EXHIBIT 1.(8)(d)(ii)
Xxxxxxx Investor Services, Inc.
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
FORM OF
PARTICIPATING CONTRACT AND POLICY AGREEMENT
Ladies and Gentlemen:
We (sometimes hereinafter referred to as "Investor Services") are the
Principal Underwriter of shares of Xxxxxxx Variable Life Investment Fund (the
"Fund"), a no-load, open-end, diversified registered management investment
company established in 1985 as a Massachusetts business trust. The Fund is a
series fund consisting of the Balanced Portfolio, Bond Portfolio, Capital
Growth Portfolio, International Portfolio, Money Market Portfolio and Growth
and Income Portfolio (individually or collectively hereinafter referred to as
the "Portfolio" or the "Portfolios"). Additional Portfolios may be created
from time to time. The Fund is the funding vehicle for variable annuity
contracts and variable life insurance policies ("Participating Contracts and
Policies") to be offered to the separate accounts or sub-accounts (the
"Accounts") of certain life insurance companies ("Participating Insurance
Companies"). Owners of Participating Contracts and Policies will designate a
portion of their premium to be invested in Accounts which invest in, or
represent an investment in, directly or indirectly, shares of beneficial
interest ("Shares") of the Portfolios of the Fund. You are a registered
broker-dealer which intends to offer and sell Participating Contracts and
Policies. In connection with such offer and sale you will be obligated to
deliver the prospectuses of such Participating Contracts and Policies and,
contemporaneously therewith, the prospectus of the Fund. Sales of Shares to
Participating Insurance Companies or their affiliates or the separate accounts
of either shall be effected solely by us as principal underwriter of the Fund,
and not by you; provided, however, that you shall be our agent in connection
with the receipt of purchase orders for Fund Shares and not in connection with
their offer and sale. The relationship between us shall be further governed by
the following terms and conditions:
1. To the extent, if any, that your activities or the activities of
the Participating Insurance Companies in connection with the sale
of Participating Contracts and Policies may constitute the sale of
Shares, you and we agree that (i) we are the sole "principal
underwriter" of the Fund and the sole "underwriter" of the Shares
as those terms are defined in the Investment Company Act of 1940
(the "1940 Act") and the Securities Act of 1933 (the "1933 Act"),
respectively, and (ii) neither you nor the Participating Insurance
Companies or the Accounts shall be deemed to be "principal
underwriters" of the Fund or "underwriters" of the Fund within the
meaning of the 1940 Act and the 1933 Act, respectively.
2. You hereby represent and warrant to us as follows:
(a) You are a corporation duly organized and validly existing in
good standing under the laws of the State of Texas and have
full power and authority to enter into this Agreement.
(b) This Agreement has been duly authorized, executed and
delivered by you and is a valid and binding obligation
enforceable against you in accordance with its terms.
(c) Your compliance with the provisions of this Agreement will
not conflict with or result in a violation of the provisions
of your charter or by-laws, or any statute or any judgment,
decree, order, rule or regulation of any court or
governmental agency or body having jurisdiction.
3. We hereby represent and warrant to you as follows:
(a) A registration statement (File No. 2-96461) on Form N-1A
with respect to the Shares (x) has been prepared by the Fund
in conformity with the requirements of the 1940 Act and the
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1933 Act and all applicable published instructions, rules
and regulations (the "Rules and Regulations") of the
Securities and Exchange Commission (the "Commission"), (y)
has been filed with the Commission, and (z) is currently
effective. The registration statement, including financial
statements and exhibits, and the final prospectus, including
the statement of additional information, as subsequently
amended and supplemented, are herein respectively referred
to as the "Registration Statement" and the "Prospectus".
