Exhibit 8 (k)
FUND PARTICIPATION AGREEMENT
THIS AGREEMENT made as of the ____day of _____________, 2004, by and
between Lord Xxxxxx Series Fund, Inc. (the "Fund"), a Maryland Corporation, on
its behalf and on behalf of each separate investment series thereof, whether
existing as of the date above or established subsequent thereto, (each a
"Portfolio" and collectively, the "Portfolios"), Lord Xxxxxx Distributor LLC, a
New York limited liability company (the "Distributor"), and Allstate Life
Insurance Company and Allstate Life Insurance Company of New York (each the
"Company"), both life insurance companies organized under the laws of the State
of ____________________________. -
WHEREAS, the Fund is registered with the Securities and Exchange Commission
("SEC") under the Investment Company Act of 1940, as amended (the " `40 Act"),
as an open-end, diversified management investment company; and
WHEREAS, the Fund is organized as a series fund comprised of separate
investment series, namely the Portfolios; and
WHEREAS, the Fund was organized to act as the funding vehicle for certain
variable life insurance and/or variable annuity contracts ("Variable Contracts")
offered by life insurance companies through separate accounts of such life
insurance companies and also offers its shares to certain qualified pension and
retirement plans; and
WHEREAS, the Fund has filed an application with the SEC requesting an order
granting relief from various provisions of the `40 Act and the rules thereunder
to the extent necessary to permit Fund shares to be sold to and held by variable
annuity and variable life insurance separate accounts of both affiliated and
unaffiliated participating insurance companies accounts ("Participating
Companies") and qualified pension and retirement plans outside the separate
account context (including, without limitation, those trusts, plans, accounts
contracts or annuities described in Sections 401(a), 403(a), 403(b), 408(a),
408(b), 414(d), 457(b), 408(k), 501(c)(18) of the Internal Revenue Code of 1986,
as amended (the "Code") and any other trust, plan, account, contract or annuity
trust that is determined to be within the scope of Treasury Regulation
ss.1.817.5(f)(3)(iii)("Plans"); and
WHEREAS, the Company has established or will establish one or more separate
accounts ("Separate Accounts") to offer Variable Contracts and is desirous of
having the Fund as one of the underlying funding vehicles for such Variable
Contracts; and
WHEREAS, the Distributor is registered with the SEC as a broker-dealer
under the Securities Exchange Act of 1934, as amended and acts as the Fund's
principal underwriter; and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares of the Fund to fund the
aforementioned Variable Contracts and the Fund is authorized to sell such shares
to the Company at net asset value;
NOW, THEREFORE, in consideration of their mutual promises, the Company, the
Fund, and the Distributor agree as follows:
Article I. SALE OF FUND SHARES
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1.1 The Fund agrees to make Variable Contract Class shares ("Shares")
of the Fund available to the Separate Accounts of the Company for investment of
purchase payments of Variable Contracts allocated to the designated Separate
Accounts as provided in the Fund's then current prospectus and statement of
additional information. The Company agrees to purchase and redeem the Shares of
the Portfolios offered by the then current prospectus and statement of
additional information of the Fund in accordance with the provisions of such
prospectus and statement of additional information. The Company shall not permit
any person other than a Variable Contract owner to give instructions to the
Company which would require the Company to redeem or exchange Shares of the
Fund.
1.2 The Fund agrees to sell to the Company those Shares of the selected
Portfolios of the Fund which the Company 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 Fund. For purposes of this
Section 1.2, the Company shall be the designee of the Fund for receipt of such
orders from the designated Separate Account and receipt by such designee shall
constitute receipt by the Fund; provided, to the extent not inconsistent with
regulatory requirements, that the Company receives the order by 4:00 p.m.
Eastern time and the Fund receives notice from the Company by telephone,
facsimile (orally confirmed) or by such other means as the Fund and the Company
may mutually agree of such order by 9:00 a.m. Eastern time on the next following
Business Day. "Business Day" shall mean any day on which the New York Stock
Exchange is open for trading and on which the Fund calculates its net asset
value pursuant to the rules of the SEC.
1.3 The Fund agrees to redeem on the Company's request, any full or
fractional Shares of the Fund held by the Company, executing such requests on a
daily basis at the net asset value next computed after receipt by the Fund or
its designee of the request for redemption, in accordance with the provisions of
this agreement and the Fund's then current registration statement. For purposes
of this Section 1.3, the Company shall be the designee of the Fund for receipt
of requests for redemption from the designated Separate Account and receipt by
such designee shall constitute receipt by the Fund; provided, to the extent not
inconsistent with regulatory requirements, that the Company receives the request
for redemption by 4:00 p.m. Eastern time and the Fund receives notice from the
Company by telephone, facsimile (orally confirmed) or by such other means as the
Fund and the Company may mutually agree of such request for redemption by 9:00
a.m. Eastern time on the next following Business Day.
