PARTICIPATION AGREEMENT
AMONG
FIRST SYMETRA NATIONAL LIFE INSURANCE COMPANY
SYMETRA SECURITIES, INC.
ALLIANCEBERNSTEIN L.P.
AND
ALLIANCEBERNSTEIN INVESTMENTS, INC.
DATED AS OF
August 31, 2012
PARTICIPATION AGREEMENT
THIS AGREEMENT, made and entered into as of the 31st day of August,
2012 ("Agreement"), by and among First Symetra Natinal Life Insurance Company,
a New York life insurance company ("Insurer") (on behalf of itself and its
"Separate Account," defined below); Symetra Securities, Inc., a Washington
corporation ("Contracts Distributor"), the principal underwriter with respect
to the Contracts referred to below; AllianceBernstein L.P., a Delaware
limited partnership ("Adviser"), the investment adviser of the Fund referred
to below; and AllianceBernstein Investments, Inc., a Delaware corporation
("Distributor"), the Fund's principal underwriter (collectively, the
"Parties"),
WITNESSETH THAT:
WHEREAS Insurer, the Distributor, and AllianceBernstein Variable
Products Series Fund, Inc. (the "Fund") desire that Class A shares ("shares")
of the Fund's Portfolios listed on Schedule A (the "Portfolios"; reference
herein to the "Fund" includes reference to each Portfolio to the extent the
context requires) be made available by Distributor to serve as underlying
investment media for those combination fixed and variable contracts of Insurer
to be offered through Contracts Distributor and other registered broker-dealer
firms as agreed to by Insurer, Contracts Distributor and Distributor; and
Insurer represents and warrants that the Contracts will be registered under
the Securities Act of 1933 (the "33 Act") unless an exemption from registration
is available prior to any issuance or sale of the Contracts and that the
Contracts will be issued and sold in compliance in all material respects with
all applicable federal and state laws and further that the sale of the
Contracts shall comply in all material respects with state insurance law
suitability requirements.
WHEREAS the Contracts provide for the allocation of net amounts
received by Insurer to separate series (the "Divisions"; reference herein to
the "Separate Account" includes reference to each Division to the extent the
context requires) of the Separate Account for investment in the shares of
corresponding Portfolios of the Fund that are made available through the
Separate Account to act as underlying investment media,
NOW, THEREFORE, in consideration of the mutual benefits and promises
contained herein, the Fund and Distributor will make shares of the Portfolios
available to Insurer for this purpose at net asset value and with no sales
charges, all subject to the following provisions:
Section 1. Additional Portfolios
The Fund has and may, from time to time, add additional Portfolios, which will
become subject to this Agreement, if, upon the written consent of each of the
Parties hereto, they are made available as investment media for the Contracts.
Section 2. Processing Transactions
2.1 Timely Pricing and Orders.
The Adviser or its designated agent will provide closing net asset
value, dividend and capital gain information for each Portfolio to Insurer or
its designate agent(s) at the close of trading on each day (a "Business Day")
on which (a) the New York Stock Exchange is open for regular trading, (b) the
Fund calculates the Portfolio's net asset value and (c) Insurer is open for
business. The Fund or its designated agent will use its best efforts to
provide this information by 6:00 p.m., Eastern time. Insurer or its
designated agent(s) will use these data to calculate unit values, which in
turn will be used to process transactions that receive that same Business
Day's Separate Account Division's unit values. Such Separate Account
processing will be done the same evening, and corresponding orders with
respect to Fund shares will be placed the morning of the following Business
Day. Insurer or its designated agent(s) will use its best efforts to place
such orders with the Fund by 10:00 a.m., Eastern time.
2.2 Timely Payments.
Insurer will transmit orders for purchases and redemptions of Fund
shares to Distributor, and will wire payment for net purchases to a custodial
account designated by the Fund on the day the order for Fund shares is placed,
to the extent practicable. Payment for net redemptions will be wired by the
Fund to an account designated by Insurer on the same day as the order is
placed, to the extent practicable, and in any event be made within six calendar
days after the date the order is placed in order to enable Insurer to pay
redemption proceeds within the time specified in Section 22(e) of the
Investment Company Act of 1940, as amended (the "1940 Act").
2.3 Redemption in Kind.
The Fund reserves the right to pay any portion of a redemption in kind
of portfolio securities, if the Fund's board of directors (the "Board of
Directors") determines that it would be detrimental to the best interests of
shareholders to make a redemption wholly in cash.
2.4 Applicable Price.
The Parties agree that Portfolio share purchase and redemption orders
resulting from Contract owner purchase payments, surrenders, partial
withdrawals, routine withdrawals of charges, or other transactions under
Contracts will be executed at the net asset values as determined as of the
close of regular trading on the New York Stock Exchange on the Business Day
that Insurer receives such orders and processes such transactions, which,
Insurer agrees shall occur not earlier than the Business Day prior to
Distributor's receipt of the corresponding orders for purchases and redemptions
of Portfolio shares. For the purposes of this section, Insurer or its
designated agent(s) shall be deemed to be the agent of the Fund for receipt
of such orders from holders or applicants of contracts, and receipt by Insurer
shall constitute receipt by the Fund. All other purchases and redemptions of
Portfolio shares by Insurer, will be effected at the net asset values next
computed after receipt by Distributor of the order therefore, and such orders
will be irrevocable. Insurer hereby elects to reinvest all dividends and
capital gains distributions in additional shares of the corresponding
Portfolio at the record-date net asset values until Insurer otherwise notifies
the Fund in writing, it being agreed by the Parties that the record date and
the payment date with respect to any dividend or distribution will be the
same Business Day.
Section 3. Costs and Expenses
3.1 General.
Except as otherwise specifically provided herein, each Party will bear
all expenses incident to its performance under this Agreement.
