EXHIBIT 3(e)
Buy Sell Agreement between American International Life Assurance
Company of New York and Alliance Variable Products Series Fund and
Alliance Capital Management, L.P., dated June 11, 1991
BUY-SELL AGREEMENT
This AGREEMENT is made this 11th day of June, 1991 by and between American
International Life Assurance Company of New York (the "Insurance Company"), on
its own behalf and on behalf of Variable Account A (the "Variable Account"),
Alliance Variable Products Series Fund (the "Fund") and Alliance Capital
Management, L.P., ("Adviser").
WHEREAS, the Variable Account is registered as a unit investment trust
under the Investment Company Act of 1940 ("1940 Act") and it is intended that
certain variable annuity contracts ("Contracts") shall be funded by the Variable
Account; and
WHEREAS, the Fund is registered as an open-end diversified management
investment company under the 1940 Act and is currently authorized to issue 9
separate series of shares and to create additional series ("Portfolios") of
shares in the future; and
WHEREAS, Adviser is the Fund's investment manager pursuant to the terms of
an agreement between Adviser and the Fund, dated September 27, 1990,
("Management Agreement"); and
WHEREAS, it is the intention of the parties to this Agreement that the Fund
will serve as the sole funding vehicle for certain sub-accounts of the Variable
Account under the Contracts;
NOW THEREFORE, in consideration of the foregoing and of the premises and
the mutual covenants, conditions and agreements contained herein and for such
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties each intending to be legally bound hereby
mutually agree as follows:
1. Fund Shares. The Insurance Company agrees that the Fund will be the
sole funding vehicle for certain sub-accounts of the Variable Account.
The Fund agrees that it will sell shares of each Portfolio of the
Fund, redeem Fund shares and exchange such shares of any Portfolio for
shares of any other Portfolio, all in such amount as the Insurance
Company may from time to time direct and upon the terms set forth in
the Registration Statement of the Fund ("Registration Statement") as
declared effective by the Securities and Exchange Commission ("SEC")
and as it may be from time to time amended. The Fund further agrees
that on each day on which the net asset value of the shares of any
Portfolio of the Fund is required to be calculated pursuant to the
requirements of the 1940 Act, the Fund shall provide the Insurance
Company with the net asset value of such Portfolio(s) by 5:00 p.m.
(New York time). The Fund will also provide the Insurance Company with
daily reports of interest and dividend income and realized capital
gains and losses for each Portfolio. This information shall also be
provided by 5:00 p.m. (New York time) on each day on which such net
asset value is calculated. The Fund reserves the right to discontinue
sales of shares of any Portfolio of the Fund, subject to the written
consent of the Insurance Company, which consent shall not be
unreasonably withheld.
2. Representations and Warranties of the Fund and Adviser. The Fund and
Adviser and each of them hereby represent and warrant that:
A. The Fund is a corporation duly organized and validly existing
pursuant to the laws of the State of Maryland;
B. The Fund is duly registered as on open-end diversified management
investment company under the provisions of the 1940 Act and is in
compliance with the provisions thereof;
C. The Fund has the requisite corporate authority to execute the
delivery of this Agreement and has taken all steps necessary to
authorize the execution, delivery and performance of this
Agreement and the transactions contemplated hereunder;
D. This Agreement, when executed by or on behalf of the Fund, will
constitute the valid and binding obligation of the Fund and
Adviser, enforceable against each in accordance with its terms;
E. Fund shares to be sold pursuant to this Agreement have been
registered under the 1933 Act, are duly authorized and will be,
upon issuance, legally issued, fully paid and nonassessable;
F. The Fund will sell its shares in compliance with all applicable
federal and state laws;
G. A Registration Statement, including a prospectus and statement of
additional information, relating to the Fund and its shares has
been prepared and filed with the SEC in accordance with
applicable provisions of the Securities Act of 1933 ("1933 Act")
and the 1940 Act and has become effective; and
H. The Registration Statement, as currently in effect, does not
include any untrue statement of a material fact of omit to state
any material fact required to be stated therein or necessary to
make the statements therein not misleading.
