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PARTICIPATION AGREEMENT
AMONG
XXXXXX XXXXXXX UNIVERSAL FUNDS, INC.,
XXXXXX XXXXXXX XXXX XXXXXX INVESTMENT
MANAGEMENT INC.
XXXXXX XXXXXXXX & XXXXXXXX, LLP
AND
SAGE LIFE ASSURANCE OF AMERICA, INC.
DATED AS OF
DECEMBER_____, 1998
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TABLE OF CONTENTS
Page
ARTICLE I. Purchase of Fund Shares 2
ARTICLE II Representations and Warranties 5
ARTICLE III. Prospectuses, Reports to Shareholders
and Proxy Statements, Voting 7
ARTICLE IV. Sales Material and Information 9
ARTICLE V Fees and Expenses 11
ARTICLE VI. Diversification 12
ARTICLE VII. Potential Conflicts 12
ARTICLE VIII. Indemnification 14
ARTICLE IX. Applicable Law 20
ARTICLE X. Termination 20
ARTICLE XI. Notices 23
ARTICLE XII. Miscellaneous 24
SCHEDULE A Separate Accounts and Contracts A-1
SCHEDULE B Portfolios of Xxxxxx Xxxxxxx Universal Funds, Inc. B-1
SCHEDULE C Proxy Voting Procedures C-1
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THIS AGREEMENT, made and entered into as of the ___ day of
December, 1998 by and among SAGE LIFE ASSURANCE OF AMERICA, INC.
(hereinafter the "Company"), a Delaware corporation, on its own
behalf and on behalf of each separate 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 an "Account", and
collectively as the "Accounts"), and XXXXXX XXXXXXX UNIVERSAL
FUNDS, INC. (hereinafter the "Fund"), a Maryland corporation, and
XXXXXX XXXXXXX XXXX XXXXXX INVESTMENT MANAGEMENT INC. and XXXXXX
XXXXXXXX & XXXXXXXX, LLP (hereinafter collectively the "Advisers"
and individually the "Adviser"), a Delaware corporation and a
Pennsylvania limited liability partnership, respectively.
WHEREAS, the Fund engages in business as an open-end management
investment company and is available to act as (i) the investment vehicle for
separate accounts established by insurance companies for individual and group
life insurance policies and annuity contracts with variable accumulation and/or
pay-out provisions (hereinafter referred to individually and/or collectively as
"Variable Insurance Products") and (ii) the investment vehicle for certain
qualified pension and retirement plans (hereinafter "Qualified Plans"); and
WHEREAS, insurance companies desiring to utilize the Fund as an
investment vehicle under their Variable Insurance Contracts enter into
participation agreements with the Fund and the Advisers (the "Participating
Insurance Companies"); and
WHEREAS, shares of the Fund are divided into several series of
shares, each representing the interest in a particular managed portfolio of
securities and other assets, any one or more of which may be made available
under this Agreement, as may be amended from time to time by mutual agreement of
the parties hereto for purchase by the Company for the Accounts (each such
portfolio made available under this Agreement (hereinafter, "Portfolio") is
listed in Schedule B which is attached hereto and incorporated herein); and
WHEREAS, the Fund has obtained an order from the Securities and
Exchange Commission, dated September 19, 1996 (File No. 812-10118), granting
Participating Insurance Companies and Variable Insurance Product separate
accounts exemptions from the provisions of Sections 9(a), 13(a), 15(a), and
15(b) of the Investment Company Act of 1940, as amended (hereinafter the "1940
Act"), and Rules 6e-2(b)(15) and 6e-3(T)(b)(15) thereunder, to the extent
necessary to permit shares of the Fund to be sold to and held by Variable
Annuity Product separate accounts of both affiliated and unaffiliated life
insurance companies and Qualified Plans (hereinafter the "Shared Funding
Exemptive Order"); and
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WHEREAS, the Fund is registered as an open-end management
investment company under the 1940 Act and its shares are registered under the
Securities Act of 1933, as amended (hereinafter the "1933 Act"); and
WHEREAS, each Adviser is duly registered as an investment adviser
under the Investment Advisers Act of 1940, as amended, and any applicable state
securities laws; and
WHEREAS, each Adviser manages certain Portfolios of the Fund; and
WHEREAS, Xxxxxx Xxxxxxx & Co. Incorporated (the "Underwriter") is
registered as a broker/dealer under the Securities Exchange Act of 1934, as
amended (hereinafter the "1934 Act"), is a member in good standing of the
National Association of Securities Dealers, Inc. (hereinafter "NASD") and serves
as principal underwriter of the shares of the Fund; and
WHEREAS, the Company has registered or will register certain
Variable Insurance Products under the 1933 Act; and
WHEREAS, each Account is a duly organized, validly existing
segregated asset account, established by resolution or under authority of the
Board of Directors of the Company, on the date shown for such Account on
Schedule A hereto, to set aside and invest assets attributable to the aforesaid
Variable Insurance Product; and
WHEREAS, the Company has registered or will register each Account
as a unit investment trust under the 1940 Act; and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase, on behalf of each Account, shares
of the Portfolios to fund certain of the foresaid Variable Insurance Products
and the Underwriter is authorized to sell such shares to each such Account at
net asset value; and
NOW, THEREFORE, in consideration of their mutual promises, the
Company, the Fund and the Underwriter agree as follows:
ARTICLE I. Purchase of Fund Shares
1.1. The Fund agrees to make available for purchase by the Company
shares of the Fund and shall execute orders placed for each Account on a daily
basis at the closing net asset value next computed after receipt by the Fund or
its designee of such order. For purposes of this Section 1.1, the Company shall
be the designee of the Fund
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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 10:00 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.
