (10) Business Days
after receipt of such material.
4.2 The FUND and the ADVISER will furnish, or will cause to be furnished,
to the LIFE COMPANY, each piece of sales literature or other promotional
material in which the LIFE COMPANY or its Separate Accounts are named, at least
fifteen (15) Business Days prior to its intended use. No such material will be
used if the LIFE COMPANY objects to its use in writing within ten (10) Business
Days after receipt of such material.
4.3 The FUND and its affiliates and agents shall not give any information
or make any representations on behalf of the LIFE COMPANY or concerning the LIFE
COMPANY, the Separate Accounts, or the Variable Contracts issued by the LIFE
COMPANY, other than the information or representations contained in a
registration statement or prospectus for such Variable Contracts, as such
registration statement and prospectus may be amended or supplemented from time
to time, or in reports of the Separate Accounts or reports prepared for
distribution to owners of such Variable Contracts, or in sales literature or
other promotional material approved by the LIFE COMPANY or its designee, except
with the written permission of the LIFE COMPANY.
4.4 The LIFE COMPANY and its affiliates and agents shall not give any
information or make any representations on behalf of the FUND or concerning the
FUND other than the information or representations contained in a registration
statement or prospectus for the FUND, as such registration statement and
prospectus may be amended or supplemented from time to time, or in sales
literature or other promotional material approved by the FUND or its designee,
except with the written permission of the FUND.
4.5 For purposes of this Agreement, the phrase "sales literature or other
promotional material" or words of similar import include, without limitation,
advertisements (such as material published, or designed for use, in a newspaper,
magazine or other periodical, 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, registration statements,
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. ("NASD")
rules, the '40 Act or the '33 Act.
Article V. POTENTIAL CONFLICTS
5.1 The parties acknowledge that the FUND will be filing an application
with the SEC to request an order granting relief from various provisions of the
'40 Act and the rules thereunder to the extent necessary to permit the FUND
shares to be sold to and held by Variable Contract separate accounts of both
affiliated and unaffiliated Participating Insurance Companies and Qualified
Plans. It is anticipated that the Exemptive Order, when and if issued, shall
require the FUND and each Participating Insurance Company to comply with
conditions and undertakings substantially as provided in this Section 5. If the
Exemptive Order imposes conditions materially different from those provided for
in this Section 5, the conditions and undertakings imposed by the Exemptive
Order shall govern this Agreement and the parties hereto agree to amend this
Agreement consistent with the Exemptive Order. The Fund will not enter into a
participation agreement with any other Participating Insurance Company unless it
imposes the same conditions and undertakings as are imposed on the LIFE COMPANY
hereby.
5.2 The Board will monitor the FUND for the existence of any material
irreconcilable conflict between the interests of Variable Contract owners of all
separate accounts investing in the FUND. An irreconcilable material conflict may
arise for a variety of reasons, which may include: (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 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 the FUND are being
managed; (e) a difference in voting instructions given by Variable Contract
owners; (f) a decision by a Participating Insurance Company to disregard the
voting instructions of Variable Contract owners and (g) if applicable, a
decision by a Qualified Plan to disregard the voting instructions of plan
participants.
5.3 The LIFE COMPANY will report any potential or existing conflicts to the
Board. The LIFE COMPANY will be responsible for assisting the Board in carrying
out its duties in this regard by providing the Board with all information
reasonably necessary for the Board to consider any issues raised. The
responsibility includes, but is not limited to, an obligation by the LIFE
COMPANY to inform the Board whenever it has determined to disregard Variable
Contract owner voting instructions. These responsibilities of the LIFE COMPANY
will be carried out with a view only to the interests of the Variable Contract
owners.
