PARTICIPATION AGREEMENT - INVESCO
EXHIBIT
8(ii)
FUND PARTICIPATION
AGREEMENT
THIS
AGREEMENT, made and entered into this day
of
2000 (the “Agreement”) by and among Massachusetts Mutual Life
Insurance Company, organized under the laws of the State
of
(the “Company”), on behalf of itself and each separate account of
the Company named in Schedule A to this Agreement, as may be amended from
time to time (each account referred to as the “Account” and
collectively as the “Accounts”); INVESCO Variable Investment
Funds, Inc., an open-end management investment company organized under the
laws of the State of Maryland (the “Fund”); INVESCO Funds Group,
Inc., a corporation organized under the laws of the State of Delaware and
investment adviser to the Fund (the “Adviser”); and INVESCO
Distributors, Inc., a corporation organized under the laws of the State of
Delaware and principal underwriter/distributor of the Fund.
WHEREAS,
the Fund engages in business as an open-end management investment company
and was established for the purpose of serving as the investment vehicle for
separate accounts established for variable life insurance contracts and
variable annuity contracts to be offered by insurance companies which have
entered into participation agreements substantially similar to this
Agreement (the “Participating Insurance Companies”),
and
WHEREAS,
beneficial interests in the Fund are divided into several series of shares,
each representing the interest in a particular managed portfolio of
securities and other assets (the “Portfolios”); and
WHEREAS,
the Company, as depositor, has established the Accounts to serve as
investment vehicles for certain variable annuity contracts and variable life
insurance policies and funding agreements offered by the Company set forth
on Schedule A (the “Contracts”); and
WHEREAS,
the Accounts are duly organized, validly existing segregated asset accounts,
established by resolutions of the Board of Directors of the Company under
the insurance laws of the State of Connecticut, to set aside and invest
assets attributable to the Contracts; and
WHEREAS,
to the extent permitted by applicable insurance laws and regulations, the
Company intends to purchase shares of the Portfolios named in Schedule B, as
such schedule may be amended from time to time (the “Designated
Portfolios”) on behalf of the Accounts to fund the
Contracts;
NOW,
THEREFORE, in consideration of their mutual promises, the Company, the Fund,
the Adviser and the Distributor agree as follows:
ARTICLE
I—SALE OF FUND SHARES
1.1
The Fund agrees to sell to the Company those shares
of the Designated Portfolios which each Account orders, executing such
orders on a daily basis at the net asset value (and with no sales charges)
next computed after receipt and acceptance by the Fund or its designee of
the order for the shares of the Fund. For purposes of this Section 1.1, the
Company will be the designee of the Fund for receipt of such orders from
each Account and receipt by such designee will constitute receipt by the
Fund; provided that the Fund receives notice of such order by 11:00 a.m.
Eastern Time on the next following business day. “Business Day”
will 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 Securities and Exchange Commission (the “Commission”). The
Fund may net the notice of redemptions it receives from the Company under
Section 1.3 of this Agreement against the notice of purchases it receives
from the Company under this Section 1.1.
1.2
The Company will pay for Fund shares on the next
Business Day after an order to purchase Fund shares is made in accordance
with Section 1.1. Payment will be made in federal funds transmitted by wire.
Upon receipt by the Fund of the payment, such funds shall cease to be the
responsibility of the Company and shall become the responsibility of the
Fund.
1.3 The Fund agrees to redeem for cash, upon the
Company’s request, any full or fractional shares of the Fund held by
the Company, executing such requests on a daily basis at the net asset value
next computed after receipt and acceptance by the Fund or its agent of the
request for redemption. For purposes of this Section 1.3, the Company will
be the designee of the Fund for receipt of requests for redemption from each
Account and receipt by such designee will constitute receipt by the Fund;
provided the Fund receives notice of such requests for redemption by 11:00
a.m. Eastern Time on the next following Business Day. Payment will be made
in federal funds transmitted by wire to the Company’s account as
designated by the Company in writing from time to time, on the same Business
Day the Fund receives notice of the redemption order from the Company. After
consulting with the Company, the Fund reserves the right to delay payment of
redemption proceeds, but in no event may such payment be delayed longer than
the period permitted under Section 22(e) of the Investment Company Act of
1940 (the “1940 Act”). The Fund will not bear any responsibility
whatsoever for the proper disbursement or crediting of redemption proceeds;
the Company alone will be responsible for such action. If notification of
redemption is received after 11:00 Eastern Time, payment for redeemed shares
will be made on the next following Business Day. The Fund may net the notice
of purchases it receives from the Company under Section 1.1 of this
Agreement against the notice of redemptions it receives from the Company
under this Section 1.3.
