FUND PARTICIPATION AGREEMENT
THIS AGREEMENT, made and entered into this day of October 1999 (the "Agreement")
by and among American Skandia Life Assurance Corporation, organized under the
laws of the State of Connecticut (the "Company"), on behalf of itself and each
separate account of the Company named in Schedule A to this Agreement, as may be
amended from time to time (each separate account referred to as the "Separate
Account" and collectively as the "Separate Accounts"); Evergreen Variable
Annuity Trust, an open-end management investment company organized under the
laws of the State of Delaware (the "Trust"); and Evergreen Distributor, Inc., a
corporation organized under the laws of the State of Delaware and principal
underwriter/distributor of the Trust (the "Distributor").
WHEREAS, the Trust engages in business as an open-end diversified, management
investment company and was established for the purpose of serving as the
investment vehicle for separate accounts established for variable life insurance
contracts and variable annuity contracts to be offered by insurance companies
which have entered into participation agreements substantially similar to this
Agreement (the "Participating Insurance Companies"), and
WHEREAS, beneficial interests in the Trust are divided into several series of
shares, each representing the interest in a particular managed portfolio of
securities and other assets (each, a "Fund" and collectively, the "Funds"); and
WHEREAS, the Company, as depositor, has established the Separate Accounts to
serve as investment vehicles for certain variable annuity contracts and variable
life insurance policies and funding agreements offered by the Company set forth
on Schedule A (the "Contracts"); and
WHEREAS, the Separate Accounts are duly organized, validly existing segregated
asset accounts, established by resolutions of the Board of Directors of the
Company under the insurance laws of the State of Connecticut, to set aside and
invest assets attributable to the Contracts; and
WHEREAS, to the extent permitted by applicable insurance laws and regulations,
the Company intends to purchase shares of the Funds named in Schedule B, as such
schedule may be amended from time to time (the "Designated Funds") on behalf of
the Separate Accounts to fund the Contracts; and
WHEREAS, the Distributor is authorized to sell such shares of the Funds to unit
investment trusts such as the Separate Accounts at net asset value.
NOW, THEREFORE, in consideration of their mutual promises, the Company, the
Trust and the Distributor agree as follows:
ARTICLE I - SALE OF FUND SHARES
1.1 The Distributor agrees to sell to the Company those shares of the
Designated Funds which the Company orders on behalf of each Separate
Account, executing such orders on a daily basis at the net asset value
(and with no sales charges) next computed after receipt and acceptance
by the Trust or its designee of the order for the shares of the Trust.
For purposes of this Section 1.1, the Company will be the designee of
the Trust for receipt of such orders from each Separate Account and
receipt by such designee will constitute receipt by the Trust; provided
that the Trust receives notice of such order by 11:00 a.m. Eastern Time
on the next following business day. "Business Day" will mean any day on
which the New York Stock Exchange is open for trading and on which the
Trust calculates its net asset value pursuant to the rules of the
Securities and Exchange Commission (the "Commission"). The Trust may
net the notice of redemptions it receives from the Company under
Section 1.3 of this Agreement against the notice of purchases it
receives from the Company under this Section 1.1.
1.2 The Company will pay for Trust shares on the next Business Day after an
order to purchase Trust shares is made in accordance with Section 1.1.
Payment will be made in federal funds transmitted by wire. Upon receipt
by the Trust of the payment, such funds shall cease to be the
responsibility of the Company and shall become the responsibility of
the Trust.
1.3 The Trust agrees to redeem for cash, upon the Company's request, any
full or fractional shares of the Trust held by the Company, executing
such requests on a daily basis at the net asset value next computed
after receipt and acceptance by the Trust or its agent of the request
for redemption. For purposes of this Section 1.3, the Company will be
the designee of the Trust for receipt of requests for redemption from
each Separate Account and receipt by such designee will constitute
receipt by the Trust; provided the Trust receives notice of such
requests for redemption by 11:00 a.m. Eastern Time on the next
following Business Day. Payment will be made in federal funds
transmitted by wire to the Company's account as designated by the
Company in writing from time to time, on the same Business Day the
Trust receives notice of the redemption order from the Company. After
consulting with the Company, the Trust reserves the right to delay
payment of redemption proceeds, but in no event may such payment be
delayed longer than the period permitted under Section 22(e) of the
Investment Company Act of 1940 (the "1940 Act"). The Trust will not
bear any responsibility whatsoever for the proper disbursement or
crediting of redemption proceeds; the Company alone will be responsible
for such action. If notification of redemption is received after 11:00
Eastern Time, payment for redeemed shares will be made on the next
following Business Day. The Trust may net the notice of purchases it
receives from the Company under Section 1.1 of this Agreement against
the notice of redemptions it receives from the Company under this
Section 1.3.
1.4 The Trust agrees to make shares of the Designated Funds available
indefinitely for purchase at the applicable net asset value per share
by Participating Insurance Companies and their separate accounts on
those days on which the Trust calculates the net asset value of each
Fund pursuant to rules of the Commission; provided, however, that the
Board of Trustees of the Trust (the "Trustees") may refuse to sell
shares of any Fund to any person, or suspend or terminate the offering
of shares of any Designated Fund if such action is required by law or
by regulatory authorities having jurisdiction or is, in the sole
discretion of the Trustees, 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 Fund.
1.5 The Trust and the Distributor agree that shares of the Trust will be
sold only to Participating Insurance Companies and their separate
accounts, qualified pension and retirement plans or such other persons
as are permitted under applicable provisions of the Internal Revenue
Code of 1986, as amended, (the "Code"), and regulations promulgated
thereunder, the sale to which will not impair the tax treatment
currently afforded the Contracts. No shares of any Fund will be sold
directly to the general public.
1.6 The Trust will not sell Trust shares to any insurance company or
separate account unless an agreement containing provisions
substantially the same as Articles I, III, V, and VII and Section 2.8
of Article II of this Agreement are in effect to govern such sales.
1.7 The Company agrees to purchase and redeem the shares of the Designated
Funds offered by the then current prospectus of the Trust in accordance
with the provisions of such prospectus.
1.8 Issuance and transfer of the Trust's shares will be by book entry only.
Stock certificates will not be issued to the Company or to any Separate
Account. Purchase and redemption orders for Trust shares will be
recorded in an appropriate title for each Separate Account or the
appropriate sub-account of each Separate Account.
1.9 The Trust will furnish same day notice (by facsimile) to the Company of
the declaration of any income, dividends or capital gain distributions
payable on each Designated Fund's shares. The Company hereby elects to
receive all such dividends and distributions as are payable on the Fund
shares in the form of additional shares of that Fund at the ex-dividend
date net asset values. The Company reserves the right to revoke this
election and to receive all such dividends and distributions in cash.
The Trust will notify the Company of the number of shares so issued as
payment of such dividends and distributions.
1.10 The Trust will make the net asset value per share for each Designated
Fund available to the Company via electronic means on a daily basis as
soon as reasonably practical after the net asset value per share is
calculated and will use its best efforts to make such net asset value
per share available by 5:30 p.m., Eastern Time, each Business Day. If
the Trust provides the Company materially incorrect net asset value per
share information (as determined under SEC guidelines), the Company
shall be entitled to an adjustment to the number of shares purchased or
redeemed to reflect the correct net asset value per share. Any material
error in the calculation or reporting of net asset value per share,
dividend or capital gain information shall be reported to the Company
immediately upon discovery by the Trust.
