AMENDED AND RESTATED PARTICIPATION AGREEMENT Among SUN CAPITAL ADVISERS TRUST, SUN CAPITAL ADVISERS, INC., SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.), and SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
AMENDED AND RESTATED
Among
SUN CAPITAL ADVISERS TRUST,
SUN CAPITAL ADVISERS, INC.,
SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.),
and
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
THIS AMENDED AND RESTATED AGREEMENT, made and entered into this 13th day of December, 2004, by and among SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.), SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK (each of which is referred to hereinafter as the "Company"), on its own behalf and on behalf of each segregated asset account of the Company set forth on Schedule A hereto as may be amended from time to time (each such account hereinafter referred to as the "Account"), SUN CAPITAL ADVISERS TRUST, a Delaware business trust (hereinafter the "Fund"), and SUN CAPITAL ADVISERS, INC. (hereinafter the "Adviser"), a Delaware corporation.
WHEREAS, the parties to this Agreement desire to amend and restate the Amended and Restated Participation Agreement dated August 18, 1999 and amended on April 17, 2000, May 1, 2001, April 1, 2002, and October 24, 2003, by and among each Company, the Fund and the Adviser so as to permit certain Accounts which are exempt from registration under certain U.S. securities laws to invest in the Fund and to incorporate certain other changes; and
WHEREAS, the Fund engages in business as an open-end management investment company and is available to act as (i) the investment vehicle for certain qualified pension or retirement plans ("Qualified Plans") and (ii) the investment vehicle for separate accounts established for variable life insurance policies and variable annuity contracts (collectively, the "Variable Insurance Products") to be offered by insurance companies which have entered into participation agreements with the Fund and the Adviser (hereinafter "Participating Insurance Companies"); and
ARTICLE I. Sale of Fund Shares
1.1. The Fund agrees to sell to the Company those shares of the Fund which each Account orders, executing such orders on a daily basis at the net asset value next computed after receipt by the Fund or its designee of the order for the shares of the Fund. For purposes of this Section 1.1, the Company shall be the designee of the Fund for receipt of such orders from each Account and receipt by such designee shall constitute receipt by the Fund; provided that the Fund receives notice of such order by 9:00 a.m. Eastern time on the next following Business Day. "Business Day" shall mean any day on which the New York Stock Exchange is open for trading and on which the Fund calculates its net asset value pursuant to the rules of the Securities and Exchange Commission (the "Commission").
1.2. The Fund agrees to make its shares available indefinitely for purchase at the applicable net asset value per share by the Company and its Accounts on those days on which the Fund calculates its net asset value pursuant to rules of the Commission, and the Fund shall use reasonable efforts to calculate such net asset value on each day which the New York Stock Exchange is open for trading. Notwithstanding the foregoing, the Board of Trustees of the Fund (hereinafter the "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 Board acting in good faith and in light of their fiduciary duties under federal and any applicable state laws, necessary in the best interest of the shareholders of such Portfolio.
1.3. The Fund and the Adviser agree that shares of the Fund will be sold only to Participating Insurance Companies and their separate accounts and certain Qualified Plans, in accordance with the terms of the Mixed and Shared Funding Exemptive Order. No shares of any Portfolio will be sold to the general public.
1.4. 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 VII of this Agreement is in effect to govern such sales.
1.5. The Fund agrees to redeem for cash, on 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 by the Fund or its designee of the request for redemption. For purposes of this Section 1.5, the Company shall be the designee of the Fund for receipt of requests for redemption from each Account and receipt by such designee shall constitute receipt by the Fund; provided that the Fund receives notice of such request for redemption by 9:00 a.m. Eastern time on the next following Business Day.
1.6. The Company agrees to purchase and redeem the shares of each Portfolio offered by the then current prospectus of the Fund and in accordance with the provisions of such prospectus.
1.7. The Company shall pay for Fund shares by 11:00 a.m. Eastern time on the next Business Day after an order to purchase Fund shares is made in accordance with the provisions of Section 1.1 hereof. Payment shall be in federal funds transmitted by wire.
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 any Account. Shares ordered from the Fund will be recorded in an appropriate title for each Account or the appropriate subaccount of each Account.
1.9. The Fund shall furnish same day notice (by wire or telephone, followed by written confirmation) to the Company of any income dividends or capital gain distributions payable on the Fund's shares. The Company hereby elects to receive all such income dividends and capital gain distributions as are payable on the Portfolio shares in additional shares of that Portfolio. The Company reserves the right to revoke this election and to receive all such income dividends and capital gain distributions in cash. The Fund shall notify the Company of the number of shares so issued as payment of such dividends and distributions.
