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EXHIBIT 8(m)
TRUST PARTICIPATION AGREEMENT
THIS AGREEMENT made as of the _____ day of _____, 1998, by and among
SAFECO Resource Series Trust, an unincorporated business trust organized under
the laws of the State of Delaware ("Trust"), SAFECO Asset Management Company, a
Washington corporation ("Adviser"), and Bankers Life Insurance Company of New
York ("Life Company"), a life insurance company organized under the laws of the
State of New York.
WHEREAS, Trust is registered with the Securities and Exchange Commission
("SEC") under the Investment Company Act of 1940, as amended ("'40 Act"), as an
open-end, diversified management investment company; and
WHEREAS, Trust is organized as a series fund comprised of several
portfolios, with those then currently available under this Agreement being
listed on Schedule A hereto, as it may be amended from time to time
("Portfolios"); and
WHEREAS, Trust 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 of such life
insurance companies ("Participating Insurance Companies"); and
WHEREAS, Trust may also offer its shares to certain qualified pension and
retirement plans ("Qualified Plans"); and
WHEREAS, Trust has obtained 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(a)(2),
6e-2(b)(15) and 6e-3(T)(b)(15) thereunder, to the extent necessary to permit
shares of the Portfolios of the Trust to be sold to and held by Variable
Contract separate accounts of both affiliated and unaffiliated Participating
Insurance Companies and Qualified Plans (File No. 812-9658) ("Exemptive Order");
and
WHEREAS, Life Company has established or will establish one or more
separate accounts ("Separate Accounts") to offer Variable Contracts and desires
to have the Trust as one of the underlying funding vehicles for certain Variable
Contracts to be issued by Life Company as set forth on Schedule A hereto, as it
may be amended from time to time; and
WHEREAS, Adviser is registered with the SEC as an investment adviser
under the Investment Advisers Act of 1940, as amended, and acts as the Trust's
investment adviser; and
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WHEREAS, to the extent permitted by applicable insurance laws and
regulations, Life Company intends to purchase shares of Trust to fund the
aforementioned Variable Contracts and Trust is authorized to sell such shares to
Life Company at net asset value.
NOW, THEREFORE, in consideration of their mutual promises, Life Company,
Trust, and Adviser agree as follows:
Article I. SALE OF TRUST SHARES
1.1 Trust agrees, as provided in its Registration Statement, to make
available to the Separate Accounts, and any sub-accounts thereof, shares of the
selected Portfolios as listed on Schedule B hereto, as it may be amended from
time to time, for investment of purchase payments of Variable Contracts
allocated to the designated Separate Accounts.
1.2 Trust agrees to sell to Life Company those shares of the selected
Portfolios which Life Company orders. Orders which are sent by Life Company to
Trust and received by Trust by 8:00 a.m. Pacific time, will be executed by Trust
at the net asset value determined on the prior Business Day. Any orders received
by Trust after 8:00 a.m. and prior to 1:00 p.m. Pacific time, will be executed
by Trust at the net asset value next computed pursuant to the rules of the SEC.
For purposes of this Section 1.2, Trust hereby appoints Life Company as its
designee for receipt of such orders from the designated Separate Account and
receipt by such designee shall constitute receipt by Trust; provided that Trust
receives notice from Life Company by telephone or facsimile (or by such other
means as Trust and Life Company may agree in writing) of receipt of such orders
by 8:00 a.m. Pacific 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 Trust calculates its net asset value pursuant to the rules of the SEC.
1.3 Trust agrees to redeem, on Life Company's request, any full or
fractional shares of Trust held by Life Company, executing such requests on each
Business Day at the net asset value next computed after receipt by Trust or its
designee of the request for redemption, in accordance with the provisions of
this Agreement and Trust's Registration Statement. For purposes of this Section
1.3, Life Company hereby appoints Trust as its designee for receipt of requests
for redemption from the designated Separate Account and receipt by such designee
shall constitute receipt by Trust; provided that Trust receives notice from Life
Company by telephone or facsimile (or by such other means as Trust and Life
Company may agree in writing) of receipt of such request for redemption by 8:00
a.m. Pacific time on the next following Business Day.
1.4 In the event that Life Company's order results in a net purchase of
Portfolio shares, Life Company shall pay for Portfolio shares by 11:00 a.m.