1.4 The Fund shall furnish, on or before the ex-dividend date, notice
to the Company of any income dividends or capital gain distributions payable on
the Shares of any Portfolios of the Fund. The Company hereby elects to receive
all such income dividends and capital gain distributions as are payable on a
Portfolio's Shares in additional Shares of the Portfolio. The Fund shall notify
the Company or its designee of the number of Shares so issued as payment of such
dividends and distributions.
1.5 The Fund shall make the net asset value per share for the selected
Portfolios available to the Company on a daily basis, via a mutually agreeable
form, as soon as reasonably practicable after the net asset value per share is
calculated but shall use its best efforts to make such net asset value available
by 6:30 p.m. Eastern time.
1.6 At the end of each Business Day, the Company shall use the
information described in Section 1.5 to calculate Separate 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. Eastern 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. To the extent not inconsistent with regulatory
requirements, the net purchase or redemption orders so determined shall be
transmitted to the Fund by the Company by 9:00 a.m. Eastern time on the Business
Day next following the Company's receipt of such requests and premiums in
accordance with the terms of Sections 1.2 and 1.3 hereof.
1.7 If the Company's order requests the purchase of Fund Shares, the
Company shall pay for such purchase by wiring federal funds to the Fund or its
designated custodial account on the day the order is transmitted by the Company.
If the Company's order requests a net redemption resulting in a payment of
redemption proceeds to the Company, the Fund shall use its best efforts to wire
the redemption proceeds to the Company by the next Business Day, unless doing so
would require the Fund to dispose of Portfolio securities or otherwise incur
additional costs. In any event, proceeds shall be wired to the Company within
three Business Days or such longer period permitted by the '40 Act or the rules,
orders or regulations thereunder and the Fund shall notify the person designated
in writing by the Company as the recipient for such notice of such delay by 3:00
p.m. Eastern time the same Business Day that the Company transmits the
redemption order to the Fund.
1.8 The Fund agrees that all Shares of the Portfolios of the Fund will
be sold only to Participating Insurance Companies which have agreed to
participate in the Fund to fund their Separate Accounts and/or to Plans, all in
accordance with the requirements of Section 817(h) of the Code and Treasury
Regulation 1.817-5. Shares of the Portfolios of the Fund will not be sold
directly to the general public.
1.9 The Fund may refuse to sell Shares of any Portfolios to any person,
or suspend or terminate the offering of the Shares of any Portfolios if such
action is required by law or by regulatory authorities having jurisdiction or
is, in the sole discretion of the Board of Directors/Trustees of the Fund (the
"Board"), deemed necessary, desirable or appropriate. Without limiting the
foregoing, it has been determined that there is a significant risk that the Fund
and its shareholders may be adversely affected by short-term or excessive
trading activity, particularly activity used to try and take advantage of
short-term swings in the market. Accordingly, the Fund reserves right to reject
any purchase order, including those purchase orders with respect to shareholders
or accounts whose trading has been or may be disruptive to the Fund or that may
otherwise adversely affect the Fund. The Company agrees to use its reasonably
best efforts to render assistance, and to cooperate with, the Fund to achieve
compliance with the Fund's policies and restrictions on short-term or excessive
trading activity as they may be amended from time to time, or to the extent
required by applicably regulatory requirements.
1.10 Issuance and transfer of Portfolio Shares will be by book entry
only. Stock certificates will not be issued to the Company or the Separate
Accounts. Shares ordered from Portfolios will be recorded in appropriate book
entry titles for the Separate Accounts.
Article II. Fees and Expenses
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2.1 Except as otherwise provided under this Agreement, the Fund and the
Distributor shall pay no fee or other compensation to the Company under this
Agreement, and the Company shall pay no fee or other compensation to the Fund or
the Distributor, except as made a part of this Agreement as it may be amended
from time to time with the mutual consent of the parties hereto. All expenses
incident to performance by each party of its respective duties under this
Agreement shall be paid by that party, unless otherwise specified in this
Agreement
Article III. REPRESENTATIONS AND WARRANTIES
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3.1 The Company represents and warrants that it is an insurance company
duly organized and in good standing under the laws of ________________________
and that it has legally and validly established each Separate Account as a
segregated asset account under such laws.
3.2 The Company represents and warrants that it has registered or,
prior to any issuance or sale of the Variable Contracts, will register each
Separate Account as a unit investment trust ("UIT") in accordance with the
provisions of the `40 Act and cause each Separate Account to remain so
registered to serve as a segregated asset account for the Variable Contracts,
unless an exemption from registration is available.
