THIS AGREEMENT is made and entered into as of the 10th day of January, 2007
by and among GENWORTH LIFE INSURANCE COMPANY OF NEW YORK (the "Company"),
organized under the laws of the State of New York, on its own behalf and on
behalf of each separate account of the Company set forth on Schedule A hereto
as may be amended from time to time (each such account referred to as an
"Account"), THE UNIVERSAL INSTITUTIONAL FUNDS, INC. (the "Fund"), a Maryland
corporation, XXXXXX XXXXXXX DISTRIBUTION, INC. (the "Underwriter"), a Delaware
corporation, and XXXXXX XXXXXXX INVESTMENT MANAGEMENT INC. (the "Adviser"), a
Delaware corporation.
WHEREAS, the Fund engages in business as an open-end management investment
company and is available to act as (i) the investment vehicle for separate
accounts established by insurance companies for individual and group life
insurance policies and annuity contracts with variable accumulation and/or
pay-out provisions (hereinafter referred to individually and/or collectively as
"Variable Insurance Products") and (ii) the investment vehicle for certain
qualified pension and retirement plans ("Qualified Plans"); and
WHEREAS, insurance companies desiring to utilize the Fund as an investment
vehicle under their Variable Insurance Products enter into participation
agreements with the Fund, the Underwriter and the Adviser (the "Participating
Insurance Companies"); and
WHEREAS, shares of the Fund are divided into several series of shares, each
representing the interest in a particular managed portfolio of securities and
other assets, any one or more of which may be made available under this
Agreement; and
WHEREAS, the Fund intends to offer shares of the series set forth on
Schedule B hereto (each such series referred to as a "Portfolio"), as such
Schedule may be amended from time to time by mutual agreement of the parties
hereto, to the Account(s) of the Company (all references herein to "shares" of
a Portfolio shall mean the class or classes of shares specifically identified
on Schedule B); and
WHEREAS, the Fund has obtained an order from the Securities and Exchange
Commission ("SEC"), dated September 19, 1996 (File No. 812-10118), granting
Participating Insurance Companies and Variable Insurance Product separate
accounts exemptions from the provisions of Sections 9(a), 13(a), 15(a), and
15(b) of the Investment Company Act of 1940, as amended (the "1940 Act"), and
Rules 6e-2(b)(15) and 6e-3(T)(b)(15) thereunder, to the extent necessary to
permit shares of the Fund to be sold to and held by Variable Insurance Product
separate accounts of both affiliated and unaffiliated life insurance companies
and Qualified Plans (the "Shared Funding Exemptive Order"); and
WHEREAS, the Fund is registered as an open-end management investment company
under the 1940 Act and its shares are registered under the Securities Act of
1933, as amended (the "1933 Act"); and
WHEREAS, the Adviser is duly registered as an investment adviser under the
Investment Advisers Act of 1940, as amended, and any applicable state
securities laws; and
1
WHEREAS, the Adviser manages the Portfolios of the Fund; and
WHEREAS, the Underwriter is registered as a broker/dealer under the
Securities Exchange Act of 1934, as amended (the "1934 Act"), is a member in
good standing of the National Association of Securities Dealers, Inc. (the
"NASD") and serves as principal underwriter of the shares of the Fund; and
WHEREAS, the Company offers or proposes to offer certain Variable Insurance
Products that it has registered (or will register) under the 1933 Act (the
"Registered Contracts"), as well as other Variable Insurance Products that are
not registered under the 1933 Act (the "Unregistered Contracts," and together
with the Registered Contracts, the "Contracts"), each as set forth on Schedule
A hereto; and
WHEREAS, each Account is a duly organized, validly existing segregated asset
account, established by resolution or under authority of the Board of Directors
of the Company, on the date shown for such Account on Schedule A hereto, to set
aside and invest assets attributable to the Contracts; and
WHEREAS, the Company has registered (or will register) certain Accounts as
unit investment trusts under the 1940 Act that are attributable to the
Registered Contracts (the "Registered Accounts"), while certain other Accounts
that are attributable to the Unregistered Contracts will not be registered
under the 1940 Act (the "Unregistered Accounts," and together with the
Registered Accounts, the "Accounts"), each as set forth on Schedule A hereto;
and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares of the Portfolios, on
behalf of each Account or sub-account thereof (together, as applicable, an
"Account"), to fund the Contracts and the Underwriter is authorized to sell
such shares to each such Account at net asset value; and
WHEREAS, the Fund, acting through the Fund's transfer agent, has established
a master account on its mutual fund shareholder account system (the "T/A
Account") reflecting the aggregate ownership of shares of the Fund and all
transactions involving such shares by the Company on behalf of the Accounts; and
WHEREAS, the Company, the Fund, the Underwriter and the Adviser wish to
permit the Fund to receive, and the Company, or its authorized agent, to
transmit, purchase, exchange and redemption orders of Portfolio shares using
either manual procedures or the National Securities Clearing Corporation
("NSCC") Fund/SERV System ("Fund/SERV"), as set forth in the attached Schedule
D; and
WHEREAS, if the Company, the Fund, the Underwriter and the Adviser wish to
receive and transmit Fund shares via Fund/SERV, it is intended that the Fund
and the Company will establish an account using Fund/SERV (the "Fund/SERV
Account") that will reflect corresponding transactions and Fund share balances
in the T/A Account.
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NOW, THEREFORE, in consideration of their mutual promises, the Company, the
Fund, the Underwriter and the Adviser agree as follows:
ARTICLE I. Purchase and Redemption of Fund Shares
1.1. The Fund and the Underwriter agree to make available for purchase by
the Company shares of the Portfolio(s) and shall execute purchase orders placed
for each Account on each Business Day at the net asset value next computed
after receipt by the Fund or its designee of such purchase order. For purposes
of this Section 1.1, and for purposes of Rule 22c-1 under the 1940 Act, the
Company shall be the designee of the Fund and the Underwriter for receipt of
such purchase orders from each Account and receipt by such designee shall
constitute receipt by the Fund; provided that such purchase orders are received
and transmitted in accordance with the Operating Procedures attached hereto as
Schedule D (the "Operating Procedures"). "Business Day" shall mean any day on
which the New York Stock Exchange, Inc. is open for trading and on which the
Fund calculates its net asset value pursuant to SEC rules.
1.2. The Fund, so long as this Agreement is in effect, agrees to make shares
of the Portfolios available for purchase at the applicable net asset value per
share by the Company and its Accounts on those days on which the Fund
calculates its net asset value pursuant to SEC rules and the Fund shall use
reasonable efforts to calculate such net asset value on each day that the New
York Stock Exchange, Inc. is open for trading. Notwithstanding the foregoing,
the Board of Trustees of the Fund (the "Board") may refuse to permit the Fund
to sell shares of any Portfolio to any person, or suspend or terminate the
offering of shares of any Portfolio if such action is required by law or by
regulatory authorities having jurisdiction or is, in the sole discretion of the
Board acting in good faith and in light of its fiduciary duties under federal
and any applicable state laws, necessary in the best interests of the
shareholders of such Portfolio.
1.3. The Fund and the Underwriter agree that shares of the Fund will be sold
only to Participating Insurance Companies and their separate accounts and to
certain qualified plans. No shares of a Portfolio will be sold to the general
public.
1.4. The Fund and the Underwriter agree to redeem for cash, on the Company's
request, any full or fractional shares of the Portfolio(s) held by the Company,
executing such redemption requests for each Account on each Business Day at the
net asset value next computed after receipt by the Fund or its designee of the
request for redemption. Subject to and in accordance with applicable laws and
regulations, however, the Fund reserves the right to redeem shares of the
Portfolios for assets other than cash. For purposes of this Section 1.4, and
for purposes of Rule 22c-1 under the 1940 Act, the Company shall be the
designee of the Fund and the Underwriter for receipt of requests for redemption
from each Account and receipt by such designee shall constitute receipt by the
Fund; provided that such redemption requests are received and transmitted in
accordance with the Operating Procedures.