ARTICLE II - REPRESENTATIONS AND WARRANTIES
2.1 The Company represents and warrants that the Contracts are or will be
registered under the Securities Act of 1933 (the "1933 Act"), or are
exempt from registration thereunder, and that the Contracts will be
issued and sold in compliance with all applicable federal and state
laws. The Company further represents and warrants that: (i) it is an
insurance company duly organized and in good standing under applicable
law; (ii) it has legally and validly established each Separate Account
as a separate account under Section 38a-433 of the General Statutes of
Connecticut; (iii) each Separate Account is or will be registered as a
unit investment trust in accordance with the provisions of the 1940 Act
to serve as a segregated investment account for the Contracts, or is
exempt from registration thereunder; and (iv) it will maintain such
registration for so long as any Contracts are outstanding. The Company
will amend each registration statement under the 1933 Act for the
Contracts and the registration statement under the 1940 Act for the
Separate Account from time to time as required in order to effect the
continuous offering of the Contracts or as may otherwise be required by
applicable law. The Company will register and qualify the Contracts for
sale in accordance with the securities laws of the various states only
if, and to the extent, deemed necessary by the Company.
2.2 Subject to the Trust's representations in Article III, the Company
represents that the Contracts are currently and at the time of issuance
will be treated as annuity contracts and/or life insurance policies (as
applicable) under applicable provisions of the Code, and that it will
make every effort to maintain such treatment and that it will notify
the Trust and the Distributor immediately upon having a reasonable
basis for believing that the Contracts have ceased to be so treated or
that they might not be so treated in the future.
2.3 The Company represents and warrants to the Trust and the Distributor
that it has a Year 2000 compliance program in existence and that it
reasonably intends to be Year 2000 compliant so as to be able perform
all of the services and/or obligations contemplated by or under this
Agreement without interruption. The Company shall immediately notify
the Trust and the Distributor if it determines that it will be unable
perform all of the services and/or obligations contemplated by or under
this Agreement in a manner that is Year 2000 compliant.
2.4 The Company represents and warrants that it will not purchase shares of
the Designated Fund(s) with assets derived from tax-qualified
retirement plans except, indirectly, through Contracts purchased in
connection with such plans.
2.5 The Company represents and warrants that all of its officers,
employees, and other individuals/entities having access to the funds
are and continue to be at all times covered by a blanket fidelity bond
or similar coverage in an amount not less than the minimal coverage as
required currently by Rule 17g-(1) of the 1940 Act or related
provisions as may be promulgated from time to time. The aforesaid bond
includes coverage for larceny and embezzlement and is issued by a
reputable bonding company.
2.6 The Trust represents and warrants that shares of the Designated Fund(s)
sold pursuant to this Agreement will be registered under the 1933 Act
and duly authorized for issuance in accordance with applicable law and
that the Trust is and will remain registered as an open-end
diversified, management investment company under the 1940 Act for as
long as such shares of the Designated Fund(s) are sold. The Trust will
amend the registration statement for its shares under the 1933 Act and
the 1940 Act from time to time as required in order to effect the
continuous offering of its shares. The Trust will register and qualify
the shares of the Designated Fund(s) for sale in accordance with the
laws of the various states only if and to the extent deemed advisable
by the Trust or the Distributor.
2.7 The Trust represents that it will use its best efforts to comply with
any applicable state insurance laws or regulations as they may apply to
the investment objectives, policies and restrictions of the Funds, to
the extent specifically requested in writing by the Company. If the
Trust cannot comply with such state insurance laws or regulations, it
will so notify the Company in writing. The Trust makes no other
representation as to whether any aspect of its operations (including,
but not limited to, fees and expenses, and investment policies)
complies with the insurance laws or regulations of any state. The
Company represents that it will use its best efforts to notify the
Trust of any restrictions imposed by state insurance laws that may
become applicable to the Trust as a result of the Separate Accounts'
investments therein. The Trust and the Distributor agree that they will
furnish the information required by state insurance laws to assist the
Company in obtaining the authority needed to issue the Contracts in
various states.
2.8 The Trust represents and warrants that, to the extent that it decides
to finance distribution expenses pursuant to Rule 12b-1 under the 1940
Act, the Trust undertakes to have the Trustees, a majority of whom are
not "interested" persons of the Trust, formulate and approve any plan
under Rule 12b-1 to finance distribution expenses. The Trust shall
notify the Company immediately upon determining to finance distribution
expenses pursuant to Rule 12b-1.
2.9 The Trust represents that it is lawfully organized and validly existing
under the laws of the State of Delaware and that it does and will
comply in all material respects with applicable provisions of the 0000
Xxx.
2.10 The Trust represents and warrants that all of its trustees, officers,
employees, investment advisers, and other individuals/entities having
access to the funds and/or securities of the Trust are and continue to
be at all times covered by a blanket fidelity bond or similar coverage
for the benefit of the Trust in an amount not less than the minimal
coverage as required currently by Rule 17g-(1) of the 1940 Act or
related provisions as may be promulgated from time to time. The
aforesaid bond includes coverage for larceny and embezzlement and is
issued by a reputable bonding company.
2.11 The Distributor represents and warrants that the Trust's respective
investment advisers: (i) are duly registered as investment advisers
under the Investment Advisers Act of 1940, as amended, or are exempt
from the registration requirements thereunder, and will remain duly
registered under all applicable federal and state securities laws (as
applicable); and (ii) will perform their respective obligations for the
Trust in accordance in all material respects with the laws of their
respective state of incorporation and any applicable state and federal
securities laws.
2.12 The Distributor represents and warrants that it: (i) is registered as a
broker-dealer under the Securities and Exchange Act of 1934, as amended
(the "1934 Act") and will remain duly registered under all applicable
federal and state securities laws; (ii) is a member in good standing of
the National Association of Securities Dealers, Inc. ("NASD"); (iii)
serves as principal underwriter/distributor of the Trust; and (iv) will
perform its obligations for the Trust in accordance in all material
respects with the laws of the State of Delaware and any applicable
state and federal securities laws.
2.13 The Trust and the Distributor represent and warrant to the Company that
each has a Year 2000 compliance program in existence and that each
reasonably intends to be Year 2000 compliant so as to be able to
perform all of the services and/or obligations contemplated by or under
this Agreement without interruption. The Trust and the Distributor
shall immediately notify the Company if it determines that it will be
unable to perform all of the services and/or obligations contemplated
by or under this Agreement in a manner that is Year 2000 compliant.
ARTICLE III - FUND COMPLIANCE
3.1 The Trust represents and warrants that it is currently qualified as a
Regulated Investment Company under Subchapter M of the Code, and that
it will maintain such qualification (under Subchapter M or any
successor or similar provision) and that it will notify the Company
immediately upon having a reasonable basis for believing that it has
ceased to so qualify or that it might not so qualify in the future.
