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EXHIBIT (8)(K)
PARTICIPATION AGREEMENT
AMONG
NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION,
VARIABLE INSURANCE FUNDS,
AMSOUTH BANK,
AND
BISYS FUND SERVICES LIMITED PARTNERSHIP
THIS AGREEMENT, dated as of the ______ day of ____________, 2000 by and
among New York Life Insurance and Annuity Corporation ("NYLIAC" or the
"Company") a Delaware life insurance company, on its own behalf and on behalf
of the segregated asset accounts of the Company set forth on Schedule A hereto
and incorporated by reference, as the Parties may agree in writing to amend
from time to time (each, the "Account" collectively, the "Accounts"), Variable
Insurance Funds (the "Fund"), a Massachusetts business trust, AmSouth Bank
(the "Adviser"), an Alabama State bank, and BISYS Fund Services Limited
Partnership (the "Underwriter"), an Ohio limited partnership.
WHEREAS, the Fund engages in business as an open-end management
investment company and is available to act as the investment vehicle for
separate accounts established for variable life insurance and variable annuity
contracts to be offered by insurance companies which have entered into
participation agreements with the Fund and the Adviser ("Participating
Insurance Companies"); and
WHEREAS, the shares of beneficial interest of the Fund are divided into
several series of shares, each designated as a "Portfolio" and representing
the interest in a particular management portfolio of securities and other
assets; and
WHEREAS, the Fund is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended, (the "1940 Act")
and the shares of the Portfolios set forth on Schedule A (the "Designated
Portfolios") will be registered under the Securities Act of 1933, as amended
(the "1933 Act"); and
WHEREAS, the Fund has obtained an order from the SEC, dated December 10,
1998 (File No. 812-10694), granting Participating Insurance Companies and
variable annuity and variable life insurance separate accounts exemptions form
the provisions of sections 9(a), 13(a), 15(a), and 15(b) of
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the 1940 Act, and Rules 6e-2(b)(15) and 6e-3(T)(b)(15) thereunder, to the
extent necessary to permit shares of the Fund to be sold to and held by
variable annuity and variable life insurance separate accounts of both
affiliated and unaffiliated life insurance companies and qualified pension and
retirement plans outside of the separate account context, and other permitted
investors (the "Mixed and Shared Funding Exemptive Order"); and
WHEREAS, the Adviser, which serves as the investment adviser to the
Portfolios of the Fund, is currently exempt from registration as an investment
adviser under the Investment Advisers Act of 1940, as amended; and
WHEREAS, the Company has registered or will register interests under
certain variable life insurance and/or variable annuity contracts (the
"Contracts"), under the 1933 Act, to the extent required thereby and said
contracts are listed in Schedule A; and
WHEREAS, each Account is duly established and maintained as a segregated
asset account, duly established by the Company, to set aside and invest assets
attributable to the aforesaid Contracts; and
WHEREAS, the Underwriter, which serves as distributor to the Fund, is
registered as a broker-dealer with the Securities Exchange Commission (the
"SEC") under the Securities Exchange Act of 1934, as amended (the "1934 Act"),
and is a member in good standing of the National Association of Securities
Dealers, Inc. (the "NASD"); and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares in the Designated
Portfolios on behalf of each Account to fund certain of the aforesaid
Contracts, and the Underwriter is authorized to sell such shares to the
Account at net asset value.
NOW, THEREFORE, in consideration of their mutual promises, the Company,
the Fund, the Adviser and the Underwriter agree as follows:
ARTICLE 1. Sale of Fund Shares
1.1. The Fund has granted to the Underwriter exclusive
authority to distribute the Fund's shares, and has agreed to instruct, and has
so instructed, the Underwriter to make available, indefinitely during the term
of this Agreement, for purchase by the Company on behalf of the Account, Fund
shares of those Designated Portfolios selected by the Company. Pursuant to
such authority and instructions, and subject to Article X hereof, the
Underwriter agrees to sell to the Company those full and fractional shares of
the Designated Portfolios which the Account orders, executing such orders on a
daily basis at the net asset value next computed after receipt by the Fund or
its designee of the order for the shares of the Designated Portfolio.
Notwithstanding the foregoing, the Board of Trustees of the Fund (the "Board")
may suspend or terminate the offering of shares of any Designated Portfolio or
class thereof, if such action is required by law or by regulatory authorities
having jurisdiction or if, in the sole discretion of the Board acting in good
faith and in the exercise of its fiduciary responsibilities to Fund
shareholders, including the Company and its Accounts, is necessary and in the
best interests of the shareholders of such Portfolios.
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1.2. The Fund shall redeem for cash, at the Company's request,
any full or fractional Designated Portfolio shares held by the Company on
behalf of the Account, such redemptions to be effected on a daily basis at net
asset value in accordance with Section 1.3 of this Agreement. Notwithstanding
the foregoing, the Fund may delay redemption of Fund shares of any Designated
Portfolio to the extent permitted by the 1940 Act, and any rules, regulations
or orders thereunder.
1.3. The Fund hereby appoints the Company as an agent of the
Fund for the limited purpose of receiving purchase and redemption requests on
behalf of the Account (but not with respect to any Fund shares that may be
held in the general account of the Company) for shares of those Designated
Portfolios made available hereunder, provided that the Fund receives notice of
such orders by 9:30 a.m. New York time on the next following Business Day. In
this Agreement, "Business Day" shall mean any day the New York Stock Exchange
is open for trading and on which a Designated Portfolio calculates its net
asset value pursuant to the rules of the SEC. Receipt by the Company as such
limited agent of the Fund shall constitute receipt by the Fund on that same
Business Day, provided that the Fund receives notice of such purchase and
redemption request by 9:30 a.m. New York time on the next following Business
Day. The Company shall provide the Fund with net purchase and redemption
requests computed in accordance with Section 1.9 hereof.
1.4. In the event of net purchases, the Company shall pay for
shares of each Designated Portfolio by 2:00 p.m. New York time on the same
Business Day that it notifies the Fund of a purchase request for such shares.
Payment for Designated Portfolio shares shall be made in federal funds by wire
transmitted to an account designated by the Fund. Upon receipt by the Fund of
federal funds so wired, such funds shall cease to be the responsibility of the
Company and shall become the responsibility of the Fund.
1.5. In the event of net redemptions, the Fund shall pay the
Company for shares of each Designated Portfolio redeemed by 2:00 p.m. New York
time on the next Business Day after it receives the redemption request from
the Company. Payment of redemption proceeds shall be made in federal funds
transmitted by wire to an account designated by the Company. The Fund reserves
the right to delay payment of redemption proceeds to the extent permitted
under Section 22(e) of the 1940 Act and any rules thereunder, and in
accordance with the procedures and policies of the Fund as described in the
then current prospectus, provided however, that in no event may any delay by
the Fund in paying redemption proceeds cause the Account to fail to meet its
obligations under Section 22(e) of the 40 Act, or cause the Company to pay
redemption proceeds out of its general account.
1.6. Any purchase or redemption request for Designated
Portfolio shares held or to be held in the Company's general account shall be
effected at the net asset value per share next determined after the Fund's
receipt of such request.
1.7. The Fund shall make the net asset value per share for each
Designated Portfolio available to the Company on a daily basis as soon as
reasonably practicable after the net asset value per share is calculated as
described from time to time in the Fund's prospectus, but shall use its best
efforts to make such net asset value available by 6:30 p.m., New York time. In
the event that the Fund is unable to meet the 6:30 p.m. time stated herein,
the Fund shall provide additional time for the Company to place orders for the
purchase and redemption of shares equal to the time it takes the Fund
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to make the net asset values available to the Company. However, if net asset
values are not available for inclusion in the next business cycle and purchase
orders/redemptions are not able to be calculated and available for the Company
to execute within the time frame identified in Section 1.3 (a), the Company on
behalf of the Account, shall be entitled to an adjustment to the number of
shares purchased or redeemed to reflect the correct share net asset value.