3
1.5. The Company agrees that purchases and redemptions of Portfolio shares
offered by the then current prospectus of the Fund shall be made in accordance
with the provisions of such prospectus.
1.6. The Fund and the Company will settle all purchase and redemption orders
transmitted pursuant to Sections 1.1 and 1.4 of this Agreement, respectively,
in accordance with the Operating Procedures.
1.7. Issuance and transfer of the Fund's shares will be by book entry only.
Share certificates will not be issued to the Company or any Account. Shares
ordered from the Fund will be recorded in an appropriate title for each Account
or the appropriate sub-account of each Account.
1.8. The Company shall not redeem Fund shares attributable to the Contracts
(as distinct from Fund shares attributable to the Company's assets held in the
Account) except (i) as necessary to implement Contract owner initiated or
approved transactions, (ii) as required by state and/or federal laws or
regulations or judicial or other legal precedent of general application
(hereinafter referred to as a "Legally Required Redemption") or (iii) as
permitted by an order of the SEC pursuant to Section 26(c) of the 1940 Act.
Upon request, the Company will promptly furnish to the Fund the opinion of
counsel for the Company (which counsel shall be reasonably satisfactory to the
Fund) to the effect that any redemption pursuant to clause (ii) above is a
Legally Required Redemption.
ARTICLE II. Representations and Warranties
2.1. The Company represents and warrants that: (i) it is an insurance
company duly organized and in good standing under applicable law; (ii) if it
intends to be a member of the NSCC, then it will be a member in good standing
of the NSCC or is otherwise entitled to use Fund/SERV and it will abide by the
rules and regulations of the NSCC; (iii) it has legally and validly established
each Account prior to any issuance or sale thereof as a segregated asset
account under applicable laws and regulations; (iv) it has registered or, prior
to any issuance or sale of the Registered Contracts, will register and will
thereafter maintain the registration of each Registered Account as a unit
investment trust in accordance with the provisions of the 1940 Act to serve as
a segregated investment account for the Registered Contracts; and (v) the
Unregistered Accounts are exempt from the registration requirements of the 1940
Act under the provisions of Section 3(c)(1), 3(c)(7) or 3(c)(11) thereof. The
Company further represents and warrants that: (i) the Registered Contracts are
or will be registered and shall remain registered under the 1933 Act; (ii) the
Unregistered Contracts are exempt from the registration requirements of the
1933 Act under the provisions of Section 3(a)(2) or 4(2) thereof; and (iii) the
Contracts will be issued and sold in compliance in all material respects with
all applicable federal and state laws. The Company shall amend the registration
statement for the Registered Accounts and the Registered Contracts under the
1940 Act and the 1933 Act, respectively, from time to time as required in order
to effect the continuous offering of the Registered Contracts; moreover, the
Company will notify the Fund immediately in writing of any changes in facts or
circumstances
4
leading the Company to believe that any of the exemptions described above with
respect to the Unregistered Contracts or Unregistered Accounts are not
applicable as represented.
2.2. The Fund and the Underwriter represent and warrant that Fund shares
sold pursuant to this Agreement shall be registered under the 1933 Act, duly
authorized for issuance and sold in compliance with the laws of the State of
Maryland and all applicable federal and state securities laws and that the Fund
is and shall remain registered under the 0000 Xxx. The Fund shall amend the
registration statement for its shares under the 1933 Act and the 1940 Act from
time to time as required in order to effect the continuous offering of its
shares. The Fund shall register and qualify the shares for sale in accordance
with the laws of the various states only if and to the extent deemed advisable
by the Fund.
2.3. The Fund and the Adviser represent that the Fund is currently qualified
as a Regulated Investment Company under Subchapter M of the Internal Revenue
Code of 1986, as amended (the "Code"), and that the Fund and the Adviser will
use reasonable efforts to maintain such qualification (under Subchapter M or
any successor or similar provision) and will notify the Company immediately
upon having a reasonable basis for believing that the Fund has ceased to so
qualify.
2.4. The Company represents and warrants that each Account is and will
continue to be a "segregated asset account" under applicable provisions of the
Code and applicable Treasury Regulations promulgated thereunder and that each
Contract is and will continue to be treated as a "variable contract" under
applicable provisions of the Code and applicable Treasury Regulations
promulgated thereunder. The Company further represents and warrants that it
will make every effort to maintain such treatment and that it will notify the
Fund immediately upon having a reasonable basis for believing that any Account
or Contract has ceased to be so treated or that any Account or Contract might
not be so treated in the future.
2.5. The Fund represents that to the extent that it decides to finance
distribution expenses pursuant to Rule 12b-1 under the 1940 Act, the Fund
undertakes to have the Board, at least a majority of whom are not interested
persons of the Fund, formulate and approve any plan under Rule 12b-1 to finance
distribution expenses.
2.6. The Fund makes no representation as to whether any aspect of its
operations (including, but not limited to, fees and expenses and investment
policies) complies with the insurance laws or regulations of the various states.
2.7. The Fund represents that it is lawfully organized and validly existing
under the laws of the State of Maryland and that it does and will comply in all
material respects with the 1940 Act. The Fund represents and warrants that it
is a member in good standing of the NSCC, or is otherwise entitled to use
Fund/SERV, and will abide by the rules and regulations of the NSCC.
2.8. The Adviser represents and warrants that it is and shall remain duly
registered in all material respects under all applicable federal and state
securities laws and that it will perform its obligations for the Fund in
compliance in all material respects with the laws of its state of domicile and
any applicable state and federal securities laws.
5
2.9. The Underwriter represents and warrants that it is and shall remain
duly registered in all material respects under all applicable federal and state
securities laws and that it will perform its obligations for the Fund in
compliance in all material respects with the laws of its state of domicile and
any applicable state and federal securities laws.
2.10. The Fund represents and warrants that all of its directors, officers,
employees, and other individuals/entities dealing with the money and/or
securities of the Fund are and shall continue to be at all times covered by a
blanket fidelity bond or similar coverage for the benefit of the Fund in an
amount not less than the minimum coverage as currently required by Rule 17g-1
of the 1940 Act or related provisions as may be promulgated from time to time.
The aforesaid blanket fidelity bond shall include coverage for larceny and
embezzlement and shall be issued by a reputable bonding company.
2.11. The Company represents and warrants that all of its directors,
officers, and employees dealing with the money and/or securities of the
Account(s) are and shall continue to be at all times covered by a blanket
fidelity bond or similar coverage for the benefit of the Company and/or the
Account(s) that is reasonable and customary in light of the Company's
obligations under this Agreement. The aforesaid includes coverage for larceny
and embezzlement and shall be issued by a reputable bonding company in an
amount not less than $5 million. The Company agrees to make all reasonable
efforts to see that this bond or another bond containing these provisions is
always in effect, and agrees to notify the Fund, the Underwriter and the
Adviser in the event that such coverage no longer applies.
ARTICLE III. Prospectuses, Reports to Shareholders and Proxy Statements; Voting
3.1. The Fund or its designee shall provide the Company with as many printed
copies of the Fund's current prospectus and statement of additional information
as the Company may reasonably request. If requested by the Company, in lieu of
providing printed copies the Fund shall provide camera-ready film or computer
diskettes containing the Fund's prospectus and statement of additional
information, and such other assistance as is reasonably necessary in order for
the Company once each year (or more frequently if the prospectus and/or
statement of additional information for the Fund is amended during the year) to
have the prospectus or other disclosure document for the Contracts and the
Fund's prospectus (and statement of additional information for the Fund and the
statement of additional information for the Registered Contracts) printed
together in one document. Alternatively, the Company may print the Fund's
prospectus and/or its statement of additional information in combination with
other fund companies' prospectuses and statements of additional information.