1.4
The Fund agrees to make shares of the Designated
Portfolios available continuously for purchase at the applicable net asset
value per share by Participating Insurance Companies and their separate
accounts on those days on which the Fund calculates its Designated Portfolio
net asset value pursuant to rules of the Commission; provided, however, that
the Board of Directors of the Fund (the “Fund Board”) may refuse
to sell shares of any Portfolio to any person, or suspend or terminate the
offering of shares of any Portfolio if such action is required by law or by
regulatory authorities having jurisdiction or is, in the sole discretion of
the Fund Board, acting in good faith and in light of its fiduciary duties
under federal and any applicable state laws, necessary in the best interests
of the shareholders of such Portfolio.
1.5
The Fund agrees that shares of the Fund will be sold
only to Participating Insurance Companies and their separate accounts,
qualified pension and retirement plans or such other persons as are
permitted under applicable provisions of the Internal Revenue Code of 1986,
as amended, (the “Code”), and regulations promulgated thereunder,
the sale to which will not impair the tax treatment currently afforded the
Contracts. No shares of any Portfolio will be sold directly to the general
public.
1.6
The Fund will not sell Fund shares to any insurance
company or separate account unless an agreement containing provisions
substantially the same as Articles I, III, V, and VI of this Agreement are
in effect to govern such sales.
1.7
The Company agrees to purchase and redeem the shares
of the Designated Portfolios offered by the then current prospectus of the
Fund in accordance with the provisions of such prospectus.
1.8
Issuance and transfer of the Fund’s shares will
be by book entry only. Stock certificates will not be issued to the Company
or to any Account. Purchase and redemption orders for Fund shares will be
recorded in an appropriate title for each Account or the appropriate
sub-account of each Account.
1.9
The Fund will furnish same day notice (by facsimile)
to the Company of the declaration of any income, dividends or capital gain
distributions payable on each Designated Portfolio’s shares. The
Company hereby elects to receive all such dividends and distributions as are
payable on the Portfolio shares in the form of additional shares of that
Portfolio at the ex-dividend date net asset values. The Company reserves the
right to revoke this election and to receive all such dividends and
distributions in cash. The Fund will notify the Company of the number of
shares so issued as payment of such dividends and distributions.
1.10
The Fund will make the net asset value per share for
each Designated Portfolio available to the Company via electronic means on a
daily basis as soon as reasonably practical after the net asset value per
share is calculated and will use its best efforts to make such net asset
value per share available by 7:00 p.m.,
Eastern Time, each business day. If the Fund provides the Company materially
incorrect net asset value per share information (as determined under SEC
guidelines), the Company shall be entitled to an adjustment to the number of
shares purchased or redeemed to reflect the correct net asset value per
share. Any material error in the calculation or reporting of net asset value
per share, dividend or capital gain information shall be reported to the
Company upon discovery by the Fund.
ARTICLE
II—REPRESENTATIONS AND WARRANTIES
2.1
The Company represents and warrants that the
Contracts are or will be registered under the Securities Act of 1933 (the
“1933 Act”), or are exempt from registration thereunder, and that
the Contracts will be issued and sold in compliance with all applicable
federal and state laws. The Company further represents and warrants that it
is an insurance company duly organized and in good standing under applicable
law and that it has legally and validly established each Account as a
separate account under Section 38a-433 of the General Statutes of
and that each Account is or will be registered as a unit
investment trust in accordance with the provisions of the 1940 Act to serve
as a segregated investment account for the Contracts, or is exempt from
registration thereunder, and that it will maintain such registration for so
long as any Contracts are outstanding, as applicable. The Company will amend
the registration statement under the 1933 Act for the Contracts and the
registration statement under the 1940 Act for the Account from time to time
as required in order to effect the continuous offering of the Contracts or
as may otherwise be required by applicable law. The Company will register
and qualify the Contracts for sale in accordance with the securities laws of
the various states only if and to the extent deemed necessary by the
Company.
2.2
The Company represents that the Contracts are
currently and at the time of issuance will be treated as annuity contracts
and/or life insurance policies (as applicable) under applicable provisions
of the Code, and that it will make every effort to maintain such treatment
and that it will notify the Fund and the 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.
2.3
The Company represents and warrants that it will not
purchase shares of the Designated Portfolio(s) with assets derived from
tax-qualified retirement plans except, indirectly, through Contracts
purchased in connection with such plans.
2.4
The Fund represents and warrants that shares of the
Designated Portfolio(s) sold pursuant to this Agreement will be registered
under the 1933 Act and duly authorized for issuance in accordance with
applicable law and that the Fund is and will remain registered as an
open-end management investment company under the 1940 Act for as long as
such shares of the Designated Portfolio(s) are sold. The Fund will amend the
registration statement for its shares under the 1933 Act and the 1940 Act
from time to time as required in order to effect the continuous offering of
its shares. The Fund will register and qualify the shares of the Designated
Portfolio(s) for sale in accordance with the laws of the various states only
if and to the extent deemed advisable by the Fund.