3.2 Registration.
The Fund will bear the cost of its registering as a management
investment company under the 1940 Act and registering its shares under the
Securities Act of 1933, as amended (the "1933 Act"), and keeping such
registrations current and effective; including, without limitation, the
preparation of and filing with the SEC of Forms N-SAR and Rule 24f-2 Notices
respecting the Fund and its shares and payment of all applicable registration
or filing fees with respect to any of the foregoing. Insurer will bear the
cost of registering the Separate Account as a unit investment trust under the
1940 Act (if such registration is required) and registering units of interest
under the Contracts under the 1933 Act (if such registration is required)
and keeping such registrations current and effective; including, without
limitation, the preparation and filing with the SEC of Forms N-SAR and Rule
24f-2 Notices respecting the Separate Account and its units of interest and
payment of all applicable registration or filing fees with respect to any of
the foregoing.
3.3 Other (Non-Sales-Related) Expenses.
The Fund will bear the costs of preparing, filing with the SEC and
setting for printing the Fund's prospectus, (including any summary prospectus,
if available, as such term is defined in Rule 498), statement of additional
information and any amendments or supplements thereto (collectively, the "Fund
Prospectus"), periodic reports to shareholders, Fund proxy material and other
shareholder communications and any related requests for voting instructions
from Participants (as defined below). Insurer will bear the costs of
preparing, filing with the SEC and setting for printing, the Separate Account's
prospectus, statement of additional information and any amendments or
supplements thereto (collectively, the "Separate Account Prospectus"), any
periodic reports to owners, annuitants or participants under the Contracts
(collectively, "Participants"), and other Participant communications. The
Fund and Insurer each will bear the costs of printing in quantity and
delivering to existing Participants the documents as to which it bears the
cost of preparation as set forth above in this Section 3.3, it being
understood that reasonable cost allocations will be made in cases where any
such Fund and Insurer documents are printed or mailed on a combined or
coordinated basis. If requested by Insurer, the Fund will provide annual
Prospectus text to Insurer on diskette for printing and binding with the
Separate Account Prospectus.
3.4 Other Sales-Related Expenses.
Expenses of distributing the Portfolio's shares and the Contracts will
be paid by Contracts Distributor and other parties, as they shall determine by
separate agreement.
3.5 Parties to Cooperate.
The Adviser, Insurer, Contracts Distributor, and Distributor each
agrees to cooperate with the others, as applicable, in arranging to print,
mail and/or deliver combined or coordinated prospectuses or other materials of
the Fund and Separate Account.
Section 4. Legal Compliance
4.1 Tax Laws.
(a) The Adviser will use its best efforts to qualify and to
maintain qualification of each Portfolio as a regulated investment company
("RIC") under Subchapter M of the Internal Revenue Code of 1986, as amended
(the "Code"), and the Adviser or Distributor will notify Insurer immediately
upon having a reasonable basis for believing that a Portfolio has ceased to so
qualify or that it might not so qualify in the future.
(b) Insurer represents that it believes, in good faith, that the
Contracts will be treated as life insurance or annuity contracts under
applicable provisions of the Code and that it will make every effort to
maintain such treatment. Insurer will notify the Fund and Distributor
immediately upon having a reasonable basis for believing that any of the
Contracts have ceased to be so treated or that they might not be so treated
in the future.
(c) The Fund will comply and maintain each Portfolio's compliance
with the diversification requirements set forth in Section 817(h) of the Code
and Section 1.817-5(b) of the regulations under the Code, and the Fund,
Adviser or Distributor will notify Insurer immediately upon having a
reasonable basis for believing that a Portfolio has ceased to so comply or
that a Portfolio might not so comply in the future.
(d) Insurer represents that it believes, in good faith, that the
Separate Account is a "segregated asset account" and that interests in the
Separate Account are offered exclusively through the purchase of or transfer
into a "variable contract," within the meaning of such terms under Section
817(h) of the Code and the regulations thereunder. Insurer will make every
effort to continue to meet such definitional requirements, and it will notify
the Fund and Distributor immediately upon having a reasonable basis for
believing that such requirements have ceased to be met or that they might
not be met in the future.
(e) The Adviser will manage the Fund as a RIC in compliance with
Subchapter M of the Code and will be in compliance with Section 817(h) of the
Code and regulations thereunder. The Fund has adopted and will maintain
procedures for ensuring that the Fund is managed in compliance with Subchapter
M and Section 817(h) and regulations thereunder.
(f) Should the Distributor or Adviser become aware of a failure of
Fund, or any of its Portfolios, to be in compliance with Subchapter M of the
Code or Section 817(h) of the Code and regulations thereunder, they represent
and agree that they will immediately notify Insurer of such in writing.
4.2 Insurance and Certain Other Laws.
(a) The Adviser will use its best efforts to cause the Fund to
comply with any applicable state insurance laws or regulations, to the extent
specifically requested in writing by Insurer. If it cannot comply, it will so
notify Insurer in writing.
(b) Insurer represents and warrants that (i) it is an insurance
company duly organized, validly existing and in good standing under the laws
of the State of New York and has full corporate power, authority and legal
right to execute, deliver and perform its duties and comply with its
obligations under this Agreement, (ii) it has legally and validly established
and maintains the Separate Account as a segregated asset account under
New York Law, and (iii) the Contracts comply in all material respects with
all other applicable federal and state laws and regulations.
(c) Insurer and Contracts Distributor represent and warrant that
Contracts Distributor is a business corporation duly organized, validly
existing, and in good standing under the laws of the State of Washington and
has full corporate power, authority and legal right to execute, deliver, and
perform its duties and comply with its obligations under this Agreement.