3.2. Except as provided in this Section 3.2, all expenses of preparing,
setting in type, printing and distributing Fund prospectuses and statements of
additional information shall be the expense of the Company. For prospectuses
and statements of additional information provided by the Company to its
Contract owners who currently own shares of one or more Portfolios
6
("Existing Contract Owners"), in order to update disclosure as required by the
1933 Act and/or the 1940 Act, the cost of printing shall be borne by the Fund.
If the Company chooses to receive camera-ready film or computer diskettes in
lieu of receiving printed copies of the Fund's prospectus, the Fund shall bear
the cost of typesetting to provide the Fund's prospectus to the Company in the
format in which the Fund is accustomed to formatting prospectuses, and the
Company shall bear the expense of adjusting or changing the format to conform
with any of its prospectuses or other disclosure documents. In such event, the
Fund will reimburse the Company in an amount equal to the product of "x" and
"y", where "x" is the number of such disclosure documents distributed to
Existing Contract Owners and "y" is the Fund's per unit cost of printing the
Fund's prospectus. The same procedures shall be followed with respect to the
Fund's statement of additional information. The Company agrees to provide the
Fund or its designee with such information as may be reasonably requested by
the Fund to assure that the Fund's expenses do not include the costs of
printing, typesetting or distributing any prospectuses or statements of
additional information other than the costs of printing those prospectuses or
statements of additional information actually distributed to Existing Contract
Owners.
3.3. The statement of additional information of the Fund shall be obtainable
from the Fund, the Underwriter, the Company or such other person as the Fund
may designate.
3.4. The Fund or its designee shall provide the Company with as many printed
copies of the Fund's current shareholder report as the Company may reasonably
request. If requested by the Company, in lieu of providing printed copies the
Fund shall provide camera-ready film or computer diskettes containing the
Fund's shareholder reports, and such other assistance as is reasonably
necessary in order for the Company twice each year (once for the Fund's
semi-annual report and once for the Fund's annual report) to have the reports
for the Contract Owners and the Fund's shareholder reports printed together in
one document. Alternately, the Company may print the Fund's shareholder reports
in combination with other fund companies' shareholder reports.
3.5. Except as provided in this Section 3.5, all expenses of preparing,
setting in type, printing and distributing Fund shareholder reports shall be
the expense of the Company. For Fund shareholder reports provided by the
Company to its Contract owners who currently own shares of one or more
Portfolios ("Existing Contract Owners"), in order to deliver such reports as
required by the 1934 Act and/or the 1940 Act, the cost of printing shall be
borne by the Fund. If the Company chooses to receive camera-ready film or
computer diskettes in lieu of receiving printed copies of the Fund's
shareholder reports, the Fund shall bear the cost of typesetting to provide the
Fund's shareholder reports to the Company in the format in which the Fund is
accustomed to formatting shareholder reports, and the Company shall bear the
expense of adjusting or changing the format to conform with any of its reports
to Contract Owners. In such event, the Fund will reimburse the Company in an
amount equal to the product of "x" and "y", where "x" is the number of such
shareholder reports distributed to Existing Contract Owners and "y" is the
Fund's per unit cost of printing the Fund's shareholder reports. The Company
agrees to provide the Fund or its designee with such information as may be
reasonably requested by the Fund to assure that the Fund's expenses do not
include the costs of printing, typesetting or distributing any shareholder
reports other than the costs of printing those shareholder reports actually
distributed to Existing Contract Owners.
7
3.6 The Fund, at its expense, shall provide the Company with copies of its
proxy statements and other communications (except for prospectuses and
statements of additional information that are covered in Section 3.1 and
reports to shareholders that are covered in Section 3.4) to shareholders in
such quantity as the Company shall reasonably require for distributing to
Existing Contract Owners. The Fund shall not pay any costs of distributing such
materials to prospective Contract owners.
3.7. If and to the extent required by law, the Company shall distribute all
proxy materials furnished by the Fund to Contract owners to whom voting
privileges are required to be extended and shall:
(i) solicit voting instructions from Contract owners;
(ii) vote the Portfolio shares in accordance with instructions
received from Contract owners; and
(iii)vote Portfolio shares for which no instructions have been
received in the same proportion as Portfolio shares for which
instructions have been received;
so long as and to the extent that the SEC continues to interpret the 1940 Act
to require pass-through voting privileges for variable contract owners. The
Company reserves the right to vote Portfolio shares held in any segregated
asset account in its own right, to the extent permitted by law. If the Company
is required to solicit voting instructions, the Fund and the Company shall
follow the procedures, and shall have the corresponding responsibilities, for
the handling of proxies and voting instruction solicitations, as set forth in
Schedule C attached hereto and incorporated herein by reference. Participating
Insurance Companies shall be responsible for ensuring that each of their
separate accounts participating in the Fund (and for which the soliciting of
voting instructions is required) calculates voting privileges in a manner
consistent with the standards set forth on Schedule C, which standards will
also be provided to the other Participating Insurance Companies.
3.8. The Fund will comply with all provisions of the 1940 Act requiring
voting by shareholders, and in particular the Fund will either provide for
annual meetings (except insofar as the SEC may interpret Section 16 of the 1940
Act not to require such meetings) or comply with Section 16(c) of the 1940 Act
(although the Fund is not one of the trusts described in Section 16(c) of the
0000 Xxx) as well as with Section 16(a) of the 1940 Act and, if and when
applicable, Section 16(b) of the 1940 Act. Further, the Fund will act in
accordance with the SEC's interpretation of the requirements of Section 16(a)
of the 1940 Act with respect to periodic elections of directors and with
whatever rules the SEC may promulgate with respect thereto.
8
ARTICLE IV. Sales Material and Information
4.1. The Company shall furnish, or shall cause to be furnished, to the Fund
or its designee, each piece of sales literature or other promotional material
in which the Fund, the Underwriter or the Adviser is named, at least ten
(10) Business Days prior to its use. No such material shall be used without the
prior approval of the Fund or its designee. The Fund shall use its reasonable
best efforts to review any such material as soon as practicable after receipt
and no later than ten (10) Business Days after receipt of such material.
4.2. The Company shall not give any information or make any representations
or statements on behalf of the Fund or concerning the Fund in connection with
the sale of the Contracts other than the information or representations
contained in the registration statement or prospectus for the Fund shares, as
such registration statement or prospectus may be amended or supplemented from
time to time, or in reports or proxy statements for the Fund which are in the
public domain or approved by the Fund for distribution to Fund shareholders, or
in sales literature or other promotional material approved by the Fund or its
designee, except with the permission of the Fund.
4.3. The Fund or its designee shall furnish, or shall cause to be furnished,
to the Company or its designee, each piece of sales literature or other
promotional material in which the Company and/or its Account(s) or Contract(s)
are named at least ten (10) Business Days prior to its use. No such material
shall be used if the Company or its designee reasonably objects to such use
within ten (10) Business Days after receipt of such material.
4.4. Neither the Fund, the Underwriter nor the Adviser shall give any
information or make any representations on behalf of the Company or concerning
the Company, each Account, or the Contracts, other than the information or
representations contained in a registration statement, prospectus, offering
memorandum or other disclosure document for the Contracts, as such documents
may be amended or supplemented from time to time, or in reports or proxy
statements for each Account which are in the public domain or approved by the
Company for distribution to Contract owners, or in sales literature or other
promotional material approved by the Company or its designee, except with the
permission of the Company.