1.10. The Fund shall make the net asset value per share for each Portfolio available to the Company on a daily basis as soon as reasonably practicable after the net asset value per share is calculated (normally 6:30 p.m. Eastern time) and shall use its best efforts to make such net asset value per share available by 7:00 p.m. Eastern time.
ARTICLE II. Representations and Warranties
2.1. The Company represents and warrants that the Contracts are or will be registered under the 1933 Act, unless exempt from registration thereunder, that the Contracts will be issued and sold in compliance in all material respects with all applicable Federal and State laws, and that the sale of the Contracts shall comply in all material respects with applicable state insurance suitability requirements. The Company further represents and warrants that it is an insurance company duly organized and in good standing under applicable law, that it has legally and validly established each Account prior to any issuance or sale thereof as a segregated asset account under applicable law, and that it has registered or, prior to any issuance or sale of the Contracts, will register each Account as a unit investment trust in accordance with the provisions of the 1940 Act to serve as a segregated investment account for the Contracts, unless the Account is exempt from registration under the 1940 Act.
2.2. The Fund represents and warrants that Fund shares sold pursuant to this Agreement shall be registered under the 1933 Act, duly authorized for issuance and sold in compliance with the laws of the State of Delaware and all applicable federal and state securities laws and that the Fund is and shall remain registered under the 0000 Xxx. The Fund shall amend the Registration Statement for its shares under the 1933 Act and the 1940 Act from time to time as required in order to effect the continuous offering of its shares. The Fund shall register and qualify the shares for sale in accordance with the laws of the various states if and to the extent deemed advisable by the Fund or the Adviser.
2.3. The Fund represents that it intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"), and that it will make every effort to 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 in the future.
2.4. The Company represents that each Account is properly treated as a "segregated asset account" for purposes of Treasury Regulation Section 1.817-5(f), that the Contracts are currently treated as endowment, annuity or life insurance contacts under applicable provisions of the Code and that it will maintain such treatment and that it will notify the Fund and the Adviser immediately upon having a reasonable basis for believing that any Account or Contract has ceased to be so treated or might not be so treated in the future.
2.5. The Fund makes no 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 the various states except that the Fund and the Adviser represent that their respective operations are and shall at all times remain in material compliance with applicable laws of the State of Delaware to the extent required to perform this Agreement.
2.6. The Fund represents that it is lawfully organized and validly existing under the laws of the State of Delaware and that it does and will comply in all material respects with the 1940 Act.
2.7. The Adviser represents and warrants that the Adviser is and shall remain duly registered as an investment adviser in all material respects under all applicable federal and state securities laws and that the Adviser shall perform its obligations for the Fund in compliance in all material respects with applicable state and federal securities laws.
2.8. The Fund and Adviser represent and warrant that all of their directors, officers, employees, investment advisers, and other individuals/entities dealing with the money and/or securities of the Fund are and shall continue to be at all times covered by a blanket fidelity bond or similar coverage for the benefit of the Fund in an amount not less than the 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 shall include coverage for larceny and embezzlement and shall be issued by a reputable bonding company.
2.9. The Company represents and warrants that all of its directors, officers, employees, investment advisers, and other individuals/entities dealing with the money and/or securities of the Fund are and shall continue to be at all times covered by a blanket fidelity bond or similar coverage for the benefit of the Fund, in an amount not less than the minimal coverage as required currently by entities subject to the requirements of Rule 17g-1 of the 1940 Act or related provisions as may be promulgated from time to time. The aforesaid Bond shall include coverage for larceny and embezzlement and shall be issued by a reputable bonding company.
ARTICLE III. Prospectuses and Proxy Statements; Voting
3.1. The Fund or the Adviser shall provide the Company, at the Company's expense, with as many copies of the Fund's current prospectus as the Company may reasonably request for distribution, at the Company's expense, to prospective Contract owners and applicants. The Fund or the Adviser shall provide the Company, at the Fund's or the Adviser's expense, with as many copies of the Fund's prospectus as necessary for distribution, at the Company's expense, to existing Contract owners. If requested by the Company in lieu thereof, the Fund shall provide such documentation (including a final "camera ready" or diskette copy of the new prospectus as set in type at the Fund's expense) and other assistance as is reasonably necessary in order for the Company once each year (or more frequently if the prospectus for the Fund is amended) to have the prospectus for the Contracts and the Fund's prospectus printed together in one document, in which case the Fund will bear its reasonable share of expenses, as described above, allocated based on the proportionate number of pages of the Fund's portion of the document.