2.5
The Fund represents that it will use its best
efforts to comply with any applicable state insurance laws or regulations as
they may apply to the investment objectives, policies and restrictions of
the Portfolios, as they may apply to the Fund, to the extent specifically
requested in writing by the Company. If the Fund cannot comply with such
state insurance laws or regulations, it will so notify the Company in
writing. The Fund makes no other representation as to whether any aspect of
its operations (including, but not limited to, fees and expenses, and
investment policies) complies with the insurance laws or regulations of any
state. The Company represents that it will use its best efforts to notify
the Fund of any restrictions imposed by state insurance laws that may become
applicable to the Fund as a result of the Accounts’ investments
therein. The Fund and the Adviser agree that they will furnish the
information required by state insurance laws to assist the Company in
obtaining the authority needed to issue the Contracts in various
states.
2.6 The Fund currently does not intend to make any
payments to finance distribution expenses pursuant to Rule 12b-1 under the
1940 Act or otherwise, although it reserves the right to make such payments
in the future. To the extent that it decides to finance distribution
expenses pursuant to Rule 12b-1, the Fund undertakes to have the directors
of its Fund Board, a majority of whom are not “interested” persons
of the Fund, formulate and approve any plan under Rule 12b-1 to finance
distribution expenses.
2.7
The Fund represents that it is lawfully organized
and validly existing under the laws of the State of Maryland and that it
does and will comply in all material respects with applicable provisions of
the 0000 Xxx.
2.8
The Fund represents and warrants that all of its
directors, officers, employees, investment advisers, and other
individuals/entities having access to the funds and/or securities of the
Fund are and continue to be at all times covered by a blanket fidelity bond
or similar coverage for the benefit of the Fund in an amount not less than
the minimal coverage as required currently by Rule 17g-(1) of the 1940 Act
or related provisions as may be promulgated from time to time. The aforesaid
bond includes coverage for larceny and embezzlement and is issued by a
reputable bonding company.
2.9
The Adviser represents and warrants that it is duly
registered as an investment adviser under the Investment Advisers Act of
1940, as amended, and will remain duly registered under all applicable
federal and state securities laws and that it will perform its obligations
for the Fund in accordance in all material respects with the laws of the
State of Delaware and any applicable state and federal securities
laws.
2.10
The Distributor represents and warrants that it is
registered as a broker-dealer under the Securities and Exchange Act of 1934,
as amended (the “1934 Act”) and will remain duly registered under
all applicable federal and state securities laws, and is a member in good
standing of the National Association of Securities Dealers, Inc.
(“NASD”) and serves as principal underwriter/distributor of the
Funds and that it will perform its obligations for the Fund in accordance in
all material respects with the laws of the State of Delaware and any
applicable state and federal securities laws.
2.11
The Fund, the Adviser and the Distributor represents
and warrants to the Company that each has a Year 2000 compliance program in
existence and that each reasonably intends to be Year 2000 compliant so as
to be able to perform all of the services and/or obligations contemplated by
or under this Agreement without interruption. The Fund, the Adviser, and the
Distributor shall immediately notify the Company if it determines that it
will be unable to perform all of the services and/or obligations
contemplated by or under this Agreement in a manner that is Year 2000
compliant.
ARTICLE
III—FUND COMPLIANCE
3.1
The Fund and the Adviser acknowledge that any
failure (whether intentional or in good faith or otherwise) to comply with
the requirements of Subchapter M of the Code or the diversification
requirements of Section 817(h) of the Code may result in the Contracts not
being treated as variable contracts for federal income tax purposes, which
would have adverse tax consequences for Contract owners and could also
adversely affect the Company’s corporate tax liability. The Fund and
the Adviser further acknowledge that any such failure may result in costs
and expenses being incurred by the Company in obtaining whatever regulatory
authorizations are required to substitute shares of another investment
company for those of the failed Fund or as well as fees and expenses of
legal counsel and other advisors to the Company and any federal income
taxes, interest or tax penalties incurred by the Company in connection with
any such failure.
3.2
The Fund represents and warrants that it is
currently qualified as a Regulated Investment Company under Subchapter M of
the Code, and that it will maintain such qualification (under Subchapter M
or any successor or similar provision) and that it will notify the Company
immediately upon having a reasonable basis for believing that it has ceased
to so qualify or that it might not so qualify in the future.