1.8 (a) The Adviser shall reimburse the Company for any
amount the Company is legally required to pay Contract owners due to the
Fund's or its agents' material miscalculation and/or materially incorrect
reporting of a Designated Portfolio's net asset value. Should a material
miscalculation or materially incorrect report by the Fund or its agents result
in a gain to Contract owners, the Company will consult with the Fund or its
designee as to what reasonable efforts shall be made to recover the money and
repay the appropriate Designated Portfolio or its agents. Should a material
miscalculation or materially incorrect report by the Fund or its agents result
in a gain to the Company or an Account, the Company or the Account (as
appropriate) shall reimburse the appropriate Designated Portfolio or its
agents for any losses incurred by a Designated Portfolio or its agents as a
result of the incorrect calculation or report.
(b) The Company shall reimburse the Fund or its agent
for any material loss incurred by the Fund as a result of a miscalculation or
incorrect reporting of net purchase or redemption orders submitted by or on
behalf of the Company or an Account. Should a miscalculation or incorrect
report by the Company by or on behalf of the Company or an Account result in a
gain to Contract owners, the Company shall use reasonable efforts to recover
the money and repay the appropriate Designated Portfolio or its agent. Should
a material miscalculation or materially incorrect report by or on behalf of
the Company or an Account result in a gain to the Fund, the Fund shall
reimburse the Company or Account (as appropriate) for any losses incurred by
the Company or Account as a result of the incorrect calculation or report.
(c) The Fund, the Adviser, and the Company each agrees
to use its best efforts to negotiate an appropriate standard of materiality to
be applied to any miscalculation or incorrect reporting of a Designated
Portfolio's net asset value or order submitted by or on behalf of the Company
or an Account. Such negotiated standard of materiality shall be consistent
with the then current industry standard, if any, for correcting pricing or
reporting errors and with any applicable judicial or regulatory guidance
including SEC and SEC staff pronouncements. The Fund, the Adviser, and the
Company each agree to promptly notify the other upon discovery of a
potentially material miscalculation or incorrect report. In the event the
Fund, the Adviser, and the Company cannot agree on a negotiated standard of
materiality, then the following standard of materiality shall apply:
(i) If the amount of the error is less than $.01 per
share, it is considered immaterial and no adjustments are
made.
(ii) If the amount of the error is $.01 per share or more,
then the following shall apply:
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(1) If the amount of the difference in the
erroneous net asset value and the correct net asset
value is less than .5% of the correct net asset
value, the Adviser shall reimburse the affected
Designated Portfolio to the extent of any loss
resulting from the error. No other adjustments
shall be made.
(2) If the amount of the difference in the
erroneous net asset value and the correct net asset
value is .5% of the correct net asset value or
greater, then Adviser will determine the impact of
the error to the affected Designated Portfolio and
shall reimburse such Portfolio (and/or Company, as
appropriate, such as in the event that the error
was not discovered until after the Company
processed transactions using the erroneous net
asset value) to the extent of any loss resulting
from the error. To the extent that an overstatement
of net asset value per share is detected quickly
and the Company has not mailed redemption checks to
Contract owners, the Company, the Fund and the
Adviser shall examine the extent of the error to
determine the feasibility of reprocessing such
redemption transaction (for purposes of reimbursing
the Fund to the extent of any such overpayment).
(d) To the extent a reprocessing of Participant
transactions is required pursuant to paragraph 1.8, the Fund shall reimburse
the Company for the Company's reprocessing in an amount of $1.00 per contract
affected by an amount of $10 or more.
1.9. At the end of each Business Day, the Company shall use the
information described herein to calculate Account unit values for the day.
Using these unit values, the Company shall process each such Business Day's
separate account transactions based on requests and premiums received by it by
the close of trading on the floor of the New York Stock Exchange (currently
4:00 p.m., New York time) to determine the net dollar amount of Fund shares
which shall be purchased or redeemed at that day's closing net asset value per
share.
1.10. The Fund shall furnish same day notice (by wire or
telephone followed by written confirmation) to the Company, of any income
dividends or capital gain distributions payable on any Designated Portfolio
shares. The Company hereby elects to receive all such dividends and
distributions as are payable on any Designated Portfolio shares in the form of
additional shares of that Designated Portfolio. The Company reserves the
right, on its behalf and on behalf of the Account, to revoke this election and
to receive all such dividends and capital gain distributions in cash. The Fund
shall notify the Company promptly of the number of Designated Portfolio shares
so issued as payment of such dividends and distributions.
1.11. Issuance and transfer of Fund shares shall be by book
entry only. Share certificates will not be issued to the Company or the
Account. Purchase and redemption orders for Fund shares shall be recorded in
an appropriate ledger for the Account or the appropriate subaccount of the
Account.
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1.12. The Parties acknowledge that the arrangement contemplated
by this Agreement is exclusive with respect to the following Designated
Portfolios: AmSouth Large Cap Fund, AmSouth Mid Cap Fund, AmSouth Enhanced
Market Fund and AmSouth International Equity Fund for two years from the date
that the Company purchases shares of the aforementioned Portfolios
(collectively, the "New Designated Portfolios") pursuant to the Subscription
Agreement dated December __, 2000 between the Company and the Fund. In no
event may shares of the New Designated Portfolios be offered or sold to any
Participating Insurance Company except with the express written consent of the
Company, which the Company may grant or deny in its sole discretion. The
Parties agree that shares of the Designated Portfolios other than the New
Designated Portfolios may be sold to other Participating Insurance Companies
(subject to Section 1.13 hereof) and the cash value of the Contracts may be
invested in other investment companies. The Company shall promote the
Designated Portfolios on the same basis as other funding vehicles available
under the Contracts.
1.13. The Fund shall sell Fund shares only to Participating
Insurance Companies and their separate accounts and to persons or plans
(collectively, "Qualified Persons") that represent and warrant to the Fund
that they qualify to purchase shares of the Fund under Section 817 (h) of the
Internal Revenue Code of 1986, as amended (the "Code"), and the regulations
thereunder without impairing the ability of the Account to consider the
portfolio investments of the Fund as constituting investments of the Account
for the purpose of satisfying the diversification requirements of Section
817(h). The Fund shall not sell shares of any Designated Portfolio to the
general public. The Fund shall not sell Fund shares to any insurance company
or separate account unless an agreement substantially complying with Articles
III, V, VI, VII and Sections 2.1 of this Agreement is in effect to govern such
sales, to the extent required. The Company hereby represents and warrants that
it and the Account are Qualified Persons.
1.14 (a) The Company shall not, without prior notice to the
Adviser (unless otherwise required by applicable law), take any action to
operate an Account as a management investment company under the 0000 Xxx.
(b) The Company shall not, without prior notice to the
Adviser (unless otherwise required by applicable law), induce Contract owners
to change or modify the composition of the Fund Board or change a Designated
Portfolio's investment adviser.
(c) The Company shall not, without prior notice to the
Fund, induce Contract owners to vote on any matter submitted for
consideration by the shareholders of a Designated Portfolio in a
manner other than as recommended by the Board.