5.4 If a majority of the Board or majority of its disinterested Trustees,
determines that a material irreconcilable conflict exists affecting the LIFE
COMPANY, the LIFE COMPANY, at its expense and to the extent reasonably
practicable (as determined by a majority of the Board's disinterested Trustees),
will take any steps necessary to remedy or eliminate the irreconcilable material
conflict, including; (a) withdrawing the assets allocable to some or all of the
Separate Accounts from the FUND or any Portfolio thereof and reinvesting those
assets in a different investment medium, which may include another Portfolio of
the FUND, or another investment company; (b) submitting the question as to
whether such segregation should be implemented to a vote of all affected
Variable Contract owners and as appropriate, segregating the assets of any
appropriate group (i.e variable annuity or variable life insurance Contract
owners of one or more Participating Insurance Companies) that votes in favor of
such segregation, or offering to the affected Variable Contract owners the
option of making such a change; and (c) establishing a new registered management
investment company (or series thereof) or managed separate account. If a
material irreconcilable conflict arises because of the LIFE COMPANY's decision
to disregard Variable Contract owner voting instructions, and that decision
represents a minority position or would preclude a majority vote, the LIFE
COMPANY may be required, at the election of the FUND, to withdraw the Separate
Account's investment in the FUND, and no charge or penalty will be imposed as a
result of such withdrawal. The responsibility to take such remedial action shall
be carried out with a view only to the interests of the Variable Contract
owners.
For the purposes of this Section 5.4, a majority of the disinterested
members of the Board shall determine whether or not any proposed action
adequately remedies any irreconcilable material conflict but in no event will
the FUND or the ADVISER (or any other investment adviser of the FUND) be
required to establish a new funding medium for any Variable Contract. Further,
the LIFE COMPANY shall not be required by this Section 5.4 to establish a new
funding medium for any Variable Contracts if any offer to do so has been
declined by a vote of a majority of Variable Contract owners materially and
adversely affected by the irreconcilable material conflict.
5.5 The Board's determination of the existence of an irreconcilable
material conflict and its implications shall be made known promptly and in
writing to the LIFE COMPANY.
5.6 No less than annually, the LIFE COMPANY shall submit to the Board such
reports, materials or data as the Board may reasonably request so that the Board
may fully carry out its obligations. Such reports, materials, and data shall be
submitted more frequently if deemed appropriate by the Board.
Article VI. VOTING
6.1 The LIFE COMPANY will provide pass-through voting privileges to all
Variable Contract owners so long as the SEC continues to interpret the '40 Act
as requiring pass-through voting privileges for Variable Contract owners.
Accordingly, the LIFE COMPANY, where applicable, will vote shares of the
Portfolio held in its Separate Accounts in a manner consistent with voting
instructions timely received from its Variable Contract owners. The LIFE COMPANY
will be responsible for assuring that each of its Separate Accounts that
participates in the FUND calculates voting privileges in a manner consistent
with other Participating Insurance Companies. The LIFE COMPANY will vote shares
for which it has not received timely voting instructions, as well as shares it
owns, in the same proportion as its votes those shares for which it has received
voting instructions.
6.2 If and to the extent Rule 6e-2 and Rule 6e-3(T) are amended, or if Rule
6e-3 is adopted, to provide exemptive relief from any provision of the '40 Act
or the rules thereunder with respect to mixed and shared funding on terms and
conditions materially different from any exemptions granted in the Exemptive
Order, then the FUND, and/or the Participating Insurance Companies, as
appropriate, shall take such steps as may be necessary to comply with Rule 6e-2
and Rule 6e-3(T), as amended, and Rule 6e-3, as adopted, to the extent such
Rules are applicable.