3.3 The Fund represents that it 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; including, but not limited to, that the Fund
will at all times comply with Section 817(h) of the Code and Treasury
Regulation 1.817-5, as amended from time to time, relating to the
diversification requirements for variable annuity, endowment, or life
insurance contracts, and with Section 817(d) of the Code, relating to the
definition of a variable contract, and any amendments or other modifications
to such Section or Regulation. The Fund will notify the Company immediately
upon having a reasonable basis for believing that the Fund or a Portfolio
thereunder has ceased to comply with the diversification requirements or
that the Fund or Portfolio might not comply with the diversification
requirements in the future. In the event of a breach of this representation
by the Fund, it will take all reasonable steps to adequately diversify the
Fund so as to achieve compliance within the grace period afforded by
Treasury Regulation 1.817-5.
3.4
The Adviser agrees to provide the Company with a
certificate or statement indicating compliance by each Portfolio of the Fund
with Section 817(h) of the Code, such certificate or statement to be sent to
the Company no later than thirty (30) days following the end of each
calendar quarter.
ARTICLE
IV—PROSPECTUS AND PROXY STATEMENTS/VOTING
4.1
The Fund will provide the Company with as many
copies of the current Fund prospectus and any supplements thereto for the
Designated Portfolio(s) as the Company may reasonably request for
distribution, at the Fund’s expense, to Contract owners at the time of
Contract fulfillment and confirmation. To the extent that the Designated
Portfolio(s) are one or more of several Portfolios of the Fund, the Fund
shall bear the cost of providing the Company only with disclosure related to
the Designated Portfolio(s). The Fund will provide, at the Fund’s
expense, as many copies of said prospectus as necessary for distribution, at
the Fund’s expense, to existing Contract owners. The Fund will provide
the copies of said prospectus to the Company or to its mailing agent. The
Company will distribute the prospectus to existing Contract owners and will
xxxx the Fund for the reasonable cost of such distribution. If requested by
the Company, in lieu thereof, the Fund will provide such documentation,
including a final copy of a current prospectus set in type at the
Fund’s expense, and other assistance as is reasonably necessary in
order for the Company at least annually (or more frequently if the Fund
prospectus is amended more frequently) to have the new prospectus for the
Contracts and the Fund’s new prospectus printed together, in which case
the Fund agrees to pay its proportionate share of reasonable expenses
directly related to the required disclosure of information concerning the
Fund. The Fund will, upon request, provide the Company with a copy of the
Fund’s prospectus through electronic means to facilitate the
Company’s efforts to provide Fund prospectuses via electronic delivery,
in which case the Fund agrees to pay its proportionate share of reasonable
expenses related to the required disclosure of information concerning the
Fund.
4.2
The Fund’s prospectus will state that the
Statement of Additional Information (the “SAI”) for the Fund is
available from the Company. The Fund will provide the Company, at the
Fund’s expense, with as many copies of the SAI and any supplements
thereto as the Company may reasonably request for distribution, at the
Fund’s expense, to prospective Contract owners and applicants. To the
extent that the Designated Portfolio(s) are one or more of several
Portfolios of the Fund, the Fund shall bear the cost of providing the
Company only with disclosure related to the Designated Portfolio(s). The
Fund will provide, at the Fund’s expense, as many copies of said SAI as
necessary for distribution, at the Fund’s expense, to any existing
Contract owner who requests such statement or whenever state or federal law
requires that such statement be provided. The Fund will provide the copies
of said SAI to the Company or to its mailing agent. The Company will
distribute the SAI as requested or required and will xxxx the Fund for the
reasonable cost of such distribution.
4.3
The Fund, at its expense, will provide the Company
or its mailing agent with copies of its proxy material, if any, reports to
shareholders/Contract owners and other permissible communications to
shareholders/Contract owners in such quantity as the Company will reasonably
require. The Company will
distribute this proxy material, reports and other communications to existing
Contract owners and will xxxx the Fund for the reasonable cost of such
distribution.
4.4
If and to the extent required by law, the Company
will:
|
| (a)
| solicit voting
instructions from Contract owners;
|
| (b)
| vote the shares of
the Designated Portfolios held in the Account in accordance with
instructions received from Contract owners; and
|
| (c)
| vote shares of the
Designated Portfolios held in the Account for which no timely instructions
have been received, in the same proportion as shares of such Designated
Portfolio for which instructions have been received from the
Company’s Contract owners,
so long as and to the
extent that the Commission continues to interpret the 1940 Act to require
pass-through voting privileges for variable Contract owners. The Company
reserves the right to vote Fund shares held in any segregated asset account
in its own right, to the extent permitted by law. The Company will be
responsible for assuring that the Accounts participating in the Fund
calculates voting privileges in a manner consistent with all legal
requirements, including the Proxy Voting Procedures set forth in Schedule C
and the Mixed and Shared Funding Exemptive Order, as described in Section
7.1.