3.3 The Company represents and warrants that the income, gains and
losses, whether or not realized, from assets allocated to each Separate Account
are, in accordance with the applicable Variable Contracts, to be credited to or
charged against such Separate Account without regard to other income, gains or
losses from assets allocated to any other accounts of the Company. The Company
represents and warrants that the assets of the Separate Account are and will be
kept separate from the General Account of the Company and any other separate
accounts the Company may have, and will not be charged with liabilities from any
business that the Company may conduct or the liabilities of any companies
affiliated with the Company.
3.4 The Company represents and warrants that the Variable 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
Variable Contracts and that the Variable 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 Variable Contracts shall comply in all material
respects with state insurance law suitability requirements. The Company agrees
to notify the Fund promptly of any investment restrictions imposed by state
insurance law applicable to the Fund.
3.5 The Company represents and warrants that the Variable Contracts are
currently and at the time of issuance will be treated as life insurance,
endowment or annuity contracts under applicable provisions of the Code, that it
will maintain such treatment and that it will notify the Fund immediately upon
having a reasonable basis for believing that the Variable Contracts have ceased
to be so treated or that they might not be so treated in the future.
3.6 The Fund represents and warrants that the Portfolio Shares offered
and sold pursuant to this Agreement will be registered under the `33 Act and
sold in accordance with all applicable federal and state laws, and the Fund
shall be registered under the `40 Act prior to and at the time of any issuance
or sale of such Shares. The Fund, subject to Section 1.9 above, shall amend its
registration statement under the `33 Act and the x00 Xxx from time to time as
required in order to effect the continuous offering of its Shares. The Fund
shall register and qualify its Shares for sale in accordance with the laws of
the various states only if and to the extent deemed advisable by the Fund.
3.7 The Fund represents and warrants that each Portfolio will comply
with the diversification requirements set forth in Section 817(h) of the Code,
and the rules and regulations thereunder, including without limitation Treasury
Regulation 1.817-5, and will notify the Company immediately upon having a
reasonable basis for believing any Portfolio has ceased to comply or might not
so comply and will immediately take all reasonable steps to adequately diversify
the Portfolio to achieve compliance.
3.8 The Fund represents and warrants that each Portfolio invested in by
the Separate Account intends to elect to be treated as a "regulated investment
company" under Subchapter M of the Code, and to qualify for such treatment for
each taxable year and will notify the Company immediately upon having a
reasonable basis for believing it has ceased to so qualify or might not so
qualify in the future.
3.9 The Distributor represents and warrants that it is and will be a
member in good standing of the National Association of Securities Dealers, Inc.
("NASD") and is and will be registered as a broker-dealer with the SEC. The
Distributor further represents that it will sell and distribute Portfolio Shares
in accordance with all applicable state and federal laws and regulations,
including without limitation the '33 Act, the '34 Act and the '40 Act.
3.10 The Distributor represents and warrants that it will remain duly
registered and licensed in all material respects under all applicable federal
and state securities laws and shall perform its obligations hereunder in
compliance in all material respects with any applicable state and federal laws.
3.11 The Fund represents and warrants that all its directors, trustees,
officers, employees, and other individuals/entities who deal 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 that required by Rule 17g-1 under the '40 Act. The
aforesaid bond shall include coverage for larceny and embezzlement and shall be
issued by a reputable bonding company. The Fund 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.
3.12 The Company represents and warrants that all of its employees and
agents who deal 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 not less than that required to be maintained by entities
subject to the requirements of Rule 17g-1 of the '40 Act . The aforesaid bond
shall include coverage for larceny and embezzlement and shall be issued by a
reputable bonding company. The Company 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 Fund in the event such coverage no longer
applies.
Article IV. PROSPECTUS AND PROXY STATEMENTS
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4.1 The Fund shall prepare and be responsible for filing with the SEC
and any state regulators requiring such filing all shareholder reports, notices,
proxy materials (or similar materials such as voting instruction solicitation
materials), prospectuses and statements of additional information of the Fund.
4.2 At least annually, the Fund or its designee shall provide the
Company, free of charge, with as many copies of the current prospectus for the
Shares of the Portfolios as the Company may reasonably request for distribution
to existing Variable Contract owners whose Variable Contracts are funded by such
Shares. The Fund or its designee shall provide the Company, at the Company's
expense, with as many more copies of the current prospectus for the Shares as
the Company may reasonably request for distribution to prospective purchasers of
Variable Contracts. If requested by the Company in lieu thereof, the Fund or its
designee shall provide such documentation in a mutually agreeable form and such
other assistance as is reasonably necessary in order for the parties hereto once
a year (or more frequently if the prospectus for the Shares is supplemented or
amended) to have the prospectus for the Variable Contracts and the prospectus
for the Fund Shares and any other fund shares offered as investments for the
Variable Contracts printed at the Company's expense together in one document,
provided however that the Company shall ensure that, except as expressly
authorized in writing by the Fund, no alterations, edits or changes whatsoever
are made to prospectuses or other Fund documentation after such documentation
has been furnished to the Company or its designee, and the Company shall assume
liability for any and all alterations, errors or other changes that occur to
such prospectuses or other Fund documentation after it has been furnished to the
Company or its designee.