3.2 The Trust represents that it will at all times invest money from the
Contracts in such a manner as to ensure that the Contracts will be
treated as variable contracts under the Code and the regulations issued
thereunder; including, but not limited to, that the Trust will at all
times comply with Section 817(h) of the Code and Treasury Regulation
1.817-5, as amended from time to time, relating to the diversification
requirements for variable annuity, endowment, or life insurance
contracts, and with Section 817(d) of the Code, relating to the
definition of a variable contract, and any amendments or other
modifications to such Section or Regulation. The Trust will notify the
Company immediately upon having a reasonable basis for believing that
the Trust or a Fund thereunder has ceased to comply with the
diversification requirements or that the Trust or Fund might not comply
with the diversification requirements in the future. In the event of a
breach of this representation by the Trust, it will take all reasonable
steps to adequately diversify the Trust so as to achieve compliance
within the grace period afforded by Treasury Regulation 1.817-5.
3.3 The Trust agrees to provide the Company with a certificate or statement
indicating compliance by each Designated Fund of the Trust with Section
817(h) of the Code, such certificate or statement to be sent to the
Company no later than thirty (30) days following the end of each
calendar quarter.
ARTICLE IV - PROSPECTUS AND PROXY STATEMENTS; VOTING
4.1 The Trust or the Distributor will provide the Company with as many
copies of the current Trust prospectus and any supplements thereto for
the Designated Fund(s), at the Trust's or Distributor's expense, as are
reasonably necessary for distribution to Contract owners at the time of
Contract fulfillment and confirmation. To the extent that the
Designated Fund(s) are one or more of several Funds of the Trust, the
Trust shall bear the cost of providing the Company only with disclosure
related to the Designated Fund(s). The Trust will provide as many
copies of said prospectus as necessary for distribution, at the Trust's
or Distributor's expense, to existing Contract owners. The Trust will
provide the copies of said prospectus to the Company or to its mailing
agent. The Company will distribute the prospectus to existing Contract
owners and will xxxx the Trust or the Distributor for the reasonable
cost of such distribution. If requested by the Company, in lieu
thereof, the Trust or the Distributor will provide such documentation,
including a final copy of a current prospectus set in type at the
Trust's or the Distributor's expense, and other assistance as is
reasonably necessary in order for the Company at least annually (or
more frequently if the Trust prospectus is amended more frequently) to
have the new prospectus for the Contracts and the Trust's new
prospectus printed together, in which case the Trust or the Distributor
agrees to pay its proportionate share of reasonable expenses directly
related to the required disclosure of information concerning the Trust.
The Trust or the Distributor will, upon request, provide the Company
with a copy of the Trust's prospectus through electronic means to
facilitate the Company's efforts to provide Trust prospectuses via
electronic delivery, in which case the Trust or the Distributor agrees
to pay its proportionate share of reasonable expenses related to the
required disclosure of information concerning the Trust.
4.2 The Trust's prospectus will state that the Statement of Additional
Information (the "SAI") for the Trust is available from the Distributor
or, in the Trust's discretion, the Prospectus shall state that such
statement is available from the Trust.
4.3 The Trust, at its expense, will provide the Company or its mailing
agent with copies of its proxy material, if any, reports to
shareholders/Contract owners and other communications to shareholders/
Contract owners in such quantity as the Company will reasonably
require. The Company will distribute this proxy material, reports and
other communications to existing Contract owners and will xxxx the
Trust for the reasonable cost of such distribution.
4.4 If and to the extent required by law, the Company will:
(a) solicit voting instructions from Contract owners;
(b) vote the shares of the Designated Funds held in the Separate
Account in accordance with instructions received from Contract
owners; and
(c) vote shares of the Designated Funds held in the Separate Account
for which no timely instructions have been received, in the same
proportion as shares of such Designated Fund for which
instructions have been received from the Company's Contract
owners,
so long as and to the extent that the Commission continues to interpret
the 1940 Act to require pass-through voting privileges for variable
Contract owners. The Company reserves the right to vote Trust shares
held in any segregated asset account in its own right, to the extent
permitted by law. The Company will be responsible for assuring that the
Separate Accounts participating in the Trust calculates voting
privileges in a manner consistent with all legal requirements,
including the Proxy Voting Procedures set forth in Schedule C and the
Mixed and Shared Funding Order, as described in Section 7.1.
4.5 The Trust will comply with all provisions of the 1940 Act requiring
voting by shareholders, and in particular, the Trust either will
provide for annual meetings (except insofar as the Commission may
interpret Section 16 of the 1940 Act not to require such meetings) or,
as the Trust currently intends, to comply with Section 16(c) of the
1940 Act (although the Trust is not one of the trusts described in
Section 16(c) of the 0000 Xxx) as well as with Sections 16(a) and, if
and when applicable, 16(b) of the 1940 Act. Further, the Trust will act
in accordance with the Commission's interpretation of the requirements
of Section 16(a) with respect to periodic elections of directors and
with whatever rules the Commission may promulgate with respect thereto.
ARTICLE V - SALES MATERIAL AND INFORMATION
5.1 The Company will furnish, or will cause to be furnished, to the Trust
or the Distributor, each piece of sales literature or other promotional
material in which the Trust, the Distributor or any of the investment
advisers to the Designated Funds are named, at least ten (10) business
days prior to its use. No such material will be used if the Trust or
the Distributor reasonably objects to such use within five (5) business
days after receipt of such material.
5.2 The Company will not give any information or make any representations
or statements on behalf of the Trust or concerning the Trust in
connection with the sale of the Contracts other than the information or
representations contained in the registration statement, prospectus or
SAI for Trust shares, as such registration statement, prospectus and
SAI may be amended or supplemented from time to time, or in reports or
proxy statements for the Trust, or in published reports for the Trust
which are in the public domain or approved by the Trust or the
Distributor (on its own behalf or on behalf of the respective
investment adviser) for distribution, or in sales literature or other
material provided by the Trust or the Distributor, except with
permission of the Trust or the Distributor (on its own behalf or on
behalf of the respective investment adviser. The Trust or the
Distributor agree to respond to any request for approval on a prompt
and timely basis.
5.3 The Trust or the Distributor will furnish, or will cause to be
furnished, to the Company or its designee, each piece of sales
literature or other promotional material in which the Company or its
separate account is named, at least ten (10) business days prior to its
use. No such material will be used if the Company reasonably objects to
such use within five (5) business days after receipt of such material.
5.4 The Trust or the Distributor will not give any information or make any
representations or statements on behalf of the Company or concerning
the Company, each Separate Account, or the Contracts other than the
information or representations contained in a registration statement,
prospectus or SAI for the Contracts, as such registration statement,
prospectus and SAI may be amended or supplemented from time to time, or
in published reports for each Separate Account or the Contracts which
are in the public domain or approved by the Company for distribution to
Contract owners, or in sales literature or other material provided by
the Company, except with permission of the Company. The Company agrees
to respond to any request for approval on a prompt and timely basis.
5.5 The Trust will provide to the Company at least one complete copy of all
registration statements, prospectuses, SAIs, reports, proxy statements,
sales literature and other promotional materials, applications for
exemptions, requests for no-action letters, and all amendments to any
of the above, that relate to the Trust or its shares, within a
reasonable time after filing of each such document with the Commission
or the NASD.
5.6 The Company will provide to the Trust at least one complete copy of all
definitive prospectuses, definitive SAI, reports, solicitations for
voting instructions, sales literature and other promotional materials,
applications for exemptions, requests for no action letters, and all
amendments to any of the above, that relate to the Contracts or each
Separate Account, contemporaneously with the filing of each such
document with the Commission or the NASD (Except that with respect to
post-effective amendments to such prospectuses and SAIs and sales
literature and promotional material, only those prospectuses and SAIs
and sales literature and promotional material that relate to or refer
to the Trust will be provided.) In addition, the Company will provide
to the Trust at least one complete copy of (i) a registration statement
that relates to the Contracts or each Separate Account, containing
representative and relevant disclosure concerning the Trust; and (ii)
any post-effective amendments to any registration statements relating
to the Contracts or such Separate Account that refer to or relate to
the Trust.