Pacific time on the same Business Day that the notice of order to purchase Trust
shares is made in accordance with the provisions of this section. If Life
Company's order requests a net redemption resulting in a
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payment of redemption proceeds to Life Company, Trust shall normally pay and
transmit the proceeds of redemptions of Portfolio shares by 11:00 a.m. Pacific
time on the same Business Day that the notice of a redemption order is received
in accordance with the provisions of this Agreement, unless doing so would
require Trust to dispose of Portfolio securities or otherwise incur additional
costs. In any event, proceeds shall be wired to Life Company within three (3)
Business Days or such longer period permitted by the '40 Act or the rules,
orders or regulations thereunder, and Trust shall notify the person designated
in writing by Life Company as the recipient for such notice of such delay by
1:00 p.m. Pacific time the same Business Day that Life Company transmits the
redemption order to Trust. If 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 Adviser, Trust shall so apply such proceeds the same
Business Day that Life Company transmits such order to Trust. Any payment made
pursuant to this Section 1.4 shall be in federal funds transmitted by wire.
1.5 Trust will provide to Life Company closing net asset value per share
for the selected Portfolio(s) at the close of trading each Business Day. In any
event, Trust shall use its best efforts to make the net asset value per share
for each Portfolio available by 3:30 p.m. Pacific time each Business Day, and as
soon as reasonably practicable after the net asset value per share for each
Portfolio is calculated, and shall calculate such net asset value in accordance
with the Trust's Registration Statement. Any material error in the calculation
of the net asset value of the Portfolios shall be reported immediately to Life
Company.
1.6 At the end of each Business Day, Life Company shall use the
information described in Section 1.5 to calculate Separate Account unit values
for the day. Using these unit values, 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 Trust 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 Trust by Life Company by 8:00 a.m. Pacific time on the
Business Day next following Life Company's receipt of such requests and premiums
in accordance with the terms of Sections 1.2 and 1.3 hereof. Orders will be sent
directly, via facsimile (or by such other means as Trust and Life Company may
agree in writing), to Trust or such other person as the Trust may designate.
1.7 Trust agrees that all shares of the Portfolios will be sold only to
Participating Insurance Companies which have agreed to participate in Trust to
fund their separate accounts and/or to Qualified Plans, all in accordance with
the requirements of Section 817(h) of the Internal Revenue Code of 1986, as
amended ("Code") and Treasury Regulation 1.817-5. Shares of the Portfolios will
not be sold directly to the general public.
1.8 Trust shall furnish, on or before the ex-dividend date, notice to
Life Company of any income dividends or capital gain distributions payable on
the shares of any Portfolio. Life
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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. Trust shall notify Life Company or its designee of the number of
shares so issued as payment of such dividends and distributions.
1.9 Trust 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 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 Trust (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 Life Company or the Separate
Accounts. Shares ordered from the Portfolio(s) will be recorded in appropriate
book entry titles for the Separate Accounts.
1.11 Each party has the right to rely on information or confirmations
provided by each other party (or by any affiliate of each other party) and shall
not be liable in the event that an error is a result of any misinformation
supplied by any other party or any such affiliate. If a mistake is caused in
supplying such information or confirmations, which results in a reconciliation
with incorrect information, the amount required to make a Variable Contract
owner's or participant's account whole shall be borne by the party providing the
incorrect information.
Article II. REPRESENTATIONS AND WARRANTIES
2.1 Life Company represents and warrants that it is an insurance company
duly organized and in good standing under the laws of its state of domicile and
that it has legally and validly established each Separate Account as a
segregated asset account under such laws, and that IL Securities, Inc., the
principal underwriter for the Variable Contracts, is registered as a
broker-dealer under the Securities Exchange Act of 1934, as amended.
2.2 Life Company represents and warrants that it has registered or, prior
to any issuance or sale of the Variable Contracts, will register and maintain
the registration of each Separate Account as a unit investment trust in
accordance with the provisions of the '40 Act, unless an exemption from
registration is available.
2.3 Life Company represents and warrants that the Variable Contracts will
be registered under the Securities Act of 1933, as amended ("'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.