3. Undertakings. The Fund and Advisor and each of them hereby state that:
A. Each of them will use its best efforts to ensure that the Fund
remains registered pursuant to the terms of the 1933 Act and the
1940 Act and that the Registration Statement will conform in all
respects to the requirements of the 1933 Act, the 1940 Act and
the rules and regulations of the SEC and that at no time will the
Registration Statement include an untrue statement of a material
fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not
misleading;
B. The Fund will, upon request, promptly furnish the Insurance
Company with copies of the Fund's Registration Statement and all
amendments and exhibits thereto and periodic reports filed with
the SEC under the 1940 Act;
C. The Fund will inform the Insurance Company in advance of all
regular and special meetings of the Fund's Board of Directors
(the "Board"). The Insurance Company may be present at such
meetings with permission of the Board and, upon reasonable
notice, make a presentation to the Board. Permission to attend
meetings or make a presentation shall not be unreasonably
withheld;
D. The Fund will promptly advise the Insurance Company of any
proposed amendment or supplement to the Registration Statement
and shall provide the Insurance Company with a copy of such
proposed amendment or supplement in advance of the filing of such
amendment or supplement with the SEC to permit its review unless
legal or regulatory requirements would make such review
impracticable;
E. The Fund will comply with the provisions of Sub-chapter M of the
Internal Revenue Code of 1986 ("Code");
F. The Fund will comply with the provisions of Section 817(h) of the
Code and any regulations thereunder, concerning diversification
of the assets of the Portfolios of the Fund, provided that the
Insurance Company will promptly advise the Fund of any changes in
such provisions after the date of the Agreement;
G. The Fund will comply with applicable state law concerning
permissible investments for separate accounts, provided that the
Insurance Company will notify the Fund of any changes in such
laws when the Insurance Company has been aware of such changes in
connection with the Contracts after the date of this Agreement;
and
H. The Fund will not adopt any plan under Rule 12b-1 of the 1940 Act
to finance distribution expenses unless such plan is presented to
and approved by the Board, a majority of the members of which are
not "interested persons" ("Disinterested Board Members") of the
Fund within the meaning of Section 2(a)(19) of the 1940 Act.
4. Representations and Warranties of the Insurance Company. The Insurance
Company represents and warrants that:
A. It is a corporation duly organized and validly existing pursuant
to the laws of the State of New York and is in good standing
under the law in all jurisdictions in which it conducts its
business;
B. It has legally and validly established the Variable Account;
C. The Variable Account is registered as a unit investment trust
under the 1940 Act;
D. It has the requisite corporate and legal authority to issue the
Contracts to be funded by the Variable Account.
E. It has the requisite corporate authority to execute and deliver
this Agreement and has taken all steps necessary to authorize the
execution, delivery and performance of this Agreement and the
transactions contemplated hereunder;
F. This Agreement, when executed by or on behalf of the Insurance
Company, will constitute the valid and binding obligation of the
Insurance Company, enforceable against it in accordance with its
terms;
G. A Registration Statement, including a prospectus and statement of
additional information, relating to the Contracts has been
prepared and filed with the SEC in accordance with applicable
provisions of the 1933 Act and the 1940 Act and has become
effective;
H. The Registration Statement as it became effective did not include
any untrue statement of a material fact of omit to state any
material fact required to be stated therein or necessary to make
the statements therein not misleading;
5. Undertakings of the Insurance Company. The Insurance Company states
that:
A. It will comply with applicable law, including state insurance
law, in connection with its obligations hereunder;
B. It will provide to purchasers of the Contracts ("Contract Owner")
voting privileges with respect to Fund shares attributable to the
variable annuity contracts of such Contract Owners. Pass-through
voting privileges will be calculated with reference to the number
of shares of the Fund attributable to a particular contract and
in a manner consistent with the rights of other participating
insurance companies. The Insurance Company will vote its own
shares and shares for which no instructions have been received in
the same proportion as instructions received for each Portfolio
within the Variable Account;
C. It will use its best efforts to ensure that the Registration
Statement will conform in all respects to the requirements of the
1933 Act and the rules and regulations of the SEC and that at no
time will the Registration Statement include an untrue statement
of a material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein not
misleading;
D. It will, upon request, promptly furnish the Fund and Adviser with
copies of the Registration Statement for the Contract and all
amendments and exhibits thereto and periodic reports filed with
the SEC under the 1940 Act; and
E. It will not (i) give any information or make any representations
concerning the Fund or Adviser, its shares or operations except
those contained in the most recent Registration Statement
relating to the Fund and any supplements thereto or (ii) use any
sales literature or advertising which mentions the Fund or
Adviser (including brochures, letters, illustrations and other
similar materials, whether transmitted directly to potential
applicants or published in print or audio-visual media), except
in either case as the Fund or Adviser may authorize in writing in
advance.