5.7 For purposes of this Article V, the phrase "sales literature or other
promotional material" includes, but is not limited to, advertisements
(such as material published, or designed for use in, a newspaper,
magazine, or other periodical, radio, television, telephone or tape
recording, videotape display, signs or billboards, motion pictures, or
other public media, (i.e., on-line networks such as the Internet or
other electronic messages)), sales literature (i.e., any written
communication distributed or made generally available to customers or
the public, including brochures, circulars, research reports, market
letters, form letters, seminar texts, reprints or excerpts of any other
advertisement, sales literature, or published article), educational or
training materials or other communications distributed or made
generally available to some or all agents or employees, registration
statements, prospectuses, SAIs, shareholder reports, and proxy
materials and any other material constituting sales literature or
advertising under the NASD Conduct Rules, the 1933 Act or the 0000 Xxx.
5.8 The Trust and the Distributor, on its own behalf or on behalf of the
respective investment advisers, hereby consent to the Company's use of
the names of the Evergreen Variable Annuity Trust, First Union National
Bank, Meridian Investment Company, Evergreen Asset Management Corp.,
Evergreen Investment Management, Evergreen Investment Management
Company, Mentor Investment Advisors LLC, Evergreen Distributors, Inc.,
as well as the names of the Designated Funds set forth in Schedule B of
this Agreement, in connection with marketing the Contracts, subject to
the terms of Sections 5.1 of this Agreement. The Trust and the
Distributor on its own behalf and on behalf of the respective
investment advisers named above, hereby consent to the use of any
trademark, trade name, service xxxx or logo used by the Trust, the
Distributor and the respective investment advisers, subject to the
Trust's and/or the Distributor's approval of such use and in accordance
with reasonable requirements of the Trust or the Distributor. Such
consent will terminate with the termination of this Agreement. The
Company agrees and acknowledges that either of the Trust, the
Distributor or the respective investment advisers are the owner of the
name, trademark, trade name, service xxxx and logo and that all use of
any designation comprised in whole or in part of the name, trademark,
trade name, service xxxx and logo under this Agreement shall inure to
the benefit of the Trust, the Distributor or the respective investment
advisers.
5.9 The Trust, the Distributor and the Company agree to adopt and implement
procedures reasonably designed to ensure that information concerning
the Company, the Trust or the Distributor, respectively, and their
respective affiliated companies, that is intended for use only by
brokers or agents selling the Contracts (i.e. information that is not
intended for distribution to Contract owners or prospective Contract
owners) and is properly marked as "Not For Use With The Public" or "For
Broker-Dealer Use Only" and that such information is only so used.
ARTICLES VI - FEES, COSTS AND EXPENSES
6.1 The Trust will pay no fee or other compensation to the Company under
this Agreement, except subject to a plan pursuant to Rule 12b-1 under
the 1940 Act to finance distribution expenses, in which case, subject
to obtaining any required exemptive orders or other regulatory
approvals, the Trust or Distributor may make payments to the Company or
to the underwriter for the Contracts if and in such amounts agreed to
by the Trust in writing. Each party, however, shall, in accordance with
the allocation of expenses specified in this Agreement, reimburse other
parties for expenses initially paid by one party but allocated to
another party. In addition, nothing herein shall prevent the parties
hereto from otherwise agreeing to perform, and arranging for
appropriate compensation for, other administrative services provided to
Contract owners relating to the Trust that are not primarily intended
to result in the sale of shares of the Designated Funds.
6.2 All expenses incident to performance by the Trust of this Agreement
will be paid by the Trust or the Distributor to the extent permitted by
law. All shares of the Designated Funds will be duly authorized for
issuance and registered in accordance with applicable federal law and,
to the extent deemed advisable by the Trust, in accordance with
applicable state law, prior to sale. The Trust will bear the expenses
for the cost of registration and qualification of the Trust's shares,
including without limitation, the preparation of and filing with the
SEC of Forms N-SAR and Rule 24f-2 Notices and payment of all applicable
registration or filing fees (if applicable) with respect to shares of
the Trust; preparation and filing of the Trust's prospectus, SAI and
registration statement, proxy materials and reports; typesetting the
Trust's prospectus; typesetting and printing proxy materials and
reports to Contract owners (including the costs of printing a Trust
prospectus that constitutes an annual report); the preparation of all
statements and notices required by any federal or state law; all taxes
on the issuance or transfer of the Trust's shares; any expenses
permitted to be paid or assumed by the Trust pursuant to a plan, if
any, under Rule 12b-1 under the 1940 Act; and other costs associated
with preparation of prospectuses and SAIs for the Designated Funds in
electronic or typeset format.
6.3 The Company shall bear all expenses associated with the registration,
qualification, and filing of the Contracts under applicable federal
securities and state insurance laws; the cost of preparing, printing,
and distributing the Contracts' prospectus and SAI; and the cost of
printing and distributing annual individual account statements for
Contract owners are required by state law.
ARTICLE VII - MIXED & SHARED FUNDING RELIEF
7.1 The Trust represents and warrants that it has received an order from
the Commission granting Participating Insurance Companies and variable
annuity separate accounts and variable life insurance separate accounts
relief from the provisions of Sections 9(a), 13(a), 15(a), and 15(b) of
the 1940 Act and Rules 6e-2(b)(15) and 6e-3(T)(b)(15) thereunder, to
the extent necessary to permit shares of the Trust to be sold to and
held by variable annuity separate accounts and variable life insurance
separate accounts of both affiliated and unaffiliated Participating
Insurance Companies and qualified pension and retirement plans outside
of the separate account context (the "Mixed and Shared Funding Order").
The parties to this Agreement agree that the conditions or undertakings
specified in the Mixed and Shared Funding Order and that may be imposed
on the Company and/or the Trust by virtue of the receipt of such order
by the Commission, will be incorporated herein by reference, and such
parties agree to comply with such conditions and undertakings to the
extent applicable to each such party.
7.2 The Trustees will monitor the Trust for the existence of any material
irreconcilable conflict among the interests of the Contract owners of
all separate accounts investing in the Trust. A material irreconcilable
conflict may arise for a variety of reasons, including, but not limited
to: (a) an action by any state insurance regulatory authority; (b) a
change in applicable federal or state insurance, tax, or securities
laws or regulations, or a public ruling, private letter ruling,
no-action or interpretative letter, or any similar action by insurance,
tax, or securities regulatory authorities; (c) an administrative or
judicial decision in any relevant proceeding; (d) the manner in which
the investments of any Fund are being managed; (e) a difference in
voting instructions given by Participating Insurance Companies or by
variable annuity and variable life insurance Contract owners; or (f) a
decision by an insurer to disregard the voting instructions of Contract
owners. The Trustees will promptly inform the Company if it determines
that a material irreconcilable conflict exists and the implications
thereof. A majority of the Trustees will consist of persons who are not
"interested" persons of the Trust.