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2.4 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 Trust 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 Life Company represents and warrants that its directors, officers,
and employees, if any, dealing with the money and/or securities of Trust are and
shall continue to be at all times covered by a blanket fidelity bond or similar
coverage in an amount not less than $2 million. The aforesaid bond shall include
coverage for larceny and embezzlement and shall be issued by a reputable bonding
company. Life Company agrees that any amounts received under such bond that
arise from the arrangements contemplated by this Agreement shall be held by Life
Company for the benefit of Trust.
2.6 Adviser and Trust represent and warrant that their directors,
officers, and employees, if any, dealing with the money and/or securities of
Trust are and shall continue to be at all times covered by a blanket fidelity
bond or similar coverage in an amount not less than the minimal coverage as
required currently by Rule 17g-1 of the '40 Act or related provisions as may be
promulgated from time to time. The aforesaid bond shall include coverage for
larceny and embezzlement and shall be issued by a reputable bonding company.
Adviser and Trust agree that any amounts received under such bond that arise
from the arrangements contemplated by this Agreement shall be held by them for
the benefit of Trust.
2.7 Adviser and Trust make no representation as to whether any aspect of
Trust's operations (including, but not limited to, fees and expenses and
investment policies) complies with the insurance laws or regulations of the
various states. Trust agrees that it will make every reasonable effort to remain
in material compliance with the applicable laws of such states of whose
requirements Life Company informs it.
2.8 Trust represents and warrants that it is duly organized and in good
standing under the laws of its state of domicile and that it is in compliance
and will comply in all material respects with the '40 Act.
2.9 Trust represents and warrants that Trust 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 Trust shall be
registered under the '40 Act prior to and at the time of any issuance or sale of
such shares. Trust, 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. Trust 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 Trust.
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2.10 Trust 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 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.
2.11 Trust represents and warrants that each Portfolio invested in by the
Separate Account intends to elect to be treated as a "regulated investment
company" under Subchapter M of the Code, and to qualify for such treatment for
each taxable year and will notify Life Company immediately upon having a
reasonable basis for believing it has ceased to so qualify or might not so
qualify in the future.
2.12 Adviser represents and warrants that it is and will remain duly
registered as an investment adviser under the Investment Advisers Act of 1940,
as amended, 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 Trust 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 Trust.
Trust 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, Trust or its designee shall provide Life Company
with the current prospectus, statement of additional information and any
supplements thereto for the shares of the Portfolios listed on Schedule A, in
the form of "camera ready" copy as set in type or, at the request of Life
Company, as a diskette in the form sent to the financial printer. Trust shall be
responsible for providing the prospectus and/or statement of additional
information in the format (i.e., "camera ready" or diskette) in which it is
accustomed to formatting prospectuses and/or statements of additional
information and shall bear the expense of providing the prospectus and/or
statement of additional information, and any supplements thereto, in such format
(e.g. typesetting expenses), and Life Company shall bear the expense of
adjusting or changing the format to conform with any of its prospectuses and/or
statements of additional information. At Life Company's option and expense, once
a year (or more frequently if the prospectus and/or statement of additional
information for the shares is supplemented or amended), Life Company may cause
Trust's prospectus and/or statement of additional information to be printed
separately and/or together in one document with the
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prospectus and/or statement of additional information for other investment
companies and/or for the Variable Contracts. Life Company shall be responsible
for the costs of printing Trust's prospectus and/or statement of additional
information, either separately or in combination as aforesaid, and of
distribution to existing Variable Contract owners ("Owners") whose Variable
Contracts are funded by such shares and to prospective purchasers of Variable
Contracts.
3.3 Trust will provide 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 Trust or the Portfolios promptly
after the filing of each such document with the SEC or other regulatory
authority. The prospectus for the Portfolios shall state that the statement of
additional information for the Portfolios is available from Trust or its
designated agent, and such statement shall be provided free of charge to any
Variable Contract Owner or participant who requests a copy. Life Company will
provide Trust 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.
3.4 Trust currently does not make and does not intend to make any
payments to finance distribution expenses pursuant to Rule 12b-1 under the '40
Act or otherwise, although it may make such payments in the future. To the
extent that it decides to finance distribution expenses pursuant to Rule 12b-1,
Trust undertakes to have its Board of Trustees, a majority of whom are not
interested persons of Trust, formulate and approve any plan under Rule 12b-1 to
finance distribution expenses. Trust will notify Life Company of the adoption of
any plan under Rule 12b-1.