1.15. The Company agrees that all net amounts available under
the Contracts covered under this Agreement shall be invested in the Fund, or
in the Company's general account, provided that such amounts may also be
invested in an investment company other than the Fund if: (a) such other
investment company, or series thereof, has investment objectives or policies
that are substantially different from the investment objectives and policies
of the Designated Portfolios; or (b) the Company gives the Fund and the
Underwriter 45 days notice of its intention to make such other investment
company available as a funding vehicle for the Contracts; or (c) such other
investment company was available as a funding vehicle for any Contracts
offered by the Company prior to the date of this Agreement; or (d) the Fund
consents to the use of such other investment company.
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ARTICLE II. Representations and Warranties
2.1. The Company represents and warrants that interests under
the Contracts are, or prior to issuance will be, registered under the 1933
Act, to the extent required thereby. The Company further represents and
warrants that the Contracts will be issued and sold in compliance with this
Agreement and, in all material respects with all applicable federal and state
laws. The Company further represents and warrants that it is an insurance
company duly organized and in good standing under applicable law, that it has
legally and validly established each Account prior to any issuance or sale
thereof as a segregated asset account under the Insurance Code and Regulations
of the state of Delaware, and that it has registered or, prior to any issuance
or sale of the Contracts, will register each Account as a unit investment
trust in accordance with the provisions of the 1940 Act (unless exempt
therefrom) and will cause each Account to remain so registered and to serve as
a segregated investment account for the Contracts to the extent required
thereby.
2.2. The Fund represents and warrants that Designated
Portfolio shares sold pursuant to this Agreement shall be registered under the
1933 Act, duly authorized for issuance and sold in compliance with this
Agreement and, in all material respects, all applicable federal and state laws
and that the Fund is and shall remain registered under the 0000 Xxx. The Fund
shall amend the registration statement for its shares under the 1933 Act and
the 1940 Act from time to time as required in order to effect the continuous
offering of its shares.
2.3. If the Fund intends to make any payments to finance
distribution expenses relating to any of the Designated Portfolios pursuant to
Rule 12b-1 under the 1940 Act, or otherwise, prior to financing such
distribution expenses, the Fund will have the Board, formulate and approve a
plan pursuant to Rule 12b-1 under the 1940 Act to finance such distribution
expenses.
2.4. The Fund makes no representations or warranties that its
operations, including, but not limited to, investment policies, fees and
expenses, comply with the insurance laws and regulations and other applicable
laws of the various states, except that the Fund represents and warrants that
the Fund's investment policies, fees, expenses and operations are and shall at
all times remain in compliance with the laws of Massachusetts to the extent
required to perform this Agreement. The Fund has disclosed or made available,
in writing, all information requested by the Company and that such information
is true and accurate in all material respects as of the effective date of this
Agreement. Without prior written notice to the Company, the Fund will not make
any material changes in fundamental investment policies or advisory fees, and
shall at all times remain in compliance in all material respects with federal
securities laws as they apply to insurance products.
2.5. The Fund represents that it is lawfully organized and
validly existing under the laws of Massachusetts and that it does and will
comply in all material respects with the 1940 Act.
2.6. The Adviser represents and warrants that it is and will
remain duly registered and licensed in all material respects under all
applicable federal and state laws and shall perform its obligations hereunder
in compliance in all material respects with all applicable federal and state
laws.
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2.7. The Fund and the Adviser represent and warrant that all of
their trustees/directors, officers, employees, investment advisers, and other
individuals or entities dealing with the money and/or securities of the Fund
are and shall continue to be at all times covered by a blanket fidelity bond
or similar coverage for the benefit of the Fund in an amount not less than the
minimum coverage as required currently by Rule 17g-1 under the 1940 Act or
related provisions as may be promulgated from time to time. The aforesaid bond
shall include coverage for larceny and embezzlement and shall be issued by a
reputable bonding company. The Fund and the Adviser each shall make all
reasonable efforts to see that this bond or another bond containing these same
provisions is always in effect, and each agrees to notify the Company in the
event such coverage no longer applies.
2.8. The Underwriter represents and warrants that all of its
directors, officers, employees, and other individuals or entities dealing with
the money and/or securities of the Fund are and shall continue to be at all
times covered by a blanket fidelity bond or similar coverage in an amount
sufficient to enable it to satisfy its contractual obligations hereunder. The
aforesaid bond shall include coverage for larceny and embezzlement and shall
be issued by a reputable bonding company. The Underwriter shall make all
reasonable efforts to see that this bond or another bond containing these same
provisions is always in effect, and agrees to notify the Company in the event
such coverage no longer applies.
2.9. The Company represents and warrants that all of its
directors, officers, employees, and other individuals/entities employed or
controlled by the Company dealing with the money and/or securities of the
Account are covered by a blanket fidelity bond or similar coverage for the
benefit of the Account, in an amount not less than $5 million. The aforesaid
bond includes coverage for larceny and embezzlement and is issued by a
reputable bonding company. The Company agrees to make all reasonable efforts
to see that this bond or another bond containing these provisions is always in
effect, and agrees to notify the Fund and the Adviser in the event that such
coverage no longer applies.
2.10. The Underwriter represents and warrants that it is and
will be a member in good standing of the NASD and is and will be registered as
a broker-dealer with the SEC. The Underwriter further represents that it will
sell and distribute the Fund shares in accordance in all material respects
with all applicable federal and state laws and regulations, including without
limitation the 1933 Act, the 1934 Act and the 1940 Act. The Underwriter
represents that its operations are and shall at all times remain in material
compliance with all applicable federal and state laws to the extent required
to perform this Agreement.
2.11. The Underwriter represents and warrants that it is and
will remain duly registered and licensed in all material respects and under
all applicable federal and state securities laws and shall perform its
obligations hereunder in compliance in all material respects with any
applicable federal and state laws.
ARTICLE III. Prospectuses and Proxy Statements; Voting
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3.1. The Underwriter shall provide the Company with as many
printed copies of the current prospectus, statement of additional information
("SAI"), supplements, proxy statements, and annual / semi-annual reports of
each Designated Portfolio (and no other Portfolio) as the Company may
reasonably request. If requested by the Company in lieu thereof, the
Underwriter shall provide such documents (including a "camera-ready" copy of
such documents as set in type, a diskette in the form sent to the financial
printer, or an electronic copy of the documents in a format suitable for
posting on the Company's website, all as the Company may reasonably request)
and such other assistance as is reasonably necessary in order for the Company
to have prospectuses, SAIs, supplements, proxy statements, and annual /
semi-annual reports for the Contracts and the Funds printed together in a
single document or posted on the Company's website. Expenses associated with
providing such documentation shall be allocated in accordance with Schedule B.
To the extent that the Underwriter performs any services outlined in Schedule
B, the Underwriter will xxxx the Fund or the Company (in accordance with
Schedule B) for reimbursement of such expenses.
3.2 If and to the extent required by law, the Company shall:
(i) solicit voting instructions from Contract owners;
(ii) vote the Portfolio shares in accordance with
instructions received from Contract owners; and
(iii) vote Portfolio shares for which no instructions
have been received in the same proportion as shares
of such Portfolio for which instructions have been
received for that Account,
so long as and to the extent that the SEC continues to interpret the 1940 Act
to require pass-through voting privileges for variable contract owners. The
Company reserves the right to vote Fund shares held in its general account and
in any segregated asset account in its own right, to the extent permitted by
law.
3.3. If and when the Company offers the New Designated
Portfolios in variable life insurance contracts, the Company shall be
responsible for assuring that each of their separate accounts participating in
the New Designated Portfolio calculates voting privileges on matters relating
to the Fund in a manner consistent with the standards set forth in the Mixed
and Shared Funding Exemptive Order, provided however, that the Fund shall
provide the Company and each Participating Insurance Company with a written
copy of such standards and such other assistance as may be necessary to
facilitate coordination between the Company and other Participating Insurance
Companies in complying with such standards (if any) and provided further that
the Company shall be free to vote Fund shares attributable to any Account in
any manner permitted by applicable law, to the extent the Mixed and Shared
Funding Exemptive Order is superceded by SEC or administrative practice
(including no-action relief).