7.3 The Company will report any potential or existing conflicts of which it
is aware to the Trustees. The Company agrees to assist the Trustees in
carrying out its responsibilities under the Mixed and Shared Funding
Order by providing the Trustees with all information reasonably
necessary for the Trustees to consider any issues raised. This
includes, but is not limited to, an obligation by the Company to inform
the Trustees whenever Contract owner voting instructions are to be
disregarded. The Trustees will record in its minutes, or other
appropriate records, all reports received by it and all action with
regard to a conflict.
7.4 If it is determined by a majority of the Trustees, or a majority of the
disinterested Trustees of the Fund's Board, that a material
irreconcilable conflict exists, the Company and other Participating
Insurance Companies will, at their expense and to the extent reasonably
practicable (as determined by a majority of the disinterested
trustees), take whatever steps are necessary to remedy or eliminate the
material irreconcilable conflict, up to and including: (a) withdrawing
the assets allocable to some or all of the Separate Accounts from the
Trust or any Fund and reinvesting such assets in a different investment
medium, including (but not limited to) another Fund of the Trust, or
submitting the question whether such segregation should be submitted to
a vote of all affected Contract owners and, as appropriate, segregating
the assets of any appropriate group (i.e., variable annuity Contract
owners or variable life insurance Contract owners of one or more
Participating Insurance Companies) that votes in favor of such
segregation, or offering to the affected Contract owners the option of
making such a change; and (b) establishing a new registered management
investment company or managed separate account.
7.5 If a material irreconcilable conflict arises because of a decision by
the Company to disregard Contract owner voting instructions, and such
disregard of voting instructions could conflict with the majority of
Contract owner voting instructions, and the Company's judgment
represents a minority position or would preclude a majority vote, the
Company may be required, at the Trust's election, to withdraw the
affected sub-account of the Separate Account's investment in the Trust
and terminate this Agreement with respect to such sub-account;
provided, however, that such withdrawal and termination will be limited
to the extent required by the foregoing material irreconcilable
conflict as determined by a majority of the disinterested Trustees of
the Fund's Board. No charge or penalty will be imposed as a result of
such withdrawal. Any such withdrawal and termination must take place
within six (6) months after the Trust gives written notice to the
Company that this provision is being implemented. Until the end of such
six-month period the Trust will, to the extent permitted by law and any
exemptive relief previously granted to the Trust, continue to accept
and implement orders by the Company for the purchase (and redemption)
of shares of the Trust.
7.6 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 insurance regulators, then the Company will
withdraw the affected sub-account of the Separate Account's investment
in the Trust and terminate this Agreement with respect to such
sub-account; provided, however, that such withdrawal and termination
will be limited to the extent required by the foregoing material
irreconcilable conflict as determined by a majority of the
disinterested Trustees of the Fund's Board. No charge or penalty will
be imposed as a result of such withdrawal. Any such withdrawal and
termination must take place within six (6) months after the Trust gives
written notice to the Company that this provision is being implemented.
Until the end of such six-month period the Advisor and Trust will, to
the extent permitted by law and any exemptive relief previously granted
to the Trust, continue to accept and implement orders by the Company
for the purchase (and redemption) of shares of the Trust.
7.7 For purposes of Sections 7.4 through 7.7 of this Agreement, a majority
of the disinterested members of the Trustees will determine whether any
proposed action adequately remedies any material irreconcilable
conflict, but in no event, other than as specified in Section 7.4, will
the Trust be required to establish a new funding medium for the
Contracts. The Company will not be required by Section 7.4 to establish
a new funding medium for the Contracts if an offer to do so has been
declined by vote of a majority of Contract owners affected by the
material irreconcilable conflict.
7.8 The Company will at least annually submit to the Trustees such reports,
materials or data as the Trustees may reasonably request so that the
Trustees may fully carry out the duties imposed upon it as delineated
in the Mixed and Shared Funding Order, and said reports, materials and
data will be submitted more frequently if deemed appropriate by the
Trustees.
7.9 If and to the extent that Rule 6e-2 and Rule 6e-3(T) are amended, or
Rule 6e-3(T) is adopted, to provide relief from any provision of the
1940 Act or the rules promulgated thereunder with respect to mixed or
shared funding (as defined in the Mixed and Shared Funding Order) on
terms and conditions materially different from those contained in the
Mixed and Shared Funding Order, then: (a) the Trust and/or the
Participating Insurance Companies, as appropriate, will take such steps
as may be necessary to comply with Rules 6e-2 and 6e-3(T), as amended,
and Rule 6e-3, as adopted, to the extent such rules are applicable; and
(b) Sections 4.4, 4.5, 7.1, 7.2, 7.3, 7.4, and 7.5 of this Agreement
will continue in effect only to the extent that terms and conditions
substantially identical to such Sections are contained in such Rule(s)
as so amended or adopted.
ARTICLE VIII - INDEMNIFICATION
8.1 Indemnification by the Company
(a) The Company agrees to indemnify and hold harmless the Trust, the
Distributor, and each of the Trust's or the Distributor's
directors, officers, employees or agents and each person, if any,
who controls or is associated with the Trust or the Distributor
within the meaning of such terms under the federal securities laws
(collectively, the "Indemnified Parties" for purposes of this
Section 8.1) against any and all losses, claims, damages,
liabilities (including amounts paid in settlement with the written
consent of the Company) or actions in respect thereof (including
reasonable legal and other expenses), to which the Indemnified
Parties may become subject under any statute, regulation, at
common law or otherwise, insofar as such losses, claims, damages,
liabilities or expenses (or litigations in respect thereof) or
settlements:
(1) arise out of or are based upon any untrue statements or
alleged untrue statements of any material fact contained in
the registration statement, prospectus or SAI for the
Contracts or contained in the Contracts or sales literature
or other promotional material for the Contracts (or any
amendment or supplement to any of the foregoing), or arise
out of or are based upon the omission or the alleged omission
to state therein a material fact required to be stated or
necessary to make such statements not misleading in light of
the circumstances in which they were made; provided that this
agreement to indemnify will not apply as to any Indemnified
Party if such statement or omission of such alleged statement
or omission was made in reliance upon and in conformity with
information furnished to the Company by or on behalf of the
Trust or the Distributor for use in the registration
statement, prospectus or SAI for the Contracts or in the
Contracts or sales literature (or any amendment or
supplement) or otherwise for use in connection with the sale
of the Contracts or Trust shares; or
(2) arise out of or as a result of statements or representations
by or on behalf of the Company (other than statements or
representations contained in the Trust registration
statement, prospectus, SAI or sales literature or other
promotional material of the Trust, or any amendment or
supplement to the foregoing, not supplied by the Company or
persons under its control) or wrongful conduct of the Company
or persons under its control, with respect to the sale or
distribution of the Contracts or Trust shares; or
(3) arise out of untrue statement or alleged untrue statement of
a material fact contained in the Trust registration
statement, prospectus, SAI or sales literature or other
promotional material of the Trust (or amendment or
supplement) or the omission or alleged omission to state
therein a material fact required to be stated therein or
necessary to make such statements not misleading in light of
the circumstances in which they were made, if such a
statement or omission was made in reliance upon and in
conformity with information furnished to the Trust by or on
behalf of the Company or persons under its control; or
(4) arise as a result of any failure by the Company to provide
the services and furnish the materials under the terms of
this Agreement; or
(5) arise out of any material breach of any representation and/or
warranty made by the Company in this Agreement or arise out
of or result from any other material breach by the Company of
this Agreement; or
(6) arise out of or result from negligence or wrongful conduct in
the Company's administration of the Separate Accounts or the
Contracts; except to the extent provided in Sections 8.1(b)
and 8.4 hereof. This indemnification will be in addition to
any liability that the Company otherwise may have.