3.2. The Fund's prospectus shall state that the Statement of Additional Information for the Fund is available from the Adviser (or in the Fund's discretion, the Prospectus shall state that such Statement is available from the Fund), and the Adviser (or the Fund), at its expense, shall provide a copy of such Statement free of charge to the Company and to any owner of a Contract or prospective owner who requests such Statement.
3.3. The Fund, at its expense, shall provide the Company with copies of its proxy material, reports to shareholders, and other communications to shareholders in such quantity as the Company shall reasonably require for distributing to Contract owners. The Company will distribute this proxy material and tabulate the votes at the Fund's or the Adviser's expense.
3.4. If and to the extent required by law the Company shall:
(i) solicit voting instructions from Contract owners;
(ii) vote the Fund shares in accordance with instructions received from Contract owners; and
(iii) vote Fund shares for which no instructions have been received in the same proportion as Fund shares of such Portfolio for which instructions have been received:
so long as and to the extent that the Commission continues to interpret the 1940 Act to require pass-through voting privileges for owners of Variable Insurance Products. 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. Participating Insurance Companies shall be responsible for assuring that each of their separate accounts participating in the Fund calculates voting privileges in a manner consistent with this Section and with each other.
ARTICLE IV. Sales Material and Information
4.1. The Company shall furnish, or shall cause to be furnished, to the Fund or its designee, each piece of sales literature or other promotional material in which the Fund, the Adviser or one of their respective affiliates is named, at least fifteen Business Days prior to its use. No such material shall be used if the Fund or its designee objects to such use within fifteen Business Days after receipt of such material.
4.2. The Company shall 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 or prospectus for the Fund shares, as such registration statement and prospectus may be amended or supplemented from time to time, or in reports or proxy statements for the Fund, or in sales literature or other promotional material approved by the Fund or its designee or by the Adviser, except with the permission of the Fund or the Adviser or the designee of either.
4.3. The Fund and the Adviser, or its designee, shall furnish, or shall cause to be furnished, to the Company or its designee, each piece of sales literature or other promotional material in which the Company and/or its separate account(s), is named at least fifteen Business Days prior to its use. No such material shall be used if the Company or its designee object to such use within fifteen Business Days after receipt of such material.
4.4. The Fund and the Adviser shall not give any information or make any representations 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 private offering memorandum for the Contracts, as such registration statement, prospectus or private offering memorandum may be amended or supplemented from time to time, or in published reports for each Account which are in the public domain or approved by the Company for distribution to Contract owners, or in sales literature or other promotional material approved by the Company or its designee, except with the permission of the Company.
4.5. The Fund will provide to the Company at least one complete copy of all registration statements, prospectuses, Statements of Additional Information, 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, contemporaneously with the filing of such document with the Commission or other regulatory authorities.
4.6. The Company will provide to the Fund at least one complete copy of all registration statements, prospectuses, Statements of Additional Information, 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 such document with the Commission or other regulatory authorities. The Company shall provide to the Fund, upon request, at least one complete copy of any offering memorandum or other material prepared in connection with the offering of any Contract that is exempt from registration under the 1933 Act or any Account that is exempt from registration under the 1940 Act.
4.7. For purposes of this Article IV, the phrase "sales literature or other promotional material" includes, but is not limited to, advertisements (such as materials published, or designed for use in, a newspaper, magazine, or other periodical, radio, television, telephone or tape recording, videotape display, signs or billboards, motion pictures, or other public media), sales literature (i.e., any written communication distributed or made generally available to customers or the public, including brochures, circulars, 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, and registration statements, prospectuses, Statements of Additional Information, private offering memoranda, shareholder reports, and proxy materials.
ARTICLE V. Fees and Expenses
5.1. The Fund and Adviser shall pay no fee or other compensation to the Company under this Agreement, except that: (a) if the Fund or any Portfolio adopts and implements a plan pursuant to Rule 12b-1 under the 1940 Act, then the Adviser or the Fund's underwriter may make payments to the Company for the Contracts in accordance with Rule 12b-1 and the terms of the Rule 12b-1 plan; and (b) the Adviser may make payments out of existing fees otherwise payable to the Adviser, past profits of the Adviser, or other resources available to the Adviser, to the extent permitted by law.