4.3 The Fund shall provide the Company with copies of the Fund's proxy
statements, Fund reports to shareholders, and other Fund communications to
shareholders in such quantity as the Company shall reasonably require for
distributing to Variable Contract owners. Alternatively and in lieu thereof, the
Company may elect to print at its own expense any of the Fund's proxy
statements, Fund reports to shareholders, and other Fund communications to
shareholders.
4.4 The Fund will provide the Company with at least one complete copy
of all prospectuses, statements of additional information, annual and
semi-annual reports, proxy statements, and all amendments or supplements to any
of the above that relate to the Portfolios promptly after the filing of each
such document with the SEC or other regulatory authority. The Company will
provide the Fund with at least one complete copy of all prospectuses, statements
of additional information, annual and semi-annual reports, proxy statements, and
all amendments or supplements to any of the above that relate to a Separate
Account promptly after the filing of each such document with the SEC or other
regulatory authority.
Article V. SALES MATERIALS
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5.1 The Company will furnish, or will cause to be furnished, to the
Fund or the Distributor, each piece of sales literature or other promotional
material in which the Fund, the Distributor or any affiliate thereof is named,
at least fifteen (15) Business Days prior to its intended use. No such material
shall be used unless the Fund or the Distributor approves such material. Such
approval shall be presumed given if notice to the contrary is not received by
the Company within fifteen Business Days after receipt by the Fund or the
Distributor of such material.
5.2 The Fund or the Distributor will furnish, or will cause to be
furnished, to the Company, each piece of sales literature or other promotional
material in which the Company or its Separate Accounts are named, at least
fifteen (15) Business Days prior to its intended use. No such material shall be
used unless the Company approves such material. Such approval shall be presumed
given if notice to the contrary is not received by the Fund or within fifteen
Business Days after receipt by the Company of such material.
5.3 Except with the permission of the Company, neither the Fund nor the
Distributor shall give any information or make any representations on behalf of
the Company or concerning the Company, the Separate Accounts, or the Variable
Contracts other than the information or representations contained in the
registration statement or prospectus for such Variable Contracts, as such
registration statement and prospectus may be amended or supplemented from time
to time, or in reports of the Separate Accounts for distribution to owners of
such Variable Contracts, or in sales literature or other promotional material
approved by the Company or its designee. Neither the Fund nor the Distributor
shall give such information or make such representations or statements in a
context that causes the information, representations or statements to be false
or misleading.
5.4 Except with the permission of the Fund or the Distributor, neither
the Company nor its affiliates or agents shall give any information or make any
representations or statements on behalf of the Fund, the Distributor or any
affiliate thereof or concerning the Fund, the Distributor or any affiliate
thereof, other than the information or representations contained in the
registration statements or prospectuses for the Fund, as such registration
statements and prospectuses may be amended or supplemented from time to time, or
in reports to shareholders or proxy statements for the Fund, or in sales
literature or other promotional material approved by the Fund or the Distributor
or designee thereof. Neither the Company nor its affiliates or agents shall give
such information or make such representations or statements in a context that
causes the information, representations or statements to be false or misleading.
5.5 For purposes of this Agreement, the phrase "sales literature or
other promotional material" or words of similar import include, without
limitation, 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 written communication distributed
or made generally available to customers or the public, including brochures,
circulars, research reports, market letters, form letters, seminar texts, or
reprints or excerpts of any other advertisement, sales literature, or published
article), educational or training materials or other communications distributed
or made generally available to some or all agents or employees, registration
statements, prospectuses, statements of additional information, shareholder
reports and proxy materials, and any other material constituting sales
literature or advertising under NASD rules, the `40 Act or the x00 Xxx.
Article VI. POTENTIAL CONFLICTS
-------------------
6.1 The parties acknowledge that the Fund has received an exemptive
order from the SEC granting relief from various provisions of the '40 Act and
the rules thereunder to the extent necessary to permit the Fund Shares to be
sold to and held by variable annuity and variable life insurance separate
accounts of Participating Companies and Plans. The terms of such exemptive order
(the "Mixed and Shared Funding Exemptive Order"), require the Fund and each
Participating Company and Plan to comply with conditions and undertakings
substantially as provided in this Article. In the event of any inconsistencies
between the terms of the Mixed and Shared Funding Exemptive Order and those
provided for in this Article, the conditions and undertakings imposed by the
Mixed and Shared Funding Exemptive Order shall govern this Agreement.