3.4 The Fund will comply, in all material respects, with all
provisions of the 1940 Act, the regulations thereunder, and applicable SEC
interpretations regarding voting by shareholders.
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ARTICLE IV. Sales Material and Information
4.1. The Company shall furnish, or shall cause to be furnished,
to the Fund or its designee, each piece of sales literature or other
promotional material that the Company develops and in which the Fund (or a
Designated Portfolio thereof) or the Adviser or the Underwriter is named. No
such material shall be used until approved by the Fund or its designee, and
the Fund will use its best efforts for it or its designee to review such sales
literature or promotional material within five (5) Business Days after receipt
of such material. The Fund or its designee reserves the right to reasonably
object to the continued use of any such sales literature or other promotional
material in which the Fund (or a Designated Portfolio thereof) or the Adviser
or the Underwriter is named, and no such material shall be used if the Fund or
its designee so objects. Any piece may be used after five (5) Business Days if
the Company has not received a response from the Fund or Underwriter.
4.2. The Company shall not give any information or make any
representations or statements on behalf of the Fund or concerning the Fund or
the Adviser or the Underwriter in connection with the sale of the Contracts
other than the information or representations contained in the registration
statement or prospectus or SAI for the Fund shares, as such registration
statement and prospectus and SAI may be amended or supplemented from time to
time, in reports or proxy statements from the Fund, or in sales literature or
other promotional material approved by the Fund or its designee, except with
the written permission of the Fund or its designee.
4.3. The Fund, Adviser, Underwriter, or their respective
designees shall furnish, or cause to be furnished, to the Company each piece
of sales literature or other promotional material that it develops and in
which the Company, the Account, or any Contract is named. No such material
shall be used until approved by the Company, and the Company will use its best
efforts to review such sales literature or promotional material within five
(5) Business Days after receipt of such material. The Company reserves the
right to reasonably object to the continued use of any such sales literature
or other promotional material in which the Company, the Account, or any
Account is named, and no such material shall be used if the Company so
objects. Any piece may be used after five (5) Business Days if the Fund,
Adviser or Underwriter has not received a response from the Company.
4.4. The Fund, the Adviser and the Underwriter shall not give
any information or make any representations on behalf of the Company or
concerning the Company, any Account, or the Contracts other than the
information or representations contained in a registration statement,
prospectus (which shall include an offering memorandum, if any, if the
Contracts issued by the Company or interests therein are not registered under
the 1933 Act), or SAI for the Contracts, as such registration statement,
prospectus, or SAI may be amended or supplemented from time to time, or in
published reports which are in the public domain or approved by the Company
for distribution to Contract owners, or in sales literature or other
promotional material approved by the Company or its designee, except with the
written permission of the Company pursuant to Section 4.3 hereof.
4.5. The Fund or its designee 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
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amendments to any of the above, that relate to the Fund or its shares
(collectively, "Fund Materials") promptly after the filing of such document(s)
with the SEC or other regulatory authorities.
4.6. The Company or its designee will provide to the Fund at
least one complete copy of all registration statements, prospectuses (which
shall include an offering memorandum, if any, if the Contracts issued by the
Company or interests therein are not registered under the 1933 Act), SAIs,
reports, solicitations for voting instructions, sales literature and other
promotional materials, applications for exemptions, requests for no-action
letters, and all amendments or supplements to any of the above, that relate to
the Contracts or any Account (collectively, "Contract Materials"), promptly
after the filing of such document(s) with the SEC or other regulatory
authorities.
4.7. The Fund will provide the Company with as much notice as
is reasonably practicable of any proxy solicitation for any Designated
Portfolio, and of any material change in the Fund's registration statement,
particularly any change that could result in a change to the registration
statement or prospectus for any Account or Contract. The Fund will work with
the Company so as to enable the Company to solicit proxies from Contract
owners, or to make changes to its prospectus or registration statement, in an
orderly manner. The Fund will make reasonable efforts to attempt to have
changes affecting Contract prospectuses become effective simultaneously with
the annual updates for such prospectuses.
4.8. For purposes of this Agreement, the phrase "sales
literature and other promotional materials" 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), sales literature (such as any electronic or written
communication distributed or made generally available to customers or the
public, including brochures, circulars, reports, market letters, form letters,
seminar texts, reprints or excerpts of any other advertisement, sales
literature, or published articles), educational or training materials or other
communications distributed or made generally available to some or all agents
or employees, and any other communications distributed or made generally
available with regard to the Fund or Contracts.
ARTICLE V. Fees and Expenses
5.1. If the Fund adopts and implements a plan pursuant to Rule
12b-1 to finance distribution expenses, or a plan to finance Contract owner
services relating to the Designated Portfolios, then the Fund or the
Underwriter may make payments to the Company or to the principal underwriter
for the Contracts in the amounts agreed to by the Fund and the Underwriter in
writing.
5.2. Except as otherwise expressly provided in this Agreement,
each party agrees to bear all expenses incident to performance by the party
under this Agreement.
5.3 Expenses associated with the preparation, filing and
distribution of registration statements, prospectuses, supplements, SAIs,
annual and semi-annaul reports, proxy statements and voting instructions and
specified sales material and other material listed in Schedule B shall be paid
for in accordance with the cost allocations set forth in Schedule B.
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ARTICLE VI. Diversification and Qualification
6.1. The Fund and its Adviser each represent and warrant that
each Designated Portfolio 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 (or any
successor provisions). Without limiting the scope of the foregoing, each
Designated Portfolio has complied and will continue to comply with Section
817(h) of the Code and Treasury Regulation 1.817-5, and any Treasury
interpretations thereof, relating to the diversification requirements for
variable annuity, endowment, or life insurance contracts, and any amendments
or other modifications or successor provisions to such Section or Regulation.
In the event of a breach of this Section 6.1 by the Fund, it will take all
steps reasonably necessary to: (a) notify the Company of such breach, and (b)
adequately diversify the Designated Portfolios so as to achieve compliance
within the 30-day grace period afforded by Regulation 1.817-5.
6.2. Subject to Section 6.3 hereof, the Fund and the
Underwriter each represent and warrant that shares of a Designated Portfolio
will not be sold to any Participating Insurance Company or other person under
any circumstances that would preclude the Company from "looking through" to
the investments of each Designated Portfolio in which it invests, pursuant to
the "look-through" rules found in Treasury Regulation 1.817-5.
6.3. Subject to Section 6.2 hereof, the Company represents and
warrants that neither it nor any Account will purchase shares of a Designated
Portfolio for any purpose or under any circumstances if such purchase would
preclude any Participating Insurance Company that also invests in such
Portfolio from "looking through" to the investments of that Portfolio,
pursuant to the "look-through" rules found in Treasury Regulation 1.817-5.
6.4. The Company represents that the Contracts are currently,
and at the time of issuance shall be, treated as life insurance, endowment, or
annuity insurance contracts, under applicable provisions of the Code, and that
it will make every effort to maintain such treatment, and that it will notify
the Fund, the Adviser, and the Underwriter immediately upon having a
reasonable basis for believing the Contracts have ceased to be so treated or
that they might not be so treated in the future. The Company agrees that any
prospectus offering a contract that is a "modified endowment contract" as that
term is defined in Section 7702A of the Code (or any successor or similar
provision), shall identify such contract as a modified endowment contract.