1.2. The Fund, so long as this Agreement is in effect, agrees to
make its shares available indefinitely for purchase at the applicable closing
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 Securities and
Exchange 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 Directors of the Fund
(hereinafter the "Board") may refuse to permit the Fund 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 interests of the shareholders of such Portfolio.
1.3. The Fund agrees that shares of the Fund will be sold only to
Participating Insurance Companies and their separate accounts and to certain
Qualified Plans. No shares of any Portfolio will be sold to the general public.
1.4 The Fund will not make its shares available for purchase by
any insurance company or separate account unless an agreement containing
provisions substantially the same as Article I, Section 2.5 of Article II,
Sections 5.1 and 5.2 of Article V and Articles VI 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 closing 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 on the next following Business Day.
1.6. The Company agrees that purchases and redemption of Portfolio
shares offered by the then current prospectus of the Fund shall be made in
accordance with the provisions of such prospectus. The Variable Insurance
Products issued by the Company, under which amounts may be invested in the Fund
(hereinafter the "Contracts"), are listed on Schedule A attached hereto and
incorporated herein by
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reference, as such Schedule A may be amended from time to time by mutual written
agreement of all of the parties hereto. The Company will give the Fund and the
Adviser 45 days written notice of its intention to make available in the future,
as a funding vehicle under the Contracts, any other investment company or
portfolio of an investment company which has substantially similar investment
objectives and policies and invests in similar securities as any of the
Portfolios listed on Schedule B.
1.7. The Company shall pay for Fund shares 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, or
as may otherwise be provided by separate agreement, with the reasonable
expectation of receipt by the Fund by 2:00 p.m. Eastern Time on that day. For
purposes of Sections 2.9 and 2.10, upon receipt by the Fund of the federal funds
so wired, such funds shall cease to be the responsibility of the Company and
shall become the responsibility of the Fund.
The Fund shall pay for redeemed Fund shares on the next Business
Day after a request to redeem Fund shares is made in accordance with the
provisions of Section 1.5 hereof. Payment shall be in federal funds transmitted
by wire, or may otherwise be provided by separate agreement, with the reasonable
expectation of receipt by the Company by 3:00 p.m. Eastern time on that day.
With respect to the payment of the purchase price by the Company
and of the redemption proceeds by the Fund, the Company and the Fund may net
purchase and redemption orders with respect to each Portfolio and may transmit
one net payment per Portfolio.
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 closing net asset value per share for
each Portfolio available to the Company on a daily basis as soon as reasonably
practical after the closing net asset value per share is calculated (normally by
6:30 p.m. Eastern time) and
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shall use its best efforts to make such closing net asset value per share
available by 7:00 p.m. Eastern time. If the Fund provides materially incorrect
closing net asset value per share information (as determined under SEC
guidelines), the Company shall be entitled to an adjustment to the number of
shares purchased or redeemed to reflect the correct net asset value per share.
Any material error in the calculation or reporting of closing net asset value
per share, dividend, or capital gain information shall be reported promptly upon
discovery to the Company.
ARTICLE II. REPRESENTATIONS AND WARRANTIES
2.1. The Company represents and warrants that the Contracts are or
will be registered under the 1933 Act; 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 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 and that it has legally and validly
established each Account prior to any issuance or sale thereof as a segregated
asset account under Delaware Insurance Law Section 2932(a) and 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.
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
Maryland and all applicable federal and state laws, other than insurance 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 only if and to the extent
deemed advisable by the Fund.
2.3. The Fund represents and warrants that it is currently
qualified as a Regulated Investment Company under Subchapter M of the Internal
Revenue Code of 1986, as amended (the "Code"), and that it will remain qualified
(under Subchapter M or any successor or similar provision) and that it will
notify the Company immediately upon having a reasonable basis for believing that
it has ceased to so qualify or that it might not so qualify in the future.
2.4 Subject to Section 6.1 hereof, the Company represents that the
Contracts are currently treated as life insurance policies or annuity contracts,
under applicable provisions of the Code and that it will make every effort to
maintain such treatment and that it will notify the Fund immediately upon having
a reasonable basis for believing
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that the Contracts have ceased to be so treated or that they might not be so
treated in the future.
2.5. The Fund represents and warrants that to the extent that it
decides to finance distribution expenses pursuant to Rule 12b-1 under the 1940
Act, the Fund undertakes to have a board of directors, a majority of whom are
not interested persons of the Fund, formulate and approve any plan under Rule
12b-1 to finance distribution expenses and to promptly notify the Company
thereof.