Article IV. SALES MATERIALS
4.1 Life Company will furnish, or will cause to be furnished, to Trust
and Adviser for review, each piece of sales literature or other promotional
material in which Trust, or any selected Portfolio thereof, or Adviser is named,
before such material is submitted to any regulatory body for review, and in any
event, at least fifteen (15) Business Days prior to its use. No such material
will be used if Trust or Adviser objects to its use in writing within fifteen
(15) Business Days after receipt of such material.
4.2 Advertising and sales literature with respect to Life Company, the
Separate Accounts and/or the Variable Contracts prepared by Trust, Adviser or
any affiliate thereof will be submitted to Life Company for review before such
material is submitted to any regulatory body for review, and in any event, at
least fifteen (15) Business Days prior to its use. No such material will be used
if Life Company objects to its use in writing within fifteen (15) Business Days
after receipt of such material.
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4.3 Trust and its affiliates and agents shall not give any information or
make any representations on behalf of Life Company or concerning Life Company,
the Separate Accounts or the Variable Contracts issued by 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 Life Company or its designee, without the written permission of Life
Company.
4.4 Life Company and its affiliates and agents shall not give any
information or make any representations on behalf of Trust or concerning Trust
other than the information or representations contained in a Registration
Statement or prospectus for Trust, as such Registration Statement and prospectus
may be amended or supplemented from time to time, or in reports of the Trust or
reports prepared for distribution to owners of shares of the Trust or for Owners
of the Variable Contracts, or in sales literature or other promotional material
approved by Trust or its designee, without the written permission of Trust.
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, electronic media, 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.
4.6 Trust and Adviser agree and acknowledge that Life Company has applied
for trademark protection of the marks "Visionary", "Visionary Variable Annuity",
and "Visionary Choice Variable Annuity" (collectively, the "Visionary Marks")
and that Life Company believes it will be granted exclusive rights to the
Visionary Marks in the field of insurance underwriting. Trust and Adviser
further agree and acknowledge that all use of any designation comprised in whole
or in part of the Visionary Marks under this Agreement shall inure to the
benefit of Life Company. Except as provided in Section 4.2, neither Trust nor
Adviser shall use any Visionary Marks on behalf of itself or any affiliate in
any registration statement, advertisement, sales literature or other materials
without the prior written consent of Life Company. Except as provided in Section
4.1, Life Company shall not use the "SAFECO" name on behalf of itself or any
affiliate in any registration statement, advertisement, sales literature or
other materials without the prior written consent of Trust and Advisor. Upon
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termination of this Agreement for any reason, Trust and Adviser shall cease all
use of any Visionary Marks and Life Company shall cease all use of the "SAFECO"
name as soon as reasonably practicable.
Article V. ADMINISTRATION OF SEPARATE ACCOUNTS
5.1 Administrative services to Owners/participants of the Variable
Contracts issued by Life Company shall be the responsibility of Life Company and
shall not be the responsibility of Trust or Adviser. Adviser recognizes Life
Company as the sole shareholder of fund shares issued under this Agreement. From
time to time, Adviser may pay amounts from its past profits to Life Company for
providing certain administrative services for Trust or its Portfolios, or for
providing Owners with other services that relate to Trust. These services may
include, among other things, sub-accounting services, answering inquiries of
Owners regarding the Portfolios, transmitting, on behalf of Trust, proxy
statements, annual reports, updated prospectus and other communications to
Variable Contract Owners regarding Trust and its Portfolios and such other
related services as Trust and Life Company may from time to time agree. In
consideration of the savings resulting from such arrangement, and to compensate
Life Company for its costs, Adviser agrees to pay to Life Company an amount
equal to 25 basis points (0.25%) per annum of the average aggregate amount
invested by Life Company in the Portfolios under this Agreement. Payment of such
amounts by Adviser will not increase the fees paid by Trust, the Portfolios or
their shareholders.
5.2 The parties agree that Adviser's payments to Life Company are for
administrative services only and do not constitute payment in any manner for
investment advisory services or for costs of distribution.
5.3 For the purposes of computing the administrative fee reimbursement
contemplated by this Article V, the average aggregate amount invested by Life
Company over a one-month period shall be computed by totaling Life Company's
aggregate investment (share net asset value multiplied by total number of shares
held by Life Company) on each Business Day during the month and dividing by the
total number of Business Days during each month.