4.5. The Fund will provide to the Company at least one complete copy of all
registration statements, prospectuses, statements of additional information,
reports, proxy statements, sales literature and other promotional materials,
applications for exemptions, requests for no-action letters, and all amendments
to any of the above, that relate to the Fund or its shares and are relevant to
the Company or the Contracts.
4.6. The Company will provide to the Fund, to the extent applicable, at
least one complete copy of all registration statements, prospectuses,
statements of additional information, offering memoranda or other disclosure
documents, reports, solicitations for voting instructions, sales literature and
other promotional materials, applications for exemptions, requests for no
action letters, and all amendments to any of the above, that relate to
investment in the Fund or the Portfolios under the Contracts.
9
4.7. For purposes of this Article IV, the phrase "sales literature or other
promotional material" includes, but is not limited to, any of the following
that refer to the Fund or any affiliate of the Fund: 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
(i.e., any written communication distributed or made generally available to
customers or the public, including brochures, circulars, research reports,
market letters, form letters, seminar texts, 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, and registration statements, offering
memoranda, prospectuses, statements of additional information or other
disclosure documents, shareholder reports, and proxy materials.
ARTICLE V. Fees and Expenses
5.1. The Fund shall pay no fee or other compensation to the Company under
this Agreement, except that if the Fund or any Portfolio adopts and implements
a service plan and/or a plan pursuant to Rule 12b-1, then the Underwriter may
make payments to the Company or to the underwriter for the Contracts pursuant
to such plans if and in amounts agreed to by the Underwriter in writing.
5.2. All expenses incident to performance by the Fund under this Agreement
shall be paid by the Fund. The Fund shall see to it that all its shares are
registered and authorized for issuance in accordance with applicable federal
law and, if and to the extent deemed advisable by the Fund, in accordance with
applicable state laws prior to their sale. Except as otherwise set forth in
Section 3.2 of this Agreement, the Fund shall bear the expenses for the cost of
registration and qualification of the Fund's shares, preparation and filing of
the Fund's prospectus and registration statement, proxy materials and reports,
setting the prospectus in type, setting in type and printing the proxy
materials and reports to shareholders, the preparation of all statements and
notices required by any federal or state law, and all taxes on the issuance or
transfer of the Fund's shares.
5.3. The Company shall bear the expenses of distributing the Fund's
prospectus, statement of additional information, proxy materials and reports to
owners of Contracts issued by the Company.
ARTICLE VI. Diversification
6.1. The Adviser and the Fund will use their best efforts to at all times
comply with Section 817(h) of the Code and Treasury Regulation 1.817-5,
relating to the diversification requirements for annuity, endowment, or life
insurance contracts and any amendments or other modifications to such Section
or Regulations. In the event the Fund ceases to so qualify, the Adviser and the
Fund will take reasonable steps to (a) notify the Company of such event and
(b) adequately diversify the Fund so as to achieve compliance within the time
period afforded by Regulation 1.817-5.
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ARTICLE VII. Potential Conflicts
7.1. The Board will monitor the Fund for the existence of any material
irreconcilable conflict between the interests of the contract owners of all
separate accounts investing in the Fund. An irreconcilable material conflict
may arise for a variety of reasons, including: (a) an action by any state
insurance regulatory authority; (b) a change in applicable federal or state
insurance, tax, or securities laws or regulations, or a public ruling, private
letter ruling, no-action or interpretative letter, or any similar action by
insurance, tax, or securities regulatory authorities; (c) an administrative or
judicial decision in any relevant proceeding; (d) the manner in which the
investments of any Portfolio are being managed; (e) a difference in voting
instructions given by contract owners; or (f) a decision by a Participating
Insurance Company to disregard the voting instructions of contract owners. The
Fund shall promptly inform the Company if the Board determines that an
irreconcilable material conflict exists and the implications thereof.
7.2. The Company will report any potential or existing conflicts of which it
is aware to the Board. The Company will assist the Board in carrying out its
responsibilities under the Shared Funding Exemptive Order by providing the
Board with all information reasonably necessary for the Board to consider any
issues raised. This includes, but is not limited to, an obligation by the
Company to inform the Board whenever Contract owner voting instructions are
disregarded. The Company agrees that these responsibilities will be carried out
with a view only to the interests of Contract owners.
7.3. If it is determined by a majority of the Board, or a majority of its
disinterested members, that a material irreconcilable conflict exists, the
Company and other Participating Insurance Companies shall, at their expense and
to the extent reasonably practicable (as determined by a majority of the
disinterested directors), take whatever steps are necessary to remedy or
eliminate the irreconcilable material conflict, up to and including:
(1) 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 (but not limited to) another portfolio of the
Fund, or submitting the question whether such segregation should be implemented
to a vote of all affected contract owners and, as appropriate, segregating the
assets of any appropriate group (i.e., annuity contract owners, life insurance
policy owners, or variable contract owners of one or more Participating
Insurance Companies) that votes in favor of such segregation, or offering to
the affected contract owners the option of making such a change; and
(2) establishing a new registered management investment company or managed
separate account. No charge or penalty will be imposed as a result of such
withdrawal. The Company agrees that it bears the responsibility to take
remedial action in the event of a Board determination of an irreconcilable
material conflict and the cost of such remedial action, and that these
responsibilities will be carried out with a view only to the interests of
Contract owners.
7.4. If a material irreconcilable conflict arises because of a decision by
the Company to disregard contract owner voting instructions and that decision
represents a minority position or would preclude a majority vote, the Company
may be required, at the Fund's election, to withdraw the affected Account's
investment in the Fund and terminate this Agreement with
11
respect to such Account (at the Company's expense); provided, however that such
withdrawal and termination shall be limited to the extent required by the
foregoing material irreconcilable conflict as determined by a majority of the
disinterested members of the Board. No charge or penalty will be imposed as a
result of such withdrawal. The Company agrees that it bears the responsibility
to take remedial action in the event of a Board determination of an
irreconcilable material conflict and the cost of such remedial action, and that
these responsibilities will be carried out with a view only to the interests of
Contract owners.
7.5. For purposes of Sections 7.3 and 7.4 of this Agreement, a majority of
the disinterested members of the Board shall determine whether any proposed
action adequately remedies any irreconcilable material conflict, but in no
event will the Fund be required to establish a new funding medium for the
Contracts. The Company shall not be required by Section 7.3 or 7.4 to establish
a new funding medium for the Contracts if an offer to do so has been declined
by vote of a majority of Contract owners materially adversely affected by the
irreconcilable material conflict.
7.6. If and to the extent that Rule 6e-2 and Rule 6e-3(T) are amended, or
Rule 6e-3 is adopted, to provide exemptive relief from any provision of the
1940 Act or the rules promulgated thereunder with respect to mixed or shared
funding (as defined in the Shared Funding Exemptive Order) on terms and
conditions materially different from those contained in the Shared Funding
Exemptive Order, then (a) the Fund and/or the Participating Insurance
Companies, as appropriate, shall take such steps as may be necessary to comply
with Rules 6e-2 and 6e-3(T), as amended, and Rule 6e-3, as adopted, to the
extent such rules are applicable; and (b) Sections 3.7, 3.8, 7.1, 7.2, 7.3 and
7.4 of this Agreement shall continue in effect only to the extent that terms
and conditions substantially identical to such Sections are contained in such
Rule(s) as so amended or adopted.