2.6. 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 represents that the Fund's investment policies, fees and
expenses are and shall at all times remain in compliance with the laws of the
State of Maryland and the Fund represents that their respective operations are
and shall at all times remain in material compliance with the laws of the State
of Maryland to the extent required to perform this Agreement. However, the Fund
represents and warrants that it will use its reasonable best efforts to ensure
that the investment policies, fees, and expenses of the Fund are and shall at
all times remain in compliance with applicable insurance and other applicable
laws of Delaware and any other applicable state as such laws are described by
and specifically requested in writing by the Company to the extent that said
compliance is reasonably necessary for the Fund to perform its duties under this
Agreement. The Fund shall furnish information not otherwise available to the
Company which is required by state insurance law to enable the Company to obtain
the authority needed to issue the Contracts in any applicable state.
2.7. The Fund represents and warrants that it is and shall remain
lawfully organized and validly existing under the laws of the State of Maryland
and that it does and will comply in all material respects with the 1940 Act and
the rules and regulations thereunder.
2.8. (a) Xxxxxx Xxxxxxx Asset Management Inc. represents and
warrants that it is and shall remain duly organized and validly existing under
the laws of the state of Delaware; (b) Xxxxxx Xxxxxxxx & Xxxxxxxx, LLP
represents and warrants that it is and shall remain duly organized and validly
existing under the laws of the state of Pennsylvania; and (c) each Adviser
represents and warrants that it is and shall remain duly registered in all
material respects under all applicable federal and state securities laws and
that it will perform its obligations for the Fund in compliance in all material
respects with the laws of its state of domicile and any applicable state and
federal securities laws.
2.9 The Fund represents and warrants that its directors, officers,
employees, and other individuals/entities dealing with the money and/or
securities of the Fund are
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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
blanket fidelity bond shall include coverage for larceny and embezzlement and
shall be issued by a reputable bonding company. The Fund agrees to make all
reasonable efforts to see that this bond or another bond containing these
provisions is always in effect, and agrees to notify the Company in the event
that such coverage no longer applies.
2.10. 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
covered by a blanket fidelity bond or similar coverage, in an amount not less
than the equivalent of U.S. $5 million. The aforesaid includes coverage for
larceny and embezzlement is issued by a reputable bonding company. The Company
agrees to make all reasonable efforts to see that this bond or another bond
containing these provisions is always in effect, and agrees to notify the Fund
and the Advisers in the event that such coverage no longer applies.
ARTICLE III. PROSPECTUSES, REPORTS TO SHAREHOLDERS AND PROXY STATEMENTS; VOTING
3.1. The Fund or its designee shall provide the Company with as
many printed copies of the Fund's current prospectus and statement of additional
information as the Company may reasonably request. If requested by the Company,
in lieu of providing printed copies the Fund shall provide camera-ready film or
computer diskettes containing the Fund's prospectus and statement of additional
information, and such other assistance as is reasonably necessary in order for
the Company once each year (or more frequently if the prospectus and/or
statement of additional information for the Fund is amended during the year) to
have the prospectus for the Contracts and the Fund's prospectus printed together
in one document, and to have the statement of additional information for the
Fund and the statement of additional information for the Contracts printed
together in one document. Alternatively, the Company may print the Fund's
prospectus and/or its statement of additional information in combination with
other fund companies' prospectuses and statements of additional information.
3.2. Except as provided in this Section 3.2., all expenses of
preparing, setting in type and printing and distributing Fund prospectuses and
statements of additional information shall be the expense of the Company. For
prospectuses and statements of additional information provided by the Company to
its existing owners of Contracts who currently own shares of one or more of the
Fund's Portfolios, in order to update disclosure as required by the 1933 Act
and/or the 1940 Act, the cost of printing shall be borne by the Fund. If the
Company chooses to receive camera-ready film or computer diskettes in lieu of
receiving printed copies of the Fund's prospectus, the Fund shall
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bear the cost of typesetting to provide the Fund's prospectus to the Company
in the format in which the Fund is accustomed to formatting prospectuses, and
the Company shall bear the expense of adjusting or changing the format to
conform with any of its prospectuses. In such event, the Fund will reimburse
the Company in an amount equal to the product of x and y where x is the number
of such prospectuses distributed to owners of the Contracts who currently own
shares of one or more of the Fund's Portfolios, and y is the Fund's per unit
cost of typesetting and printing the Fund's prospectus. The same procedures
shall be followed with respect to the Fund's statement of additional
information. The Company agrees to provide the Fund or its designee with such
information as may be reasonably requested by the Fund to assure that the
Fund's expenses do not include the cost of printing, typesetting, and
distributing any prospectuses or statements of additional information other
than those actually distributed to existing owners of the Contracts who
currently own shares of one or more of the Fund's Portfolios.
3.3. The Fund's statement of additional information shall be
obtainable by Contract owners from the Fund, the Company or such other person as
the Fund may designate, as agreed upon by the parties.
3.4. The Fund, at its expense, shall provide the Company with
copies of its proxy statements, reports to shareholders, and other
communications (except for prospectuses and statements of additional
information, which are covered in section 3.1) to shareholders in such quantity
as the Company shall reasonably require for distributing to Contract owners.