5.4 Adviser will calculate the reimbursement of administrative expenses
at the end of each calendar quarter and will make such reimbursement to Life
Company within thirty (30) days thereafter. The reimbursement check will be
accompanied by a statement showing the calculation of the monthly amounts
payable by Adviser and such other supporting data as may be reasonably requested
by Life Company.
Article VI. POTENTIAL CONFLICTS
6.1 Life Company has received a copy of the amended and restated
application for exemptive relief filed by Trust and certain affiliates on
December 20, 1995 with the SEC and the Exemptive Order issued by the SEC on
January 17, 1996, in response thereto. Life
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Company has reviewed the conditions to the requested relief set forth in such
application for exemptive relief.
6.2 The Board will monitor Trust for the existence of any material
irreconcilable conflict between the interests of Variable Contract Owners of all
separate accounts investing in Trust. A material irreconcilable 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 Trust are being managed;
(e) a difference in voting instructions given by Variable Contract Owners; and
(f) a decision by a Participating Insurance Company to disregard the voting
instructions of Variable Contract Owners.
6.3 Life Company will report any potential or existing conflicts to the
Board. 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, including, but 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 Life Company will be carried out with a view only to the
interests of the Variable Contract Owners.
6.4 If a majority of the Board or majority of its disinterested members
determines that a material irreconcilable conflict exists affecting Life
Company, Life Company, at its expense and to the extent reasonably practicable
(as determined by a majority of the Board's disinterested members), will take
any steps necessary to remedy or eliminate the material irreconcilable conflict
as determined by a majority of the Board's disinterested members, including: (a)
withdrawing the assets allocable to some or all of the Separate Accounts from
Trust or any Portfolio thereof and reinvesting those assets in a different
investment medium, which may include another Portfolio of Trust, or another
investment company; (b) submitting the question as to whether an alternative
investment 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 Life Company's decision to disregard Variable
Contract Owner voting instructions, and that decision represents a minority
position or would preclude a majority vote, Life Company may be required, at the
election of Trust, to withdraw the Separate Account's investment in Trust, 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.
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For the purposes of this Section 6.4, a majority of the disinterested
members of the Board shall determine whether or not any proposed action
adequately remedies any material irreconcilable conflict but in no event will
Trust or Adviser (or any other investment adviser of Trust) be required to
establish a new funding medium for any Variable Contract. Further, Life Company
shall not be required by this Section 6.4 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
material irreconcilable conflict.
6.5 Trust shall give Life Company prompt written notice of the Board's
determination of the existence of a material irreconcilable conflict and its
implications.
6.6 No less than annually, 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 under this Article VI. Such reports,
materials and data shall be submitted more frequently if deemed appropriate by
the Board.
Article VII. VOTING
7.1 Life Company will provide pass-through voting privileges 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. Variable Contract Owners to whom Life Company will provide pass-through
voting privileges pursuant to this Agreement are hereinafter referred to as
"Pass-through Voters." Accordingly, Life Company, when applicable, will
distribute to Pass-through Voters all proxy material furnished by Adviser and
will vote shares of the Portfolios held in its Separate Accounts in a manner
consistent with voting instructions timely received from Pass-through Voters.
Life Company will be responsible for assuring that each of its Separate Accounts
that participates in Trust calculates voting privileges in a manner consistent
with other Participating Insurance Companies. 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 it votes those shares for which it has received voting
instructions. Life Company reserves the right to disregard the voting
instructions of Pass-through Voters to the extent such action is permitted by
Rules 6e-2 or 6e-3(T) under the '40 Act and is permitted under applicable state
insurance laws affecting Trust.
7.2 Trust shall notify Life Company of Trust's intent to file proxy
solicitation materials with the SEC as soon as practicable prior to such filing.
Life Company and its agents shall not oppose or interfere with the solicitation
of proxies for Portfolio shares held for Pass-through Voters, unless required to
by applicable law. Trust shall notify Life Company of any shareholder proposal
upon its inclusion in the proxy solicitation materials filed with the SEC.
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7.3 Trust shall comply with all provisions of the '40 Act requiring
voting by shareholders, and in particular Trust will either provide for annual
meetings or comply with Section 16(c) of the '40 Act (although Trust is not one
of the trusts described in Section 16(c) of that Act) as well as Sections 16(a)
and, if and when applicable, 16(b). Further, Trust shall act in accordance with
the SEC's interpretation of the requirements of Section 16(a) with respect to
periodic elections of trustees and with whatever rule the SEC may promulgate
with respect thereto.