6. Fees and Expenses. The Fund or Adviser shall bear the cost of (a)
registration and qualification of the Fund's shares; (b) preparation
and filing of the Fund's prospectus and registration statement, proxy
materials and reports; (c) preparation of all other statements and
notices relating to the Fund, as required by any federal or state law;
(d) all applicable fees, including without limitation, all fees due
under Rule 24f-2 under the 1940 Act relating to the Fund; all taxes on
the issuance or transfer of Fund's shares; and (e) all costs of
printing and distributing all copies of prospectuses, Statement of
Additional Information, proxy materials, and fund financial reports as
required by applicable state and federal law.
7. Indemnification.
A. The Fund and Adviser will indemnify and hold harmless the
Insurance Company and each of its directors and officers and the
Variable Account against any and all losses, claims, damages,
liabilities or expenses (including, without limitation, any
expenses reasonably incurred in investigating or defending
against any litigation commenced or threatened, or any claim) to
which the Insurance Company or the Variable Account may become
subject arising out of or based upon (i) any untrue statement or
alleged untrue statement of any material fact contained in the
Registration Statement or prospectus relating to the Fund and its
shares or any amendment or supplement thereto, or (ii) 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; provided, however, neither the Fund nor
Adviser shall be liable in any such case under (i) and (ii) above
to the extent that any such loss, claim, damage, liability or
expense arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in
good faith reliance upon and in conformity with information
furnished by the Insurance Company or the Variable Account
specifically for use in the preparation thereof.
B. The Insurance Company will indemnify and hold harmless the Fund
and Adviser and each of its officers and directors against any
and all losses, claims, damages, liabilities, or expenses
(including without limitation, any expenses reasonably incurred
in investigating or defending against any litigation commenced or
threatened, or any claim) to which the Fund or Adviser become
subject arising out of or based upon (i) the Variable Account's
use of the Fund as its sole funding vehicle; provided, however,
the Insurance Company shall not be liable to the extent that any
such loss, claim, damage, liability or expense arises out of or
is based upon the Fund's failure to comply with the investment
policies and restrictions set forth in its Registration
Statement, or (ii) any untrue statement or alleged untrue
statement of a material fact contained in the Registration
Statement for the Contracts, or (iii) the omission or alleged
omission in such Registration Statement to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances under which
they were made. Notwithstanding the foregoing, the Insurance
Company will not be liable under Subsections 7(B)(ii) and
7(B)(iii) hereof to the extent that any such loss, claim, damage,
liability or expense arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged
omission made in good faith reliance upon and in conformity with
information furnished by the Fund or Adviser specifically for use
in the preparation thereof.
C. Promptly after receipt by an indemnified party under this Section
7 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against
the indemnifying party under this Section 7, notify the
indemnifying party of the commencement thereof; but the omission
so to notify the indemnifying party will not relieve it from
liability which it may have to any indemnified party otherwise
than under this Section 7. In case any such action is brought
against any indemnified party, and it notifies the indemnifying
party of the commencement thereof, the indemnifying party will be
entitled to participate therein and, to the extent that it may
wish, to assume the defense thereof, with counsel satisfactory to
such indemnified party, and after notice from the indemnifying
party to such indemnified party of this election to assume the
defense thereof, the indemnifying party will not be liable to
such indemnified party under this paragraph for any legal or
other expenses subsequently incurred by such indemnified party in
connection with the defense thereof other than reasonable costs
of investigation.
D. Except as specifically provided in this Agreement, in particular
this Section 7, the Insurance Company, the Fund and Adviser will
have no responsibility to pay or reimburse another person for any
fines, penalties or legal or other expenses incurred in
connection with or as a result of their performance of their
responsibilities under this Agreement.
8. Potential Conflicts.
A. The Insurance Company has reviewed a copy of an application for
exemptive relief, as amended, filed by the Fund on September 4,
1990 with the Securities and Exchange Commission and, in
particular, has reviewed the conditions to the requested relief
set forth therein. As set forth in such application, the
Insurance Company agrees to report any potential or existing
conflicts promptly to the Board, and in particular whenever
Contract Owner voting instructions are disregarded, and
recognizes that it will be responsible for assisting the Board in
carrying out is responsibilities under such application. The
Insurance Company agrees to carry out such responsibilities with
a view to the interests of existing Contract Owners.