3.5. 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 Securities and Exchange Commission
continues to interpret the 1940 Act to require pass-through voting privileges
for variable contract owners. The Company reserves the right to vote Fund shares
held in any segregated asset account in its own right, to the extent permitted
by law. The Fund and the Company shall follow the procedures, and shall have the
corresponding responsibilities, for the handling of proxy and voting instruction
solicitations, as set forth in Schedule C attached hereto and incorporated
herein by reference. Participating
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Insurance Companies shall be responsible for ensuring that each of their
separate accounts participating in the Fund calculates voting privileges in a
manner consistent with the standards set forth on Schedule C, which standards
will also be provided to the other Participating Insurance Companies.
3.6. The Fund will comply with all provisions of the 1940 Act
requiring voting by shareholders, and in particular the Fund will either provide
for annual meetings or comply with Section 16(c) of the 1940 Act (although the
Fund is not one of the trusts described in Section 16(c) of that Act) as well as
with Sections 16(a) and, if and when applicable, 16(b). Further, the Fund will
act in accordance with the Securities and Exchange Commission's interpretation
of the requirements of Section 16(a) with respect to periodic elections of
directors and with whatever rules the Commission may promulgate with respect
thereto.
3.7. The Fund shall use reasonable efforts to provide Fund
prospectuses for the Portfolios, Fund reports to shareholders, proxy materials
and other Fund communications (or camera-ready equivalents) to the Company
sufficiently in advance of the Company's mailing dates to enable the Company to
complete, at reasonable cost, the printing, assembling and/or distribution of
the communications in accordance with applicable laws and regulations.
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 or the Adviser(s) is named, at least five Business
Days prior to its use. No such material shall be used if the Fund or its
designee reasonably objects to such use within five 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, except with the permission of the Fund. The Fund agrees to respond to
any request for approval on a prompt and timely basis. The Company shall adopt
and implement procedures reasonably designed to ensure that "broker only"
materials including information about the Fund are not distributed to existing
or prospective owners, and the Fund shall not be liable for any losses, damages,
or expenses relating to the improper use of such broker only materials.
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4.3. The Fund 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, its separate account(s) and/or
the Contracts are named at least five Business Days prior to its use. No such
material shall be used if the Company or its designee reasonably objects to such
use within five Business Days after receipt of such material.
4.4. The Fund and the Advisers 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 or prospectus for the Contracts, as such
registration statement and prospectus 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. The Company agrees to
respond to any request for approval on a prompt and timely basis. The Fund shall
adopt and implement procedures reasonably designed to ensure that "broker only"
materials including information about the Company or the Contracts are not
distributed to existing or prospective owners, and the Company shall not be
liable for any losses, damages or expenses relating to the improper use of such
broker only materials.
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, which are
relevant to the Company or the Contracts.
The Fund shall provide the Company with as much notice as is
reasonably practicable (but in any event, such notice shall be provided at least
thirty days prior to the anticipated date of such solicitation or change) of any
proxy solicitation for a Portfolio and of any material changes in the
prospectuses or registration statements relating to a Portfolio or its shares,
particularly any changes resulting in a change to a prospectus or registration
statement relating to the Contracts.
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
investment in the Fund under the Contracts.
4.7. For purposes of this Article IV, the phrase "sales literature
or other promotional material" includes, but is not limited to, any of the
following that refer to
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the Fund or any affiliate of the Fund: advertisements (such as material
published, or designed for use in, a newspaper, magazine, or other periodical,
radio, television, telephone or tape recording, videotape display, signs or
billboards, motion pictures, or other public media), sales literature (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, shareholder reports, and proxy materials, and any other
material constituting sales literature or advertising under the NASD rules, the
1933 Act, or the 0000 Xxx.
4.8. The Company, the Fund, and the Advisers agree that the
provisions of this Article IV are not intended to designate nor otherwise imply
that the Company is an underwriter or distributor of shares of the Fund.
ARTICLE V. FEES AND EXPENSES
5.1. The Fund shall pay no fee or other compensation to the Company
under this agreement, except that if the Fund or any Portfolio adopts and
implements a plan pursuant to Rule 12b-1 to finance distribution expenses, then
the Underwriter may make payments to the Company or to the underwriter for the
Contracts if and in amounts agreed to by the Underwriter in writing.
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. Except as otherwise
set forth in the Section 3.2 of this Agreement, 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, the preparation of all statements
and notices required by any federal or state law, and all taxes on the issuance
or transfer of the Fund's shares.
5.3. The Company shall bear the expenses of distributing the Fund's
prospectus, proxy materials and reports to owners of Contracts issued by the
Company.
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ARTICLE VI. DIVERSIFICATION
6.1. The Fund will at all times invest money from the Contracts in
such a manner as to ensure that the Contracts will be treated as
variable contracts under the Code and the regulations issued thereunder.
Without limiting the scope of the foregoing, the Fund currently complies with
and at all times will continue to comply with Section 817(h) of the Code and
Treasury Regulation 1.817-5, relating to the diversification requirements for
variable annuity, endowment, or life insurance contracts and any amendments or
other modifications to such Section or Regulations. In the event of a breach of
this Article VI by the Fund, or upon having a reasonable basis to believe any
Portfolio has ceased to comply or may not so comply in the future, it will take
all necessary steps (a) to immediately notify Company of such breach or
suspected breach and (b) to adequately diversify the Fund so as to achieve
compliance within the grace period afforded by Regulation 817-5.