6.2 The Fund's Board will monitor the Fund for the existence of any
material irreconcilable conflict between and among the interests of the Variable
Contract owners of all Participating Companies and of Plan Participants and
Plans investing in the Fund, and determine what action, if any, should be taken
in response to such conflicts. An irreconcilable material conflict may arise for
a variety of reasons, which may include: (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 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 the Fund are being
managed; (e) a difference in voting instructions given by variable annuity and
variable life insurance contract owners; (f) a decision by a Participating
Insurance Company to disregard the voting instructions of Variable Contract
owners and (g) if applicable, a decision by a Plan to disregard the voting
instructions of plan participants.
6.3 The Company will report any potential or existing conflicts to the
Board. The Company will be obligated to assist the Board in carrying out its
duties and 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. The responsibility includes, but is not limited
to, an obligation by the Company to inform the Board whenever it has determined
to disregard Variable Contract owner voting instructions.
6.4 If a majority of the Board, or a majority of its disinterested
Board members, determines that a material irreconcilable conflict exists with
regard to contract owner investments in the Fund, the Board shall give prompt
notice of the conflict and the implications thereof to all Participating
Companies and Plans. If the Board determines that the Company is a relevant
Participating Company or Plan with respect to said conflict, the Company shall
at its sole cost and expense, and to the extent reasonably practicable (as
determined by a majority of the disinterested Board members), take such action
as is necessary to remedy or eliminate the irreconcilable material conflict.
Such necessary action may include but shall not be limited to: (a) withdrawing
the assets allocable to some or all of the Separate Accounts from the Fund or
any Portfolio thereof and reinvesting those assets in a different investment
medium, which may include another Portfolio of the Fund, or another investment
company; (b) 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 life insurance contract owners of one or more Participating
Insurance Companies) that votes in favor of such segregation, or offering to the
affected Variable Contract owners the option of making such a change; and (c)
establishing a new registered management investment company (or series thereof)
or managed separate account. If a material irreconcilable conflict arises
because of the Company's decision to disregard Variable Contract owner voting
instructions, and that decision represents a minority position or would preclude
a majority vote, the Company may be required, at the election of the Fund to
withdraw the Separate Account's investment in the Fund, and 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 interests of the
Variable Contract owners.
For the purposes of this Article, a majority of the disinterested
members of the Board shall determine whether or not any proposed action
adequately remedies any irreconcilable material conflict but in no event will
the Fund or its investment adviser (or any other investment adviser of the Fund)
be required to establish a new funding medium for any Variable Contract.
Further, the Company shall not be required by this Article to establish a new
funding medium for any Variable Contracts if any offer to do so has been
declined by a vote of a majority of Variable Contract owners materially and
adversely affected by the irreconcilable material conflict.
6.5 The Board's determination of the existence of an irreconcilable
material conflict and its implications shall be made known promptly and in
writing to the Company.
6.6 No less than annually, the Company shall submit to the Board such
reports, materials or data as the Board may reasonably request so that the Board
may fully carry out its obligations. Such reports, materials, and data shall be
submitted more frequently if deemed appropriate by the Board.
6.7 If and to the extent that the SEC promulgates new rules or
regulations with respect to mixed or shared funding 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 such
rules and regulations, as adopted, to the extent such rules are applicable; and
(b) this Article VI shall be deemed to incorporate such new terms and
conditions, and any term or condition of this Article VI that is inconsistent
therewith, shall be deemed to be succeeded thereby.
6.8 The Company acknowledges it has been advised by the Fund that it
may be appropriate for the Company to disclose the potential risks of mixed and
shared funding in prospectuses or other applicable disclosure documents.
Article VII. VOTING
-----------------------
7.1 The Company will provide pass-through voting privileges to all
Variable Contract owners so long as the SEC continues to interpret the `40 Act
as requiring pass-through voting privileges for Variable Contract owners.
Accordingly, the Company, where applicable, will vote Shares of the Portfolio
held in its Separate Accounts in a manner consistent with voting instructions
timely received from its Variable Contract owners. The Company will be
responsible for assuring that each of its Separate Accounts that participates in
the Fund calculates voting privileges in a manner consistent with other
Participating Insurance Companies. The Company 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. The Company and its agents shall not oppose or interfere with the
solicitation of proxies for Fund Shares held for such Variable Contract owners.
Article VIII. INDEMNIFICATION
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8.1 Indemnification by the Company.