7.7. Each of the Company and the Adviser shall at least annually submit to
the Board such reports, materials or data as the Board may reasonably request
so that the Board may fully carry out the obligations imposed upon it by the
provisions hereof and in the Shared Funding Exemptive Order. Such reports,
materials and data shall be submitted more frequently if deemed appropriate by
the Board.
ARTICLE VIII. Contract Holder Information
8.1 Agreement to Provide Contract Holder Information Pursuant to Rule 22c-2
(i) To the extent required by Rule 22c-2 under the 1940 Act, or in the
event the Company has the ability to do so, the Company agrees to provide the
Fund, upon written request, the taxpayer identification number ("TIN"), if
known, of any or all Contract holders and the amount, date, name or other
identifier of any investment professional(s) associated with the Contract
holder(s) or account(s) (if known), and transaction type (purchase, redemption,
transfer or exchange) of every purchase, redemption, transfer or exchange of
shares of the Portfolio(s) held through one or more account(s) maintained by
the Company during the period covered by the request ("transaction
information").
12
(ii) Requests must set forth a specific period, not to exceed ninety
(90) business days from the date of the request, for which transaction
information is sought. The Fund may request transaction information older than
ninety (90) business days from the date of the request as it deems necessary to
investigate compliance with policies established by the Fund for the purpose of
eliminating or reducing any dilution of the value of the outstanding shares of
the Portfolio(s) issued by the Fund.
(iii) The Company agrees to transmit the requested transaction
information that is on its books and records to the Fund or its designee
promptly, but in any event not later than five (5) business days after receipt
of a request. If the requested transaction information is not on the Company's
books and records, the Company agrees to: (i) provide or arrange to provide to
the Fund the requested transaction information from Contract holders who hold
an account with an indirect intermediary; or (ii) if directed by the Fund,
block further purchases of shares of the Portfolio(s) from such indirect
intermediary. In such instance, the Company agrees to inform the Fund 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 Fund should be consistent with the NSCC Standardized Data Reporting Format.
For purposes of this provision, an "indirect intermediary" has the same meaning
as in SEC Rule 22c-2 under the Investment Company Act.
8.2 Agreement to Restrict Trading; Instructions; Confirmations
(i) To the extent required by Rule 22c-2, or in the event the Company
has the ability to do so, the Company agrees to execute written instructions
from the Fund to restrict or prohibit further purchases or exchanges of shares
of the Portfolio(s) by a Contract holder that has been identified by the Fund
as having engaged in transactions of Portfolio shares (directly or indirectly
through the Company's account) that violate market timing or frequent trading
policies established by the Fund for the purpose of eliminating or reducing any
dilution of the value of the outstanding Portfolio shares issued by the Fund.
(ii) Instructions must include the TIN, if known, and the specific
restrictions(s) to be executed. If the TIN is not known, the instructions must
include an equivalent identifying number of the Contract holder(s) or
account(s) or other agreed upon information to which the instruction relates.
(iii) The Company agrees to execute instructions as soon as reasonably
practicable, but not later than five (5) business days after receipt of the
instructions by the Company.
(iv) The Company must provide written confirmation to the Fund that
instructions have been executed. The Company agrees to provide confirmation as
soon as reasonably practicable, but not later than ten (10) business days after
the instructions have been executed.
13
8.3 Limitations on Use of Information
The Fund agrees not to use the transaction information received from the
Company for marketing or any other similar purpose without the prior written
consent of the Company.
ARTICLE IX. Anti-Money Laundering
9.1. The Company represents and warrants that it is in compliance and will
continue to be in compliance with all applicable anti-money laundering laws and
regulations, including the Bank Secrecy Act, as amended by the USA PATRIOT Act,
and implementing regulations of the Bank Secrecy Act ("BSA Regulations") and
applicable guidance issued by the SEC and the guidance and rules of the
applicable Exchanges, SROs and the NASD (collectively, "Guidance").
9.2. The Company will take all reasonable and practicable steps to ensure
that it does not accept or maintain investments in any Contract from:
(i) A person or entity (A) who is or becomes subject to sanctions
administered by the U.S. Office of Foreign Assets Control ("OFAC"), is included
in any executive order or is on the list of Specially Designated Nationals and
Blocked Persons maintained by OFAC, or (B) whose name appears on such other
lists of prohibited persons and entities as may be mandated by applicable U.S.
law or regulation.
(ii) A foreign shell bank (i.e., a bank with no physical presence in any
country).
9.3. To the extent permitted by applicable law, the Company agrees to notify
in writing the Anti-Money Laundering Compliance Officer of the Fund if it
becomes aware of any suspicious activity or pattern of activity or any activity
that may require further review to determine whether it is suspicious in
connection with the Funds.
ARTICLE X. Indemnification
10.1. Indemnification by the Company
10.1(a). The Company agrees to indemnify and hold harmless the Fund, the
Underwriter, the Adviser and each member of the Board and each officer and
employee of the Fund, and each director, officer and employee of the
Underwriter and the Adviser, and each person, if any, who controls the Fund,
the Underwriter or the Adviser within the meaning of Section 15 of the 1933 Act
(collectively, the "Indemnified Parties" and individually, an "Indemnified
Party," for purposes of this Section 10.1) against any and all losses, claims,
damages, liabilities (including amounts paid in settlement with the written
consent of the Company) or litigation (including reasonable 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
Contracts and:
14
(i) arise out of or are based upon any untrue statements or alleged
untrue statements of any material fact contained in the
registration statement, prospectus, offering memorandum or other
disclosure document for the Contracts or contained in the
Contracts or sales or other promotional literature 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 the Company by or
on behalf of the Fund, the Adviser or the Underwriter for use in
the registration statement, prospectus, offering memorandum or
other disclosure document for the Contracts or in the Contracts
or sales or other promotional literature (or any amendment or
supplement) or otherwise for use in connection with the sale of
the 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 or other promotional
literature of the Fund not supplied by the Company, or persons
under its control and other than statements or representations
authorized by the Fund, the Underwriter or the Adviser) or
unlawful conduct of the Company or persons under its control,
with respect to the sale or distribution of the Contracts or Fund
shares; or
(iii)arise out of or as a result of any untrue statement or alleged
untrue statement of a material fact contained in a registration
statement, prospectus, or sales or other promotional 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 a 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) 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; or
Each of paragraphs (i) through (v) above is limited by and in accordance with
the provisions of Sections 10.1(b) and 10.1(c) below.
10.1(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
15
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.
10.1(c). The Company shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Company in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice
of such service on any designated agent), but failure to notify the Company of
any such claim shall not relieve the Company from any liability which it may
have to the Indemnified Party against whom such action is brought otherwise
than on account of this indemnification provision. In case any such action is
brought against the Indemnified Parties, 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.
10.1(d). The Fund, the Underwriter or the Adviser, as applicable, will
promptly notify the Company of the commencement of any litigation or
proceedings against an Indemnified Party in connection with this Agreement, the
issuance or sale of the Fund shares or the Contracts, or the operation of the
Fund.