ARTICLE VII. POTENTIAL CONFLICTS
7.1. The Board will monitor the Fund for the existence of any
material irreconcilable conflict between the interests of the contract owners of
all separate accounts investing in the Fund. An irreconcilable material conflict
may arise for a variety of reasons, including: (a) an action by any state
insurance regulatory authority; (b) a change in applicable federal or state
insurance, tax, or securities laws or regulations, or a public ruling, private
letter ruling, no-action or interpretative letter, or any similar action by
insurance, tax, or securities regulatory authorities; (c) an administrative or
judicial decision in any relevant proceeding; (d) the manner in which the
investments of any Portfolio are being managed; (e) a difference in voting
instructions given by Variable Insurance Product owners; or (f) a decision by a
Participating Insurance Company to disregard the voting instructions of contract
owners. 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 will assist the Board in carrying
out its responsibilities under the 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 members, that a material irreconcilable conflict exists,
the Company and other Participating Insurance Companies shall, at their expense
and to the extent
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reasonably practicable (as determined by a majority of the disinterested
directors), take whatever steps are necessary to remedy or eliminate the
irreconcilable material conflict, up to and including: (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 policy 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 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 (at the Company's expense); 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.
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 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 month period, the Underwriter
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 7.5 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 declined by vote
of a majority of Contract owners materially adversely affected by the
irreconcilable material conflict.
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7.7. If and to the extent that Rule 6e-2 and Rule 6e-3(T) are amended, or
Rule 6e-3 is adopted, to provide exemptive relief from any provision of the
1940 Act or the rules promulgated thereunder with respect to mixed or shared
funding (as defined in the Shared Funding Exemptive Order) on terms and
conditions materially different from those contained in the Shared Funding
Exemptive Order, then (a) the Fund and/or the Participating Insurance Companies,
as appropriate, shall take such steps as may be necessary to comply with Rules
6e-2 and 6e-3(T), as amended, and Rule 6e-3, as adopted, to the extent such
rules are applicable; and (b) Sections 3.4, 3.5, 7.1, 7.2, 7.3, 7.4, and 7.5 of
this Agreement shall continue in effect only to the extent that terms and
conditions substantially identical to such Sections are contained in such
Rule(s) as so amended or adopted.
ARTICLE VIII. INDEMNIFICATION
8.1. Indemnification By The Company
8.1(a) The Company agrees to indemnify and hold harmless the Fund and
each member of the Board and Fund officers, and each Adviser and each director
and officer of each Adviser, 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" and individually, "Indemnified Party," 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 or prospectus for the
Contracts 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 or prospectus for the
Contracts or in the Contracts or sales literature (or any amendment
or supplement) or
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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 and
other than statements or representations authorized by the Fund or
an Adviser) or unlawful 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 or as a result 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
and in conformity with 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.
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
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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 or any of their officers or directors in connection
with the issuance or sale of the Fund shares or the Contracts or
the operation of the Fund.
8.2. Indemnification by the Advisers
8.2(a). Each Adviser agrees, with respect to each Portfolio
that it manages, 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" and individually,
"Indemnified Party," 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 or
regulation, at common law or otherwise, insofar as such losses,
claims, damages, liabilities or expenses (or actions in respect
thereof) or settlements are related to the sale or acquisition of
shares of the Portfolio that it manages 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
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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 Fund by or
on behalf of the Company for use in the registration
statement or prospectus for the Fund or in sales literature
(or any amendment or supplement) or otherwise for use in
connection with the sale of the Contracts or Portfolio
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 for the Contracts not supplied by the Fund
or persons under its control and other than statements or
representations authorized by the Company) or unlawful
conduct of the Fund, Adviser(s) or Underwriter or persons
under their control, with respect to the sale or
distribution of the Contracts or Portfolio shares; or
(iii) arise out of or as a result of any untrue
statement or alleged untrue statement of a material fact
contained in a registration statement, prospectus, 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; 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, without limitation, the
Fund's obligation to comply with Article VI hereto; 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
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by and in accordance with the provisions of Sections
8.2(b) and 8.2(c) hereof.
8.2(b). An Adviser 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 and
duties under this Agreement.
8.2(c). An 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.
8.3. Indemnification by the Fund
8.3(a). The Fund 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
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Act (hereinafter collectively, the "Indemnified Parties" and
individually, "Indemnified Party," for purposes of this Section
8.3) against any and all losses, claims, damages, liabilities
(including amounts paid in settlement with the written consent of
the Fund) 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 result from
the gross negligence, bad faith or willful misconduct of the Board
or any member thereof, and:
(i) 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, without limitation, the Fund's obligation
to comply with Article VI hereto; or
(ii) arise out of or result from any material
breach of any representation and/or warranty made by
the Fund in this Agreement or arise out of or result
from any other material breach of this Agreement by
the Fund;
8.3(b). The Fund 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 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 and
duties under this Agreement.