Article VII. INDEMNIFICATION
7.1 Indemnification by the LIFE COMPANY. The LIFE COMPANY agrees to
indemnify and hold harmless the FUND, the ADVISER and each of their directors,
principals, officers, employees and agents and each person, if any, who controls
the FUND or the ADVISER within the meaning of Section 15 of the '33 Act
(collectively, the "Indemnified Parties") against any and all losses, claims,
damages, liabilities (including amounts paid in settlement with the written
consent of the LIFE COMPANY, which consent shall not be unreasonably withheld)
or litigation (including legal and other expenses), to which the Indemnified
Parties may become subject under any statute, regulation, at common law or
otherwise, insofar as such losses, claims, damages, liabilities or expenses (or
actions in respect thereof) or settlements are related to the sale or
acquisition of the FUND's shares or the Variable Contracts and:
(a) arise out of or are based upon any untrue statements or alleged untrue
statements of any material fact contained in the Registration
Statement or prospectus for the Variable Contracts or contained in the
Variable 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 LIFE COMPANY by or on
behalf of the FUND for use in the registration statement or prospectus
for the Variable Contracts or in the Variable Contracts or sales
literature (or any amendment or supplement) or otherwise for use in
connection with the sale of the Variable Contracts or the FUND shares;
or
(b) arise out of or as a result of statements or representations (other
than statements or representations contained in the registration
statement, prospectus or sales literature of the FUND not supplied by
the LIFE COMPANY, or persons under its control) or wrongful conduct of
the LIFE COMPANY or persons under its control, with respect to the
sale or distribution of the Variable Contracts or the FUND shares; or
(c) arise out of any untrue statement or alleged untrue statement of a
material fact contained in a registration statement, prospectus, 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 statement or omission or
such alleged statement or omission was made in reliance upon and in
conformity with information furnished to the FUND by or on behalf of
the LIFE COMPANY; or
(d) arise as a result of any failure by the LIFE COMPANY to provide
substantially the services and furnish the materials under the terms
of this Agreement; or
(e) arise out of or result from any material breach of any representation
and/or warranty made by the LIFE COMPANY in this Agreement or arise
out of or result from any other material breach of this Agreement by
the LIFE COMPANY.
7.2 The LIFE COMPANY shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
incurred or assessed against an Indemnified Party as such may arise from such
Indemnified Party's willful misfeasance, bad faith, or gross negligence in the
performance of such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations or duties under this Agreement.
7.3 The LIFE 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 LIFE 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 LIFE COMPANY of
any such claim shall not relieve the LIFE 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 LIFE COMPANY shall be entitled to
participate at its own expense in the defense of such action. The LIFE COMPANY
also shall be entitled to assume the defense thereof, with counsel satisfactory
to the party named in the action. After notice from the LIFE COMPANY to such
party of the LIFE 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 LIFE 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.
7.4 Indemnification by the FUND. The FUND agrees to indemnify and hold
harmless the LIFE COMPANY and each of its directors, officers, employees, and
agents and each person, if any, who controls the LIFE COMPANY within the meaning
of Section 15 of the '33 Act (collectively, the "Indemnified Parties") against
any and all losses, claims, damages, liabilities (including amounts paid in
settlement with the written consent of the FUND which consent shall not be
unreasonably withheld) 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 are
related to the sale or acquisition of the FUND's shares or the Variable
Contracts and:
(a) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the registration statement
or prospectus 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 ADVISER or
the FUND by or on behalf of the LIFE COMPANY for use in the
registration statement or prospectus for the FUND or in sales
literature (or any amendment or supplement) or otherwise for use in
connection with the sale of the Variable Contracts or the FUND shares;
or
(b) arise out of or as a result of statements or representations (other
than statements or representations contained in the registration
statement, prospectus or sales literature for the Variable Contracts
not supplied by the ADVISER or the FUND or persons under its control)
or wrongful conduct of the FUND or persons under its control, with
respect to the sale or distribution of the Variable Contracts or the
FUND shares; or
(c) arise out of any untrue statement or alleged untrue statement of a
material fact contained in a registration statement, prospectus, or
sales literature covering the Variable 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 statements therein not misleading, if such
statement or omission or such alleged statement or omission was made
in reliance upon and in conformity with information furnished to the
LIFE COMPANY for inclusion therein by or on behalf of the FUND; or
(d) arise as a result of (i) a failure by the FUND to provide
substantially the services and furnish the materials under the terms
of this Agreement; or (ii) a failure by a Portfolio(s) invested in by
the Separate Account to comply with the diversification requirements
of Section 817(h) of the Code; or (iii) a failure by a Portfolio(s)
invested in by the Separate Account to qualify as a "regulated
investment company" under Subchapter M of the Code; or
(e) arise out of or result from any material breach of any representation
and/or warranty made by the FUND in this Agreement or arise out of or
result from any other material breach of this Agreement by the FUND.