4.5
The Fund will comply with all provisions of the 1940
Act requiring voting by shareholders, and in particular, the Fund either
will provide for annual meetings (except insofar as the Commission may
interpret Section 16 of the 1940 Act not to require such meetings) or, as
the Fund currently intends, to comply with Section 16(c) of the 1940 Act
(although the Fund is not one of the trusts described in Section 16(c) of
the 0000 Xxx) as well as with Sections 16(a) and, if and when applicable,
16(b). Further, the Fund will act in accordance with the Commission’s
interpretation of the requirements of Section 16(a) with respect to periodic
elections of directors and with whatever rules the Commission may promulgate
with respect thereto.
ARTICLE
V—SALES MATERIAL AND INFORMATION
5.1
The Company will furnish, or will cause to be
furnished, to the Fund or the Adviser, each piece of sales literature or
other promotional material in which the Fund or the Adviser is named, at
least ten (10) Business Days prior to its use. No such material will be used
if the Fund or the Adviser reasonably objects to such use within five (5)
Business Days after receipt of such material.
5.2
The Company will not give any information or make
any representations or statements on behalf of the Fund or concerning the
Fund in connection with the sale of the Contracts other than the information
or representations contained in the registration statement, prospectus or
SAI for Fund shares, as such registration statement, prospectus and SAI may
be amended or supplemented from time to time, or in reports or proxy
statements for the Fund, or in published reports for the Fund which are in
the public domain or approved by the Fund or the Adviser for distribution,
or in sales literature or other material provided by the Fund or by the
Adviser, except with permission of the Fund or the Adviser. The Fund and the
Adviser agree to respond to any request for approval on a prompt and timely
basis.
5.3
The Fund or the Adviser will furnish, or will cause
to be furnished, to the Company or its designee, each piece of sales
literature or other promotional material in which the Company or its
separate account is named, at least ten (10) Business Days prior to its use.
No such material will be used if the Company reasonably objects to such use
within five (5) Business Days after receipt of such material.
5.4
The Fund and the Adviser will not give any
information or make any representations or statements on behalf of the
Company or concerning the Company, each Account, or the Contracts other than
the information or representations contained in a registration statement,
prospectus or SAI for the Contracts, as such registration statement,
prospectus and SAI may be amended or supplemented from time to time, or in
published reports for each Account or the Contracts which are in the public
domain or approved by the Company for distribution to Contract owners, or in
sales literature or other material provided by the Company, except with
permission of the Company. The Company agrees to respond to any request for
approval on a prompt and timely basis.
5.5
The Fund will provide to the Company at least one
complete copy of all registration statements, prospectuses, SAIs, reports,
proxy statements, sales literature and other promotional materials,
applications for exemptions, requests for no-action letters, and all
amendments to any of the above, that relate to the Fund or its shares,
within a reasonable time after filing of each such document with the
Commission or the NASD.
5.6
The Company will provide to the Fund at least one
complete copy of all definitive prospectuses, definitive SAI, reports,
solicitations for voting instructions, sales literature and other
promotional materials, applications for exemptions, requests for no action
letters, and all amendments to any of the above, that relate to the
Contracts or each Account, contemporaneously with the filing of each such
document with the Commission or the NASD (Except that with respect to
post-effective amendments to such prospectuses and SAIs and sales literature
and promotional material, only those prospectuses and SAIs and sales
literature and promotional material that relate to or refer to the Fund will
be provided.) In addition, the Company will provide to the Fund at least one
complete copy of (i) a registration statement that relates to the Contracts
or each Account, containing representative and relevant disclosure
concerning the Fund; and (ii) any post-effective amendments to any
registration statements relating to the Contracts or such Account that refer
to or relate to the Fund.
5.7
For purposes of this Article V, the phrase “sales
literature or other promotional material” includes, but is not limited
to, 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, (i.e., on-line networks such as the Internet or
other electronic messages)), sales literature (i.e., any written
communication distributed or made generally available to customers or the
public, including brochures, circulars, research reports, market letters,
form letters, seminar texts, reprints or excerpts of any other
advertisement, sales literature, or published article), educational or
training materials or other communications distributed or made generally
available to some or all agents or employees, registration statements,
prospectuses, SAIs, shareholder reports, and proxy materials and any other
material constituting sales literature or advertising under the NASD rules,
the 1933 Act or the 1940 Act.