B. If a majority of the Board, or a majority of Disinterested Board
Members, determine that a material irreconcilable conflict exists
with regard to Contract Owner investments in the Fund, the Board
shall give prompt notice to Insurance Company and all other
participating insurance companies. If the Board determines that
the Insurance Company is responsible for causing or creating said
conflict, the Insurance Company shall at its sole cost and
expense, and to the extent reasonably practicable (as determined
by a majority of the Disinterested Board Members), take such
action as is necessary to remedy or eliminate the irreconcilable
material conflict. Such necessary action may include, but shall
not be limited to: (i) withdrawing the assets allocable to the
Variable Account from the Fund and reinvesting such assets in a
different investment medium including another Portfolio of the
Fund, or submitting the question of whether such segregation
should be implemented to a vote of all affected Contract Owners;
and/or (ii) establishing a new registered management investment
company.
C. If a material irreconcilable conflict arises as a result of a
decision by the Insurance Company to disregard Contract Owner
voting instructions and said decision represents a minority
position or would preclude a majority vote by all Contract Owners
having an interest in the Fund, the Insurance Company may be
required, at the Board's election, to withdraw the Variable
Account's investment in the Fund. The responsibility to take
remedial action in the event of a Board determination of a
material irreconcilable conflict and to bear the cost of such
remedial action will be carried out with a view only to the
interests of the contract owners.
D. For the purpose of this Section, a majority of the Disinterested
Board Members shall determine whether or not any proposed action
adequately remedies any irreconcilable material conflict, but in
no event will the Fund be required to bear the expense of
establishing a new funding medium for any Contract. The Insurance
Company shall not be required by this section to establish a new
funding medium for any Contract if an offer to do so has been
declined by vote of majority of the Contract Owners materially
adversely affected by the irreconcilable material conflict.
E. The Insurance Company and the Adviser will report any potential
or existing conflicts to the Board of Directors. The Insurance
Company and Adviser will provide the Board with all information
reasonably necessary for the Board to consider any issue raised.
9. Term of Agreement. This Agreement shall continue in full force and
effect from the effective date of this Agreement, subject to
termination at will by any party hereto upon 6 months prior written
notice to the other party unless terminated upon less than 6 months
notice for such reasons as set forth in Section 10 below.
10. Termination. This Agreement shall terminate immediately:
A. At the option of the Insurance Company upon a final adverse
decision in formal proceedings against the Fund or Advisor by the
National Association of Securities Dealers, Inc. ("NASD"), the
SEC, any state securities or insurance department or any other
regulatory body, provided such decision has a material impact on
the ability of any of the parties to continue to perform their
respective duties under this Agreement;
B. At the option of the Fund upon a final adverse decision in formal
proceedings against the Insurance Company or an affiliate by the
NASD, the SEC, any state securities or insurance department or
any other regulatory body, provided such decision has a material
impact on the ability of any of the parties to continue to
perform their respective duties under this Agreement;
C. With respect to a particular sub-account of the Variable Account,
upon the issuance of an exemptive order under the 1940 Act
necessary to permit the substitution of the shares of another
investment company for the corresponding Portfolio shares of the
Fund, which serves as the funding vehicle for such sub-account,
provided that the Insurance Company shall notify the fund at the
time such exemptive order is requested. This Agreement may be
terminated immediately at the option of the Fund if such
substitution is made and the investment manager is a party other
than (i) Adviser or (ii) an affiliate of Insurance Company. The
Insurance Company will provide the Fund a copy of the exemptive
application seeking such an order no later than 5 days after the
application to permit substitution is filed with the SEC; or
D. If such action is requested by law or by regulatory authorities
having jurisdiction or is, in the discretion of the Board of
Directors acting in good faith and in light of their fiduciary
duties under applicable federal and state laws, necessary in the
best interests of the shareholders of the Fund.
11. Effect of Termination of Buy-Sell Agreement.
A. Notwithstanding any termination of this Agreement, the Fund
shall, at the option of the Insurance Company, continue to make
available additional shares of the Fund 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"), provided that the Insurance
Company shall obtain a complete substitution order within a
reasonable time. Specifically, without limitation, the owners of
the Existing Contracts shall be permitted to reallocate
investments in the Fund, redeem investments in the Fund and/or
invest in the Fund upon the making of any additional purchase
payments permitted under the Existing Contracts.