5.2. All expenses incident to performance by the Fund under this Agreement shall be paid by the Fund. The Fund shall see to it that all its shares are registered and authorized for issuance in accordance with applicable federal law and, if and to the extent deemed advisable by the Fund, in accordance with applicable state laws prior to their sale. The Fund shall bear the expenses for the cost of registration and qualification of the Fund's shares; preparation and filing of the Fund's prospectus and registration statement, proxy materials and reports; setting the prospectus in type; setting in type and printing the proxy materials and reports to shareholders (including, if so elected, the costs of printing a prospectus that constitutes an annual report); the preparation of all statements and notices required by any federal or state law; and all other expenses set forth in Article III of this Agreement.
ARTICLE VI. Diversification
6.1. Each Portfolio of the Fund will at all times comply with Section 817(h) of the Code and Treasury Regulation Section 1.817-5, relating to the diversification requirements for variable annuity, endowment, or life insurance contracts, to the extent such requirements apply to the Portfolio's investments pursuant to Treasury Regulation Section 1.817-5(f), and any amendments or other modifications to such Section or Regulations.
ARTICLE VII. Potential Conflicts
7.1. The Board will monitor the Fund for the existence of any material irreconcilable conflict among the interests of the contract owners of all separate accounts investing in the Fund and determine what action is to be taken. An irreconcilable material conflict may arise for a variety of reasons, including: (a) an action by any state insurance regulatory authority; (b) a change in applicable federal or state insurance, tax or securities laws or regulations, or a public ruling, private letter ruling, no-action or interpretive 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 variable annuity contract owners, variable life insurance contract owners and Plan trustees; (f) a decision by an insurer to disregard the voting instructions of contract owners; or (g) if applicable, a decision by a Qualified Plan to disregard the voting instructions of Plan participants. The Board shall promptly inform the Company if it determines that an irreconcilable material conflict exists and the implications thereof.
7.2. The Company will report any potential or existing conflicts of which it is aware to the Board. The Company and the Adviser will assist the Board in carrying out its responsibilities under the Mixed and Shared Funding Exemptive Order by providing the Board with all information reasonably necessary for the Board to consider any issues raised. This includes, but is not limited to, an obligation by the Company to inform the Board whenever contract owner voting instructions are disregarded.
7.3. If it is determined by a majority of the Board, or a majority of its disinterested trustees that a material irreconcilable conflict exists, the Company and other Participating Insurance Companies shall, at their expense and to the extent reasonably practicable (as determined by a majority of the disinterested trustees), take whatever steps are necessary to remedy or eliminate the irreconcilable material conflict, up to and including: (1) withdrawing the assets allocable to some or all of the separate 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 implemented to a vote of all affected Contract owners and, as appropriate, segregating the assets of any appropriate group (i.e., annuity contract owners, life insurance contract owners, or variable contract owners of one or more Participating Insurance Companies) that votes in favor of such segregation, or offering to the affected contract owners the option of making such a change; and (2) establishing a new registered management investment company or series thereof or managed separate account.
7.4. If a material irreconcilable conflict arises because of a decision by the Company to disregard contract owner voting instructions and that decision represents a minority position or would preclude a majority vote, the Company may be required, at the Fund's election, to withdraw the affected Account's investment in the Fund and terminate this Agreement with respect to such Account; provided, however that such withdrawal and termination shall be limited to the extent required by the foregoing material irreconcilable conflict as determined by a majority of the disinterested members of the Board. No charge or penalty will be imposed as a result of the withdrawal. Any such withdrawal and termination must take place within six (6) months after the Fund gives written notice that this provision is being implemented, and until the end of that six (6) month period the Adviser and Fund shall continue to accept and implement orders by the Company for the purchase (and redemption) of shares of the Fund.
7.5. If a material irreconcilable conflict arises because a particular state insurance regulator's decision applicable to the Company conflicts with the majority of other state regulators, then the Company will withdraw the affected Account's investment in the Fund and terminate this Agreement with respect to such Account within six (6) months after the Board informs the Company in writing that it has determined that such decision has created an irreconcilable material conflict; provided, however, that such withdrawal and termination shall be limited to the extent required by the foregoing material irreconcilable conflict as determined by a majority of the disinterested members of the Board. Until the end of the foregoing six (6) month period, the Adviser and Fund shall continue to accept and implement orders by the Company for the purchase (and redemption) of shares of the Fund.