(d) Distributor represents and warrants that it is a business
corporation duly organized, validly existing, and in good standing under the
laws of the State of Delaware and has full corporate power, authority and
legal right to execute, deliver, and perform its duties and comply with its
obligations under this Agreement.
(e) Distributor represents and warrants that the Fund is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Maryland and has full power, authority, and legal right
to execute, deliver, and perform its duties and comply with its obligations
under this Agreement.
(f) Adviser represents and warrants that it is a limited
partnership, duly organized, validly existing and in good standing under the
laws of the State of Delaware and has full power, authority, and legal right
to execute, deliver, and perform its duties and comply with its obligations
under this Agreement.
4.3 Securities Laws.
(a) Insurer represents and warrants that (i) interests in the
Separate Account pursuant to the Contracts will be registered under the 1933
Act to the extent required by the 1933 Act (or are not so registered in proper
reliance upon an exemption from such registration requirements) and the
Contracts will be duly authorized for issuance and sold in compliance with
State law, (ii) the Separate Account is and will remain registered under the
1940 Act to the extent required by the 1940 Act, (or are not so registered in
proper reliance upon an exemption from such registration requirements) (iii)
the Separate Account does and will comply in all material respects with the
requirements of the 1940 Act and the rules thereunder, (iv) the Separate
Account's 1933 Act registration statement relating to the Contracts, together
with any amendments thereto, will, at all times comply in all material
respects with the requirements of the 1933 Act and the rules thereunder, and
(v) the Separate Account Prospectus will at all times comply in all material
respects with the requirements of the 1933 Act and the rules thereunder.
(b) The Adviser and Distributor represent and warrant that (i)
Fund shares sold pursuant to this Agreement will be registered under the 1933
Act to the extent required by the 1933 Act and duly authorized for issuance
and sold in compliance with Maryland law, (ii) the Fund is and will remain
registered under the 1940 Act to the extent required by the 1940 Act, (iii)
the Fund will amend the registration statement for its shares under the 1933
Act and itself under the 1940 Act from time to time as required in order to
effect the continuous offering of its shares, (iv) the Fund does and will
comply in all material respects with the requirements of the 1940 Act and
the rules thereunder, (v) the Fund's 1933 Act registration statement, together
with any amendments thereto, will at all times comply in all material respects
with the requirements of the 1933 Act and rules thereunder, and (vi) the Fund
Prospectus will at all times comply in all material respects with the
requirements of the 1933 Act and the rules thereunder.
(c) The Fund will register and qualify its shares for sale in
accordance with the laws of any state or other jurisdiction only if and to
the extent reasonably deemed advisable by the Fund, Insurer or any other
life insurance company utilizing the Fund.
(d) Distributor and Contracts Distributor each represents and
warrants that it is registered as a broker-dealer with the SEC under the
Securities Exchange Act of 1934, as amended, and is a member in good standing
of the Financial Industry Regulatory Authority (the "FINRA").
4.4 Notice of Certain Proceedings and Other Circumstances.
(a) Distributor or the Fund shall immediately notify Insurer of
(i) the issuance by any court or regulatory body of any stop order, cease and
desist order, or other similar order with respect to the Fund's registration
statement under the 1933 Act or the Fund Prospectus, (ii) any request by the
SEC for any amendment to such registration statement or Fund Prospectus,
(iii) the initiation of any proceedings for that purpose or for any other
purpose relating to the registration or offering of the Fund's shares, or
(iv) any other action or circumstances that may prevent the lawful offer or
sale of Fund shares in any state or jurisdiction, including, without
limitation, any circumstances in which (x) the Fund's shares are not
registered and, in all material respects, issued and sold in accordance with
applicable state and federal law or (y) such law precludes the use of such
shares as an underlying investment medium of the Contracts issued or to be
issued by Insurer. Distributor and the Fund will make every reasonable effort
to prevent the issuance of any such stop order, cease and desist order or
similar order and, if any such order is issued, to obtain the lifting thereof
at the earliest possible time.
(b) Insurer and Contracts Distributor shall immediately notify the
Fund of (i) the issuance by any court or regulatory body of any stop order,
cease and desist order or similar order with respect to the Separate Account's
registration statement under the 1933 Act relating to the Contracts or the
Separate Account Prospectus, (ii) any request by the SEC for any amendment to
such registration statement or Separate Account Prospectus that relates to the
Funds, (iii) the initiation of any proceedings for that purpose or for any
other purpose relating to the registration or offering of the Separate Account
interests pursuant to the Contracts, or (iv) any other action or circumstances
that may prevent the lawful offer or sale of said interests in any state or
jurisdiction, including, without limitation, any circumstances in which said
interests are not registered and, in all material respects, issued and sold in
accordance with applicable state and federal law. Insurer and Contracts
Distributor will make every reasonable effort to prevent the issuance of any
such stop order, cease and desist order or similar order and, if any such
order is issued, to obtain the lifting thereof at the earliest possible time.
4.5 Insurer to Provide Documents.
Upon request, Insurer will provide the Fund and the Distributor one
complete copy of SEC registration statements, Separate Account Prospectuses,
reports, any preliminary and final voting instruction solicitation material,
applications for exemptions, requests for no-action letters, and amendments to
any of the above, that relate to the Separate Account or the Contracts,
contemporaneously with the filing of such document with the SEC or other
regulatory authorities.
The Insurer shall furnish, or shall cause to be furnished, to the Fund
or its designee, a copy of each piece of sales literature or other promotional
material that the Insurer develop or propose to use and in which the Fund (or
a Portfolio thereof), its Adviser or one of its sub-advisers or the Distributor
is named in connection with the Contracts, at least ten (10) Business Days
prior to its use. No such material shall be used if the Fund objects to such
use within five (5) Business Days after receipt of such material. Any approval
on sales literature or other promotional material that the Insurer develops or
uses shall be in effect for one year so long as such disclosure regarding the
Fund or Distributor is the same as used in the approved piece. The Insurer
shall furnish to the Fund or its designee any sales material or other
promotional material with differing disclosure for approval. In addition,
Insurer may prepare such materials, based on performance information supplied
by third party information providers (e.g., Lipper, Morningstar).