5.8
The Investment Company, the Adviser and the
Distributor hereby consent to the Insurance Company’s use of the names
of the INVESCO, AMVESCAP and INVESCO Funds Group, Inc. as well as the names
of the Designated Funds set forth in Schedule B of this Agreement, in
connection with marketing the Contracts, subject to the terms of Sections
5.1 of this Agreement. Insurance Company acknowledges and agrees that
Adviser and Distributor and/or their affiliates own all right, title and
interest in an to the name INVESCO and the INVESCO open circle design, and
covenants not, at any time, to challenge the rights of Adviser and
Distributor and/or their affiliates to such name or design, or the validity
or distinctiveness thereof. The Investment Company, the Adviser and the
Distributor hereby consent to the use of any trademark, trade name, service
xxxx or logo used by the Investment Company, the Adviser and the
Distributor, subject to the Investment Company’s, the Adviser’s
and/or the Distributor’s approval of such use and in accordance with
reasonable requirements of the Investment Company, the Adviser or the
Distributor. Such consent will terminate with the termination of this
Agreement. Adviser or Distributor may withdraw this consent as to any
particular use of any such name or identifying marks at any time (i) upon
Adviser’s or Distributor’s reasonable determination that such use
would have a material adverse effect on the reputation or marketing efforts
of Adviser, Distributor or such Funds or (ii) if no investment company, or
series or class of shares of any investment company advised by Adviser or
distributed by Distributor continues to be offered through variable
insurance contracts issued by Insurance Company; provided however, that
Adviser or Distributor may, in eithers individual discretion, continue to
use materials prepared or printed prior to the withdrawal of such
authorization. The Insurance Company agrees and acknowledges that all use of
any designation comprised in
whole or in part of the name, trademark, trade name, service xxxx and logo
under this Agreement shall inure to the benefit of the Investment Company,
Adviser and/or the Distributor.
5.9
The Fund, the Adviser, the Distributor and the
Company agree to adopt and implement procedures reasonably designed to
ensure that information concerning the Company, the Fund, the Adviser or the
Distributor, respectively, and their respective affiliated companies, that
is intended for use only by brokers or agents selling the Contracts is
properly marked as “Not For Use With The Public” and that such
information is only so used.
ARTICLES
VI—FEES, COSTS AND EXPENSES
6.1
The Fund will pay no fee or other compensation to
the Company under this Agreement, except as provided below: (a) if the Fund
or any Designated Portfolio adopts and implements a plan pursuant to Rule
12b-1 under the 1940 Act to finance distribution expenses, then, subject to
obtaining any required exemptive orders or other regulatory approvals, the
Fund may make payments to the Company or to the underwriter for the
Contracts if and in such amounts agreed to by the Fund in writing; (b) the
Fund may pay fees to the Company for administrative services provided to
Contract owners that are not primarily intended to result in the sale of
shares of the Designated Portfolio or of underlying Contracts.
6.2
All expenses incident to performance by the Fund of
this Agreement will be paid by the Fund to the extent permitted by law. All
shares of the Designated Portfolios will be duly authorized for issuance and
registered in accordance with applicable federal law and, to the extent
deemed advisable by the Fund, in accordance with applicable state law, prior
to sale. The Fund will bear the expenses for the cost of registration and
qualification of the Fund’s shares, including without limitation, the
preparation of and filing with the SEC of Forms N-SAR and Rule 24f-2 Notices
and payment of all applicable registration or filing fees with respect to
shares of the Fund; preparation and filing of the Fund’s prospectus,
SAI and registration statement, proxy materials and reports; typesetting the
Fund’s prospectus; typesetting and printing proxy materials and reports
to Contract owners (including the costs of printing a Fund prospectus that
constitutes an annual report); the preparation of all statements and notices
required by any federal or state law; all taxes on the issuance or transfer
of the Fund’s shares; any expenses permitted to be paid or assumed by
the Fund pursuant to a plan, if any, under Rule 12b-1 under the 1940 Act;
and other costs associated with preparation of prospectuses and SAIs for the
Designated Portfolios in electronic or typeset format, as well as any
distribution expenses as set forth in Article III of this
Agreement.
ARTICLE
VII—MIXED & SHARED FUNDING RELIEF
7.1
The Fund represents and warrants that it has
received an order from the Commission granting Participating Insurance
Companies and variable annuity separate accounts and variable life insurance
separate accounts relief from the provisions of Sections 9(a), 13(a), 15(a),
and 15(b) of the 1940 Act and Rules 6e-2(b)(15) and 6e-3(T)(b)(15)
thereunder, to the extent necessary to permit shares of the Fund to be sold
to and held by variable annuity separate accounts and variable life
insurance separate accounts of both affiliated and unaffiliated
Participating Insurance Companies and qualified pension and retirement plans
outside of the separate account context (the “Mixed and Shared Funding
Exemptive Order”). The parties to this Agreement agree that the
conditions or undertakings specified in the Mixed and Shared Funding
Exemptive Order and that may be imposed on the Company, the Fund and/or the
Adviser by virtue of the receipt of such order by the Commission, will be
incorporated herein by reference, and such parties agree to comply with such
conditions and undertakings to the extent applicable to each such
party.