10.2. Indemnification by the Underwriter
10.2(a). The Underwriter agrees to indemnify and hold harmless the Company
and each of its directors, officers and employees, and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act
(collectively, the "Indemnified Parties" and individually, an "Indemnified
Party," for purposes of this Section 10.2) against any and all losses, claims,
damages, liabilities (including amounts paid in settlement with the written
consent of the Underwriter) or litigation (including reasonable 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 shares of a Portfolio 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 or sales or other
promotional literature 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
16
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, the
Underwriter or the Adviser by or on behalf of the Company for use
in the registration statement or prospectus for the Fund or in
sales or other promotional literature (or any amendment or
supplement) or otherwise for use in connection with the sale of
the Contracts or Portfolio shares; or
(ii) arise out of or as a result of statements or representations
(other than statements or representations contained in
registration statement, prospectus, offering memorandum, other
disclosure document or sales or other promotional literature for
the Contracts not supplied by the Fund or the Underwriter or
persons under their respective control and other than statements
or representations authorized by the Company) or unlawful conduct
of the Fund or the Underwriter or persons under their respective
control, with respect to the sale or distribution of the
Contracts or Portfolio shares; or
(iii)arise out of or as a result of any untrue statement or alleged
untrue statement of a material fact contained in a registration
statement, prospectus, offering memorandum, other disclosure
document or sales or other promotional literature covering the
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 statement
or statements therein not misleading, if such statement or
omission was made in reliance upon information furnished to the
Company by or on behalf of the Fund or the Underwriter; or
(iv) arise as a result of any failure by the Underwriter 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 Underwriter in this
Agreement or arise out of or result from any other material
breach of this Agreement by the Underwriter.
Each of paragraphs (i) through (v) above is limited by and in accordance with
the provisions of Sections 10.2(b) and 10.2(c) below.
10.2(b). The Underwriter 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 and duties under
this Agreement.
17
10.2(c). The Underwriter shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Underwriter in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice
of such service on any designated agent), but failure to notify the Underwriter
of any such claim shall not relieve the Underwriter from any liability which it
may have to the Indemnified Party against whom such action is brought otherwise
than on account of this indemnification provision. In case any such action is
brought against the Indemnified Parties, the Underwriter will be entitled to
participate, at its own expense, in the defense thereof. The Underwriter also
shall be entitled to assume the defense thereof, with counsel satisfactory to
the party named in the action. After notice from the Underwriter to such party
of the Underwriter's election to assume the defense thereof, the Indemnified
Party shall bear the fees and expenses of any additional counsel retained by
it, and the Underwriter will not be liable to such 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.
10.2(d). The Company will promptly notify the Underwriter of the
commencement of any litigation or proceedings against an Indemnified Party in
connection with this Agreement, the issuance or sale of the Contracts or the
operation of the Account(s).
10.3. Indemnification by the Adviser
10.3(a) The Adviser agrees to indemnify and hold harmless the Company and
each of its directors, officers and employees, and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act
(collectively, the "Indemnified Parties" and individually, an "Indemnified
Party," for purposes of this Section 10.3) against any and all losses, claims,
damages, liabilities (including amounts paid in settlement with the written
consent of the Adviser) or litigation (including reasonable 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 shares of a Portfolio 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 or sales or other
promotional literature 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, the Underwriter or the Adviser
by or on behalf of the Company for use in the registration
statement or prospectus for the Fund or in sales or other
promotional literature (or any amendment or
18
supplement) or otherwise for use in connection with the sale of
the Contracts or Portfolio 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, offering memorandum, other
disclosure document or sales or other promotional literature for
the Contracts not supplied by the Fund or the Adviser or persons
under their respective control and other than statements or
representations authorized by the Company) or unlawful conduct of
the Fund or the Adviser or persons under their respective
control, with respect to the sale or distribution of the
Contracts or Portfolio shares; or
(iii)arise out of or as a result of any untrue statement or alleged
untrue statement of a material fact contained in a registration
statement, prospectus, offering memorandum, other disclosure
document or sales or other promotional literature covering the
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 statement
or statements therein not misleading, if such statement or
omission was made in reliance upon information furnished to the
Company by or on behalf of the Fund or the Adviser; or
(iv) arise as a result of any failure by the Adviser 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 Adviser in this
Agreement or arise out of or result from any other material
breach of this Agreement by the Adviser; or
(vi) arise out of the failure of the Fund or any Portfolio to comply
with the diversification requirements set forth in Section 817(h)
of the Code or to qualify as a "regulated investment company"
under Subchapter M of the Code.
Each of paragraphs (i) through (vi) above is limited by and in accordance with
the provisions of Sections 10.3(b) and 10.3(c) below.
10.3(b). The Adviser 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 and duties under
this Agreement.
10.3(c). The Adviser shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified
19
the Adviser in writing within a reasonable time after the summons or other
first legal process giving information of the nature of the claim shall have
been served upon such Indemnified Party (or after such Indemnified Party shall
have received notice of such service on any designated agent), but failure to
notify the Adviser of any such claim shall not relieve the Adviser from any
liability which it may have to the Indemnified Party against whom such action
is brought otherwise than on account of this indemnification provision. In case
any such action is brought against the Indemnified Parties, the Adviser will be
entitled to participate, at its own expense, in the defense thereof. The
Adviser also shall be entitled to assume the defense thereof, with counsel
satisfactory to the party named in the action. After notice from the Adviser to
such party of the Adviser's election to assume the defense thereof, the
Indemnified Party shall bear the fees and expenses of any additional counsel
retained by it, and the Adviser will not be liable to such 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.
10.3(d). The Company will promptly notify the Adviser of the commencement of
any litigation or proceedings against an Indemnified Party in connection with
this Agreement, the issuance or sale of the Contracts or the operation of the
Account(s).
ARTICLE XI. Applicable Law
11.1. This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the State of Delaware.
11.2. This Agreement shall be subject to the provisions of the 1933, 1934
and 1940 Acts, and the rules and regulations and rulings thereunder, including
such exemptions from those statutes, rules and regulations as the SEC may grant
(including, but not limited to, the Shared Funding Exemptive Order) and the
terms hereof shall be interpreted and construed in accordance therewith.
ARTICLE XII. Termination
12.1. This Agreement shall continue in full force and effect until the first
to occur of:
(a) termination by any party for any reason by one hundred eighty
(180) days advance written notice delivered to the other parties; or
(b) termination by the Company by written notice to the Fund, the
Underwriter and the Adviser with respect to any Portfolio based upon
the Company's determination that shares of such Portfolio are not
reasonably available to meet the requirements of the Contracts;
provided, however, that said termination shall become effective ten
(10) days after receipt of notice unless the Fund makes available a
sufficient number of shares of the Portfolio to reasonably meet the
requirements of the Contracts within said ten (10) day period; or
20
(c) termination by the Company by written notice to the Fund, the
Underwriter and the Adviser with respect to any Portfolio in the
event that any of the Portfolio's shares are not registered, issued
or sold in accordance with applicable state and/or federal law or
such law precludes the use of such shares as the underlying
investment media of the Contracts issued or to be issued by the
Company; or
(d) termination by the Company by written notice to the Fund, the
Underwriter and the Adviser with respect to any Portfolio in the
event that such Portfolio ceases to qualify as a Regulated Investment
Company under Subchapter M of the Code or under any successor or
similar provision; or
(e) termination by the Company by written notice to the Fund, the
Underwriter and the Adviser with respect to any Portfolio in the
event that such Portfolio fails to meet the diversification
requirements specified in Article VI hereof; or
(f) termination by the Fund, the Underwriter or the Adviser by written
notice to the Company if the Fund, the Underwriter or the Adviser, as
applicable, shall determine, in its sole judgment exercised in good
faith, that the Company has suffered a material adverse change in its
business, operations, financial condition or prospects since the date
of this Agreement or is the subject of material adverse publicity;
provided, however, that no such termination shall be effective under
this subsection (f) until the Company has been afforded a reasonable
opportunity to respond to a statement by the Fund, the Underwriter or
the Adviser concerning the reason for notice of termination
hereunder; or
(g) termination by the Company by written notice to the Fund, the
Underwriter or the Adviser, if the Company shall determine, in its
sole judgment exercised in good faith, that the Fund, the Underwriter
or the Adviser has suffered a material adverse change in its
business, operations, financial condition or prospects since the date
of this Agreement or is the subject of material adverse publicity;
provided, however, that no such termination shall be effective under
this subsection (g) until the Fund, the Underwriter or the Adviser
(as appropriate) has been afforded a reasonable opportunity to
respond to a statement by the Company concerning the reason for
notice of termination hereunder; or
(h) termination by the Fund, the Underwriter or the Adviser by written
notice to the Company in the event that formal administrative
proceedings are instituted against the Company by the NASD, the SEC,
an insurance commissioner or any other regulatory body regarding the
Company's duties under this Agreement or related to the sale of the
Contracts, the operation of any Account, or the purchase of the
Fund's shares; provided, however, that the Fund, the Underwriter or
the Adviser (as applicable) determines in its sole judgment exercised
in good faith, that any such administrative proceedings will have a
material adverse effect upon the ability of the Company to perform
its obligations under this Agreement; or
21
(i) termination by the Company in the event that formal administrative
proceedings are instituted against the Fund, the Underwriter or the
Adviser by the NASD, the SEC, any state securities or insurance
department or any other regulatory body regarding the Fund's, the
Underwriter's or the Adviser's duties under this Agreement or related
to the sale of the Fund's shares or the operation of the Underwriter,
the Adviser, the Fund, or a Portfolio; provided, however, that the
Company determines in its sole judgment exercised in good faith, that
any such administrative proceedings will have a material adverse
effect upon the ability of the Fund, the Underwriter or the Adviser
to perform its obligations under this Agreement; or
(j) termination by any party to this Agreement upon another party's
material breach of any provision of this Agreement.