7.4 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 Trust, 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 VIII. INDEMNIFICATION
8.1 Indemnification by Life Company. Life Company agrees to indemnify and
hold harmless Trust, Adviser and each of their directors, principals, officers,
employees and agents and each person, if any, who controls Trust or Adviser
within the meaning of Section 15 of the '33 Act (collectively, the "Indemnified
Parties" for purposes of Sections 8.1, 8.2, 8.3 and 8.4 of this Article VIII)
against any and all losses, claims, damages, liabilities (including amounts paid
in settlement with the written consent of 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 Trust 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 or sales literature of 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 Life Company or an affiliate thereof by
or on behalf of Trust for use in the registration statement or
prospectus for the Variable Contracts or in the Variable Contracts
or
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sales literature (or any amendment or supplement) or otherwise
for use in connection with the sale of the Variable Contracts or
Trust 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 Trust
not supplied by Life Company or an affiliate thereof) or wrongful
conduct of Life Company or persons under its control, with respect
to the sale or distribution of the Variable Contracts or Trust
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 Trust 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
Trust for inclusion therein by or on behalf of Life Company; or
(d) arise out of any failure by Life Company to provide in all
material respects the specified 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 Life Company in this
Agreement or arise out of or result from any other material breach
of this Agreement by Life Company.
8.2 Life Company shall not be liable under this indemnification provision
with respect to any losses, claims, damages, liabilities or litigation to which
an Indemnified Party would otherwise be subject by reason of 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 or to Trust or Adviser,
whichever is applicable.
8.3 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 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 on any designated
party (or after such Indemnified Party shall have received notice of such
service on any designated agent), but failure to notify Life Company of any such
claim shall not relieve 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, Life Company shall be entitled to participate, at its own
expense, in the defense thereof. Life Company also shall be entitled to assume
the defense thereof, with counsel satisfactory to the party named in the action.
After
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notice from Life Company to such party of 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 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.
8.4 Trust or Adviser agrees promptly to notify Life Company of the
commencement of any litigation or proceedings against it or any of its officers,
trustees or directors in connection with the issuance or sale of the shares of
the selected Portfolio(s) or the operations of the Trust.
8.5 Indemnification by Trust and Adviser. Trust and Adviser agree to
indemnify and hold harmless Life Company and each of its directors, officers,
employees, and agents and each person, if any, who controls Life Company within
the meaning of Section 15 of the '33 Act (collectively, the "Indemnified
Parties" for the purposes of Sections 8.5, 8.6, 8.7 and 8.8 of this Article
VIII) against any and all losses, claims, damages, liabilities (including
amounts paid in settlement with the written consent of Trust or Adviser, 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 Trust 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 Trust
(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 Adviser or Trust or an affiliate
thereof by or on behalf of Life Company for use in the
Registration Statement or prospectus for Trust or in sales
literature (or any amendment or supplement) or otherwise for use
in connection with the sale of the Variable Contracts or Trust
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
Variable Contracts not supplied by Trust, Adviser or an affiliate
thereof) or wrongful conduct of Trust or Adviser or persons under
their control, with respect to the sale or distribution of Trust
shares; or
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(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 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 Life Company for inclusion therein by or on behalf of Trust; or
(d) arise out of any failure by Trust or Adviser to provide in all
material respects the specified services and furnish the materials
under the terms of this Agreement (including a failure, whether
unintentional or in good faith or otherwise, to comply with the
diversification requirements specified in Section 2.10 of this
Agreement); or
(e) arise out of or result from any material breach of any
representation and/or warranty made by Trust or Adviser in this
Agreement or arise out of or result from any other material breach
of this Agreement by Trust or Adviser.
8.6 Trust or Adviser 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 or to
Life Company or the Separate Accounts, whichever is applicable.
8.7 Trust or Adviser 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 Trust or Adviser 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 on any designated
party (or after such Indemnified Party shall have received notice of such
service on any designated agent), but failure to notify Trust or Adviser of any
such claim shall not relieve Trust or Adviser 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, Trust or Adviser shall be entitled to participate,
at its own expense, in the defense thereof. Trust or Adviser also shall be
entitled to assume the defense thereof, with counsel satisfactory to the party
named in the action. After notice from Trust or Adviser to such party of Trust
or Adviser's election to assume the defense thereof, the Indemnified Party shall
bear the fees and expenses of any additional counsel retained by it, and Trust
or Adviser 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.