7.2
The Fund Board will monitor the Fund for the
existence of any irreconcilable material conflict among the interests of the
Contract owners of all separate accounts investing in the Fund. An
irreconcilable material conflict may arise for a variety of reasons,
including, but not limited to: (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 Portfolio are being managed; (e) a
difference in voting instructions given by Participating Insurance Companies
or by variable annuity and variable life insurance Contract owners; or (f) a
decision by an insurer to disregard the voting instructions of Contract
owners. The Fund Board will promptly inform the Company if it determines
that an irreconcilable material conflict exists and the implications
thereof. A majority of the Fund Board will consist of persons who are not
“interested” persons of the Fund.
7.3
The Company will report any potential or existing
conflicts of which it is aware to the Fund Board. The Company agrees to
assist the Fund Board in carrying out its responsibilities, as delineated in
the Mixed and Shared Funding Exemptive Order, by providing the Fund Board
with all information reasonably necessary for the Fund Board to consider any
issues raised. This includes, but is not limited to, an obligation by the
Company to inform the Fund Board whenever Contract owner voting instructions
are to be disregarded. The Fund Board will record in its minutes, or other
appropriate records, all reports received by it and all action with regard
to a conflict.
7.4
If it is determined by a majority of the Fund Board,
or a majority of its disinterested directors, that an irreconcilable
material conflict exists, the Company and other Participating Insurance
Companies will, at their expense and to the extent reasonably practicable
(as determined by a majority of the disinterested directors), take whatever
steps are necessary to remedy or eliminate the irreconcilable material
conflict, up to and including: (a) withdrawing the assets allocable to some
or all of the Accounts from the Fund or any Portfolio and reinvesting such
assets in a different investment medium, including (but not limited to)
another Portfolio of the Fund, or submitting the question whether such
segregation should be submitted to a vote of all affected Contract owners
and, as appropriate, segregating the assets of any appropriate group
(i.e., variable annuity Contract owners 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 Contract owners
the option of making such a change; and (b) establishing a new registered
management investment company or managed separate account.
7.5
If a material irreconcilable conflict arises because
of a decision by the Company to disregard Contract owner voting
instructions, and such disregard of voting instructions could conflict with
the majority of Contract owner voting instructions, and the Company’s
judgment represents a minority position or would preclude a majority vote,
the Company may be required, at the Fund’s election, to withdraw the
affected sub-account of the Account’s investment in the Fund and
terminate this Agreement with respect to such sub-account; provided,
however, that such withdrawal and termination will be limited to the extent
required by the foregoing irreconcilable material conflict as determined by
a majority of the disinterested directors of the Fund Board. No charge or
penalty will be imposed as a result of such withdrawal. Any such withdrawal
and termination must take place within six (6) months after the Fund gives
written notice to the Company that this provision is being implemented.
Until the end of such six-month period the Adviser and Fund will, to the
extent permitted by law and any exemptive relief previously granted to the
Fund, continue to accept and implement orders by the Company for the
purchase (and redemption) of shares of the Fund.
7.6
If an irreconcilable conflict arises because a
particular state insurance regulator’s decision applicable to the
Company conflicts with the majority of other state insurance regulators,
then the Company will withdraw the affected sub-account of the
Account’s investment in the Fund and terminate this Agreement with
respect to such sub-account; provided, however, that such withdrawal and
termination will be limited to the extent required by the foregoing
irreconcilable material conflict as determined by a majority of the
disinterested directors of the Fund Board. No charge or penalty will be
imposed as a result of such withdrawal. Any such withdrawal and termination
must take place within six (6) months after the Fund gives written notice to
the Company that this provision is being implemented. Until the end of such
six-month period the Advisor
and Fund will, to the extent permitted by law and any exemptive relief
previously granted to the Fund, continue to accept and implement orders by
the Company for the purchase (and redemption) of shares of the
Fund.
7.7
For purposes of Sections 7.4 through 7.7 of this
Agreement, a majority of the disinterested members of the Fund Board will
determine whether any proposed action adequately remedies any irreconcilable
material conflict, but in no event, other than as specified in Section 7.4,
will the Fund be required to establish a new funding medium for the
Contracts. The Company will not be required by Section 7.4 to establish a
new funding medium for the Contracts if an offer to do so has been declined
by vote of a majority of Contract owners affected by the irreconcilable
material conflict.
7.7
The Company will at least annually submit to the
Fund Board such reports, materials or data as the Fund Board may reasonably
request so that the Fund Board may fully carry out the duties imposed upon
it as delineated in the Mixed and Shared Funding Exemptive Order, and said
reports, materials and data will be submitted more frequently if deemed
appropriate by the Fund Board.