12.2. Notwithstanding any termination of this Agreement with respect to a
Portfolio, the Fund and the Underwriter shall at the option of the Company
continue to make available additional shares of the Portfolio, 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"),
unless such further sale of Portfolio shares is proscribed by law, regulation
or applicable regulatory authority, or unless the Board determines that
liquidation of the Portfolio following termination of this Agreement is in the
best interests of the Portfolio. Specifically, subject to the foregoing, the
owners of the Existing Contracts shall be permitted to direct reallocation of
investments in the Portfolio, redemption of investments in the Portfolio and/or
investment in the Portfolio upon the making of additional purchase payments
under the Existing Contracts. The parties agree that this Section 12.2 shall
not apply to any terminations under Article VII and the effect of such Article
VII terminations shall be governed by Article VII of this Agreement.
ARTICLE XIII. Notices
Any notice shall be sufficiently given when sent by registered or certified
mail 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:
The Universal Institutional Funds, Inc.
c/x Xxxxxx Xxxxxxx Investment Management Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: President
22
If to the Underwriter:
Xxxxxx Xxxxxxx Distribution, Inc.
c/x Xxxxxx Xxxxxxx Investment Management Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
If to the Adviser:
Xxxxxx Xxxxxxx Investment Management Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
If to the Company:
Genworth Life Insurance Company of New York
0000 Xxxx Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: General Counsel, Securities
ARTICLE XIV. Miscellaneous
14.1. All persons dealing with the Fund must look solely to the property of
the Fund for the enforcement of any claims against the Fund, as neither the
Board, officers, agents or shareholders of the Fund assume any personal
liability for obligations entered into on behalf of the Fund.
14.2. Subject to the requirements of legal process and regulatory authority,
each party hereto shall treat as confidential any "non-public personal
information" about any "consumer" of another party (as such terms are defined
in SEC Regulation S-P) and any other information reasonably identified as
confidential in writing by another party ("Confidential Information"). Each
party agrees not to disclose, disseminate or utilize another party's
Confidential Information except: (i) as permitted by this Agreement, (ii) upon
the written consent of the other party, (iii) where the Confidential
Information comes into the public domain through no fault of the party
receiving the information, or (iv) as otherwise required or permitted under
applicable law.
14.3. The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions hereof
or otherwise affect their construction or effect.
14.4. This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
23
14.5. If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the Agreement
shall not be affected thereby.
14.6. Each party hereto shall cooperate with each other party and all
appropriate governmental authorities (including without limitation the SEC, the
NASD and state insurance regulators) and shall permit such authorities
reasonable access to its books and records in connection with any investigation
or inquiry relating to this Agreement or the transactions contemplated hereby.
Notwithstanding the generality of the foregoing, each party hereto further
agrees to furnish state insurance authorities with any information or reports
in connection with services provided under this Agreement which such
authorities may request in order to ascertain whether the insurance operations
of the Company are being conducted in a manner consistent with applicable law
and regulations.
14.7. 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.
14.8. This Agreement or any of the rights and obligations hereunder may not
be assigned by any party without the prior written consent of all parties
hereto; provided, however, that the Adviser may assign this Agreement or any
rights or obligations hereunder to any affiliate of or company under common
control with the Adviser, if such assignee is duly licensed and registered to
perform the obligations of the Adviser under this Agreement.
14.9. If requested by the Fund, the Underwriter or the Adviser, the Company
shall furnish, or shall cause to be furnished, to the requesting party or its
designee copies of the following documents:
(a) the Company's annual statement (prepared under statutory accounting
principles) and annual report (prepared under generally accepted
accounting principles ("GAAP"), if any), as soon as practical and in
any event within ninety (90) days after the end of each fiscal year;
(b) the Company's quarterly statements (prepared under statutory
accounting principles and GAAP, if any), as soon as practical and in
any event within forty-five (45) days after the end of each quarterly
period;
(c) any financial statement, proxy statement, notice or report of the
Company sent to stockholders and/or policyholders, as soon as
practical after the delivery thereof to stockholders; and
(d) any registration statement (without exhibits) and financial reports
of the Company filed with the SEC or any state insurance regulator,
as soon as practical after the filing thereof.
24
14.10 Unless otherwise specifically provided in this Agreement, no provision
of this Agreement may be amended or modified in any manner except by a written
agreement executed by all parties.
[Remainder of Page Intentionally Left Blank]
25
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed in its name and on its behalf by its duly authorized representative
of the date specified above.
GENWORTH LIFE INSURANCE
COMPANY OF NEW YORK
By:
----------------------------------
Name:
Title:
THE UNIVERSAL INSTITUTIONAL FUNDS, INC.
By:
----------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President
XXXXXX XXXXXXX DISTRIBUTION, INC.
By:
----------------------------------
Name: Xxxxxxx X. Xxxxx
Title: President
XXXXXX XXXXXXX INVESTMENT MANAGEMENT INC.
By:
----------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Managing Director
26
SCHEDULE A
SEPARATE ACCOUNTS AND ASSOCIATED CONTRACTS
Name of Separate Account and Form Number and Name of
Date Established by Board of Directors Contract Funded by Separate Account
-------------------------------------- -------------------------------------------------
Registered Account(s): Registered Contract(s):
Genworth Life of New York VL Separate RetireReady Accumulator NY Life Insurance
Account 1 (March 20, 2000) (P1258/P1259)
Genworth Life of New York VA Separate RetireReady Choice NY Variable Annuity
Account 1 (April 1, 1996) (P1154)
RetireReady Selections NY Variable Annuity
(P1156)
Unregistered Account(s): Unregistered Contract(s):
N/A N/A
A-1
SCHEDULE B
PORTFOLIOS OF THE UNIVERSAL INSTITUTIONAL FUNDS, INC.
AVAILABLE UNDER THIS AGREEMENT
Equity and Income Portfolio - Class II Shares
B-1
SCHEDULE C
PROXY VOTING PROCEDURES
The following is a list of procedures and corresponding responsibilities for
the handling of proxies and voting instructions relating to the Fund. The
defined terms herein shall have the meanings assigned in the Participation
Agreement except that the term "Company" shall also include the department or
third party assigned by the Company to perform the steps delineated below.