8.3(c). The Fund shall not be liable under this
indemnification provision with respect to any claim made against
an Indemnified Party unless such Indemnified Party shall have
notified the Fund in writing within a reasonable time after the
summons or other first legal process giving information of the
nature of the claim shall have been served upon such Indemnified
Party (or after such Indemnified Party shall have received notice
of such service on any designated agent), but failure to notify
the Fund of any such claim shall not relieve the Fund from any
liability which it may have to the Indemnified Party against whom
such action is brought otherwise than on account of this
indemnification provision. In case any such action is brought
against the Indemnified Parties, the Fund will be entitled to
participate, at its own expense, in the defense thereof. The Fund
also shall be entitled to assume the defense thereof, with counsel
satisfactory to the party named in the action. After
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22
notice from the Fund to such party of the Fund's election to
assume the defense thereof, the Indemnified Party shall bear the
fees and expenses of any additional counsel retained by it, and
the Fund will not be liable to such party under this Agreement for
any legal or other expenses subsequently incurred by such party
independently in connection with the defense thereof other than
reasonable costs of investigation.
8.3(d). The Company agrees promptly to notify the Fund of
the commencement of any litigation or proceedings against it or
any of its respective officers or directors in connection with
this Agreement, the issuance or sale of the Contracts, with
respect to the operation of either Account, or the sale or
acquisition of shares of the Fund.
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
State of New York, without regard to conflict of laws principles.
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 Securities and Exchange Commission
may grant (including, but not limited to, the Shared Funding
Exemptive Order) and the terms hereof shall be interpreted and
construed in accordance therewith.
ARTICLE X. TERMINATION
10.1. This Agreement shall continue in full force and
effect until the first to occur of:
(a) termination by any party for any reason by six months
advance written notice delivered to the other parties; or
(b) termination by the Company by written notice to the
Fund and the Adviser with respect to any Portfolio based upon the
Company's determination that shares of such Portfolio are not
reasonably available to meet the requirements of the Contracts; or
(c) termination by the Company by written notice to the
Fund and the Adviser with respect to any Portfolio in the event
any of the Portfolio's shares are not registered, issued or sold
in accordance with
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applicable state and/or federal law or such law precludes the use
of such shares as the underlying investment media of the Contracts
issued or to be issued by the Company; or
(d) termination by the Company by written notice to the
Fund and the Adviser with respect to any Portfolio in the event
that such Portfolio ceases to qualify as a Regulated Investment
Company under Subchapter M of the Code or under any successor or
similar provision, or if the Company reasonably believes that the
Fund may fail to so qualify; or
(e) termination by the Company by written notice to the
Fund and the Adviser with respect to any Portfolio in the event
that such Portfolio falls to meet the diversification requirements
specified in Article VI hereof; or
(f) termination by the Fund by written notice to the
Company if the Fund shall determine, in its sole judgment
exercised in good faith, that the Company and/or its affiliated
companies has suffered a material adverse change in its business,
operations, financial condition or prospects since the date of
this Agreement or is the subject of material adverse publicity; or
(g) termination by the Company by written notice to the
Fund and the Adviser, if the Company shall determine, in its sole
judgment exercised in good faith, that either the Fund or an
Adviser has suffered a material adverse change in its business,
operations, financial condition or prospects since the date of
this Agreement or is the subject of material adverse publicity; or
(h) termination by the Fund or the Adviser by written
notice to the Company, if the Company gives the Fund and the
Adviser the written notice specified in Section 1.6 hereof and at
the time such notice was given there was no notice of termination
outstanding under any other provision of this Agreement; provided,
however any termination under this Section 10.1(h) shall be
effective sixty (60) days after the notice specified in Section
1.6 was given; or
(i) termination by the Company upon the Fund's failure to
cure a material breach of any provision of this Agreement within
thirty days after written notice thereof; or
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(j) termination by the Fund upon the Company's failure to
cure a material breach of any provision of this Agreement within
thirty days after written notice thereof.
10.2. Notwithstanding any termination of this Agreement,
the Fund shall at the option of the Company, continue to make
available additional shares of a Portfolio pursuant to the terms
and conditions of this Agreement, for all 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 direct reallocation of investments in the Fund,
redemption of investments in the Fund and/or investment in the
Fund upon the making of additional purchase payments under the
Existing Contracts. The parties agree that this Section 10.2
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.
10.3. The Company shall not redeem Fund shares attributable
to the Contracts (as distinct from Fund shares attributable to the
Company's assets held in the Account) except (i) as necessary to
implement Contract Owner initiated or approved transactions, or
(ii) as required by state and/or federal laws or regulations or
judicial or other legal precedent of general application
(hereinafter referred to as a "Legally Required Redemption") or
(iii) as permitted by an order of the Securities and Exchange
Commission pursuant to Section 26(b) of the 1940 Act. Upon
request, the Company will promptly furnish to the Fund the opinion
of counsel for the Company (which counsel shall be reasonably
satisfactory to the Fund) to the effect that any redemption
pursuant to clause (ii) above is a Legally Required Redemption.
Furthermore, except in cases where permitted under the terms of
the Contracts, the Company shall not prevent Contract Owners from
allocating payments to a Portfolio that was otherwise available
under the Contracts without first giving the Fund 90 days prior
written notice of its intention to do so.