4.6 Fund to Provide Documents.
Upon request, the Fund will provide to Insurer one complete copy of
SEC registration statements, Fund Prospectuses, reports, any preliminary and
final proxy material, applications for exemptions, requests for no-action
letters, and all amendments to any of the above, that relate to the Fund or
its shares, contemporaneously with the filing of such document with the SEC
or other regulatory authorities.
The Fund, the Distributor or the Adviser shall furnish, or shall cause
to be furnished, to the Insurer, a copy of each piece of sales literature or
other promotional material in which the Insurer and/or their Contracts, are
named at least ten (10) Business Days prior to its use. No such material
shall be used if the Insurer object to such use within five (5) Business Days
after receipt of such material. Any approval on sales literature or other
promotional material that the Fund develops or uses shall be in effect for
one year so long as such disclosure regarding the Insurer is the same as used
in the approved piece. The Fund shall furnish to the Insurer or its designee
any sales material or other promotional material with differing disclosure for
approval.
4.7 Shareholder Information.
(a) Agreement to Provide Information. The Insurer agrees to
provide the Distributor upon written request, the taxpayer identification
number ("TIN"), if known, of any or all Shareholder(s) of the account and
the amount, date, name or other identifier of any investment professional(s)
associated with the Shareholder(s) or account (if known), and transaction type
(purchase, redemption, transfer, or exchange) of every purchase, redemption,
transfer, or exchange of Shares held through an account maintained by the
Insurer during the period covered by the request.
(1) Period Covered by Request. Requests must set forth a specific
period, not to exceed 90 days from the date of the request, for which
transaction information is sought. The Distributor may request transaction
information older than 90 days from the date of the request as it deems
necessary to investigate compliance with policies established by the Fund for
purpose of eliminating or reducing any dilution of the value of the outstanding
shares issued by the Fund.
(2) Form and Timing of Response. The Insurer agrees to transmit
the requested information that is on its books and records to the Distributor
or their designee promptly, but in any event not later than 10 business days,
after receipt of a request. If the requested information is not on the
Insurer's books and records, the Insurer agrees to use reasonable efforts to:
(i) provide or arrange to provide to the Distributor the requested information
regarding Shareholders who hold an account with an indirect intermediary; or
(ii) if directed by the Distributor, block further purchase of Fund Shares
from such indirect intermediary.
In such instance, the Insurer agrees to inform the Distributor whether
it plans to perform (i) or (ii). Responses required by this paragraph must be
communicated in writing and in a format mutually agreed upon by the parties.
To the extent practicable, the format for any transaction information provided
to the Distributor should be consistent with the NSCC Standardized Data
Reporting Format. For purposes of this provision "indirect intermediary" has
the same meaning as in SEC Rule 22c-2 under the Investment Company Act of
1940.
(3) Limitations on Use of Information. The Distributor agrees not
to use the information received for marketing or any other similar purpose
without prior written consent of the Insurer.
(b) Agreement to Restrict Trading. The Insurer agrees to execute
written instructions from the Distributor to restrict or prohibit further
purchase or exchanges of Shares by a Shareholder that has been identified by
the Distributor as having engaged in transactions of the Fund's Shares
(directly or indirectly through the Insurer's account) that violate policies
established by the Distributor for the purpose of eliminating or reducing any
dilution of the value of the outstanding Shares issued by the Fund.
(1) Form of Instructions. Instructions must include the TIN, if
known, and the specific restriction(s) to be executed. If the TIN is not
known, the instructions must include an equivalent identifying number of the
Shareholder(s) or account(s) or other agreed upon information to which the
instruction relates.
(2) Timing of Response. The Insurer agrees to execute instructions
as soon as reasonably practicable, but not later than five business days after
receipt of the instructions by the Insurer.
(3) Confirmation by the Insurer. The Insurer must provide written
confirmation to the Distributor that instructions have been executed. The
Insurer agrees to provide confirmation as soon as reasonably practicable, but
no later than ten business days after the instructions have been executed.
(c) Definitions. For purposes of this Section:
(1) The term "Shares" means the interests of the Shareholders
corresponding to the redeemable securities of record issued by the Fund under
the Investment Company Act of 1940 that are held by the Insurer.
(2) The term "Shareholder" means the holder of interests in a
variable annuity or a variable life insurance contract issued by the Insurer.
(3) The term "written" includes electronic writings and facsimile
transmissions.
Section 5. Mixed and Shared Funding
5.1 General.
The Fund has obtained an order exempting it from certain provisions of
the 1940 Act and rules thereunder so that the Fund is available for investment
by certain other entities, including, without limitation, separate accounts
funding variable life insurance policies and separate accounts of insurance
companies unaffiliated with Insurer ("Mixed and Shared Funding Order"). The
Parties recognize that the SEC has imposed terms and conditions for such
orders that are substantially identical to many of the provisions of this
Section 5.
5.2 Disinterested Directors.
The Fund agrees that its Board of Directors shall at all times consist
of directors a majority of whom (the "Disinterested Directors") are not
interested persons of Adviser or Distributor within the meaning of Section
2(a)(19) of the 1940 Act.