7.5 The FUND 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 obligations and duties under this Agreement.
7.6 The FUND 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 FUND 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 FUND of any such claim shall not relieve the
FUND 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 Parties,
the FUND shall be entitled to participate at its own expense in the defense
thereof. The FUND also shall be entitled to assume the defense thereof, with
counsel satisfactory to the party named in the action. After notice from the
FUND to such party of the FUND'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 FUND 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.
Article VIII. TERM; TERMINATION
8.1 This Agreement shall be effective as of the date hereof and shall
continue in force until terminated in accordance with the provisions herein.
8.2 This Agreement shall terminate in accordance with the following
provisions:
(a) At the option of the LIFE COMPANY or the FUND at any time from the
date hereof upon 180 days' notice, unless a shorter time is agreed to
by the parties;
(b) At the option of the LIFE COMPANY, if the FUND shares are not
reasonably available to meet the requirements of the Variable
Contracts as determined by the LIFE COMPANY. Prompt notice of election
to terminate shall be furnished by the LIFE COMPANY, said termination
to be effective ten days after receipt of notice unless the FUND makes
available a sufficient number of shares to reasonably meet the
requirements of the Variable Contracts within said ten-day period;
(c) At the option of the LIFE COMPANY, upon the institution of formal
proceedings against the FUND by the SEC, the NASD, or any other
regulatory body, the expected or anticipated ruling, judgment or
outcome of which would, in the LIFE COMPANY's reasonable judgment,
materially impair the FUND's ability to meet and perform the FUND's
obligations and duties hereunder. Prompt notice of election to
terminate shall be furnished by the LIFE COMPANY with said termination
to be effective upon receipt of notice;
(d) At the option of the FUND, upon the institution of formal proceedings
against the LIFE COMPANY by the SEC, the NASD, or any other regulatory
body, the expected or anticipated ruling, judgment or outcome of which
would, in the FUND's reasonable judgment, materially impair the LIFE
COMPANY's ability to meet and perform its obligations and duties
hereunder. Prompt notice of election to terminate shall be furnished
by the FUND with said termination to be effective upon receipt of
notice;
(e) In the event the FUND's shares are not registered, issued or sold in
accordance with applicable state or federal law, or such law precludes
the use of such shares as the underlying investment medium of Variable
Contracts issued or to be issued by the LIFE COMPANY. Termination
shall be effective upon such occurrence without notice;
(f) At the option of the FUND if the Variable Contracts cease to qualify
as annuity contracts or life insurance contracts, as applicable, under
the Code, or if the FUND reasonably believes that the Variable
Contracts may fail to so qualify. Termination shall be effective upon
receipt of notice by the LIFE COMPANY;
(g) At the option of the LIFE COMPANY, upon the FUND's breach of any
material provision of this Agreement, which breach has not been cured
to the satisfaction of the LIFE COMPANY within ten days after written
notice of such breach is delivered to the FUND;
(h) At the option of the FUND, upon the LIFE COMPANY's breach of any
material provision of this Agreement, which breach has not been cured
to the satisfaction of the FUND within ten days after written notice
of such breach is delivered to the LIFE COMPANY;
(i) At the option of the FUND, if the Variable Contracts are not
registered, issued or sold in accordance with applicable federal
and/or state law. Termination shall be effective immediately upon such
occurrence without notice;
(j) In the event this Agreement is assigned without the prior written
consent of the LIFE COMPANY, the FUND, and the ADVISER, termination
shall be effective immediately upon such occurrence without notice.
8.3 Notwithstanding any termination of this Agreement pursuant to Section
8.2 hereof, the FUND at its option may elect to continue to make available
additional the FUND shares, as provided below, for so long as the FUND desires
pursuant to the terms and conditions of this Agreement, for all Variable
Contracts in effect on the effective date of termination of this Agreement
(hereinafter referred to as "Existing Contracts"). Specifically, without
limitation, if the FUND so elects to make additional FUND shares available, the
owners of the Existing Contracts or the LIFE COMPANY, whichever shall have legal
authority to do so, shall be permitted to reallocate investments in the FUND,
redeem investments in the FUND and/or invest in the FUND upon the payment of
additional premiums under the Existing Contracts. In the event of a termination
of this Agreement pursuant to Section 8.2 hereof, the FUND and the ADVISER, as
promptly as is practicable under the circumstances, shall notify the LIFE
COMPANY whether the FUND elects to continue to make the FUND shares available
after such termination. If the FUND shares continue to be made available after
such termination, the provisions of this Agreement shall remain in effect and
thereafter either the FUND or the LIFE COMPANY may terminate the Agreement, as
so continued pursuant to this Section 8.3, upon sixty (60) days prior written
notice to the other party.