ARTICLE VII.Potential Conflicts
The following provisions shall apply only upon the sale of shares
of the Designated Portfolios to variable life insurance separate accounts, and
then only to the extent required under the 0000 Xxx.
7.1 The Board will monitor the Fund for the existence of any
material irreconcilable conflict between the interests of the Contract owners
of all separate accounts investing in the Fund and all other persons investing
in the Fund. A material irreconcilable conflict may arise for a variety of
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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 Designated
Portfolio are being managed; (e) a difference in voting instructions given by
variable annuity contract and variable life insurance contract owners; (f) a
decision by an insurer to disregard the voting instructions of contract
owners; or (g) if applicable, a decision by a qualified pension or retirement
plan to disregard the voting instructions of its participants. The Board shall
promptly inform the Company if it determines that a material irreconcilable
conflict exists and the implications thereof.
7.2. The Company, with a view only to the interests of Contract
owners, will report any potential or existing conflicts of which it is aware
to the Board. The Company, with a view only to the interests of Contract
owners, will assist the Board in carrying out its responsibilities under the
Mixed and Shared Funding Exemptive Order, by providing the Board with all
information reasonably necessary for the Board to consider any issues raised.
This includes, but is not limited to, an obligation by the Company to inform
the Board whenever Contract owner voting instructions are disregarded. No less
than annually, the Company shall submit to the Board such reports, materials,
or data as the Board reasonably requests so that the Board may carry out its
obligations under the Mixed and Shared Funding Exemptive Order. Such reports,
materials and data shall be submitted more frequently if deemed appropriate by
the Board.
7.3. If it is determined by a majority of the Board, or a
majority of its disinterested members, that a material irreconcilable conflict
exists, and if it is a Participating Insurance Company for which a material
irreconcilable conflict is relevant, the Company and other Participating
Insurance Companies shall, at their expense and to the extent reasonably
practicable (as determined by a majority of the disinterested Board members),
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 Fund or any
Designated Portfolio and reinvesting such assets in a different investment
medium, including (but not limited to) another Designated Portfolio of the
Fund, or submitting the question as to whether such segregation should be
implemented to a vote of all affected Contract owners and, as appropriate,
segregating the assets of any appropriate group (i.e., annuity contract
owners, life insurance contract owners, or variable contract owners of one or
more Participating Insurance Companies) that votes in favor of such
segregation, or offering to the effected contract owners the option of making
such a change; and (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
Account's investment in the Fund and terminate this Agreement with respect to
the Account (at the Company's expense); provided, however, that such
withdrawal and termination shall be limited to the extent required by the
foregoing material irreconcilable conflict as determined by a majority of the
disinterested members of the Board. Any such withdrawal and termination must
take place within six (6) months after the Fund gives written notice that this
provision is being implemented, and until the end of that six (6) month period
the Fund and the Underwriter shall continue to accept and implement
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orders by the Company for the purchase (and redemption) of shares of the Fund.
No charge or penalty will be imposed as a result of such withdrawal. The
responsibility to take such remedial action shall be carried out with a view
only to the interest of the Contract owners.
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 Fund (at the Company's expense) within six (6)
months after the Board informs the Company in writing that it has determined
that such decision has created a material irreconcilable conflict; provided,
however, that such withdrawal and termination shall be limited to the extent
required by the foregoing material irreconcilable conflict as determined by a
majority of the disinterested members of the Board. Until the end of the
foregoing six (6) month period, the Fund and the Underwriter shall continue to
accept and implement orders by the Company for the purchase (and redemption)
of shares of the Fund. The responsibility to take such action shall be carried
out with a view only to the interest of the Contract owners.
7.6. For purposes of Section 7.3 through 7.6 of this Agreement,
a majority of the disinterested members of the Board shall determine whether
any proposed action adequately remedies any material irreconcilable conflict,
but in no event will the Fund be required to establish a new funding medium
for the Contracts. The Company shall not be required by Section 7.3 to
establish a new funding medium for the Contract if an offer to do so has been
declined by vote of a majority of Contract owners materially and adversely
affected by the material irreconcilable conflict. In the event that the Board
determines that any proposed action does not adequately remedy any material
irreconcilable 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 members of the Board.
7.7 If and to the extent any Mixed and Shared Funding
Exemptive Order or any amendment thereto contains terms and conditions
different from Sections 3.2, 3.3, 3.4, 7.1, 7.2, 7.3, 7.4, 7.5 and 7.6 of this
Agreement, then the Fund and/or the Participating Insurance Companies, as
appropriate, shall take such steps as may be necessary to comply with the
Mixed and Shared Funding Exemptive Order, and Sections 3.2, 3.3, 3.4, 7.1,
7.2, 7.3, 7.4, 7.5 and 7.6 of this Agreement shall continue in effect only to
the extent that terms and conditions substantially identical to such Sections
are contained in the Mixed and Shared Funding Exemptive Order or any amendment
thereto. If and to the extent that Rule 6e-2 and Rule 6e-3(T) are amended, or
Rule 6e-3 under the 1940 Act is adopted, to provide exemptive relief from any
provision of the 1940 Act or the rules promulgated thereunder with respect to
mixed or shared funding (as defined in the Mixed and Shared Funding Exemptive
Order) on terms and conditions materially different from those contained in
the Mixed and Shared Funding Exemptive Order, then (a) the Fund and/or the
Participating Insurance Companies as appropriate, shall take such steps as may
be necessary to comply with Rules 6e-2 and 6e-3(T), as amended, and Rule 6e-3,
as adopted, to the extent such rules are applicable; and (b) Sections 3.2,
3.3, 3.4, 7.1, 7.2, 7.3, 7.4 and 7.5 of this Agreement shall continue in
effect only to the extent that terms and conditions substantially identical to
such Sections are contained in such Rule(s) as so amended or adopted.
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ARTICLE VIII. Indemnification
8.1. Indemnification by the Company
8.1(a).The Company agrees to indemnify and hold harmless
the Fund, the Adviser, the Underwriter and the trustees/directors and officers
thereof, and each person, if any, who controls the Fund, the Adviser or the
Underwriter within the meaning of Section 15 of the 1933 Act (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 investigations or litigation
(including reasonable legal and other expenses) (collectively, a "Loss") to
which the Indemnified Parties may become subject under any statute or
regulation, at common law or otherwise, insofar as a Loss is related to the
sale or acquisition of the Contracts and:
(i) arises out of or is based upon any untrue statement
or alleged untrue statements of any material fact
contained in any Contract Materials, or arises out
of or is based upon the omission or the alleged
omission to state therein a material fact required
to be stated therein or necessary to make the
statements therein not misleading, provided that
this agreement to indemnify shall not apply to any
Indemnified Party if such statement or omission or
such alleged statement or omission was made in
reliance upon and in conformity with information
furnished to the Company or its designee by or on
behalf of the Indemnified Party for use in the
Contract Materials or otherwise for use in
connection with the sale of the Contracts or Fund
shares; or
(ii) arises out of or is a result of statements or
representations (other than statements or
representations contained in the materials not
supplied by the Company or its designee) or
wrongful conduct of the Company or persons under
its control, with respect to the sale or
distribution of the Contracts; or
(iii) arises out of any untrue statement or alleged
untrue statement of a material fact contained in
any Fund Materials or arises out of or is based
upon the omission or alleged omission to state
therein a material fact required to be stated
therein or necessary to make the statements therein
not misleading if such a statement or omission was
made in reliance upon and in conformity with
information furnished to the Fund or it designee by
or on behalf of the Company; or
(iv) arises as a result of any material failure by the
Company to perform the obligations, provide the
services or furnish the materials required of it
under the terms of this Agreement (including a
failure, whether unintentional or in good faith or
otherwise, to comply with the qualification
requirements specified in Article VI of this
Agreement); or
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(v) arises out of or results from any material breach
of any representation and/or warranty made by the
Company in this Agreement or arises out of or
result from any other material breach of this
Agreement by the Company;
as limited by and in accordance with the provisions of Sections 8.1(b) and
8.1(c) hereof.