5.3 Monitoring for Material Irreconcilable Conflicts.
The Fund agrees that its Board of Directors will monitor for the
existence of any material irreconcilable conflict between the interests of the
participants in all separate accounts of life insurance companies utilizing
the Fund, including the Separate Account. Insurer agrees to inform the Board
of Directors of the Fund of the existence of or any potential for any such
material irreconcilable conflict of which it is aware. The concept of a
"material irreconcilable conflict" is not defined by the 1940 Act or the rules
thereunder, but the Parties recognize that such a conflict may arise for a
variety of reasons, including, without limitation:
(a) an action by any state insurance or other regulatory authority;
(b) a change in applicable federal or state insurance, tax or
securities laws or regulations, or a public ruling, private letter ruling, no-
action or interpretative letter, or any similar action by insurance, tax or
securities regulatory authorities;
(c) an administrative or judicial decision in any relevant
proceeding;
(d) the manner in which the investments of any Portfolio are being
managed;
(e) a difference in voting instructions given by variable annuity
contract and variable life insurance contract participants or by participants
of different life insurance companies utilizing the Fund; or
(f) a decision by a life insurance company utilizing the Fund to
disregard the voting instructions of participants.
Insurer will assist the Board of Directors in carrying out its
responsibilities by providing the Board of Directors with all information
reasonably necessary for the Board of Directors to consider any issue raised,
including information as to a decision by Insurer to disregard voting
instructions of Participants.
5.4 Conflict Remedies.
(a) It is agreed that if it is determined by a majority of the
members of the Board of Directors or a majority of the Disinterested Directors
that a material irreconcilable conflict exists, Insurer and the other life
insurance companies utilizing the Fund will, at their own expense and to the
extent reasonably practicable (as determined by a majority of the
Disinterested Directors), take whatever steps are necessary to remedy or
eliminate the material irreconcilable conflict, which steps may include, but
are not limited to:
(i) withdrawing the assets allocable to some or all of the separate
accounts from the Fund or any Portfolio and reinvesting such
assets in a different investment medium, including another
Portfolio of the Fund, or submitting the question whether such
segregation should be implemented to a vote of all affected
participants and, as appropriate, segregating the assets of
any particular group (e.g., annuity contract owners or
participants, life insurance contract owners or all contract
owners and participants of one or more life insurance companies
utilizing the Fund) that votes in favor of such
segregation, or offering to the affected contract owners or
participants the option of making such a change; and
(ii) establishing a new registered investment company of the type
defined as a "Management Company" in Section 4(3) of the 1940
Act or a new separate account that is operated as a Management
Company.
(b) If the material irreconcilable conflict arises because of
Insurer's decision to disregard Participant voting instructions and that
decision represents a minority position or would preclude a majority vote,
Insurer may be required, at the Fund's election, to withdraw the Separate
Account's investment in the Fund. No charge or penalty will be imposed as a
result of such withdrawal. Any such withdrawal must take place within six
months after the Fund gives notice to Insurer that this provision is being
implemented, and until such withdrawal Distributor and the Fund shall continue
to accept and implement orders by Insurer for the purchase and redemption of
shares of the Fund.
(c) If a material irreconcilable conflict arises because a
particular state insurance regulator's decision applicable to Insurer
conflicts with the majority of other state regulators, then Insurer will
withdraw the Separate Account's investment in the Fund within six months after
the Fund's Board of Directors informs Insurer that it has determined that
such decision has created a material irreconcilable conflict, and until such
withdrawal Distributor and Fund shall continue to accept and implement orders
by Insurer for the purchase and redemption of shares of the Fund.
(d) Insurer agrees that any remedial action taken by it in
resolving any material irreconcilable conflict will be carried out at its
expense and with a view only to the interests of Participants.
(e) For purposes hereof, a majority of the Disinterested Directors
will determine whether or not any proposed action adequately remedies any
material irreconcilable conflict. In no event, however, will the Fund or
Distributor be required to establish a new funding medium for any Contracts.
Insurer will not be required by the terms hereof to establish a new funding
medium for any Contracts if an offer to do so has been declined by vote of a
majority of Participants materially adversely affected by the material
irreconcilable conflict.
5.5 Notice to Insurer.
The Fund will promptly make known in writing to Insurer the Board of
Directors' determination of the existence of a material irreconcilable
conflict, a description of the facts that give rise to such conflict and
the implications of such conflict.
5.6 Information Requested by Board of Directors.
Insurer and the Fund will at least annually submit to the Board of
Directors of the Fund such reports, materials or data as the Board of
Directors may reasonably request so that the Board of Directors may fully
carry out the obligations imposed upon it by the provisions hereof, and said
reports, materials and data will be submitted at any reasonable time deemed
appropriate by the Board of Directors. All reports received by the Board of
Directors of potential or existing conflicts, and all Board of Directors
actions with regard to determining the existence of a conflict, notifying life
insurance companies utilizing the Fund of a conflict, and determining whether
any proposed action adequately remedies a conflict, will be properly recorded
in the minutes of the Board of Directors or other appropriate records, and
such minutes or other records will be made available to the SEC upon request.
5.7 Compliance with SEC Rules.
If, at any time during which the Fund is serving an investment medium
for variable life insurance policies, 1940 Act Rules 6e-3(T) or, if applicable,
6e-2 are amended or Rule 6e-3 is adopted to provide exemptive relief with
respect to mixed and shared funding, the Parties agree that they will comply
with the terms and conditions thereof and that the terms of this Section 5
shall be deemed modified if and only to the extent required in order also to
comply with the terms and conditions of such exemptive relief that is afforded
by any of said rules that are applicable.
Section 6. Termination
6.1 Events of Termination.
Subject to Section 6.4 below, this Agreement will terminate as to a
Portfolio:
(a) at the option of Insurer or Distributor upon at least six
months advance written notice to the other Parties, or
(b) at the option of the Fund upon (i) at least sixty days advance
written notice to the other parties, and (ii) approval by (x) a majority of
the disinterested Directors upon a finding that a continuation of this Contract
is contrary to the best interests of the Fund, or (y) a majority vote of the
shares of the affected Portfolio in the corresponding Division of the Separate
Account (pursuant to the procedures set forth in Section 10 of this Agreement
for voting Trust shares in accordance with Participant instructions).