(a) Subject to Section 8.3 below, the Company agrees to indemnify and hold
harmless the Fund and the Distributor, and each of their trustees,
directors, members, principals, officers, partners, employees and agents
and each person, if any, who controls the Fund or the Distributor within
the meaning of Section 15 of the `33 Act (collectively, the "Indemnified
Parties" for purposes of this Article) against any and all losses, claims,
damages, liabilities (including amounts paid in settlement with the written
consent of the Company, which consent shall not be unreasonably withheld)
or litigation (including 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 expenses (or actions in respect thereof) or settlements are
related to the sale or acquisition of the Fund's Shares or the Variable
Contracts and:
(i) arise out of or are based upon any untrue statements or alleged untrue
statements of any material fact contained in the registration statement or
prospectus for the Variable Contracts or contained in the Variable
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 the Company by or on behalf
of an Indemnified Party for use in the registration statement or prospectus
for the Variable Contracts or in the Variable Contracts or sales literature
(or any amendment or supplement) or otherwise for use in connection with
the sale of the Variable Contracts or Fund Shares; or
(ii) arise out of or as a result of statements or representations (other than
statements or representations contained in the registration statement,
prospectus or sales literature of the Fund not supplied by the Company, or
persons under its control) or wrongful conduct of the Company or persons
under its control, with respect to the sale or distribution of the Variable
Contracts or Fund Shares; or
(iii)arise out of any untrue statement or alleged untrue statement of a
material fact contained in a registration statement, prospectus, or sales
literature of the Fund or any amendment thereof or supplement thereto 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 to the Fund by or on behalf of the Company; or
(iv) arise as a result of any failure by the Company to provide the services and
furnish the materials under the terms of this Agreement; or
(v) arises out of information or instructions from the Company or its agents
concerning the purchase, redemption, transfer or other transaction in Fund
Shares; or
(vi) arise out of or result from any material breach of any representation
and/or warranty made by the Company in this Agreement or arise out of or
result from any other material breach of this Agreement by the Company.
(b) The Company shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
incurred or assessed against an Indemnified Party as such may arise from 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 or duties under this Agreement.
(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 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 party under this Agreement for any legal or
other expenses subsequently incurred by such party independently in connection
with the defense thereof other than reasonable costs of investigation.
8.2 Indemnification by the Fund and the Distributor.
------------------------------------------------
(a) Subject to Section 8.3 below, the Fund and the Distributor agree to
indemnify and hold harmless the Company and each of its directors, officers,
employees, and agents and each person, if any, who controls the Company within
the meaning of Section 15 of the `33 Act (collectively, the "Indemnified
Parties" for the purposes of this Article) against any and all losses, claims,
damages, liabilities (including amounts paid in settlement with the written
consent of the Fund and the Distributor which consent shall not be unreasonably
withheld) or litigation (including legal and other expenses) to which the
Indemnified Parties may become subject under any statute, or regulation, at
common law or otherwise, insofar as such losses, claims, damages, liabilities or
expenses (or actions in respect thereof) or settlements are related to the sale
or acquisition of the Fund's Shares or the Variable Contracts and:
(i) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the registration statement or
prospectus of the Fund (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 the Fund or
the Distributor by or on behalf of the Company for use in the registration
statement or prospectus for the Fund (or any amendment or supplement) or
otherwise for use in connection with the sale of the Variable Contracts or
Fund Shares; or
(ii) arise out of or as a result of statements or representations (other than
statements or representations contained in the registration statement,
prospectus or sales literature for the Variable Contracts not supplied by
the Fund or the Distributor or persons under its control) or wrongful
conduct of the Fund or the Distributor or persons under its control, with
respect to the sale or distribution of the Variable Contracts or Fund
Shares; or
(iii)arise out of any untrue statement or alleged untrue statement of a
material fact contained in a registration statement or prospectus covering
the Variable Contracts, or any amendment thereof or supplement thereto 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 to the Company for inclusion therein by or on behalf of the Fund
or the Distributor; or
(iv) arise as a result of a failure by the Fund or the Distributor to provide
the services and furnish the materials under the terms of this Agreement;
or
(v) arise out of or result from any material breach of any representation
and/or warranty made by the Fund or the Distributor in this Agreement or
arise out of or result from any other material breach of this Agreement by
the Fund or the Distributor.
(b) The Fund or the Distributor shall not be liable under this
indemnification provision with respect to any losses, claims, damages,
liabilities or litigation 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 Indemnified Party's duties or by
reason of such Indemnified Party's reckless disregard of obligations and duties
under this Agreement.