8.1(b).The Company shall not be liable under this
indemnification provision with respect to any Loss incurred or assessed
against an Indemnified Party as such may arise from the Indemnified Party's
willful misfeasance, bad faith, or gross negligence in the performance of such
Indemnified Party's duties or by reason of such Indemnified Party's reckless
disregard of its obligations or duties under this Agreement or to the Fund,
the Underwriter or the Adviser, whichever is applicable.
8.1(c).The Company shall not be liable under this
indemnification provision with respect to any claim made against an
Indemnified Party unless such Indemnified Party shall have notified the
Company in writing within a reasonable time after the summons or other first
legal process giving information of the nature of the claim shall have been
served upon such Indemnified Party (or after such Indemnified Party shall have
received notice of such service on any designated agent), but failure to
notify the Company of any such claim shall not relieve the Company from any
liability which it may have to the Indemnified Party against whom such action
is brought otherwise than on account of this indemnification provision. In
case any such action is brought against an Indemnified Party, the Company
shall be entitled to participate, at its own expense, in the defense of such
action. The Company also shall be entitled to assume the defense thereof, with
counsel satisfactory to the Indemnified Party named in the action. After
notice from the Company to such party of the Company's election to assume the
defense thereof, the Indemnified Party shall bear the fees and expenses of any
additional counsel retained by it, and the Company will not be liable to such
Indemnified Party under this Agreement for any legal or other expenses
subsequently incurred by such Indemnified Party independently in connection
with the defense thereof other than reasonable costs of investigation.
8.1(d).Each Indemnified Party will promptly notify the
Company of the commencement of any investigation or litigation or proceedings
against the Indemnified Party or any of its officers or directors in
connection with this Agreement, the issuance or sale of the Designated
Portfolio shares, the Contracts or the operation of each Account or the
acquisition of shares in the Fund.
8.2. Indemnification by the Fund
8.2(a).The Fund shall indemnify and hold harmless the
Company, and each of its directors and officers and each person, if any, who
controls the Company, within the meaning of Section 15 of the 1933 Act
(collectively, the "Indemnified Parties" for purposes of this Section 8.2)
against any Loss to which the Indemnified Parties may become subject under any
statute or regulation, at common law or otherwise, insofar as such Loss is
related to the operations of the Fund and:
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(i) arises out of or is based upon any untrue statement or
alleged untrue statement of any material fact contained in
the Fund Materials, or arises out of or is based upon the
omission or the alleged omission to state therein a
material fact required to be stated therein or necessary
to make the statements therein not misleading, provided
that this agreement to indemnify shall not apply as to any
Indemnified Party if such statement or omission or such
alleged statement or omission was made in reliance upon
and in conformity with information furnished to the Fund
or its designee by or on behalf of the Indemnified Party
for use in the Fund Material or otherwise for use in
connection with the sale of the Contracts or Fund shares;
or
(ii) arises out of or as a result of statements or
representations (other than statements or representations
contained in materials not supplied by the Fund or its
designees) or wrongful conduct of the Fund or persons
under its control, with respect to the sale or
distribution of the Contracts or Fund shares; or
(iii) arises out of any untrue statement or alleged untrue
statement of a material fact contained in any Contract
Materials, or the omission or alleged omission to state
therein a material fact required to be stated therein or
necessary to make the statement or statements therein not
misleading, if such statement or omission was made in
reliance upon and in conformity with information furnished
to the Company by or on behalf of the Fund; or
(iv) arises as a result of any material failure by the
Fund or its designees to perform the obligations, provide
the services or furnish the materials required of it under
the terms of this Agreement (including a failure of the
Fund, whether unintentional or in good faith or otherwise,
to comply with the diversification and other qualification
requirements specified in Article VI of this Agreement);
or
(v) arises out of or result from any material breach of
any representation and/or warranty made by the Fund in
this Agreement or arises out of or result from any other
material breach of this Agreement by the Fund;
as limited by and in accordance with the provisions of Section 8.2(b) and
8.2(c) hereof. The Parties agree that the Fund's indemnification obligations
under this Section are not intended to serve as an indemnification by the Fund
of the Underwriter or to create obligations in violation of the 1940 Act. The
Company agrees that, in the event a Loss gives rise to an indemnification
obligation under this Section as well as Sections 8.3 and 8.4 hereof, it will
seek satisfaction under the indemnification provisions of Sections 8.3 and 8.4
before seeking indemnification under this Section 8.2 unless the Company
determines that doing so would not be in its best interests or that of its
Contract owners.
8.2(b).The Fund shall not be liable under this
indemnification provision with respect to any Loss to which an Indemnified
Party would otherwise be subject by reason of such Indemnified Party's willful
misfeasance, bad faith, or gross negligence in the performance of such
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Indemnified Party's duties or by reason of such Indemnified Party's reckless
disregard of obligations and duties under this Agreement or to the Company or
the Account, whichever is applicable.
8.2(c).The Fund shall not be liable under this
indemnification provision with respect to any claim made against an
Indemnified Party unless such Indemnified Party shall have notified the Fund
in writing within a reasonable time after the summons or other first legal
process giving information of the nature of the claim shall have been served
upon such Indemnified Party (or after such Indemnified Party shall have
received notice of such service on any designated agent), but failure to
notify the Fund of any such claim shall not relieve the Fund from any
liability which it may have to the Indemnified Party against whom such action
is brought otherwise than on account of this indemnification provision. In
case any such action is brought against an Indemnified Party, the Fund will be
entitled to participate, at its own expense, in the defense thereof. The Fund
also shall be entitled to assume the defense thereof, with counsel
satisfactory to the Indemnified Party named in the action. After notice from
the Fund to such party of the Fund's election to assume the defense thereof,
the Indemnified Party shall bear the fees and expenses of any additional
counsel retained by it, and the Fund will not be liable to such Indemnified
Party under this Agreement for any legal or other expenses subsequently
incurred by such Indemnified Party independently in connection with the
defense thereof other than reasonable costs of investigation.
8.2(d).Each Indemnified Party will promptly notify the
Fund of the commencement of any investigation or litigation or proceedings
against the Indemnified Party or any of its officers or directors in
connection with this Agreement, the issuance or sale of the Designated
Portfolio shares, the Contracts or the operation of each Account or the
acquisition of shares in the Fund.