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8.8 Life Company agrees promptly to notify Trust or Adviser of the
commencement of any litigation or proceedings against it or any of its officers
or directors in connection with the issuance or sale of the Variable Contracts
or the operation of each Separate Account.
Article IX. TERM; TERMINATION
9.1 This Agreement shall be effective as of the date hereof and shall
continue in force until terminated in accordance with the provisions herein.
9.2 This Agreement shall terminate in accordance with the following
provisions:
(a) At the option of Life Company or Trust 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 Life Company, if Trust shares are not reasonably
available to meet the requirements of the Variable Contracts as
determined by Life Company. Prompt notice of election to terminate
shall be furnished by Life Company, said termination to be
effective ten (10) days after receipt of notice unless Trust 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 Life Company, upon the institution of formal
proceedings against Trust or Adviser by the SEC, the NASD, or any
other regulatory body, the expected or anticipated ruling,
judgment or outcome of which would, in Life Company's reasonable
judgment, materially impair Trust's ability to meet and perform
Trust's obligations and duties hereunder. Prompt notice of
election to terminate shall be furnished by Life Company with said
termination to be effective upon receipt of notice;
(d) At the option of Trust, upon the institution of formal proceedings
against Life Company or the principal underwriter for the Variable
Contracts by the SEC, the NASD, or any other regulatory body, the
expected or anticipated ruling, judgment or outcome of which
would, in Trust's reasonable judgment, materially impair Life
Company's ability to meet and perform its obligations and duties
hereunder. Prompt notice of election to terminate shall be
furnished by Trust with said termination to be effective upon
receipt of notice;
(e) In the event Trust's shares are not registered, issued or sold in
accordance with applicable federal and/or state law and any
applicable rules and regulations thereunder, or such law precludes
the use of such
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shares as the underlying investment media for Variable Contracts
issued or to be issued by Life Company. Termination shall be
effective upon such occurrence without notice;
(f) Upon the receipt of any necessary regulatory approvals, or
requisite vote of Pass-through Voters having an interest in the
Portfolios, to substitute for shares of the Portfolios the shares
of another investment company in accordance with the terms of the
applicable Variable Contracts. Life Company shall give sixty (60)
days' written notice to Adviser of any proposed request for
regulatory approvals or vote to replace the Portfolios' shares;
(g) At the option of Trust if the Variable Contracts cease to qualify
as annuity contracts or life insurance contracts, as applicable,
under the Code, or if Trust reasonably believes that the Variable
Contracts may fail to so qualify. Termination shall be effective
upon receipt of notice by Life Company;
(h) At the option of Life Company, upon Trust's breach of any material
provision of this Agreement, which breach has not been cured to
the satisfaction of Life Company within thirty (30) days after
written notice of such breach is delivered to Trust;
(i) At the option of Trust, upon Life Company's breach of any material
provision of this Agreement, which breach has not been cured to
the satisfaction of Trust within thirty (30) days after written
notice of such breach is delivered to Life Company;
(j) At the option of Trust, if the Variable Contracts are not
registered, issued or sold in accordance with applicable federal
and/or state law and any applicable rules and regulations
thereunder. Termination shall be effective immediately upon such
occurrence without notice; and
(k) In the event this Agreement is assigned without the prior written
consent of Life Company, Trust and Adviser. Termination shall be
effective immediately upon such occurrence without notice.
9.3 If the need for substitution of the shares of another investment
company, pursuant to Section 26(b) of the '40 Act, arises out of the failure of
the Portfolios' shares to be registered, issued or sold to Life Company in
conformance with federal law, or such law precludes the use of shares of the
Portfolios as underlying investment media for Variable Contracts issued or to be
issued by the Company as a result of a failure of Trust to comply
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with such law, the expenses of obtaining such order shall be reimbursed by
Adviser. Adviser shall cooperate with Life Company in connection with such
application.