(c) The Fund or the Distributor, as the case may be, 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 or the Distributor, as the case may be, 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 or the Distributor of any such
claim shall not relieve the Fund or the Distributor 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 Fund or the Distributor shall be
entitled to participate at its own expense in the defense thereof. The Fund or
the Distributor also shall be entitled to assume the defense thereof, with
counsel satisfactory to the party named in the action. After notice from the
Fund or the Distributor to such party of the Fund's or the Distributor'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 or the
Distributor will not be liable to such party under this Agreement for any legal
or other expenses subsequently incurred by such party independently in
connection with the defense thereof other than reasonable costs of
investigation.
8.3 Indemnification for Errors. In the event of any error or delay with
respect to information regarding the purchase, redemption, transfer or
registration of Shares of the Fund, the parties agree that each is obligated to
make the Separate Accounts and/or the Fund, respectively, whole for any error or
delay that it causes, subject in the case of pricing errors to the related
Portfolio's policies on materiality of pricing errors. In addition, each party
agrees that neither will receive compensation from the other for the costs of
any reprocessing necessary as a result of an error or delay. Each party agrees
to provide the other with prompt notice of any errors or delays of the type
referred to in this Section.
Article IX. TERM; TERMINATION
-----------------
9.1 This Agreement shall be effective as of the date hereof and shall
continue in force until terminated in accordance with the provisions herein.
9.2 This Agreement shall terminate in accordance with the following
provisions:
(a) At the option of the Company or the Fund at any time from the date hereof
upon ninety (90) days notice, unless a shorter time is agreed to by the
parties;
(b) At the option of the Company, if Fund Shares are not reasonably available
to meet the requirements of the Variable Contracts as determined by the
Company. Prompt notice of election to terminate shall be furnished by the
Company, said termination to be effective ten days after receipt of notice
unless the Fund makes available a sufficient number of Shares to reasonably
meet the requirements of the Variable Contracts within said ten-day period;
(c) At the option of the Company, upon the institution of formal proceedings
against the Fund by the SEC, the National Association of Securities
Dealers, Inc., or any other regulatory body, the expected or anticipated
ruling, judgment or outcome of which would, in the Company's reasonable
judgment, materially impair the Fund's ability to meet and perform the
Fund's obligations and duties hereunder. Prompt notice of election to
terminate shall be furnished by the Company with said termination to be
effective upon receipt of notice;
(d) At the option of the Fund, upon the institution of formal proceedings
against the Company by the SEC, the NASD, or any other regulatory body, the
expected or anticipated ruling, judgment or outcome of which would, in the
Fund's reasonable judgment, materially impair the Company's ability to meet
and perform its obligations and duties hereunder. Prompt notice of election
to terminate shall be furnished by the Fund with said termination to be
effective upon receipt of notice;
(e) In the event the Fund's Shares are not registered, issued or sold in
accordance with applicable state or federal law, or such law precludes the
use of such Shares as the underlying investment medium of Variable
Contracts issued or to be issued by the Company. Termination shall be
effective upon such occurrence without notice;
(f) At the option of the Fund if the Variable Contracts cease to qualify as
annuity contracts or life insurance contracts, as applicable, under the
Code, or if the Fund reasonably believes that the Variable Contracts may
fail to so qualify. Termination shall be effective upon receipt of notice
by the Company;
(g) At the option of the Company, upon the Fund's breach of any material
provision of this Agreement, which breach has not been cured to the
satisfaction of the Company within ten days after written notice of such
breach is delivered to the Fund;
(h) At the option of the Fund, upon the Company's breach of any material
provision of this Agreement, which breach has not been cured to the
satisfaction of the Fund within ten days after written notice of such
breach is delivered to the Company;
(i) At the option of the Fund, if the Variable Contracts are not registered,
issued or sold in accordance with applicable federal and/or state law.
Termination shall be effective immediately upon such occurrence without
notice;
(j) In the event this Agreement is assigned without the prior written consent
of the Company, the Fund, and the Distributor, termination shall be
effective immediately upon such occurrence without notice.
9.3 Notwithstanding any termination of this Agreement pursuant to
Section 9.2 hereof, the Fund at the option of the Company will continue to make
available additional Fund Shares, as provided below, pursuant to the terms and
conditions of this Agreement, for all Variable 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 or the Company, whichever shall have legal authority to do
so, shall be permitted to reallocate investments in the Fund, redeem investments
in the Fund and/or invest in the Fund upon the payment of additional premiums
under the Existing Contracts.
Article X. NOTICES
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Any notice hereunder shall be given by registered or certified mail
return receipt requested to the other party at the address of such party set
forth below or at such other address as such party may from time to time specify
in writing to the other party.