(b) The Registration Statement and the Prospectus and any
amendment or supplement thereto will contain all statements
required to be stated therein and will comply in all
material respects with the requirements of the 1940 Act, the
1933 Act and the Rules and Regulations, and the Registration
Statement and any post-effective amendment thereto will not
contain or incorporate by reference any untrue statement of
a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were
made, not misleading, and the Prospectus and any amendment
or supplement thereto will not contain or incorporate by
reference any untrue statement of a material fact or omit to
state a material fact required to be stated therein or
necessary in order to make the statements therein, in light
of the circumstances under which they were made, not
misleading.
(c) We are a corporation duly organized and validly existing in
good standing under the laws of The Commonwealth of
Massachusetts and have full power and authority to enter
into this Agreement.
(d) This Agreement has been duly authorized, executed and
delivered by us and is a valid and binding obligation
enforceable against us in accordance with its terms.
(e) Our compliance with all of the provisions of this Agreement
will not conflict with or result in a violation of the
provisions of our charter or by-laws, or any statute or any
judgment, decree, order, rule or regulation of any court or
governmental agency or body having jurisdiction over us.
4. You hereby covenant and agree with us as follows:
(a) You shall be an independent contractor and neither you nor
any of your directors, officers or employees as such, is or
shall be an employee of us or of the Fund. You are
responsible for your own conduct and the employment, control
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and conduct of your agents and employees and for injury to
such agents or employees or to others through your agents or
employees.
(b) You or one or more Participating Insurance Companies will be
responsible for insuring compliance with all applicable laws
and regulations of any regulatory body having jurisdiction
over you or Participating Contracts and Policies.
(c) No person is authorized to make any representations
concerning Shares except those contained in the Prospectus
relating thereto and in such printed information as issued
by us for use as information supplemental to the prospectus.
In offering Participating Contracts and Policies you shall,
with respect to the Fund and the Shares, rely solely on the
representations contained in the Prospectus and in the
above-mentioned supplemental information.
(d) You are not entitled to any compensation whatsoever from us
or the Fund with respect to offers of Participating
Contracts and Policies.
5. We hereby covenant and agree with you as follows:
(a) If, at any time when a Prospectus relating to the Shares is
required to be delivered under the 1940 Act, the 1933 Act or
the Rules and Regulations, we become aware of the occurrence
of any event as a result of which the Prospectus as then
amended or supplemented would include any untrue statement
of a material fact, or omit to state a material fact
necessary to make the statements therein, in light of the
circumstances under which made, not misleading, or if we
become aware that it has become necessary at any time to
amend or supplement the Prospectus to comply with the 1940
Act, the 1933 Act or the Rules and Regulations, we will
promptly notify you and promptly request the Fund to prepare
and to file with the Commission an amendment to the
Registration Statement or supplement to the Prospectus which
will correct such statement or omission or an amendment or
supplement which will effect such compliance, and deliver to
you copies of any such amendment or supplement.
(b) We will cooperate with you by taking such action as may be
necessary for the Fund to qualify the Shares for offer and
sale under the securities or Blue Sky laws of any state or
jurisdiction as you may request and as may be required by
applicable law, and will continue such qualification in
effect so long as is required by applicable law in
connection with the distribution of Shares.
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6. We reserve the right in our discretion, without notice, to suspend
sales or withdraw the offering of Shares entirely, as to any
person or generally. We reserve the right to amend this Agreement
at any time and you agree that the sale of Participating Contracts
and Policies, after notice of any such amendment has been sent to
you, shall constitute your agreement to any such amendment.
7. If we elect to provide to you for the purpose of your offering
Participating Contracts and Policies copies of any Prospectus
relating to the Shares and printed information supplemental
thereto, we shall furnish you with such copies as you reasonably
request upon the payment of reasonable charges therefor by you or
one or more Participating Insurance Companies. If we elect not to
provide such copies of such documents, you or one or more
Participating Insurance Companies shall bear the entire cost of
printing copies for your use. You shall not use such copies of
such documents printed by you or one or more Participating
Insurance Companies until you shall have furnished us with a copy
thereof and we either have given you written approval for use or
twenty days shall have elapsed following our receipt thereof and
we have not objected thereto in writing.