B. Notwithstanding termination of this Agreement, and regardless of
the cause or reason for such termination, the provisions of
Section 7 (Indemnification) shall survive and be binding upon
Adviser or the Insurance Company for a period of ten years
following such termination and upon the Fund for a period of ten
years following such termination or its deregistration as an
investment company under the 1940 Act, whichever comes first.
12. Effect of Termination of Management Agreement. In the event that
Adviser shall cease to serve as the Fund's investment manager, the
obligations of Adviser hereunder shall terminate, provided only that
any liability for action taken by Adviser in accordance with its
obligations hereunder during the period that Adviser served as
investment manager, shall survive such termination.
13. Assignment. This Agreement and the rights, duties and obligations of
the parties hereto shall not be assignable by either party except that
the Insurance Company may assign any of its rights or obligations
under this Agreement to its parent corporation or to an affiliated
company.
14. Name, Logo, Trademark, Service Xxxx or Symbol. Neither the Insurance
company, the Fund nor Adviser will use the other's name nor any other
name, logo, trademark, service xxxx nor symbol that is now or may
hereafter by owned by the other party, a parent or an affiliate or
subsidiary thereof, except in the manner and to the extent that the
other party may specifically authorize in writing. Upon termination of
this Agreement, each party will immediately discontinue the use of
such name, logo, trademark, service xxxx, or symbol belonging to the
other party, parent, affiliate or subsidiary thereof.
15. Miscellaneous. The terms and conditions of this Agreement shall be
interpreted and construed in accordance with the provisions of the
federal securities laws and rules and regulations thereunder and the
laws of the State of New York. The Fund shall immediately notify the
Insurance Company of the issuance by any regulatory body of any stop
order with respect to the Fund's Registration Statement or the
initiation of any proceeding relating to the offer or sale of shares
of the Fund in any state or jurisdiction. The Insurance Company shall
immediately notify the Fund and Adviser of the issuance by any
regulatory body of any stop order with respect to the Registration
Statement for the Contracts or the initiation of any proceeding
relating to the offer or sale of the Contracts in any state or
jurisdiction. The Insurance Company, the Fund and Adviser agree that
they shall submit to all regulatory and administrative bodies having
jurisdiction over the Fund, the Variable Account, Adviser and the
Insurance Company or their agents, present or future, any information,
reports or other material which any such body by reason of this
Agreement may legally require pursuant to applicable laws or
regulations.
16. Severability. If any provisions of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the
remainder of this Agreement shall not be affected thereby.
17. Notices. Any notice required under this Agreement shall be deemed to
have been given to the Insurance Company and the Variable Account if
mailed to Xxx Xxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxxx 00000, Attention:
General Counsel, and notice is deemed given to the Fund and Adviser if
mailed to Alliance Capital Management Corporation, 0000 Xxxxxx xx xxx
Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: General Counsel or at
such other address furnished to the other party pursuant hereto.
18. Headings. The descriptive headings of this Agreement are for
convenience only and shall not control or affect the meaning or
construction of any provision of this Agreement.
19. Waivers. The waiver by any party of a breach by any other party of any
of the provisions of this Agreement shall not operate or be deemed as
a waiver or any other provision of this Agreement or of any subsequent
breach thereof by any party.
20. Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto each of which shall
be deemed to be an original and all of which, when so executed and
delivered by the parties, taken together shall constitute one and the
same instrument.
21. Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto and may not be modified except in a written
instrument executed by all parties hereto.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
Date: June 11,1991
Attest: American International Life Assurance
Company of New York,
______________________________ on its own behalf and on behalf
of Variable Account A
/s/ Xxxxxxx X. Xxxx
By: ____________________________
Xxxxxxx X. Xxxx
Vice President
Its:____________________________
Attest: Alliance Variable Products
/s/ Xxxxxx X. Xxxxxxxx
_____________________________ Series Fund, Inc.
/s/ Xxxxx X. Xxxxxxx
By: ____________________________
Xxxxx X. Xxxxxxx
Chairman and President
Its: ____________________________
Attest: Alliance Capital Management, L.P.
/s/ Xxxxxx X. Xxxxxxxx /s/ Xxxx X. Xxxxxx
_____________________________ By:_____________________________
Xxxx X. Xxxxxx
Executive Vice President
Its:____________________________