8.3. Indemnification By the Adviser
8.3(a) The Adviser agrees to indemnify and hold harmless
the Company, and its directors and officers and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act, and any
officer, director, employee or agent of the foregoing, (collectively, the
"Indemnified Parties" for purposes of this Section 8.3) against any Loss to
which the Indemnified Parties may be required to pay or may become subject
under any statute or regulation, at common law or otherwise, insofar as such
Loss is related to the sale or acquisition of Designated Portfolio shares or
the Contracts and:
(i) arises out of or based upon any untrue statement or
alleged untrue statement of any material fact
contained in any Fund Materials, or arises out of
or is based upon the omission or the alleged
omission to state therein a material fact required
to be stated therein or necessary to make the
statements therein not misleading, if such
statement or omission or such alleged statement or
omission was made in reliance upon and in
conformity with information furnished for inclusion
therein by or on behalf of the Adviser; or
(ii) arises out of or as a result of statements or
representations (other than statements or
representations contained in materials not supplied
by
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Adviser or its designee) or wrongful conduct of
the Adviser or persons under its control, with
respect to the sale or distribution of the
Contracts or Fund shares; or
(iii) arises out of any untrue statement or alleged
untrue statement of a material fact contained in
the Contract Materials or the omission or alleged
omission to state therein a material fact required
to be stated therein or necessary to make the
statements therein not misleading, if such
statement or omission or such alleged statement or
omission was made in reliance upon and in
conformity with information furnished for inclusion
therein by or on behalf of the Adviser; or
(iv) arises as a result of any material failure by the
Adviser to perform the obligations, provide the
services or furnish the materials required of it
under the terms of this Agreement (including a
failure of the Adviser, whether intentional or in
good faith or otherwise, to comply with the
diversification and other qualification
requirements specified in Article VI of this
Agreement); or
(v) arises out of or results from any material breach
of any representation and/or warranty made by the
Adviser in this Agreement or arises out of or
results from any other material breach of this
Agreement by the Adviser;
as limited by and in accordance with the provisions of Sections 8.3 (b) and
8.3 (c) hereof.
8.3(b).The Adviser shall not be liable under this
indemnification provision with respect to any Loss which an Indemnified Party
would otherwise be subject by reason of such Indemnified Party's willful
misfeasance, bad faith, or gross negligence in the performance of such
Indemnified Party's duties or by reason of such Indemnified Party's reckless
disregard of obligations and duties under this Agreement or to the Company,
the Fund, the Adviser, the Underwriter or the Account, whichever is
applicable.
8.3(c).The Adviser shall not be liable under this
indemnification provision with respect to any claim made against an
Indemnified Party unless such Indemnified Party shall have notified the
Adviser in writing within a reasonable time after the summons or other first
legal process giving information of the nature of the claim shall have been
served upon such Indemnified Party (or after such Indemnified Party shall have
received notice of such service on any designated agent), but failure to
notify the Adviser of any such claim shall not relieve the Adviser from any
liability which it may have to the Indemnified Party against whom such action
is brought otherwise than on account of this indemnification provision. In
case any such action is brought against the Indemnified Parties, the Adviser
will be entitled to participate, at its own expense, in the defense thereof.
The Adviser also shall be entitled to assume the defense thereof, with counsel
satisfactory to the Indemnified Party named in the action. After notice from
the Adviser to such Indemnified Party of the Adviser's election to assume the
defense thereof, the Indemnified Party shall bear the fees and expenses of any
additional counsel retained by it, and the Adviser will not be liable to such
Indemnified Party under this
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Agreement for any legal or other expenses subsequently incurred by such
Indemnified Party independently in connection with the defense thereof other
than reasonable costs of investigation.
8.3(d).Each Indemnified Party shall promptly notify the
Adviser of the commencement of any litigation or proceeding against the
Indemnified Party or any of its respective officers or directors in connection
with the Agreement, the issuance or sale of the Contracts, the operation of
the Account, or the sale or acquisition of shares of the Fund.
8.4 Indemnification by the Underwriter
8.4(a) The Underwriter will indemnify the Company and each
of its officers, directors and trustees, if any, who control the Company
within the meaning of Section 15 of the 1933 Act (collectively, the
"Indemnified Parties" for purposes of Section 8.4) against any Loss to which
the Indemnified Parties may become subject under any statute or regulation, at
common law or otherwise, insofar as a Loss is related to the operations of the
Underwriter or sale or acquisition of Fund shares and:
(i) arises as a result of any material failure by the
Underwriter to perform the obligations, provide the
services or furnish the materials required of it under the
terms of this Agreement (including a failure by the
Underwriter, whether intentional or in good faith or
otherwise, to comply with the diversification and
qualification requirements specified in Article VI
hereof); or
(ii) arises out of or results from any material breach of
any representations and/or warranty made by the
Underwriter in this Agreement or arises out of or results
from any other material breach of this Agreement by the
Underwriter,
as limited by and in accordance with the provisions of Sections 8.4(b) and
8.4(c) hereof.
8.4(b).The Underwriter shall not be liable under this
indemnification provision with respect to any Loss which an Indemnified Party
would otherwise be subject by reason of such Indemnified Party's willful
misfeasance, bad faith, or gross negligence in the performance of such
Indemnified Party's duties or by reason of such Indemnified Party's reckless
disregard of obligations and duties under this Agreement or to the Company,
the Fund, the Adviser, the Underwriter or the Account, whichever is
applicable.
8.4(c).The Underwriter shall not be liable under this
indemnification provision with respect to any claim made against an
Indemnified Party unless such Indemnified Party shall have notified the
Underwriter in writing within a reasonable time after the summons or other
first legal process giving information of the nature of the claim shall have
been served upon such Indemnified Party (or after such Indemnified Party shall
have received notice of such service on any designated agent), but failure to
notify the Underwriter of any such claim shall not relieve the Underwriter
from any liability which it may have to the Indemnified Party against whom
such action is brought otherwise than on account of this indemnification
provision. In case any such action is brought against the Indemnified Parties,
the Underwriter will be entitled to participate, at its own expense, in the
defense thereof. The Underwriter also shall be entitled to assume the defense
thereof, with counsel satisfactory to the Indemnified Party named in the
action. After notice from the Underwriter to such
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Indemnified Party of the Underwriter's election to assume the defense thereof,
the Indemnified Party shall bear the fees and expenses of any additional
counsel retained by it, and the Underwriter will not be liable to such
Indemnified Party under this Agreement for any legal or other expenses
subsequently incurred by such Indemnified Party independently in connection
with the defense thereof other than reasonable costs of investigation.
8.4(d).Each Indemnified Party shall promptly notify the
Underwriter of the commencement of any litigation or proceeding against the
Indemnified Party or any of its respective officers or directors in connection
with the Agreement, the issuance or sale of the Contracts, the operation of
the Account, or the sale or acquisition of shares of the Fund.
8.5 A successor by law of the parties to this Agreement shall be
entitled to the benefits of indemnification contained in this Article VIII.
These indemnification provisions contained in this Article VIII shall survive
any termination of this Agreement.
ARTICLE IX. Applicable Law
This Agreement shall be construed and provisions hereof
interpreted under and in accordance with the laws of the State of New York
applicable to contracts entirely entered into and performed in New York by New
York residents.
ARTICLE X. Termination
10.1. This Agreement shall be effective as of the date hereof and
shall continue in full force and effect until the first to occur of:
(a) termination by any Party, for any reason with respect to
some or all Designated Portfolios, by ninety (90) days
advance written notice delivered to the other Parties; or
(b) termination by the Company by written notice to the Fund,
Adviser and the Underwriter with respect to any Designated
Portfolio based upon the Company's determination that shares
of such Designated Portfolio are not reasonably available to
meet the requirements of the Contracts; or
(c) termination by the Company by written notice to the Fund,
Adviser and the Underwriter in the event any of the
Designated Portfolio's shares are not registered, issued or
sold in accordance with applicable law or such law precludes
the use of such shares as the underlying investment media of
the Contracts issued or to be issued by the Company; or
(d) termination by the Company by written notice to the Fund,
the Adviser and the Underwriter with respect to any
Designated Portfolio in the event that such Designated
Portfolio ceases to qualify as a regulated investment
company under Subchapter M of the Code or under any
successor provision or fails to comply
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with the Section 817 (h) diversification requirements
specified in Article VI hereof, or if the Company reasonably
believes that such Portfolio may fail to so qualify or
comply; or
(e) termination by the Fund, Adviser or Underwriter by written
notice to the Company in the event of a breach of Section
6.4 of this Agreement; or
(f) termination by the Company upon any substitution of the
shares of another investment company or series thereof for
shares of a Designated Portfolio of the Fund in accordance
with the terms of the Contracts, provided that the Company
has given at least 45 days prior written notice to the Fund,
Adviser and Underwriter of the date of substitution; or
(g) termination upon mutual agreement of the parties to this
Agreement; or
(h) termination by any party in the event that the Board
determines that a material irreconcilable conflicts exists
as provided in, and in accordance with the provisions of,
Article VII.