8. (a) You will indemnify and hold harmless Investor Services and
each of its directors and officers and each person, if any,
who controls Investor Services within the meaning of Section
15 of the 1933 Act, against any loss, liability, damages,
claim or expense (including the reasonable cost of
investigating or defending any alleged loss, liability,
damages, claim or expense and reasonable counsel fees
incurred in connection therewith), arising by reason of any
person's acquiring any Shares, which may be based upon the
1933 Act or any other statute or common law, and which (i)
may be based upon any wrongful act by you, any of your
employees or representatives, or (ii) may be based upon any
untrue statement or alleged untrue statement of a material
fact contained in a registration statement or prospectus
covering Shares 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 us or the Fund by you, or (iii) may be based on
any untrue statement or alleged untrue statement of a
material fact contained in a registration statement or
prospectus covering insurance products sold by you, or any
amendments or supplement thereto, or the omission or alleged
omission to state therein a material fact required to be
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stated therein or necessary to make the statement or
statements therein not misleading, unless such statement or
omission was made in reliance upon information furnished to
you or a Participating Insurance Company by or on behalf of
Investor Services or the Fund; provided, however, that in no
case (i) is the indemnity by you in favor of any person
indemnified to be deemed to protect Investor Services or any
such person against any liability to which Investor Services
or any such person would otherwise be subject by reason of
willful misfeasance, bad xxxxx x xxxxx negligence in the
performance of its or his duties or by reason of its or his
reckless disregard of its obligations and duties under this
Agreement, or (ii) are you to be liable under your indemnity
agreement contained in this paragraph with respect to any
claim made against Investor Services or any person
indemnified unless Investor Services or such person, as the
case may be, shall have notified you 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 Investor Services or upon such person
(or after Investor Services or such person shall have
received notice of such service on any designated agent),
but failure to notify you of any such claim shall not
relieve you from any liability which you may have to
Investor Services or any person against whom such action is
brought otherwise than on account of your indemnity
agreement contained in this paragraph. You shall be entitled
to participate, at your own expense, in the defense, or, if
you so elect, to assume the defense of any suit brought to
enforce any such liability, but, if you elect to assume the
defense, such defense shall be conducted by counsel chosen
by you and satisfactory to Investor Services, or to its
officers or directors, or to any controlling person or
persons, defendant or defendants in the suit. In the event
that you assume the defense of any such suit and retain such
counsel, Investor Services or such officers or directors or
controlling person or persons, defendant or defendants in
the suit, shall bear the fees and expenses of any additional
counsel retained by them, but, in case you do not elect to
assume the defense or any such suit, you shall reimburse
Investor Services and such officers, directors or
controlling person or persons, defendant of defendants in
such suit, for the reasonable fees and expenses of any
counsel retained by them. You agree promptly to notify
Investor Services of the commencement of any litigation or
proceedings against it in connection with the offer, issue
and sale of any shares.