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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:
Xxxxxx Xxxxxxx Universal Funds, Inc.
c/o Morgan Xxxxxxx Xxxx Xxxxxx Investment
Management Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Xx., Esq.
If to Adviser:
Xxxxxx Xxxxxxx Xxxx Xxxxxx Investment Management
Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Xx., Esq.
If to Adviser:
Xxxxxx Xxxxxxxx & Xxxxxxxx, LLP
Xxx Xxxxx Xxxxxx
Xxxx Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxxxx Xxxxxx
If to the Company:
Sage Life Assurance of America, Inc.
000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxx, Esq.
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ARTICLE XII. MISCELLANEOUS
12.1. All persons dealing with the Fund must look solely to
the property of the Fund 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.
12.2. Subject to the requirements of 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 provisions 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 Securities and Exchange Commission, the
National Association of Securities Dealers and state insurance
regulators) and shall permit each other and 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. Notwithstanding the generality
of the foregoing, each party hereto further agrees to furnish the
California Insurance Commissioner with any information or reports
in connection with services provided under this Agreement which
such Commissioner may request in order to ascertain whether the
insurance operations of the Company are being conducted in a
manner consistent with the California Insurance Regulations and
any other applicable law or regulations.
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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.
12.8 This Agreement or any of the rights and obligations
hereunder may not be assigned by any party without the prior
written consent of all parties hereto; provided, however, that a
change of control of an Adviser shall not be deemed an assignment
for purposes of this Agreement.
12.9 The Company shall, upon request by the Fund or an
Adviser, furnish, or cause to be furnished, to the Fund or its
designee copies of the following publicly available reports:
(a) the Company's annual statement (prepared under
statutory accounting principles) and annual report
(prepared under generally accepted accounting principles
("GAAP"), if any), as soon as practical and in any event
within 90 days after the end of each fiscal year;
(b) the Company's quarterly statements (statutory)
(and GAAP, if any), as soon as practical and in any event
within 45 days after the end of each quarterly period:
(c) any financial statement, proxy statement, notice
or report of the Company sent to stockholders and/or
policyholders, as soon as practical after the delivery
thereof to stockholders;
(d) any registration statement (without exhibits)
and financial reports of the Company filed with the
Securities and Exchange Commission or any state insurance
regulator, as soon as practical after the filing thereof;
(e) any other publicly available report submitted to
the Company by independent accountants in connection with
any annual, interim or special audit made by them of the
books of the Company, as soon as practical after the
receipt thereof.
12.10 Except as otherwise expressly provided in this
Agreement, none of the Fund, its Advisers, the Fund's principal
underwriter, or any affiliates thereof, shall use any trademark,
trade name, service xxxx or logo of the Company or any of its
affiliates, or any variation of any such
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trademark, trade name, service xxxx or logo, without the Company's
prior written consent, the granting of which shall be at the
Company's sole option.
12.11. Except as otherwise expressly provided in this
Agreement, neither the Company nor any of its affiliates shall use
any trademark, trade name, service xxxx or logo of the Fund, its
Advisers, its principal underwriter, or any affiliates thereof, or
any variation of any such trademark, trade name, service xxxx or
logo, without the respective party's prior written consent, the
granting of which shall be at such party's sole option.
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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be executed in its name and on its behalf by its duly authorized
representative and its seal to be hereunder affixed hereto as of the date
specified above.
SAGE LIFE ASSURANCE OF AMERICA, INC.
By:
--------------------------
Name:
Title:
XXXXXX XXXXXXX UNIVERSAL FUNDS, INC.
By:
--------------------------
Name:
Title:
XXXXXX XXXXXXX XXXX XXXXXX INVESTMENT
MANAGEMENT INC.
By:
--------------------------
Name:
Title:
XXXXXX XXXXXXXX & XXXXXXXX, LLP
By:
--------------------------
Name:
Title:
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SCHEDULE A
SEPARATE ACCOUNTS AND CONTRACTS
NAME OF SEPARATE ACCOUNT AND FORM NUMBER AND NAME OF CONTRACT
DATE ESTABLISHED BY BOARD OF DIRECTORS FUNDED BY SEPARATE ACCOUNT
A-1
31
SCHEDULE B
XXXXXX XXXXXXX UNIVERSAL FUNDS PORTFOLIOS
AVAILABLE UNDER THE VARIABLE INSURANCE
PRODUCTS PORTFOLIO ADVISER
------------------------------------------ -----------------
Value Xxxxxx Xxxxxxxx & Xxxxxxxx, LLP
Mid Cap Value Xxxxxx Xxxxxxxx & Xxxxxxxx, LLP
Global Equity Xxxxxx Xxxxxxx Xxxx Xxxxxx Investment
Management Inc.
X-x
32
SCHEDULE C
PROXY VOTING PROCEDURES
The following is a list of procedures and corresponding responsibilities for the
handling of proxies and voting instructions relating to the Fund. The defined
terms herein shall have the meanings assigned in the Participation Agreement
except that the term "Company" shall also include the department or third party
assigned by the Company to perform the steps delineated below.
