EXHIBIT 1.A(8)(b)(iii)
ASSIGNMENT AND MODIFICATION AGREEMENT
This Agreement is made by and between Xxxxxxxxx & Xxxxxx Advisers
Management Trust ("Trust"), a Massachusetts business trust, Xxxxxxxxx & Xxxxxx
Management Incorporated ("N&B Management"), a New York corporation, Xxxxxxxxx &
Xxxxxx Advisers Management Trust ("Successor Trust"), a Delaware business trust,
Advisers Managers Trust ("Managers Trust") and Security Life of Denver Insurance
Company ("Life Company"), a life insurance company organized under the laws of
the State of Colorado.
WHEREAS, the Life Company has previously entered into a Sales Agreement
dated September 28, 1994 (the "Sales Agreement") with the Trust and N&B
Management regarding the purchase of shares of the Trust by Life Company; and
WHEREAS, as part of the reorganization into a "master-feeder" fund
structure (the "Reorganization"), the Trust will be converted into the Successor
Trust, a Delaware business trust; and
WHEREAS, as part of the Reorganization, each Portfolio of the Trust will
transfer all of its assets to the corresponding Portfolio of the Successor Trust
("Successor Portfolio") and each Successor Portfolio will invest all of its net
investable assets in a corresponding series of Managers Trust; and
WHEREAS, as part of the Reorganization, an Order under Section 6(c) of the
Investment Company Act of 1940 ("'40 Act") is expected to be issued by the
Securities and Exchange Commission ("SEC") granting exemptions from Sections
9(a), 13(a), 15(a) and 15(b) of the '40 Act and Rules 6e-2(b)(15) and 6e-
3(T)(b)(15) thereunder; and
WHEREAS, the Order is expected to require that certain conditions (the
"Conditions") as set forth in the Notice (Investment Company Act Release No.
21003 (April 12, 1995)) be made a part of the Sales Agreement; and
WHEREAS, the parties hereto desire to assign the Sales Agreement form the
Trust to the Successor Trust, to modify the Sales Agreement to include the
Conditions and to rename the Sales Agreement; and
WHEREAS, Managers Trust will become a party to the Sales Agreement as
modified hereby, due to and for purposes of its obligations under the
Conditions.
NOW THEREFORE, in consideration of their mutual promises, Trust, N&B
Management, Successor Trust, Managers Trust and Life Company agree as follows:
1. The Sales Agreement is hereby assigned by the Trust to the Successor
Trust.
2. Pursuant to such assignment, the Successor Trust hereby accepts all
rights and benefits of the Trust under the Sales Agreement and agrees
to perform all duties and obligations of the Trust under the Sales
Agreement. Upon the effectiveness of this Assignment and Modification
Agreement, the Trust will be released from all obligations and duties
under the Sales Agreement.
3. The Sales Agreement is hereby modified to include the Conditions as
follows:
Sections 13 and 14 of the Sales Agreement are replaced by the following:
13. a) The Board of Trustees of each of the Successor Trust and
Managers Trust (the "boards") will monitor the Successor Trust and
Managers Trust, respectively, (collectively the "Funds") for the
existence of any material irreconcilable conflict between the interests
of the contract owners of all insurance company separate accounts
investing in the Funds. A material irreconcilable conflict may arise
for a variety of reasons, including: (a) state insurance regulatory
authority action; (b) a change in applicable federal or state insurance,
tax, or securities laws or regulations, or a public ruling, private
letter ruling, or any similar action by insurance, tax, or securities
regulatory authorities; (c) an administrative or judicial decision in
any relevant preceding; (d) the manner in which the investments of the
Funds are being managed; (e) a difference in voting instructions given
by variable annuity and variable life insurance contract owner or by
contract owners of different participating insurance companies; or (f) a
decision by a participating insurance company to disregard voting
instructions of contract owners.
b) Life Company, other participating insurance companies, N&B
Management (or any other manager or administrator of the Funds), and any
qualified pension and retirement plan that executes a fund participation
agreement upon becoming an owner of 10% or more of the assets of the
Funds (collectively, "Participants") will report any potential or
existing conflicts to the Boards. Participants will be responsible for
assisting the appropriate Board in carrying out its responsibilities
under these Conditions by providing the Board with all information
reasonably necessary for it to consider any issues raised. This
responsibility includes, but is not limited to, an obligation by each
Participant to inform the Board whenever variable contract owner voting
instructions are disregarded. These responsibilities will be carried
out with a view only to the interests of the contact owners.