If to the Fund:
Lord Xxxxxx Family of Funds
00 Xxxxxx Xxxxxx
Xxxxxx Xxxx, XX 00000
Attention: General Counsel
with a copy to:
Lord, Xxxxxx & Co. LLC
00 Xxxxxx Xxxxxx
Xxxxxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxx
If to the Distributor:
Lord Xxxxxx Distributor LLC
00 Xxxxxx Xxxxxx
Xxxxxx Xxxx, XX 00000
Attention: General Counsel
If to the Company:
Allstate Life Insurance Company
Allstate Life Insurance Company of New York
0000 Xxxxxxx Xxxx, Xxxxx X0X
Xxxxxxxxxx, XX 00000
Attention: _____________________________
Notice shall be deemed given on the date of receipt by the addressee as
evidenced by the return receipt.
Article XI. MISCELLANEOUS
------------------------------
11.1 Privacy. Each party hereto acknowledges that, by reason of its
performance under this Agreement, it shall have access to, and shall receive
from the other party (and its affiliates, partners and employees), the
confidential information of the other party (and its affiliates, partners and
employees), including but not limited to the "nonpublic personal information" of
their consumers within the meaning of SEC Regulation S-P (collectively,
"Confidential Information"). Each party shall hold all such Confidential
Information in the strictest confidence and shall use such Confidential
Information solely in connection with its performance under this Agreement and
for the business purposes set forth in this Agreement. Under no circumstances
may a party cause any Confidential Information of the other party to be
disclosed to any third party or reused or redistributed without the other
party's prior written consent.
11.2 Counterparts. This Agreement may be executed simultaneously in two
or more counterparts, each of which taken together shall constitute one and the
same instrument.
11.3 Severability. 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.
11.4 Governing Law. This Agreement shall be construed and the
provisions hereof interpreted under and in accordance with the laws of the State
of New York. It shall also be subject to the provisions of the federal
securities laws and the rules and regulations thereunder and to any orders of
the SEC granting exemptive relief therefrom and the conditions of such orders.
11.5 Liability. This Agreement has been executed on behalf of the Fund
by the undersigned officer of the Fund in his or her capacity as an officer of
the Fund. The obligations of this Agreement shall be binding upon the assets and
property of the Fund and each respective Portfolio thereof only and shall not be
binding on any Director/Trustee, officer or shareholder of the Fund
individually. In addition, notwithstanding any other provision of this
Agreement, no Portfolio shall be liable for any loss, expense, fee, charge or
liability of any kind relating to or arising from the actions or omissions of
any other Portfolio or from the application of this Agreement to any other
Portfolio. It is also understood that each of the Portfolios shall be deemed to
be entering into a separate Agreement with the Company so that it is as if each
of the Portfolios had signed a separate Agreement with the Company and that a
single document is being signed simply to facilitate the execution and
administration of the Agreement.
11.6 Inquiries and Investigations. Each party 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.
11.7 Subcontractors, Agents or Affiliates. The Company may hire or make
arrangements for subcontractors, agents or affiliates to perform the services
set forth in this Agreement. The Company shall provide the Fund with written
notice of the names of any subcontractors, agents or affiliates the Company
hires or arranges to perform such services, and any specific operational
requirements that arise as a result of such arrangement. The Company agrees that
it is and will be responsible for the acts and omissions of its subcontractors,
affiliates, and agents and that the indemnification provided by the Company in
Section 8 of this Agreement shall be deemed to cover the acts and omissions of
such subcontractors, affiliates, and agents to the same extent as if they were
the acts or omissions of the Company.
11.8 Client Lists. The Company hereby consents to the Distributor's,
the Fund's, or its investment adviser's use or reference to the Company's name
in connection with any full, partial or representative list of clients.
11.9 Entire Agreement. This Agreement constitutes the entire agreement
and understanding between the parties hereto and supersedes all prior agreement
and understandings relating to the subject matter hereof.
11.10 Amendment, Waiver and Other Matters. Neither this Agreement, nor
any provision hereof, may be amended, waived, modified or terminated in any
manner except by a written instrument properly authorized and executed by all
parties hereto. 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, which the parties hereto are entitled to under
state and federal laws.
IN WITNESS WHEREOF, the parties have caused their duly authorized
officers to execute this Fund Participation Agreement as of the date and year
first above written.
Lord Xxxxxx Series Fund, Inc.
By:_____________________________
Name: Xxxxxxxx X. Xxxxxx
Title: Vice President and Assistant Secretary
Lord Xxxxxx Distributor LLC
By: Lord, Xxxxxx & Co. LLC, its Managing Member
By:_____________________________
Name: Xxxxxxxx X. Xxxxxx
Title: Member and Deputy General Counsel
Allstate Life Insurance Company
By:______________________________
Name:
Title:
Allstate Life Insurance Company of New York
By:______________________________
Name:
Title:
