Exhibit 13(m)
AMENDMENT NO. 1
To
PARTICIPATION AGREEMENT
Among
LSA VARIABLE SERIES TRUST,
LSA ASSET MANAGEMENT LLC
And
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
THIS AGREEMENT (the "Agreement"), made and entered into as of the first day
of June 2002, by and among Allstate Life Insurance Company of New York
(hereinafter the "Company"), on its own behalf and on behalf of one or more of
its separate accounts, LSA Variable Series Trust (the "Fund") and LSA Asset
Management LLC (the "Manager").
WHEREAS, effective May 1, 2002, the parties hereto entered into a
Participation Agreement ("Participation Agreement") which describes, among other
things, the respective duties and obligations of the Company, the Fund and the
Manager; and
WHEREAS, the parties agree that the Participation Agreement should be
amended in accordance with the terms of this Agreement;
NOW, THEREFORE, in consideration of their mutual promises, the Fund, the
Manager and the Company agree as follows:
Section 1. AMENDMENT TO ARTICLE VII OF PARTICIPATION AGREEMENT
1.1 Unless otherwise indicated, defined terms used in this Agreement shall
have the meanings ascribed to them in the Participation Agreement.
1.2 The parties agree that, effective as of the date of this Agreement,
Article VII of the Participation Agreement is hereby deleted in its entirety and
is replaced with the following section, which now shall be deemed Article VII of
such agreement:
ARTICLE VII. POTENTIAL MATERIAL IRRECONCILABLE CONFLICTS
7.1 The parties acknowledge that the Fund's shares may be made
available for investment to other Participating Insurance Companies
that are affiliated with the Company, and that the separate accounts
of such companies may serve as investment vehicles for both variable
life insurance policies and variable annuity contracts. In such event,
the trustees ("Trustees") of the Fund will monitor the Fund for the
existence of any material irreconcilable conflict between the
interests of the contract owners of all Participating Insurance
Companies. 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
annuity contract and variable life insurance contract 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 agrees to promptly report any potential or
existing conflicts of which it is aware to the Board. The Company will
assist the Board in carrying out its specified responsibilities under
this Article VII by providing the Board with all information
reasonably necessary for the Board to consider any issues raised
including, but not limited to, information regarding a decision by the
Company to disregard Contract owner voting instructions.
7.3 If it is determined by a majority of the Trustees, or a
majority of the Board's disinterested Trustees, that a material
irreconcilable conflict exists that
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affects the interests of Contract owners, the Company shall, in
cooperation with other Participating Insurance Companies whose
contract owners are also affected, at its expense and to the extent
reasonably practicable (as determined by the Board) take whatever
steps are necessary or appropriate to remedy or eliminate the
irreconcilable material conflict, which steps could include: (a)
withdrawing the assets allocable to some or all of the 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 of whether or not such
segregation should be implemented to a vote of all affected Contract
owners and, as appropriate, segregating the assets of any appropriate
group (i.e., annuity contract owners, life insurance contract owners,
or variable contract owners of one or more Participating Insurance
Companies) that votes in favor of such segregation, or offering to the
affected Contract owners the option of making such a change; or (b)
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; 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 Trustees. Any such
withdrawal and termination must take place within six (6) months after
the Fund gives written notice that this provision is being
implemented. Until the end of such six (6) month period, the Fund
shall continue to accept and implement orders by the Company for the
purchase and redemption of shares of the Fund.
7.5 If a material irreconcilable conflict arises because a
particular state insurance regulator's decision applicable to the
Company conflicts with the majority of other state regulators, then
the Company will withdraw the affected Account's investment in the
Fund and terminate this Agreement with respect to such Account within
six (6) months after the Board informs the Company in writing that it
has determined that such decision has created an irreconcilable
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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 Trustees. Until the end of such six (6) month period,
the Fund shall continue to accept and implement orders by the Company
for the purchase and redemption of shares of the Fund.
7.6 For purposes of Sections 7.3 through 7.6 of this Agreement, a
majority of the disinterested Trustees shall determine whether any
proposed action adequately remedies any irreconcilable material
conflict, but in no event will the Company be required to establish a
new funding medium for the Contracts if an offer to do so has been
declined by a vote of a majority of Contract owners materially
adversely affected by the irreconcilable material conflict. In the
event that the Board determines that any proposed action does not
adequately remedy any irreconcilable material conflict, then the
Company will withdraw the Account's investment in the Fund and
terminate this Agreement within six (6) months after the Board informs
the Company in writing of the foregoing determination; provided,
however, that such withdrawal and termination shall be limited to the
extent required by any such material irreconcilable conflict as
determined by a majority of the disinterested Trustees.
7.7 The Company shall at least annually submit to the Board such
reports, materials or data as the Board may reasonably request so that
the Board may fully carry out the duties imposed upon it in accordance
with the requirements of this Article VII and, upon request, such
reports, material and data shall be submitted more frequently and, in
any other format, if deemed appropriate by the Board.
7.8 If and to the extent that Rule 6e-2 and Rule 6e-3(T) are
amended, or Rule 6e-3 is adopted, to provided exemptive relief from
any provision of the 1940 Act or the rules promulgated thereunder with
respect to mixed or shared funding on terms and conditions materially
different from those contained in this Article VII, then the Fund 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 may be
applicable.
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Section 2. MISCELLANEOUS
2.1 The captions in this Agreement are included for convenience of
reference only and do not define or delineate any of the provisions hereof or
otherwise affect their construction or effect.
2.2 This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original and all such
counterparts, taken together, shall constitute one and the same instrument.
2.3 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.
2.4 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, to which the parties hereto are entitled under applicable
state and federal laws.
2.5 This Agreement sets forth the entire agreement and understanding
between the parties and supercedes all prior communications, agreements and
understandings, oral or written, between the parties regarding the subject
matter hereof. In the event of any conflict between the terms of this Agreement
and the Participation Agreement, then the terms of this Agreement shall
supercede such conflicting terms of the Participation Agreement.
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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed and ratified in its name, and on its behalf, by its duly authorized
representative as of the day and year first above written.
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
By: /s/ Xxxxxxx Xxxxxx Pas
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Title: Assistant Vice President
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LSA VARIABLE SERIES TRUST
By: /s/ Xxxx Xxxxxx
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Title: President
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LSA ASSET MANAGEMENT LLC
By: /s/ Xxxxxxxx Xxxxxxx
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Title: Chief Operating Officer
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