(b) No party will be entitled to indemnification under Section 8.1(a)
if such loss, claim, damage, liability or litigation is due to the
willful misfeasance, bad faith, gross negligence, or reckless
disregard in the performance of such party's duties and
obligations under this Agreement.
(c) The Indemnified Parties promptly will notify the Company of the
commencement of any litigation, proceedings, complaints or
litigation by regulatory authorities against them in connection
with the issuance or sale of the Trust shares or the Contracts or
the operation of the Trust.
8.2 Indemnification by the Distributor
(a) The Distributor agrees to indemnify and hold harmless the Company
and each of its directors, officers, employees or agents and each
person, if any, who controls or is associated with the Company
within the meaning of such terms under the federal securities
(collectively, the "Indemnified Parties" for purposes of this
Section 8.2) against any and all losses, claims, damages,
liabilities (including amounts paid in settlement with the written
consent of the Distributor) or litigation in respect thereof
(including reasonable legal and other expenses) to which the
Indemnified Parties may become subject under any statute,
regulation, at common law or otherwise, insofar as such losses,
claims, damages, liabilities or expenses (or litigation in respect
thereof) or settlements:
(1) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in
the registration statement, prospectus or SAI for the Trust
or sales literature or other promotional material of the
Trust (or any amendment or supplement to any of the
foregoing), or arise out of or are based upon the omission or
the alleged omission to state therein a material fact
required to be stated or necessary to make such statements
not misleading in light of the circumstances in which they
were made; provided that this agreement to indemnify will not
apply as to any Indemnified Party if such statement or
omission of such alleged statement or omission was made in
reliance upon and in conformity with information furnished to
the Trust or the Distributor by or on behalf of the Company
for use in the registration statement, prospectus or SAI for
the Trust or in sales literature of the Trust (or any
amendment or supplement thereto) or otherwise for use in
connection with the sale of the Contracts or Trust shares; or
(2) arise out of or as a result of statements or representations
(other than statements or representations contained in the
Contracts or in the Contract or Trust registration
statements, prospectuses or statements of additional
information or sales literature or other promotional material
for the Contracts or of the Trust, or any amendment or
supplement to the foregoing, not supplied by the Distributor
or persons under the control of the Distributor respectively)
or wrongful conduct of the Distributor or persons under the
control of the Distributor respectively, with respect to the
sale or distribution of the Contracts or Trust shares; or
(3) arise out of any untrue statement or alleged untrue statement
of a material fact contained in a registration statement,
prospectus, SAI or sales literature or other promotional
material covering the Contracts (or any amendment or
supplement thereto), or the omission or alleged omission to
state therein a material fact required to be stated or
necessary to make such statement or statements not misleading
in light of the circumstances in which they were made, 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 Distributor or persons under the control of the
Distributor; or
(4) arise as a result of any failure by the Distributor to
provide the services and furnish the materials under the
terms of this Agreement;
(5) arise out of any material breach of any representation and/or
warranty made by the Distributor in this Agreement or arise
out of or result from any other material breach by the
Distributor of this Agreement; or
except to the extent provided in Sections 8.2(b) and 8.4
hereof. This indemnification will be in addition to any
liability that the Distributor otherwise may have.
(b) No party will be entitled to indemnification under Section 8.2(a)
if such loss, claim, damage, liability or litigation is due to the
willful misfeasance, bad faith, gross negligence, or reckless
disregard in the performance of such party's duties and
obligations under this Agreement.
(c) The Indemnified Parties will promptly notify the Distributor of
the commencement of any litigation, proceedings, complaints or
litigation by regulatory authorities against them in connection
with the issuance or sale of the Contracts or the operation of the
Separate Account.
8.3 Indemnification by the Trust
(a) The Trust agrees to indemnify and hold harmless the Company and
each of its directors, officers, employees or agents and each
person, if any, who controls or is associated with the Company
within the meaning of such terms under the federal securities
(collectively, the "Indemnified Parties" 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 Trust) or litigation in respect thereof (including
reasonable legal and other expenses) to which the Indemnified
Parties may become subject under any statute, regulation, at
common law or otherwise, insofar as such losses, claims, damages,
liabilities or expenses (or litigation in respect thereof) or
settlements, are related to the operations of the Trust and:
(1) arise as a result of any failure by the Trust to provide the
services and furnish the materials under the terms of this
Agreement; or
(2) arise out of or result from any material breach of any
representation and/or warranty made by the Trust in this
Agreement or arise out of or result from any other material
breach of this Agreement by the Trust (including a failure,
whether intentional or in good faith or otherwise, to comply
with the requirements of Subchapter M of the Code specified
in Article III, Section 3.1 of this Agreement and the
diversification requirements specified in Article III,
Section 3.2 of this Agreement; or
(3) arise out of or result from the incorrect or untimely
calculation or reporting of daily net asset value per share
or dividend or capital gain distribution rate;
except to the extent provided in Sections 8.3(b) and 8.4
hereof. This indemnification will be in addition to any
liability that the Trust otherwise may have.
(b) No party will be entitled to indemnification under Section 8.3(a)
if such loss, claim, damage, liability or litigation is due to the
willful misfeasance, bad faith, gross negligence, or reckless
disregard in the performance of such party's duties and
obligations under this Agreement.
(c) The Indemnified Parties will promptly notify the Trust of the
commencement of any litigation, proceedings, complaints or actions
by regulatory authorities against them in connection with the
issuance or sale of the Contracts or the operation of the Separate
Account.
8.4 Indemnification Procedure
Any person obligated to provide indemnification under this Article VIII
("Indemnifying Party" for the purpose of this Section 8.4) will not be
liable under the indemnification provisions of this Article VIII with
respect to any claim made against a party entitled to indemnification
under this Article VIII ("Indemnified Party" for the purpose of this
Section 8.4) unless such Indemnified Party will have notified the
Indemnifying Party in writing within a reasonable time after the
summons or other first legal process giving information of the nature
of the claim will have been served upon such Indemnified Party (or
after such party will have received notice of such service on any
designated agent), but failure to notify the Indemnifying Party of any
such claim will not relieve the Indemnifying Party from any liability
which it may have to the Indemnified Party against whom such action is
brought otherwise than on account of the indemnification provision of
this Article VIII, except to the extent that the failure to notify
results in the failure of actual notice to the Indemnifying Party and
such Indemnifying Party is damaged solely as a result of failure to
give such notice. In case any such action is brought against the
Indemnified Party, the Indemnifying Party will be entitled to
participate, at its own expense, in the defense thereof. The
Indemnifying Party also will be entitled to assume the defense thereof,
with counsel satisfactory to the party named in the action. After
notice from the Indemnifying Party to the Indemnified Party of the
Indemnifying Party's election to assume the defense thereof, the
Indemnified Party will bear the fees and expenses of any additional
counsel retained by it, and the Indemnifying Party 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,
unless: (a) the Indemnifying Party and the Indemnified Party will have
mutually agreed to the retention of such counsel; or (b) the named
parties to any such proceeding (including any impleaded parties)
include both the Indemnifying Party and the Indemnified Party and
representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between
them. The Indemnifying Party will not be liable for any settlement of
any proceeding effected without its written consent but if settled with
such consent or if there is a final judgment for the plaintiff, the
Indemnifying Party agrees to indemnify the Indemnified Party from and
against any loss or liability by reason of such settlement or judgment.
A successor by law of the parties to this Agreement will be entitled to
the benefits of the indemnification contained in this Article VIII. The
indemnification provisions contained in this Article VIII will survive
any termination of this Agreement.
ARTICLE IX - APPLICABLE LAW
9.1 This Agreement will be construed and the provisions hereof interpreted
under and in accordance with the laws of the Commonwealth of
Massachusetts.
9.2 This Agreement will be subject to the provisions of the 1933 Act, the
1934 Act and the 1940 Act, and the rules and regulations and rulings
thereunder, including such exemptions from those statutes, rules and
regulations as the Commission may grant (including, but not limited to,
the Mixed and Shared Funding Order) and the terms hereof will be
interpreted and construed in accordance therewith.
ARTICLE X - TERMINATION
10.1 This Agreement will terminate automatically in the event of its
assignment, unless made with the written consent of each party, or:
(a) at the option of any party, with or without cause, with respect to
one, some or all of the Funds, upon six (6) month's advance
written notice to the other parties or, if later, upon receipt of
any required exemptive relief or orders from the SEC, unless
otherwise agreed in a separate written agreement among the
parties; or
(b) at the option of the Company, upon written notice to the other
parties, with respect to any Fund if shares of the Fund are not
reasonably available to meet the requirements of the Contracts as
determined in good faith by the Company; or
(c) at the option of the Company, upon written notice to the other
parties, with respect to any Fund in the event any of the Fund's
shares are not registered, issued or sold in accordance with
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 Company; or
(d) at the option of the Trust upon institution of formal proceedings
against the Company by the NASD, the Commission, the insurance
commission of any state or any other regulatory body regarding the
Company's duties under this Agreement or related to the sale of
the Contracts, the administration of the Contracts, the operation
of the Separate Account, or the purchase of the Trust shares,
provided that the Trust determines in its sole judgment that any
such proceeding would have a material adverse effect on the
Company's ability to perform its obligations under this Agreement;
or
(e) at the option of the Company upon institution of formal
proceedings against Trust or the Distributor by the NASD, the
Commission or any state securities or insurance commission or any
other regulatory body, provided that the Company determines in its
sole judgment that any such proceeding would have a material
adverse effect on the Trust's or the Distributor's ability to
perform its obligations under this Agreement; or
(f) at the option of the Company, if the Trust 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 Trust may fail to so qualify; or
(g) at the option of the Company, with respect to any Fund, if the
Trust fails to meet the diversification requirements specified in
Section 3.2 hereof or if the Company reasonably believes the Trust
may fail to meet such requirements; or
(h) at the option of any party to this Agreement, upon another party's
material breach of any provision of this Agreement; or
(i) at the option of the Company, if the Company determines in its
sole judgment exercised in good faith that either the Trust, the
Distributor or the investment adviser to any of the Designated
Portfolios has suffered a material adverse change in its business,
operations or financial condition since the date of this Agreement
or is the subject of material adverse publicity which is likely to
have a material adverse impact upon the business and operations of
the Company or the Contracts (including the sale thereof); or
(j) at the option of the Trust or the Distributor, if the Trust or the
Distributor respectively, determines in its sole judgment
exercised in good faith that the Company has suffered a material
adverse change in its business, operations or financial condition
since the date of this Agreement or is the subject of material
adverse publicity which is likely to have a material adverse
impact upon the business and operations of the Trust or the
Distributor; or
(k) at the option of the Company or the Trust upon receipt of any
necessary regulatory approvals and/or the vote of the Contract
owners having an interest in the Separate Account (or any
sub-account) to substitute the shares of another investment
company for the corresponding Fund's shares of the Trust in
accordance with the terms of the Contracts for which those Fund
shares had been selected to serve as the underlying portfolio. The
Company will give sixty (60) days' prior written notice to the
Trust of the date of any proposed vote or other action taken to
replace the Trust's shares or of the filing of any required
regulatory approval(s); or
(1) at the option of the Company or the Trust upon a determination by
a majority of the Trust Board, or a majority of the disinterested
Trustees, that a material irreconcilable conflict exists among the
interests of: (1) all Contract owners of variable insurance
products of all separate accounts; or (2) the interests of the
Participating Insurance Companies investing in the Trust as set
forth in Article VII of this Agreement; or
(m) subject to the Trust's compliance with Article III, at the option
of the Trust in the event any of the Contracts are not issued or
sold in accordance with applicable federal and/or state law.
Termination will be effective immediately upon such occurrence
without notice.
10.2 Notice Requirement
(a) In the event that any termination of this Agreement is based upon
the provisions of Article VII, such prior written notice will be
given in advance of the effective date of termination as required
by such provisions.
(b) In the event that a party to this Agreement terminates the
Agreement based upon the provisions of Sections 10.1(b)-(h),
prompt written notice of the election to terminate this Agreement
for cause shall be furnished by the party terminating the
Agreement to the non-terminating party. The Agreement shall be
terminated effective upon receipt of such notice by the
non-terminating party(ies).
(c) In the event that a party to this Agreement terminates the
Agreement based upon the provisions of Sections 10.1(i) or (j),
prior written notice of the election to terminate this Agreement
for cause shall be furnished by the party terminating the
Agreement to the non-terminating party(ies). Such prior written
notice shall be given by the party terminating this Agreement to
the non-terminating party(ies) at least sixty (60) days before the
effective date of termination.
10.3 Effect of Termination
Notwithstanding any termination of this Agreement, the Trust and the
Distributor will, at the option of the Company, continue to make
available additional shares of the Trust 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 will be permitted to reallocate
investments in the Designated Funds (as in effect on such date), redeem
investments in the Designated Funds and/or invest in the Designated
Funds upon the making of additional purchase payments under the
Existing Contracts. The parties agree that this Section 10.3 will not
apply to any terminations under Article VII and the effect of such
Article VII terminations will be governed by Article VII of this
Agreement.
10.4 Surviving Provisions
Notwithstanding any termination of this Agreement, each party's
obligations under Article VIII to indemnify other parties will survive
and not be affected by any termination of this Agreement. In addition,
with respect to Existing Contracts, all provisions of this Agreement
also will survive and not be affected by any termination of this
Agreement.
ARTICLE XI - NOTICES
Any notice will be deemed duly given when sent by certified mail, return receipt
requested, to the other party at the address of such party set forth below or at
such other address as such party may from time to time specify in writing to the
other parties. All notices will be deemed given three (3) business days after
the date received or rejected by the addressee:
If to the Company:
-----------------
American Skandia Life Assurance Corporation
0 Xxxxxxxxx Xxxxx
X.X. Xxx 000
Xxxxxxx, Xxxxxxxxxxx 00000-0000
Attn: Xx. Xxxxxx X. Xxxxxxx
If to the Fund:
--------------
Evergreen Variable Annuity Trust
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xx. Xxxxxx X. Xxxxxxxx
If to the Distributor:
---------------------
Evergreen Distributor, Inc.
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn:
ARTICLE XII - MISCELLANEOUS
12.1 All persons dealing with the Trust must look solely to the property of
the Trust for the enforcement of any claims against the Trust as
neither the trustees, officers, agents or shareholders assume any
personal liability for obligations entered into on behalf of the Trust.
12.2 The Trust and the Distributor acknowledge that the identities of the
customers of the Company or any of its affiliates (collectively the
"Protected Parties" for purposes of this Section 12.2), information
maintained regarding those customers, and all computer programs and
procedures developed by the Protected Parties or any of their employees
or agents in connection with the Company's performance of its duties
under this Agreement are the valuable property of the Protected
Parties. The Trust and the Distributor agree that if they come into
possession of any list or compilation of the identities of or other
information about the Protected Parties' customers, or any other
property of the Protected Parties, other than such information as may
be independently developed or compiled by the Trust and the Distributor
from information supplied to them by the Protected Parties' customers
who also maintain accounts directly with the Trust and the Distributor,
the Trust and the Distributor will hold such information or property in
confidence and refrain from using, disclosing or distributing any of
such information or other property except: (a) with the Company' s
prior written consent; or (b) as required by law or judicial process.
The Trust and the Distributor acknowledge that any breach of the
agreements in this Section 12.2 would result in immediate and
irreparable harm to the Protected Parties for which there would be no
adequate remedy at law and agree that in the event of such a breach,
the Protected Parties will be entitled to equitable relief by way of
temporary and permanent injunctions, as well as such other relief as
any court of competent jurisdiction deems appropriate.
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 will constitute one and the
same instrument.
12.5 If any provision of this Agreement will be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the
Agreement will not be affected thereby.
12.6 This Agreement will not be assigned by any party hereto without the
prior written consent of all the parties.
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 law.
12.8 The parties to this Agreement acknowledge and agree that this Agreement
shall not be exclusive in any respect.
12.9 Each party to this Agreement will cooperate with each other party and
all appropriate governmental authorities (including without limitation
the Commission, the NASD and state insurance regulators) and will
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.
12.10 Each party represents that the execution and delivery of this Agreement
and the consummation of the transactions contemplated herein have been
duly authorized by all necessary corporate or trust action, as
applicable, by such party and when so executed and delivered this
Agreement will be the valid and binding obligation of such party
enforceable in accordance with its terms.
12.11 The parties to this Agreement may amend the schedules to this Agreement
from time to time to reflect changes in or relating to the Contracts,
the Separate Accounts or the Funds of the Trust or other applicable
terms of this Agreement.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed in its name and behalf by its duly authorized representative and its
seal to be hereunder affixed hereto as of the date specified below.
AMERICAN SKANDIA I.IFE ASSURANCE
CORPORATION
By: ______________________________
Xxxxxx X. Xxxxxxx
Deputy Chief Executive Officer and President
EVERGREEN VARIABLE ANNUITY TRUST
By: ______________________________
EVERGREEN DISTRIBUTOR, INC.
By: ______________________________
October 7, 1999
PARTICIPATION AGREEMENT
SCHEDULE A
The following Separate Accounts and Associated Contracts of American Skandia
Life Assurance Corporation are permitted in accordance with the provisions of
this Agreement to invest in Funds of the Trust shown in Schedule B: NAME OF
SEPARATE ACCOUNT:
American Skandia Life Assurance Corporation Variable Account B (Class 1
Sub-accounts)
CONTRACT(S):
American Skandia Advisor Plan (ASAPSM)
American Skandia Advisor Plan IISM (ASAPII)
American Skandia XTra CreditSM (ASXT)
American Skandia LifeVest(R) (ASL(R))
American Skandia ProtectorSM (AS ProSM)
NAME OF SEPARATE ACCOUNT: American Skandia Life Assurance Corporation Variable
Account B (Class 2 Sub-accounts)
CONTRACT(S):
American Skandia Advisors Choice(R)2000 (Choice2000)
NAME OF SEPARATE ACCOUNT:
American Skandia Life Assurance Corporation Variable Account B (Class 3
Sub-accounts)
CONTRACT(S):
American Skandia Impact (AS ImpactSM)
NAME OF SEPARATE ACCOUNT:
American Skandia Life Assurance Corporation Separate Account Q
CONTRACT(S):
American Skandia AS(k) Group Variable Annuity
NAME OF SEPARATE ACCOUNT:
American Skandia Life Assurance Corporation Separate Account F
CONTRACT(S):
American Skandia Trophy (AS Trophy) Modified Single Premium Variable Life
Insurance
American Skandia Life Champion (AS Life Champion) Flexible Premium Variable Life
Insurance
PARTICIPATION AGREEMENT
SCHEDULE B
The Separate Account(s) shown on Schedule A may invest in the following Funds of
the Trust.
Fund Name
Evergreen VA Global Leaders Fund*
Evergreen VA Special Equity Fund*
Evergreen VA Foundation Fund
Evergreen VA Equity Index Fund
Evergreen VA Strategic Income Fund
Evergreen VA Omega Fund
Evergreen VA Capital Growth Fund
* Funds available in all core American Skandia variable insurance products
shown in Schedule A as well as the Evergreen/First Union proprietary
variable annuity using American Skandia's Advisor Plan IISM and XTra
CreditSM chassis. Other funds are only available in the proprietary
variable annuity products.
PARTICIPATION AGREEMENT
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 Trust. 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.
1. The proxy proposals are given to the Company by the Trust as early as
possible before the date set by the Trust 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 Trust will inform
the Company of the Record, Mailing and Meeting dates. This will be done
verbally approximately two months before meeting.
2. 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 Trust, as soon as possible, but no later
than two weeks after the Record Date.
3. The Trust'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 Trust will provide the last Annual
Report to the Company pursuant to the terms of Section 6.2 of the Agreement
to which this Schedule relates.
4. The text and format for the Voting Instruction Cards ("Cards" or "Card") is
provided to the Company by the Trust. The Company, at its expense, shall
produce and personalize the Voting Instruction Cards. The Trust 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:
|X| name (legal name as found on account registration)
|X| address
|X| Trust or account number
|X| coding to state number of units
|X| individual Card number for use in tracking and verification of votes
(already on Cards as printed by the Trust).
(This and related steps may occur later in the chronological process
due to possible uncertainties relating to the proposals.)
5. During this time, the Trust 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:
|X| Voting Instruction Card(s)
|X| one proxy notice and statement (one document)
|X| return envelope (postage pre-paid by Company) addressed to the Company
or its tabulation agent
|X| "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
Trust.)
|X| cover letter - optional, supplied by Company and reviewed and approved
in advance by the Trust
6. 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 Trust.
7. Package mailed by the Company.
* The Trust 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.
8. 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.
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 Trust in the past.
9. 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.
10. 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.
11. 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.
12. The actual tabulation of votes is done in units which is then converted to
shares. (It is very important that the Trust receives the tabulations
stated in terms of a percentage and the number of SHARES.) The Trust must
review and approve tabulation format.
13. Final tabulation in shares is verbally given by the Company to the Trust on
the morning of the meeting not later than 10:00 a.m. Eastern time. The
Trust may request an earlier deadline if reasonable and if required to
calculate the vote in time for the meeting.
14. 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 Trust will provide a standard form for each Certification.
15. 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 Trust will be
permitted reasonable access to such Cards.
16. All approvals and "signing-off' may be done orally, but must always be
followed up in writing.
October 7, 1999