7.6. For purposes of Sections 7.3 through 7.6 of this Agreement, a majority of the disinterested members of the Board shall determine whether any proposed action adequately remedies any irreconcilable material conflict, but in no event will the Fund be required to establish a new funding medium for the Contracts. The Company shall not be required by Section 7.3 to establish a new funding medium for the contracts if an offer to do so has been (a) declined by vote of a majority of Contract owners materially adversely affected by the irreconcilable material conflict or (b) pursuant to governing Qualified Plan documents and applicable law, the Qualified Plan makes the decision without a vote of its participants. In the event that the Board determines that any proposed action does not adequately remedy any irreconcilable material conflict, then the Company will withdraw the Account's investment in the Fund and terminate this Agreement within six (6) months after the Board informs the Company in writing of the foregoing determination, provided, however, that such withdrawal and termination shall be limited to the extent required by any such material irreconcilable conflict as determined by a majority of the disinterested members of the Board.
ARTICLE VIII. Indemnification
8.1. Indemnification by the Company
8.1(a). The Company agrees to indemnify and hold harmless the Fund and each of its directors and officers and each person, if any, who controls the Fund or the Adviser within the meaning of Section 15 of the 1933 Act (collectively, the "Indemnified Parties" for purposes of this Section 8.1) against any and all losses, claims, damages, liabilities (including amounts paid in settlement with the written consent of the Company) or litigation (including legal and other expenses), to which the Indemnified Parties may become subject under any statute, regulation, at common law or otherwise, insofar as such losses, claims, damages, liabilities or expenses (or actions in respect thereof) or settlements are related to the sale or acquisition of the Fund's shares or the Contracts and:
(i) 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 private offering memorandum for the Contract or contained in the Contracts or sales literature for the Contracts (or any amendment or supplement to any of the foregoing), or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, provided that this agreement to indemnify shall not apply as to any Indemnified Party if such statement or omission or such alleged statement or omission was made in reliance upon and in conformity with information furnished to the Company by or on behalf of the Fund for use in the Registration Statement, prospectus or private offering memorandum for the Contracts or in the Contracts or sales literature (or any amendment or supplement) or otherwise for use in connection with the sale of the Contracts or Fund shares; or
(ii) arise out of or as a result of statements or representations (other than statements or representations contained in the Registration Statement, prospectus or sales literature of the Fund 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
(iii) arise out of any untrue statement or alleged untrue statement of a material fact contained in a Registration Statement, prospectus, or sales literature of the Fund or any amendment thereof or supplement thereto or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading if such a statement or omission was made in reliance upon information furnished to the Fund by or on behalf of the Company; or
(iv) arise as a result of any failure by the Company to provide the services and furnish the materials under the terms of this Agreement; or
(v) arise out of or result from any material breach of any representation and/or warranty made by the Company in this Agreement or arise out of or result from any other material breach of this Agreement by the Company, as limited by and in accordance with the provisions of Sections 8.1(b) and 8.1(c) hereof.
8.1(b). The Company shall not be liable under this indemnification provision with respect to any losses, claims, damages, liabilities or litigation incurred or assessed against an Indemnified Party as such may arise from such Indemnified Party's willful misfeasance, bad faith, or gross negligence in the performance of such Indemnified Party's duties or by reason of such Indemnified Party's reckless disregard of obligations or duties under this Agreement or to the Fund, whichever is applicable.
8.1(c). The Company shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party shall have notified the Company in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify the Company of any such claim shall not relieve the Company from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision. In case any such action is brought against the Indemnified Parties, the Company shall be entitled to participate, at its own expense, in the defense of such action. The Company also shall be entitled to assume the defense thereof, with counsel satisfactory to the party named in the action. After notice from the Company to such party of the Company's election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and the Company will not be liable to such party under this Agreement for any legal or other expenses subsequently incurred by such party independently in connection with the defense thereof other than reasonable costs of investigation.
8.1(d). The Indemnified Parties will promptly notify the Company of the commencement of any litigation or proceedings against them in connection with the issuance or sale of the Fund Shares or the Contracts or the operations of the Fund.
8.2. Indemnification by the Adviser
8.2(a). The Adviser agrees to indemnify and hold harmless the Company and each of its directors and officers and each person, if any, who controls the Company within the meaning of Section 15 of the 1933 Act (collectively, the "Indemnified Parties" for purposes of this Section 8.2) against any and all losses, claims, damages, liabilities (including amounts paid in settlement with the written consent of the Adviser) or litigation (including legal and other expenses) to which the Indemnified Parties may become subject under any statute, at common law or otherwise, insofar as such losses, claims, damages, liabilities or expenses (or actions in respect thereof) or settlements are related to the sale or acquisition of the Fund's shares or the Contracts and:
(i) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the Registration Statement or prospectus or sales literature of the Fund (or any amendment or supplement to any of the foregoing), or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, provided that this agreement to indemnify shall not apply as to any Indemnified Party if such statement or omission or such alleged statement or omission was made in reliance upon and in conformity with information furnished to the Adviser or Fund by or on behalf of the Company specifically for use in the Registration Statement or prospectus for the Fund or in sales literature (or any amendment or supplement) or otherwise specifically for use in connection with the sale of the Contracts or Fund shares: or
(ii) arise out of or as a result of statements or representations (other than statements or representations contained in the Registration Statement, prospectus, private offering memorandum or sales literature for the Contracts not supplied by the Adviser or persons under its control) or wrongful conduct of the Fund or Adviser or persons under their control, with respect to the sale or distribution of the Contracts or Fund shares; or
(iii) arise out of any untrue statement or alleged untrue statement of a material fact contained in a Registration Statement, prospectus, private offering memorandum or sales literature covering the Contracts, or any amendment thereof or supplement thereto, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statement or statements therein not misleading, if such statement or omission was made in reliance upon and in conformity with information furnished to the Company by or on behalf of the Fund specifically for inclusion therein; or
(iv) arise as a result of any failure by the Fund to provide the services and furnish the materials under the terms of this Agreement (including a failure of any Portfolio, whether unintentional or in good faith or otherwise, to invest in a manner that complies with the diversification requirements specified in Article VI of this Agreement); or
(v) arise out of or result from any material breach of any representation and/or warranty made by the Adviser in this Agreement or arise out of or result from any other material breach of this Agreement by the Adviser; as limited by and in accordance with the provisions of Sections 8.2(b) and 8.2(c) hereof.
8.2(b). The 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 each Company or Account, whichever, is applicable.
8.2(c). The 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 the 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 upon such Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify the Adviser of any such claim shall not relieve the 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 the Indemnified Parties, the Adviser will be entitled to participate, at its own expense, in the defense thereof. The Adviser also shall be entitled to assume the defense thereof with counsel satisfactory to the party named in the action. After notice from the Adviser to such party of the 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 the 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.
8.2(d). The Company agrees promptly to notify the 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 Contracts or the operation of each Account.
ARTICLE IX. Applicable Law
9.1. This Agreement shall be construed and the provisions hereof interpreted under and in accordance with the laws of the Commonwealth of Massachusetts.
9.2. This Agreement shall be subject to the provisions of the 1933, 1934 and 1940 Acts, and the rules and regulations and rulings thereunder, including such exemptions from those statutes, rules and regulations as the Commission may grant (including, but not limited to, the Mixed and Shared Funding Exemptive Order) and the terms hereof shall be interpreted and construed in accordance therewith.
ARTICLE X. Termination
10.1. This Agreement shall terminate:
(a) at the option of any party upon one-year advance written notice to the other parties unless otherwise agreed in a separate written agreement among the parties; or
(b) at the option of the Company if shares of the Portfolios delineated in Schedule B are not reasonably available to meet the requirements of the Contracts as determined by the Company within ten (10) days of notice by Company to Fund of such fact; or
(c) at the option of the Fund upon institution of formal proceedings against the Company by the NASD, the Commission, the insurance or securities commission or division of any state or any other regulatory body regarding the Company's duties under this Agreement or related to the sale of the Contracts, the administration of the Contracts, the operation of the Account, or the purchase of the Fund shares; or
(d) at the option of the Company upon institution of formal proceedings against the Fund by the NASD, the Commission, or any state securities or insurance department or any other regulatory body; or
(e) at the option of the Company or the Fund upon receipt of any necessary regulatory approvals and/or the vote of the contract owners having an interest in the Account (or any subaccount) to substitute the shares of another investment company for the corresponding Portfolio shares of the Fund in accordance with the terms of the Contracts for which those Portfolio shares had been selected to serve as the underlying investment media. The Company will give 30 days' prior written notice to the Fund of the date of any proposed vote or other action taken to replace the Fund's shares; or