9.4 Notwithstanding any termination of this Agreement pursuant to
subsections (a), (b), (c), (e), (f) (h), and/or (k) (hereinafter referred to as
the "Qualifying Subsections") of Section 9.2 hereof, and unless the further sale
of shares of the Portfolios is proscribed by applicable law or the SEC or other
regulatory body, Trust will continue to make available additional Trust shares,
as provided below, 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, the Owners of the Existing Contracts shall be permitted to
reallocate investments in Trust, redeem investments in Trust and/or invest in
Trust upon the payment of additional premiums under the Existing Contracts. In
the event of a termination of this Agreement pursuant to the Qualifying
Subsections of Section 9.2 hereof, Trust and Adviser, as promptly as is
practicable under the circumstances, shall notify Life Company whether Trust
under applicable law may continue to make Trust shares available after such
termination. If Trust shares continue to be made available after such
termination, the provisions of this Agreement shall remain in effect and
thereafter either Trust or Life Company may terminate the Agreement, as so
continued pursuant to this Section 9.4, upon sixty (60) days' prior written
notice to the other party. This Section 9.4 shall not apply in the event of
termination of this Agreement pursuant to subsections (d), (g), (i) and/or (j)
of Section 9.2 hereof.
9.5 Except as necessary to implement Variable Contract Owner initiated
transactions, or as required by state insurance laws or regulations, Life
Company shall not redeem the shares attributable to the Variable Contracts (as
opposed to the shares attributable to Life Company's assets held in the Separate
Accounts), and Life Company shall not prevent Variable Contract Owners from
allocating payments to a Portfolio that was otherwise available under the
Variable Contracts until sixty (60) days after Life Company shall have notified
Trust of its intention to do so.
Article X. 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 Life Company: Indianapolis Life Insurance Company
0000 X. Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxx Xxxx, Esq.
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If to Trust: SAFECO Resource Series Trust
0000 Xxxxxxxx Xxxxxx X.X.
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Controller
If to Adviser: SAFECO Asset Management Company
0000 Xxxxxxxx Xxxxxx X.X.
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Institutional Division
Notice shall be deemed given on the date of receipt by the addressee as
evidenced by the return receipt.
Article XI. MISCELLANEOUS
11.1 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.
11.2 This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
11.3 This Agreement may not be assigned by any party without the written
consent of all parties.
11.4 If any provision of this Agreement shall be held or made invalid by
a court decision, statute, rule or otherwise, the remainder of the Agreement
shall not be affected thereby.
11.5 This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the State of Washington. 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.
11.6 It is understood and expressly stipulated that neither the
shareholders of shares of any Portfolio nor the Trustees or officers of Trust or
any Portfolio shall be personally liable hereunder. No Portfolio shall be liable
for the liabilities of any other Portfolio. All persons dealing with Trust or a
Portfolio must look solely to the property of Trust or that Portfolio,
respectively, for enforcement of any claims against Trust or that Portfolio. It
is also understood that each of the Portfolios shall be deemed to be entering
into a separate Agreement with Life Company so that it is as if each of the
Portfolios had signed a separate
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Agreement with Life Company and that a single document is being signed simply to
facilitate the execution and administration of the Agreement.
11.7 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.
11.8 The rights, remedies and obligations contained in this Agreement are
cumulative and are in addition to any and all rights, remedies and obligations,
at law or in equity, which the parties hereto are entitled to under state and
federal laws.
11.9 No provision of this Agreement may be amended or modified in any
manner except by a written agreement properly authorized and executed by Trust,
Adviser and Life Company.
IN WITNESS WHEREOF, the parties have caused their duly authorized
officers to execute this Trust Participation Agreement as of the date and year
first above written.
SAFECO Resource Series Trust
By:
------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President and Controller
SAFECO Asset Management Company
By:
------------------------------
Name: Xxxxxx Xxxxxxxxx
Title: Vice President
Bankers Life Insurance Company of New York
By:
----------------------------
Name:
--------------------------
Title:
-------------------------
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SCHEDULE A
SAFECO Resource Series Trust - Portfolios
Equity Portfolio
Growth Portfolio
Bankers Life Insurance Company of New York - Variable Contracts
Visionary Choice Variable Annuity
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SCHEDULE B
Separate Accounts and Sub-Accounts Selected Portfolios
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Bankers Life Insurance Company of New York Account I
Safeco Resource Equity Portfolio Sub-Account Equity Portfolio
Safeco Resource Growth Portfolio Sub-Account Growth Portfolio