(c) at the option of the Fund upon institution of formal
proceedings against Insurer or Contracts Distributor by the FINRA, the SEC,
any state insurance regulator or any other regulatory body regarding Insurer's
obligations under this Agreement or related to the sale of the Contracts, the
operation of the Separate Account, or the purchase of the Fund shares, if, in
each case, the Fund reasonably determines that such proceedings, or the facts
on which such proceedings would be based, have a material likelihood of
imposing material adverse consequences on the Portfolio to be terminated; or
(d) at the option of Insurer upon institution of formal proceedings
against the Fund, Adviser, or Distributor by the FINRA, the SEC, or any state
insurance regulator or any other regulatory body regarding the Fund's,
Adviser's or Distributor's obligations under this Agreement or related to the
operation or management of the Fund or the purchase of Fund shares, if, in
each case, Insurer reasonably determines that such proceedings, or the facts
on which such proceedings would be based, have a material likelihood of
imposing material adverse consequences on Insurer, Contracts Distributor or
the Division corresponding to the Portfolio to be terminated; or
(e) at the option of any Party in the event that (i) the
Portfolio's shares are not registered and, in all material respects, issued
and sold in accordance with any applicable state and federal law or (ii) such
law precludes the use of such shares as an underlying investment medium of the
Contracts issued or to be issued by Insurer; or
(f) upon termination of the corresponding Division's investment in
the Portfolio pursuant to Section 5 hereof; or
(g) at the option of Insurer if the Portfolio ceases to qualify as
a RIC under Subchapter M of the Code or under successor or similar provisions;
or
(h) at the option of Insurer if the Portfolio fails to comply with
Section 817(h) of the Code or with successor or similar provisions; or
(i) at the option of Insurer if Insurer reasonably believes that
any change in a Fund's investment adviser or investment practices will
materially increase the risks incurred by Insurer.
6.2 Funds to Remain Available.
Except (i) as necessary to implement Participant-initiated transactions,
(ii) as required by state insurance laws or regulations, (iii) as required
pursuant to Section 5 of this Agreement, or (iv) with respect to any Portfolio
as to which this Agreement has terminated, Insurer shall not (x) redeem Fund
shares attributable to the Contracts, or (y) prevent Participants from
allocating payments to or transferring amounts from a Portfolio that was
otherwise available under the Contracts, until, in either case, 45 calendar
days after Insurer shall have notified the Fund or Distributor of its
intention to do so.
6.3 Survival of Warranties and Indemnifications.
All warranties and indemnifications will survive the termination of
this Agreement.
6.4 Continuance of Agreement for Certain Purposes.
Notwithstanding any termination of this Agreement, the Distributor
shall continue to make available shares of the Portfolios pursuant to the
terms and conditions of this Agreement, for all Contracts in effect on the
effective date of termination of this Agreement (the "Existing Contracts"),
except as otherwise provided under Section 5 of this Agreement. Specifically,
and without limitation, the Distributor shall facilitate the sale and purchase
of shares of the Portfolios as necessary in order to process premium payments,
surrenders and other withdrawals, and transfers or reallocations of values
under Existing Contracts.
Section 7. Parties to Cooperate Respecting Termination
The other Parties hereto agree to cooperate with and give reasonable
assistance to Insurer in taking all necessary and appropriate steps for the
purpose of ensuring that the Separate Account owns no shares of a Portfolio
after the Final Termination Date with respect thereto.
Section 8. Assignment
This Agreement may not be assigned by any Party, except with
the written consent of each other Party.
Section 9. Notices
Notices and communications required or permitted by Section 2 hereof
will be given by means mutually acceptable to the Parties concerned. Each
other notice or communication required or permitted by this Agreement will be
given to the following persons at the following addresses and facsimile
numbers, or such other persons, addresses or facsimile numbers as the Party
receiving such notices or communications may subsequently direct in writing:
First Symetra National Life Insurance
Company of New York
000 000xx Xxx XX, Xxxxx 0000
Xxxxxxxx, XX 00000
Attn: Legal Counsel, SC-11
AllianceBernstein Investments, Inc.
0000 Xxxxxx xx xxx Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn.: Legal - Mutual Fund Secretary
FAX: (000) 000-0000
AllianceBernstein L.P.
0000 Xxxxxx xx xxx Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Legal - Mutual Find Secretary
FAX: (000) 000-0000
Section 10. Voting Procedures
Subject to the cost allocation procedures set forth in Section 3
hereof, Insurer will distribute all proxy material furnished by the Fund to
Participants and will vote Fund shares in accordance with instructions
received from Participants. Insurer will vote Fund shares that are (a) not
attributable to Participants or (b) attributable to Participants, but for
which no instructions have been received, in the same proportion as Fund
shares for which said instructions have been received from Participants.
Insurer agrees that it will disregard Participant voting instructions only to
the extent it would be permitted to do so pursuant to Rule 6e-3 (T)(b)(15)(iii)
under the 1940 Act if the Contracts were variable life insurance policies
subject to that rule. Other participating life insurance companies utilizing
the Fund will be responsible for calculating voting privileges in a manner
consistent with that of Insurer, as prescribed by this Section 10.
Section 11. Foreign Tax Credits
The Adviser agrees to consult in advance with Insurer concerning any
decision to elect or not to elect pursuant to Section 853 of the Code to pass
through the benefit of any foreign tax credits to the Fund's shareholders.