10.2. Notwithstanding any termination of this Agreement, the Fund
and the Underwriter shall, at the option of the 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"). Specifically, without limitation, the owners of the Existing
Contracts may be permitted to retain investments, reinvest dividends,
reallocate investments in the Designated Portfolios, redeem investments and/or
invest in the Fund upon the making of additional purchase payments under the
Existing Contracts. The Parties agree that this Section 10.2 shall not apply
to any terminations under Section 1.1 or Article VII and the effect of such
Article VII terminations shall be governed by Article VII of this Agreement.
Underwriter shall have no obligation under this paragraph to continue to make
shares available of the Fund or any Designated Portfolio for which it does not
serve as principal underwriter.
ARTICLE XI. Notices
Any notice shall be sufficiently given when sent by registered
mail, certified mail or next-day delivery by the notifying Party to the other
Parties at the addresses of such party set forth below or at such other
address as a Party may from time to time specify in writing to the other
Parties.
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If to the Fund: Variable Insurance Funds
0000 Xxxxxxx Xxxx
Xxxxxxxx, Xxxx 00000-0000
Attn: President
If to the Company: New York Life Insurance and Annuity Corporation
00 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Rock, Senior Vice President
If to the Adviser: AmSouth Bank
000 Xxxxxxxxxx Xxxxxxx E., 0xx Xxxxx X.
Xxxxxxxxxx, Xxxxxxx 00000
Attn: Xxxx Xxxxxxx, Senior Vice President
If to the Underwriter: BISYS Fund Services Limited Partnership
0000 Xxxxxxx Xxxx
Xxxxxxxx, Xxxx 00000-0000
Attn: Xxxxxxx X. Xxxxx, President
ARTICLE XII. Miscellaneous
12.1. All persons dealing with the Fund must look solely to the
property of the respective Designated Portfolios. Except as otherwise provided
herein, the Parties agree that neither the Board officers nor shareholders of
the Fund assume any personal liability or responsibility for obligations
entered into by or on behalf of the Fund.
12.2. Subject to the requirements of legal process and
regulatory authority, each Party hereto shall treat as confidential the names
and addresses of the owners of the Contracts and all information reasonably
identified as confidential in writing by any other Party hereto and, except as
permitted by this Agreement, shall not disclose, disseminate or utilize such
names and addresses and other confidential information without the express
written consent of the affected Party without the written consent of the
affected Party, unless such information has come into the public domain.
12.3. The captions in this Agreement are included for
convenience of reference only and in no way define or delineate any of the
provisions hereof or otherwise affect their construction or effect.
12.4. This Agreement may be executed simultaneously in two or
more counterparts, each of which taken together shall constitute one and the
same instrument.
12.5. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of the
Agreement shall not be affected thereby.
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24
12.6. Each Party hereto shall cooperate with each other Party
and all appropriate governmental authorities (including without limitation the
SEC, the NASD, and state insurance regulators) and shall permit 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.
12.7. The rights, remedies and obligations contained in this
Agreement are cumulative and are in addition to any and all rights, remedies,
obligations, at law or in equity, which the Parties hereto are entitled under
federal and state laws.
12.8. This Agreement or any of the rights and obligations
hereunder may not be assigned by any Party without the prior consent of all
Parties hereto.
IN WITNESS WHEREOF, each of the Parties hereto has caused this Agreement
to be executed in its name and on its behalf by its duly authorized
representative and its seal to be hereunder affixed hereto as the date
specified below.
New York Life Insurance and Annuity By its authorized officer
Corporation
By: ________________________________
Title: _____________________________
Date: _____________________________
Variable Insurance Funds By its authorized officer
By: ______________________________
Title: _____________________________
Date: _____________________________
AmSouth Bank By its authorized officer
By: __________________________
Title: __________________________
Date: __________________________
24
25
BISYS Fund Services Limited By: BISYS Fund Services, Inc.,
Partnership Its General Partner
By its authorized officer
By: ______________________________
Title: ____________________________
Date: ____________________________
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SCHEDULE A
NAME OF SEPARATE ACCOUNT
AND DATE ESTABLISHED
BY BOARD OF DIRECTORS CONTRACTS FUNDED DESIGNATED PORTFOLIOS
--------------------------------------------------------------------------------------
NYLIAC Variable Annuity AmSouth Premium AmSouth Enhanced Market Fund
Separate Account - III Plus Variable Annuity AmSouth International Equity
(11-30-94) Fund
AmSouth Large Cap Fund
AmSouth Mid Cap Fund
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(Page 1 of 2)
SCHEDULE B
COMPANY FUND
---------------------------------------------------------------------------------------------------
Preparing and filing the Account's Preparing and filing the Fund's registration
registration statement statement
---------------------------------------------------------------------------------------------------
Text composition for Account prospectuses and Text composition for Designated Portfolio
supplements prospectuses and supplements
---------------------------------------------------------------------------------------------------
Text alterations of Account prospectuses and Text alterations of Designated Portfolio
Account supplements prospectuses and Designated Portfolio supplements
---------------------------------------------------------------------------------------------------
Printing Account prospectuses and supplements A camera ready Designated Portfolio prospectus
and Fund prospectuses and supplements for and printing of Designated Portfolio prospectuses
prospective policy owners for existing policy owners that invest in the
Designated Portfolio
---------------------------------------------------------------------------------------------------
Text composition and printing Account SAIs Text composition and printing Fund SAIs
---------------------------------------------------------------------------------------------------
Mailing and distributing Account SAIs to Mailing and distributing Fund SAIs to policy
policy owners upon request by policy owners owners upon request by policy owners
---------------------------------------------------------------------------------------------------
Mailing and distributing Account Mailing and distributing Designated Portfolio
prospectuses and Account supplements to prospectuses and supplements to existing policy
policy owners of record as required by owners that invest in the Funds
Federal Securities Laws and mailing and
distributing account and Fund prospectuses
and supplements to prospective purchasers
---------------------------------------------------------------------------------------------------
Text composition (Account), printing, Text composition of annual and semi-annual
mailing, and distributing annual and semi- reports (Fund), printing, mailing and distributing
annual reports for Account annual and semi-annual reports for the Fund to
existing policyowners that invest in Designated
Portfolios
---------------------------------------------------------------------------------------------------
Text composition, printing, mailing, Text composition, printing, mailing, distributing,
distributing, and tabulation of proxy and tabulation of proxy statements and voting
statements and voting instruction solicitation instruction solicitation materials to policy owners
materials to policy owners with respect to with respect to proxies related to the Fund
proxies related to the Account
---------------------------------------------------------------------------------------------------
28
(Page 2 of 2)
SCHEDULE B (CONTINUED)
---------------------------------------------------------------------------------------------------
Preparation, printing and distributing sales
material and advertising relating to the Funds
contained in contract advertising and sales
materials and filing such materials with and
obtaining approval from, the SEC, the NASD,
any state insurance regulatory authority. and
any other appropriate regulatory authority, to
the extent required
---------------------------------------------------------------------------------------------------