7.8
If and to the extent that Rule 6e-2 and Rule 6e-3(T)
are amended, or Rule 6e-3 is adopted, to provide exemptive relief from any
provision of the 1940 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, will 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) Sections 4.4, 4.5, 7.1, 7.2, 7.3, 7.4, and 7.5 of this Agreement
will continue in effect only to the extent that terms and conditions
substantially identical to such Sections are contained in such Rule(s) as so
amended or adopted.
ARTICLE
VIII—INDEMNIFICATION
8.1 Indemnification by the
Company
(a)
The Company agrees to indemnify and hold harmless the Fund, the
Adviser, the Distributor, and each person, if any, who controls or is
associated with the Fund, the Adviser, or the Distributor within the meaning
of such terms under the federal securities laws and any director, trustee,
officer, employee or agent of the foregoing (collectively, the
“Indemnified Parties” for purposes of this Section 8.1) against
any and all losses, claims, expenses, damages, liabilities (including
amounts paid in settlement with the written consent of the Company) or
actions in respect thereof (including reasonable 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:
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(1) arise out of or are based upon any untrue statements
or alleged untrue statements of any material fact contained in the
registration statement, prospectus or SAI for the Contracts or contained
in the Contracts or sales literature or other promotional material for the
Contracts (or any amendment or supplement to any of the foregoing), or
arise out of or are based upon the omission or the alleged omission to
state therein a material fact required to be stated or necessary to make
such statements not misleading in light of the circumstances in which they
were made; provided that this agreement to indemnify will not apply as to
any Indemnified Party if such statement or omission of such alleged
statement or omission was made in reliance upon and in conformity with
information furnished to the Company by or on behalf of the Fund, the
Adviser, of the Distributor for use in the registration statement,
prospectus or SAI for the Contracts or in the Contracts or sales
literature (or any amendment or supplement) or otherwise for use in
connection with the sale of the Contracts or Fund shares; or
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(2) arise out of or as a result of statements or
representations by or on behalf of the Company (other than statements or
representations contained in the Fund registration statement, prospectus,
SAI or sales literature or other promotional material of the Fund, or any
amendment or supplement to the foregoing,
not supplied by the Company or persons under its control) or wrongful
conduct of the Company or persons under its control, with respect to the
sale or distribution of the Contracts or Fund shares; or
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(3) arise out of untrue statement or alleged untrue
statement of a material fact contained in the Fund registration statement,
prospectus, SAI or sales literature or other promotional material of the
Fund (or amendment or supplement) or the omission or alleged omission to
state therein a material fact required to be stated therein or necessary
to make such statements not misleading in light of the circumstances in
which they were made, if such a statement or omission was made in reliance
upon and in conformity with information furnished to the Fund by or on
behalf of the Company or persons under its control; or
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(4) arise as a result of any failure by the Company to
provide the services and furnish the materials under the terms of this
Agreement; or
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(5) arise out of any material breach of any
representation and/or warranty made by the Company in this Agreement or
arise out of or result from any other material breach by the Company of
this Agreement;
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extent provided in Sections 8.1(b) and 8.4 hereof. This indemnification
will be in addition to any liability that the Company otherwise may
have.
(b)
No party will be entitled to indemnification under Section
8.1(a) if such loss, claim, damage, liability or action is due to the
willful misfeasance, bad faith, or gross negligence in the performance of
such party’s duties under this Agreement, or by reason of such
party’s reckless disregard of its obligations or duties under this
Agreement.
(c)
The Indemnified Parties promptly will notify the Company of the
commencement of any litigation, proceedings, complaints or actions by
regulatory authorities against them in connection with the issuance or sale
of the Fund shares or the Contracts or the operation of the
Fund.
8.2 Indemnification by the Adviser &
Distributor
(a)
The Adviser and Distributor agree to indemnify and hold harmless
the Company and each person, if any, who controls or is associated with the
Company within the meaning of such terms under the federal securities laws
and any director, officer, employee or agent of the foregoing (collectively,
the “Indemnified Parties” for purposes of this Section 8.2)
against any and all losses, claims, expenses, damages, liabilities
(including amounts paid in settlement with the written consent of the
Adviser and Distributor) or actions in respect thereof (including reasonable
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:
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(1) arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact contained in the
registration statement, prospectus or SAI for the Fund or sales literature
or other promotional material 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 or necessary to make such statements not misleading in light of the
circumstances in which they were made; provided that this agreement to
indemnify will not apply as to any Indemnified Party if such statement or
omission of such alleged statement or omission was made in reliance upon
and in conformity with information furnished to the Adviser or Fund by or
on behalf of the Company for use in the registration statement, prospectus
or SAI for the Fund or in sales literature of the Fund (or any amendment
or supplement thereto) or otherwise for use in connection with the sale of
the Contracts or Fund shares; or
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