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(b) Investor Services will indemnify and hold harmless you and
each of your directors and officers and each person, if any,
who controls you within the meaning of Section 15 of the
1933 Act, against any loss, liability, damages, claim or
expense (including the reasonable cost of investigating or
defending any alleged loss, liability, damages, claim or
expense and reasonable counsel fees incurred in connection
therewith), arising by reason of any person's acquiring any
Shares, which may be based upon the 1933 Act or any other
statute or common law, and which (i) may be based upon any
wrongful act by Investor Services, any of its employees or
representatives, or (ii) may be based upon any untrue
statement or alleged untrue statement of a material fact
contained in a registration statement or prospectus covering
Shares 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 th
statements therein not misleading unless such statement or
omission was made in reliance upon information furnished to
Investor Services or the Fund by you or (iii) may be based
on any untrue statement or alleged untrue statement of a
material fact contained in a registration statement or
prospectus covering insurance products sold by you, or any
amendment 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 information furnished to
you by or on behalf of Investor Services or the Fund;
provided, however, that in no case (i) is the indemnity by
Investor Services in favor of any person indemnified to be
deemed to protect you or any such person against any
liability to which you or any such person would otherwise be
subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of your or his duties by
reason of your or his reckless disregard of your or his
obligations and duties under this Agreement, or (ii) is
Investor Services to be liable under its indemnity agreement
contained in this paragraph with respect to any claim made
against you or any person indemnified unless you or such
person, as the case may be, shall have notified Investor
Services in writing within a reasonable time after the
summons or other first legal process giving information of
the nature of the claim shal have been served upon you or
upon such person (or after you or such person shall have
received notice of such service on any designated agent),
but failure to notify Investor Services of any such claim
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shall not relieve Investor Services from any liability to
which Investor Services may have to you or any person
against whom such action is brought otherwise than on
account of its indemnity agreement contained in this
paragraph. Investor Services shall be entitled to
participate, at its own expense, in th defense, or, if it so
elects, to assume the defense of any suit brought to enforce
any such liability, but, if it elects to assume the defense,
such defense shall be conducted by counsel chosen by
Investor Services and satisfactory to you, or to your
officers or directors, or to any controlling person or
persons, defendant or defendants in the suit. In the event
that Investor Services assumes the defense of any such suit
and retains such counsel, you or such officers or directors
or controlling person or persons, defendant or defendants in
the suit, shall bear the fees and expenses of any additional
counsel retained by you, but, in case Investor Services does
not elect to assume the defense of any such suit, Investor
Services shall reimburse you and such officers, directors or
controlling person or persons, defendant or defendants in
such suit, for the reasonable fees and expenses of any
counsel retained by you. Investor Services agrees promptly
to notify you of the commencement of any litigation or
proceedings against it in connection with the offer, issue
and sale of any Shares.
9. The indemnities, representations, warranties, covenants and
agreements of each party to this Agreement as set forth in this
Agreement will remain in full force and effect regardless of any
investigation made by or on behalf of either of such parties or
any of their respective officers, directors, partners or any
controlling person, and will survive delivery of and payment for
the Shares.
10. Any provision of this Agreement which may be determined by
competent authority to be prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the
extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such
prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other
jurisdiction. To the extent permitted by applicable law, each
party hereto waives any provision of law which renders any
provision hereof prohibited or unenforceable in any respect.
11. This Agreement, as amended by the letter agreement dated February
3, 1995, as amended, together constitutes the entire agreement
among the parties concerning the subject matter hereof, and
supersede any and all prior understandings.
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12. This Agreement shall automatically terminate in the event of its
assignment. This Agreement may be terminated at any time by either
party by written notice given to the other party, provided that
the obligation of each party to indemnify the other party pursuant
to paragraph 8 hereof shall apply with respect to any Shares sold
before or after such termination.
13. Any notice hereunder shall be duly given if mailed or telegraphed
to the other party hereto at the address specified below. This
Agreement shall be governed by and construed in accordance with
the laws of The Commonwealth of Massachusetts.
14. This Agreement may be executed in any number of counterparts
which, taken together shall constitute one and the same
instrument. This Agreement shall become effective upon receipt by
us of your acceptance hereof.
15. This Agreement may not be modified or amended except by a written
instrument duly executed by the parties hereto.
XXXXXXX INVESTOR SERVICES, INC.
By:
------------------
Xxxx X. Xxxxxx
President
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
The undersigned hereby accepts the
offer set forth in the above letter.
USAA INVESTMENT MANAGEMENT COMPANY
Dated:____________ By:
--------------------
Xxxx X. Xxxxxxxx
Senior Vice President,
Investments Services
Authorized Representative
00000 Xxxxxx X. XxXxxxxxx Xxxxxxx
Xxx Xxxxxxx, Xxxxx 00000
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