Section 12. Indemnification
12.1 Of Fund, Distributor and Adviser by Insurer.
(a) Except to the extent provided in Sections 12.1(b) and 12.1(c),
below, Insurer agrees to indemnify and hold harmless the Fund, Distributor and
Adviser, each of their directors and officers, and each person, if any, who
controls the Fund, Distributor or Adviser within the meaning of Section 15 of
the 1933 Act (collectively, the "Indemnified Parties" for purposes of this
Section 12. 1) against any and all losses, claims, damages, liabilities
(including amounts paid in settlement with the written consent of Insurer) or
actions in respect thereof (including, to the extent reasonable, legal and
other expenses), to which the Indemnified Parties may become subject under any
statute, regulation, at common law or otherwise, insofar as such losses,
claims, damages, liabilities or actions are related to the sale, acquisition,
or holding of the Fund's shares and:
(i) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the
Separate Account's 1933 Act registration statement, the
Separate Account Prospectus, the Contracts or, to the extent
prepared by Insurer or Contracts Distributor, sales literature
or advertising for the Contracts (or any amendment or
supplement to any of the foregoing), or arise out of or are
based upon the omission or the alleged omission to state
therein a material fact required to be stated 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 Insurer or
Contracts Distributor by or on behalf of the Fund, Distributor
or Adviser for use in the Separate Account's 1933 Act
registration statement, the Separate Account Prospectus, the
Contracts, or sales literature or advertising (or any
amendment or supplement to any of the foregoing); or
(ii) arise out of or as a result of any other statements or
representations (other than statements or representations
contained in the Fund's 1933 Act registration statement, Fund
Prospectus, sales literature or advertising of the Fund, or
any amendment or supplement to any of the foregoing, not
supplied for use therein by or on behalf of Insurer or
Contracts Distributor) or the negligent, illegal or fraudulent
conduct of Insurer or Contracts Distributor or persons under
their control (including, without limitation, their employees
and "Associated Persons," as that term is defined in
paragraph (m) of Article I of the FINRA's By-Laws), in
connection with the sale or distribution of the Contracts or
Fund shares; or
(iii) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the Fund's
1933 Act registration statement, Fund Prospectus, sales
literature or advertising of the Fund, or any amendment or
supplement to any of the foregoing, 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 a statement or omission was made in
reliance upon and in conformity with information furnished to
the Fund, Adviser or Distributor by or on behalf of Insurer or
Contracts Distributor for use in the Fund's 1933 Act
registration statement, Fund Prospectus, sales literature or
advertising of the Fund, or any amendment or supplement to any
of the foregoing; or
(iv) arise as a result of any failure by Insurer or Contracts
Distributor to perform the obligations, provide the services
and furnish the materials required of them under the terms of
this Agreement.
(b) Insurer shall not be liable under this Section 12.1 with
respect to any losses, claims, damages, liabilities or actions to which an
Indemnified Party would otherwise be subject by reason of willful misfeasance,
bad faith, or gross negligence in the performance by that Indemnified Party of
its duties or by reason of that Indemnified Party's reckless disregard of
obligations or duties under this Agreement or to Distributor or to the Fund.
(c) Insurer shall not be liable under this Section 12.1 with
respect to any action against an Indemnified Party unless the Fund, Distributor
or Adviser shall have notified Insurer in writing within a reasonable time
after the summons or other first legal process giving information of the
nature of the action 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 Insurer of any such action shall not
relieve Insurer from any liability which it may have to the Indemnified Party
against whom such action is brought otherwise than on account of this Section
12. 1. In case any such action is brought against an Indemnified Party,
Insurer shall be entitled to participate, at its own expense, in the defense
of such action. Insurer also shall be entitled to assume the defense thereof,
with counsel approved by the Indemnified Party named in the action, which
approval shall not be unreasonably withheld . After notice from Insurer
to such Indemnified Party of Insurer's election to assume the defense thereof,
the Indemnified Party will cooperate fully with Insurer and shall bear the
fees and expenses of any additional counsel retained by it, and Insurer 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.
12.2 Indemnification of Insurer and Contracts Distributor by
Adviser.
(a) Except to the extent provided in Sections 12.2(d) and 12.2(e),
below, Adviser agrees to indemnify and hold harmless Insurer and Contracts
Distributor, each of their directors and officers, and each person, if any,
who controls Insurer or Contracts Distributor within the meaning of Section 15
of the 1933 Act (collectively, the "Indemnified Parties" for purposes of this
Section 12.2) against any and all losses, claims, damages, liabilities
(including amounts paid in settlement with the written consent of Adviser) or
actions in respect thereof (including, to the extent reasonable, legal and
other expenses) to which the Indemnified Parties may become subject under any
statute, at common law or otherwise, insofar as such losses, claims, damages,
liabilities or actions are related to the sale, acquisition, or holding of the
Fund's shares and:
(i) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the Fund's
1933 Act registration statement, Fund Prospectus, sales
literature or advertising of the Fund or, to the extent not
prepared by Insurer or Contracts Distributor, sales literature
or advertising for the Contracts (or any amendment or
supplement to any of the foregoing), or arise out of or are
based upon the omission or the alleged omission to state
therein a material fact required to be stated 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 Distributor,
Adviser or the Fund by or on behalf of Insurer or Contracts
Distributor for use in the Fund's 1933 Act registration
statement, Fund Prospectus, or in sales literature or
advertising (or any amendment or supplement to any of the
foregoing); or
(ii) arise out of or as a result of any other statements or
representations (other than statements or representations
contained in the Separate Account's 1933 Act registration
statement, Separate Account Prospectus, sales literature or
advertising for the Contracts, or any amendment or supplement
to any of the foregoing, not supplied for use therein by or
on behalf of Distributor, Adviser, or the Fund) or the
negligent, illegal or fraudulent conduct of the Fund,