8.4 Except as necessary to implement Variable Contract owner initiated
transactions, or as required by state insurance laws or regulations, the LIFE
COMPANY shall not redeem the shares attributable to the Variable Contracts (as
opposed to the shares attributable to the LIFE COMPANY's assets held in the
Separate Accounts), and the LIFE COMPANY shall not prevent Variable Contract
owners from allocating payments to a Portfolio that was otherwise available
under the Variable Contracts until thirty (30) days after the LIFE COMPANY shall
have notified the FUND of its intention to do so.
Article IX. NOTICES
Any notice hereunder shall be given by registered or certified mail return
receipt requested 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:
Navellier Variable Insurance Series Fund, Inc.
Xxx Xxxx Xxxxxxx, Xxxxx Xxxxx
Xxxx, Xxxxxx 00000
Attn: Xxxxxx X. Xxxxxxx
If to the ADVISER:
Navellier & Associates, Inc.
Xxx Xxxx Xxxxxxx, Xxxxx Xxxxx
Xxxx, Xxxxxx 00000
Attn: Xxxxxx X. Xxxxxxx
If to the LIFE COMPANY:
Notice shall be deemed given on the date of receipt by the addressee as
evidenced by the return receipt.
Article X. MISCELLANEOUS
10.1 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.
10.2 This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
10.3 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.
10.4 This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the State of Massachusetts.
It shall also be subject to the provisions of the federal securities laws and
the rules and regulations thereunder and to any orders of the SEC granting
exemptive relief therefrom and the conditions of such orders.
10.5 It is understood and expressly stipulated that neither the
shareholders of shares of any Portfolio nor the directors or officers of the
FUND or any Portfolio shall be personally liable hereunder. No Portfolio shall
be liable for the liabilities of any other Portfolio. All persons dealing with
the FUND or a Portfolio must look solely to the property of the FUND or that
Portfolio, respectively, for enforcement of any claims against the FUND or that
Portfolio. It is also understood that each of the Portfolios shall be deemed to
be entering into a separate Agreement with the LIFE COMPANY so that it is as if
each of the Portfolios had signed a separate Agreement with the LIFE COMPANY and
that a single document is being signed simply to facilitate the execution and
administration of the Agreement.
10.6 Each party 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 contemplated hereby.
10.7 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.
10.8 If the Agreement terminates, the parties agree that Article 7 and
Sections 10.5, 10.6 and 10.7 shall remain in effect after termination.
10.9 No provision of this Agreement may be amended or modified in any
manner except by a written agreement properly authorized and executed by the
FUND, the ADVISER and the LIFE COMPANY.
10.10 No failure or delay by a party in exercising any right or remedy
under this Agreement will operate as a waiver thereof and no single or partial
exercise of rights shall preclude a further or subsequent exercise. The rights
and remedies provided in this Agreement are cumulative and not exclusive of any
rights or remedies provided by law.
10.11 The rights, remedies, and obligations contained in this Agreement are
cumulative and are in addition to any and all rights, remedies and obligations,
at law or in equity, which the parties are entitled to under state and federal
laws.
IN WITNESS WHEREOF, the parties have caused their duly authorized
officers to execute this Fund Participation Agreement as of the date and year
first above written.
NAVELLIER VARIABLE INSURANCE SERIES FUND,
INC.
By:_______________________________________
Name:
Title:
NAVELLIER & ASSOCIATES, INC.
By:_______________________________________
Name:
Title:
LIFE COMPANY
By:_______________________________________
Name:
Title:
APPENDIX A
Navellier Growth Portfolio
APPENDIX B
Name of Separate Account and
Variable Contract Number Portfolio
1. Navellier Growth Portfolio