(f) at the option of the Company or the Fund upon a determination by a majority of the Fund Board, or a majority of the disinterested Fund Board members, that an irreconcilable material conflict exists from the Company's continued investment in the Fund; or
(g) at the option of the Company if any Portfolio of the Fund ceases to qualify as a Regulated Investment Company under Subchapter M of the Internal Revenue Code, or under any successor or similar provision, or if the Company reasonably believes that the Portfolio may fail to so qualify; or
(h) at the option of the Company if any Portfolio of the Fund fails to meet the diversification requirements specified in Article VI hereof; or
(i) at the option of any party to this Agreement, upon another party's material breach of any provision of this Agreement; or
(j) at the option of the Company, if the Company determines in its sole judgment exercised in good faith, that either the Fund or the Adviser has suffered a material adverse change in its business, operations or financial condition since the date of this Agreement or is the subject of material adverse publicity which is likely to have a material adverse impact upon the business and operations of the Company; or
(k) at the option of the Fund or Adviser, if the Fund or Adviser respectively, shall determine in its sole judgment exercised in good faith, that the Company has suffered a material adverse change in its business, operations or financial condition since the date of this Agreement or is the subject of material adverse publicity which is likely to have a material adverse impact upon the business and operations of the Fund or Adviser; or
(l) at the option of the Fund or Adviser in the event any of the Contracts are not issued or sold in accordance with applicable federal and/or state law or if any Account or Contract ceased to qualify as annuity contracts or life insurance contracts, as applicable, under the Code or if the Fund or Adviser reasonably believes the Account or Contract may fail to so qualify.
10.2. Notice Requirement
(a) In the event that any termination of this Agreement is based upon the provisions of Article VII such prior written notice shall be given in advance of the effective date of termination as required by such provisions.
(b) In the event that any termination of this Agreement is based upon the provisions of Sections 10.1(b) - (d) or 10.1(g) - (i), prompt written notice of the election to terminate this Agreement for cause shall be furnished by the party terminating the Agreement to the non-terminating parties, with said termination to be effective: (x) upon receipt of such notice by the non-terminating parties in the case of terminations based on Sections 10.1(b) - (d); or (y) in the event of terminations based on Sections 10.1(g) - (i) if the breaching party has not cured such breach.
(c) In the event that any termination of this Agreement is based upon the provisions of Sections 10.1(j) or 10.1(k), prior written notice of the election to terminate this Agreement for cause shall be furnished by the party terminating this Agreement to the non-terminating parties. Such prior written notice shall be given by the party terminating this Agreement to the non-terminating parties at least 30 days before the effective date of termination.
(d) In the event that any termination of this Agreement is based upon the provisions of Section 10.1(l), termination shall be effective immediately upon such occurrence without notice.
10.3. It is understood and agreed that the right to terminate this Agreement pursuant to Section 10.1(a) may be exercised for any reason or for no reason.
10.4. Effect of Termination
(a) Notwithstanding any termination of this Agreement pursuant to Section 10.1 of this Agreement, the Fund may, at its option, or in the event of termination of this Agreement by the Fund or the Adviser pursuant to Section 10.1(a) of this Agreement, the Company may require the Fund and the Adviser to continue to make available additional shares of the Fund for so long after the termination of this Agreement as the Fund or the Company, if the Company is so requiring, desires pursuant to the terms and conditions of this Agreement as provided in paragraph (b) below for all Contracts in effect on the effective date of termination of this Agreement (hereinafter referred to as "Existing Contracts"). Specifically, without limitation, if the Fund so elects to make available additional shares of the Fund, pursuant to instructions from the owners of the Existing Contracts, the Company shall be permitted to reallocate investments in the Fund, redeem investments in the Fund and/or invest in the Fund upon the making by such owners of additional purchase payments under the Existing Contracts. The parties agree that this Section 10.4 shall not apply to any terminations under Article VII and the effect of such Article VII terminations shall be governed by Article VII of this Agreement.
(b) In the event of a termination of this agreement pursuant to Section 10.1 of this Agreement, the Fund shall promptly notify the Company whether the Fund will continue to make available shares of the Fund after such termination, except that, with respect to a termination by the Fund or the Adviser pursuant to Section 10.1(a) of this Agreement, the Company shall promptly notify the Fund whether it wishes the Fund to continue to make available additional shares of the Fund. If shares of the Fund continue to be made available after such termination, the provisions of this Agreement shall remain in effect except for Section 10.1(a) and thereafter the Fund or the Company may terminate the Agreement, as so continued pursuant to this Section 10.4 upon written notice to the other party, such notice to be for a period that is reasonable under the circumstances.