Distributor, Adviser or persons under their control
(including, without limitation, their employees and Associated
Persons), in connection with the sale or distribution of the
Contracts or Fund shares; or
(iii) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the
Separate Account's 1933 Act registration statement, Separate
Account Prospectus, sales literature or advertising covering
the Contracts, or any amendment or supplement to any of the
foregoing, 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 was made in reliance upon and in
conformity with information furnished to Insurer or Contracts
Distributor by or on behalf of the Fund, Distributor or Adviser
for use in the Separate Account's 1933 Act registration
statement, Separate Account Prospectus, sales literature or
advertising covering the Contracts, or any amendment or
supplement to any of the foregoing; or
(iv) arise as a result of any failure by the Fund, Adviser or
Distributor to perform the obligations, provide the services
and furnish the materials required of them under the terms of
this Agreement;
(b) Except to the extent provided in Sections 12.2(d) and 12.2(e)
hereof, Adviser agrees to indemnify and hold harmless the Indemnified Parties
from and against any and all losses, claims, damages, liabilities (including
amounts paid in settlement thereof with, except as set forth in Section
12.2(c) below, the written consent of Adviser) or actions in respect thereof
(including, to the extent reasonable, legal and other expenses) to which the
Indemnified Parties may become subject directly or indirectly under any
statute, at common law or otherwise, insofar as such losses, claims, damages,
liabilities or actions directly or indirectly result from or arise out of the
failure of any Portfolio to operate as a regulated investment company in
compliance with (i) Subchapter M of the Code and regulations thereunder and
(ii) Section 817(h) of the Code and regulations thereunder (except to the
extent that such failure is caused by Insurer), including, without limitation,
any income taxes and related penalties, rescission charges, liability under
state law to Contract owners or Participants asserting liability against
Insurer or Contracts Distributor pursuant to the Contracts, the costs of any
ruling and closing agreement or other settlement with the Internal Revenue
Service, and the cost of any substitution by Insurer of shares of another
investment company or portfolio for those of any adversely affected Portfolio
as a funding medium for the Separate Account that Insurer deems necessary or
appropriate as a result of the noncompliance.
(c) The written consent of Adviser referred to in Section 12.2(b)
above shall not be required with respect to amounts paid in connection with
any ruling and closing agreement or other settlement with the Internal Revenue
Service.
(d) Adviser shall not be liable under this Section 12.2 with
respect to any losses, claims; damages, liabilities or actions to which an
Indemnified Party would otherwise be subject by reason of willful misfeasance,
bad faith, or gross negligence in the performance by that Indemnified Party of
its duties or by reason of such Indemnified Party's reckless disregard of its
obligations and duties under this Agreement or to Insurer, Contracts
Distributor or the Separate Account.
(e) Adviser shall not be liable under this Section 12.2 with
respect to any action against an Indemnified Party unless Insurer or Contracts
Distributor shall have notified Adviser in writing within a reasonable time
after the summons or other first legal process giving information of the
nature of the action 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 Adviser of any such action shall not
relieve Adviser from any liability which it may have to the Indemnified Party
against whom such action is brought otherwise than on account of this Section
12.2. In case any such action is brought against an Indemnified Party, Adviser
will be entitled to participate, at its own expense, in the defense of such
action. Adviser also shall be entitled to assume the defense thereof (which
shall include, without limitation, the conduct of any ruling request and
closing agreement or other settlement proceeding with the Internal Revenue
Service), with counsel approved by the Indemnified Party named in the action,
which approval shall not be unreasonably withheld. After notice from Adviser
to such Indemnified Party of Adviser's election to assume the defense thereof,
the Indemnified Party will cooperate fully with Adviser and shall bear the
fees and expenses of any additional counsel retained by it, and Adviser 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.
12.3 Effect of Notice.
Any notice given by the indemnifying Party to an Indemnified Party
referred to in Section 12.1(c) or 12.2(e) above of participation in or control
of any action by the indemnifying Party will in no event be deemed to be an
admission by the indemnifying Party of liability, culpability or
responsibility, and the indemnifying Party will remain free to contest
liability with respect to the claim among the Parties or otherwise.
Section 13. Applicable Law
This Agreement will be construed and the provisions hereof interpreted
under and in accordance with New York law, without regard for that state's
principles of conflict of laws.
Section 14. Execution in Counterparts
This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together will constitute one and the same
instrument.
Section 15. Severability
If any provision of this Agreement is held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement will not
be affected thereby.
Section 16. Rights Cumulative
The rights, remedies and obligations contained in this Agreement are
cumulative and are in addition to any and all rights, remedies and obligations,
at law or in equity, that the Parties are entitled to under federal and state
laws.
Section 17. Restrictions on Sales of Fund Shares
Insurer agrees that the Fund will be permitted (subject to the other
terms of this Agreement) to make its shares available to separate accounts of
other life insurance companies.
Section 18. Headings
The Table of Contents and headings used in this Agreement are for
purposes of reference only and shall not limit or define the meaning of the
provisions of this Agreement.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed in their names and on their behalf by and through their duly
authorized officers signing below.
FIRST SYMETRA NATIONAL LIFE INSURANCE
COMPANY OF NEW YORK
By: /s/Xxxxxx X. Xxxxxxxx
Name: Xxxxxx X. Xxxxxxxx
Title: Executive Vice President
SYMETRA SECURITIES, INC.
By: /s/Xxxxx X. Xxxxx
Name: Xxxxx X. Xxxxx
Title: President
ALLIANCEBERNSTEIN, L.P.
By: /s/Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: Assistant Secretary
ALLIANCEBERNSTEIN INVESTMENTS, INC.
By: /s/Xxxxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx
Title: Assistant Vice President
SCHEDULE A
AllianceBernstein VPS Real Estate Class A
AllianceBernstein VPS Small Cap Growth Class A
AllianceBernstein VPS Small/Mid Cap Value Class A