- The proxy proposals are given to the Company by the Fund as early as
possible before the date set by the Fund for the shareholder meeting to
enable the Company to consider and prepare for the solicitation of voting
instructions from owners of the Contracts and to facilitate the
establishment of tabulation procedures. At this time the Fund will inform
the Company of the Record, Mailing and Meeting dates. This will be done
verbally approximately two months before meeting.
- Promptly after the Record Date, the Company will perform a "tape run", or
other activity, which will generate the names, addresses and number of
units which are attributed to each contract owner/policyholder (the
"Customer") as of the Record Date. Allowance should be made for account
adjustments made after this date that could affect the status of the
Customers' accounts as of the Record Date.
- Note: The number of proxy statements is determined by the activities
described in this Step #2. The Company will use its best efforts to call
in the number of Customers to the Fund, as soon as possible, but no later
than two weeks after the Record Date.
- The Fund's Annual Report must be sent to each Customer by the Company
either before or together with the Customers' receipt of voting,
instruction solicitation material. The Fund will provide the last Annual
Report to the Company pursuant to the terms of Section 3.3 of the
Agreement to which this Schedule relates.
- The text and format for the Voting Instruction Cards ("Cards" or "Card")
is provided to the Company by the Fund. The Company at its expense shall
produce and personalize the Voting Instruction Cards. The Fund or its
affiliate must approve the Card before it is printed. Allow approximately
2-4 business days for printing information on the Cards. Information
commonly found on the Cards includes:
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- name (legal name as found on account registration)
- address
- fund or account number
- coding to state number of units
- individual Card number for use in tracking and verification of votes
(already on Cards as printed by the Fund).
(This and related steps may occur later in the chronological process due to
possible uncertainties relating to the proposals.)
- During this time, the Fund will develop, produce and pay for the Notice of
Proxy and the Proxy Statement (one document). Printed and folded notices
and statements will be sent to Company for insertion into envelopes
(envelopes and return envelopes are provided and paid for by the Company).
Contents of envelope sent to Customers by the Company will include:
- Voting Instruction Card(s)
- One proxy notice and statement (one document)
- return envelope (postage pre-paid by Company) addressed to the
Company or its tabulation agent
- "urge buckslip" - optional, but recommended. (This is a small,
single sheet of paper that requests Customers to vote as quickly as
possible and that their vote is important. One copy will be supplied
by the Fund.)
- cover letter - optional, supplied by Company and reviewed and
approved in advance by the Fund.
- The above contents should be received by the Company approximately 3-5
business days before mail date. Individual in charge at Company reviews
and approves the contents of the mailing package to ensure correctness and
completeness. Copy of this approval sent to the Fund.
- Package mailed by the Company.
* The Fund must allow at least a 15-day solicitation time to the
Company as the shareowner. (A 5-week period is recommended.)
Solicitation time is calculated as calendar days from (but not
including,) the meeting, counting backwards.
- Collection and tabulation of Cards begins. Tabulation usually takes place
in another department or another vendor depending on process used. An
often used procedure is to sort Cards on arrival by proposal into vote
categories of all yes, no, or mixed replies, and to begin data entry.
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Note: Postmarks are not generally needed. A need for postmark information
would be due to an insurance company's internal procedure and has not
been required by the Fund in the past.
- Signatures on Card checked against legal name on account registration
which was printed on the Card.
Note: For Example, if the account registration is under "Xxxx X. Xxxxx,
Trustee," then that is the exact legal name to be printed on the Card and
is the signature needed on the Card.
- If Cards are mutilated, or for any reason are illegible or are not signed
properly, they are sent back to Customer with an explanatory letter and a
new Card and return envelope. The mutilated or illegible Card is
disregarded and considered to be not received for purposes of vote
tabulation. Any Cards that have been "kicked out" (e.g. mutilated,
illegible) of the procedure are "hand verified," i.e., examined as to why
they did not complete the system. Any questions on those Cards are
usually remedied individually.
- There are various control procedures used to ensure proper tabulation of
votes and accuracy of that tabulation. The most prevalent is to sort the
Cards as they first arrive into categories depending upon their vote; an
estimate of how the vote is progressing may then be calculated. If the
initial estimates and the actual vote do not coincide, then an internal
audit of that vote should occur. This may entail a recount.
- The actual tabulation of votes is done in units which is then converted
to shares. (It is very important that the Fund receives the tabulations
stated in terms of a percentage and the number of shares.) The Fund must
review and approve tabulation format.
- Final tabulation in shares is verbally given by the Company to the Fund
on the morning of the meeting not later than 10:00 a.m. Eastern time. The
Fund may request an earlier deadline if reasonable and if required to
calculate the vote in time for the meeting.
- A Certification of Mailing and Authorization to Vote Shares will be
required from the Company as well as an original copy of the final vote.
The Fund will provide a standard form for each Certification.
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- The Company will be required to box and archive the Cards received from
the Customers. In the event that any vote is challenged or if otherwise
necessary for legal, regulatory, or accounting purposes, the Fund will be
permitted reasonable access to such Cards.
- All approvals and "signing-off" may be done orally, but must always be
followed up in writing.
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