10.5. Except as necessary to implement contract owner initiated or approved transactions, or as required by state insurance laws or regulations, the Company shall not redeem Fund shares attributable to the Contracts (as opposed to Fund shares attributable to the Company's assets), and the Company shall not prevent contract owners from allocating payments to a Portfolio that was otherwise available under the Contracts, until 90 days after the Company shall have notified the Fund or Adviser of its intention to do so.
ARTICLE XI. Notices
Any notice shall be sufficiently given when sent by registered or certified mail to the other party at the address of such party set forth below or at such other address as such party may from time to time specify in writing to the other party.
If to the Fund:
Sun Capital Advisers Trust
One Sun Life Executive Park
Xxxxxxxxx Xxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxx X. Xxxxxx, Esq.
If to the Company:
Sun Life Assurance Company of Canada (U.S.)
Xxx Xxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxxx X. Xxxx, Esq.
If to the Adviser:
Sun Capital Advisers, Inc.
One Sun Life Executive Park
Xxxxxxxxx Xxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxx X. Xxxxxx, Esq.
ARTICLE XII. Miscellaneous
12.1. All persons dealing with the Fund must look solely to the property of the Fund, or in the case of a claim relating to a Portfolio, the assets of that Portfolio for the enforcement of any claims against the Fund as neither the Board, officers, agents or shareholders assume any personal liability for obligations entered into on behalf of the Fund. No Portfolio shall be subject to liability for the obligations of any other Portfolio.
12.2. Except as otherwise required by law, legal process and regulatory authority, each party hereto shall treat as confidential the names and addresses of the owners of the Contracts and all information reasonably identified as confidential in writing by any other party hereto and, except as permitted by this Agreement shall not disclose, disseminate or utilize such names and addresses and other confidential information until such time as it may come into the public domain without the express written consent of the affected party.
12.3. The captions in this Agreement are included for convenience of reference only and in no way define or delineate any of the provision hereof or otherwise affect their construction or effect.
12.4. This Agreement may be executed simultaneously in two or more counterparts, each of which taken together shall constitute one and the same instrument.
12.5. If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of the Agreement shall not be affected thereby.
12.6. Each party hereto shall cooperate with each other party and all appropriate governmental authorities (including without limitation the Commission, 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.
12.7. The rights, remedies and obligations contained in this Agreement are cumulative and are in addition to any and all rights, remedies and obligations, at law or in equity, which the parties hereto are entitled to under state and federal laws.
SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
FOR THE PRESIDENT
By: ________________________________
Name: Xxxx X. Xxxxxxx
Title: Vice President
FOR THE SECRETARY
By: ________________________________
Name: Xxxxx X. Xxxxx
Title: Senior Counsel
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
FOR THE PRESIDENT
By: ________________________________
Name: Xxxx X. Xxxxxxx
Title: Vice President
FOR THE SECRETARY
By: ________________________________
Name: Xxxxx X. Xxxxx
Title: Senior Counsel
SUN CAPITAL ADVISERS TRUST
By: ________________________________
Name: Xxxxx M.A. Xxxxxxxx
Title: President, Chief Executive Officer and Trustee
By: ________________________________
Name: Xxxxx X. Xxxxxx
Title: Secretary
SUN CAPITAL ADVISERS, INC.
By: ________________________________
Name: Xxxxx X. Xxxxx
Title: Chief Financial Officer
By: ________________________________
Name: Xxxxx X. Xxxxxx
Title: Secretary
SCHEDULE A
Sun Life Assurance Company of Canada (U.S.)
on behalf of its segregated accounts
|
Account |
Date of Organization |
|
Separate Account F |
July 13, 1989 |
|
Separate Account G |
July 25, 1996 |
|
Separate Account H |
November 2, 1998 |
|
Separate Account I |
December 1, 1998 |
Sun Life Insurance and Annuity Company of New York
on behalf of its segregated accounts
|
Account |
Date of Organization |
|
Separate Account C |
October 18, 1985 |
|
Separate Account D |
April 24, 2003 |
SCHEDULE B
Sun Capital Advisers Trust
Sun Capital All Cap Fund
Sun Capital Investment Grade Bond Fund
Sun Capital Money Market Fund
Sun Capital Real Estate Fund
SC Xxxxx Venture Value Fund
SC Value Small Cap Fund
SC Blue Chip Mid Cap Fund
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