c) If a majority of the Board of a Fund or a majority of its
disinterested trustees or directors, determines that a material
irreconcilable conflict exists, the relevant Participant, at its expense
and to the extent reasonably practicable (as determined by a majority of
disinterested trustees or directors), will take any steps necessary to
remedy or eliminate the irreconcilable material conflict, including:
(a) withdrawing the assets allocable to some or all of the separate
accounts from the Funds or any series thereof and reinvesting those
assets in a different investment medium, which may include another
series of the Successor Trust or Managers Trust, or another investment
company or submitting the question as to whether such segregation should
be implemented to a vote of all affected variable contract owners and,
as appropriate, segregating the assets of any appropriate group (i.e.,
variable annuity or variable annuity contract owners of one or more
Participants) that votes in favor of such segregation, or offering to
the affected variable contract owners the option of making such a
change; and (b) establishing a new registered management investment
company or managed separate account. If a material irreconcilable
conflict arises because of a Participant's decision to disregard
contract owner voting instructions, and that decision represents a
minority position or would preclude a majority vote, the Participant may
be required, at the election of the relevant Fund, to withdraw its
separate account's investment in such Fund, and no charge or penalty
will be imposed as a result of such withdrawal.
The responsibility to take remedial action in the event of a
Board determination of an irreconcilable material conflict and to bear
the cost of such remedial action shall be a contractual obligation of
all Participants under their agreements governing their participation in
the Funds. The responsibility to take such remedial action shall be
carried out with a view
only to the interests of the contract owners.
For the purposes of Condition (c), a majority of the
disinterested members of the applicable Board shall determine whether or
not any proposed action adequately remedies any irreconcilable material
conflict, but in no event will the relevant Fund or N&B Management (or
any other investment adviser of the Funds) be required to establish a
new funding medium for any variable contract. Further, no participant
shall be required by this condition (c) to establish a new funding
medium for any variable contract if any offer to do so has been declined
by a vote of a majority of contract owners materially affected by the
irreconcilable material conflict.
d) Any board's determination of the existence of an
irreconcilable material conflict and its implications shall be made
known promptly and in writing to all Participants.
14. a) Participants will provide pass-through voting privileges to
all contract owners so long as the SEC continues to interpret the '40
Act as requiring pass-through voting privileges for variable contract
owners. This condition will apply to UIT-separate accounts investing in
the Successor Trust and to managed separate accounts investing in
Managers Trust to the extent a vote is required with respect to matters
relating to Mangers Trust. Accordingly, the Participants, where
applicable, will vote shares of a Fund held in their separate accounts
in a manner consistent with voting instructions timely received from
variable contract owners. Participants will be responsible for assuring
that each of their separate accounts that participates in the Funds
calculates voting privileges in a manner consistent with other
Participants. The obligation to calculate voting privileges in a manner
consistent with all other separate accounts investing in the Funds will
be a contractual obligation of all Participants under the agreements
governing participation in the Funds. Each Participant will vote shares
for which it has not received timely voting instructions, as well as
shares it owns, in the same proportion as its votes those shares for
which it has received voting instructions.
b) If and to the extent Rule 6e-2 and Rule 6e-3(T) are amended,
or Rule 6e-3 is adopted, to provide exemptive relief from any provision
of the '40 Act or the rules thereunder with respect to mixed and shared
funding on terms and conditions materially different from any exemptions
granted in the order requested, then the Successor Trust, Managers Trust
and/or the Participants, as appropriate, shall take such steps as may be
necessary to comply with Rule 6e-2 and Rule 6e-3(T), as amended, and
Rule 6e-3, as adopted, to the extent such Rules are applicable.
c) No less than annually, the Participants shall submit to the
Boards such reports, materials or data as such Boards may reasonably
request so that the Boards may fully carry out the obligations imposed
upon them by these Conditions. Such reports, materials, and data shall
be submitted more frequently if deemed appropriate by the applicable
Boards.
4. The sales Agreement shall be renamed Fund Participation Agreement.
5. This Assignment and Modification Agreement shall be effective on May 1,
1995, the closing date of the conversion. In the event of a conflict
between the terms of this Assignment and Modification Agreement and the
terms of the Sales Agreement, the terms of this Assignment and
Modification Agreement shall control.
6. All other terms and conditions of the Sales Agreement remain in full
force and effect.
Executed this 1st day of May, 1995.
XXXXXXXXX & XXXXXX ADVISERS MANAGEMENT
TRUST (A MASSACHUSETTS BUSINESS TRUST)
Attest: /s/ By: /s/
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Xxxxxxx Xxxxxx, Chairman
XXXXXXXXX & XXXXXX ADVISERS MANAGEMENT
TRUST (A DELAWARE BUSINESS TRUST)
Attest: /s/ By: /s/
-------------------------- ---------------------------------------
Xxxxxxx Xxxxxx, Chairman
ADVISERS MANAGERS TRUST
Attest: /s/ By: /s/
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XXXXXXXXX & XXXXXX MANAGEMENT
INCORPORATED
Attest: /s/ By: /s/
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SECURITY LIFE OF DENVER INSURANCE
COMPANY
Attest: /s/ By: /s/
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