.. The proxy proposals are given to the Company by the Fund as early as
possible before the date set by the Fund for the shareholder meeting to
enable the Company to consider and prepare for the solicitation of voting
instructions from Contract owners and to facilitate the establishment of
tabulation procedures. At this time the Fund will inform the Company of the
Record, Mailing and Meeting dates. This will be done verbally approximately
two months before the shareholder meeting.
.. Promptly after the Record Date, the Company will perform a "tape run," or
other activity, which will generate the names, addresses and number of
units, which are attributed to each Contract owner/policyholder (the
"Customer") as of the Record Date. Allowance should be made for account
adjustments made after this date that could affect the status of the
Customers' accounts as of the Record Date.
.. Note: The number of proxy statements is determined by the activities
described in this Step #2. The Company will use its best efforts to call in
the number of Customers to the Fund, as soon as possible, but no later than
two weeks after the Record Date.
.. The Fund's Annual Report must be sent to each Customer by the Company either
before or together with the Customers' receipt of voting instruction
solicitation material. The Fund will provide the last Annual Report to the
Company pursuant to the terms of Section 3.4 of the Participation Agreement
to which this Schedule relates.
.. The text and format for the Voting Instruction Cards ("Cards" or "Card") is
provided to the Company by the Fund. The Company, at its expense, shall
produce and personalize the Voting Instruction Cards. The Fund or its
affiliate must approve the Card before it is printed. Allow approximately
2-4 Business Days for printing information on the Cards. Information
commonly found on the Cards includes:
. name (legal name as found on account registration)
. address
. fund or account number
. coding to state number of units
. individual Card number for use in tracking and verification of votes
(already on Cards as printed by the Fund).
(This and related steps may occur later in the chronological process due to
possible uncertainties relating to the proposals.)
C-1
.. During this time, the Fund will develop, produce and pay for the Notice of
Proxy and the Proxy Statement (one document). Printed and folded notices and
statements will be sent to Company for insertion into envelopes (envelopes
and return envelopes are provided and paid for by the Company). Contents of
envelope sent to Customers by the Company will include:
. Voting Instruction Card(s)
. One proxy notice and statement (one document)
. return envelope (postage pre-paid by Company) addressed to the Company
or its tabulation agent
. "urge buckslip" - optional, but recommended (this is a small, single
sheet of paper that requests Customers to vote as quickly as possible
and that their vote is important; one copy will be supplied by the Fund.)
. cover letter - optional; supplied by Company and reviewed and approved
in advance by the Fund
.. The above contents should be received by the Company approximately 3-5
Business Days before mail date. Individual in charge at Company reviews and
approves the contents of the mailing package to ensure correctness and
completeness. Copy of this approval sent to the Fund.
.. Package mailed by the Company.
* The Fund must allow at least a 15-day solicitation time to the Company
as the shareowner. (A 5-week period is recommended.) Solicitation time
is calculated as calendar days from (but not including) the shareholder
meeting, counting backwards.
.. Collection and tabulation of Cards begins. Tabulation usually takes place in
another department or another vendor depending on process used. An often
used procedure is to sort Cards on arrival by proposal into vote categories
of all yes, no, or mixed replies, and to begin data entry.
Note: Postmarks are not generally needed. A need for postmark information
would be due to an insurance company's internal procedure and has not been
required by the Fund in the past.
.. Signatures on Card checked against legal name on account registration that
was printed on the Card.
Note: For Example, if the account registration is under "Xxxx X. Xxxxx,
Trustee," then that is the exact legal name to be printed on the Card and is
the signature needed on the Card.
C-2
.. If Cards are mutilated, or for any reason are illegible or are not signed
properly, they are sent back to Customer with an explanatory letter and a
new Card and return envelope. The mutilated or illegible Card is disregarded
and considered to be not received for purposes of vote tabulation. Any Cards
that have been "kicked out" (e.g. mutilated, illegible) of the procedure are
"hand verified," i.e., examined as to why they did not complete the system.
Any questions on those Cards are usually remedied individually.
.. There are various control procedures used to ensure proper tabulation of
votes and accuracy of that tabulation. The most prevalent is to sort the
Cards as they first arrive into categories depending upon their vote; an
estimate of how the vote is progressing may then be calculated. If the
initial estimates and the actual vote do not coincide, then an internal
audit of that vote should occur. This may entail a recount.
.. The actual tabulation of votes is done in units, which is then converted to
shares. (It is very important that the Fund receives the tabulations stated
in terms of a percentage and the number of shares.) The Fund must review and
approve tabulation format.
.. Final tabulation in shares is verbally given by the Company to the Fund on
the morning of the shareholder meeting not later than 10:00 a.m. Eastern
time. The Fund may request an earlier deadline if reasonable and if required
to calculate the vote in time for the shareholder meeting.
.. A Certification of Mailing and Authorization to Vote Shares will be required
from the Company as well as an original copy of the final vote. The Fund
will provide a standard form for each Certification.
.. The Company will be required to box and archive the Cards received from the
Customers. In the event that any vote is challenged or if otherwise
necessary for legal, regulatory, or accounting purposes, the Fund will be
permitted reasonable access to such Cards.
.. All approvals and "signing-off" may be done orally, but must always be
followed up in writing.
C-3
SCHEDULE D
Operating Procedures
Unless otherwise defined below, all capitalized terms have the meanings
specified in the Participation Agreement, each of which this Exhibit is a part.
I. FUND/SERV AND NETWORKING PROCEDURES
A. Fund/SERV Account Establishment. All parties hereto agree and acknowledge
that the Company or its designee may not open or establish any new accounts in
connection with the Fund or its Portfolios through Fund/SERV or NSCC's
Networking system ("Networking") without the prior written consent of the Fund.
The Company further acknowledges that the Fund reserves the right to reject any
new Fund/SERV or Networking accounts established by the Company in connection
with the Fund or its Portfolios that have not been previously approved by the
Fund in writing.
B. Transmittal of Portfolio Information. With respect to each Portfolio, the
Fund will provide the Company or its designee, via the NSCC's Mutual Fund
Profile System, with (i) the net asset value per share of the Portfolio (the
"Share Price") on each Business Day, determined as of the time specified in the
Portfolio's prospectus ("Close of Trading"); (ii) dividend and capital gains
distribution information on ex-date, but no later than the first Business Day
following each ex-date established for the payment of dividends or capital
gains distributions by the Portfolio; and (iii) in the case of fixed income and
money market Portfolios which declare dividends daily, the daily accrual
interest rate factor. The Fund will use its best efforts to communicate such
information to the Company or its designee via the NSCC's Mutual Fund Profile
System by 6:00 p.m. Eastern Time each Business Day; provided, however, that the
Fund reserves the right to communicate the Share Price at a time later than
7:00 p.m. Eastern Time due to extraordinary or unforeseen circumstances.
C. Transmittal of Orders. The Company agrees that, unless otherwise agreed
to in writing with the Fund, orders for the purchase, exchange or redemption of
Fund shares ("Instructions") received by the Company prior to the Close of
Trading on any Business Day ("Day 1") will be transmitted to the Fund's
transfer agent via Fund/SERV and accepted by Fund/SERV prior to 6:00 a.m.
Eastern Time on the following Business Day ("Day 2") (such orders are referred
to as "Day 1 Trades"). Each transmission by the Company or its designee of a
purchase, exchange or redemption order relating to a Business Day ("Order")
will constitute a representation by the Company that such Order was based on
Instructions that the Company received and accepted as being in good order
prior to the Close of Trading on that Business Day, and that the Order included
all purchase, exchange and redemption Instructions so received by the Company.
In the event that Orders for any Business Day are not transmitted to the
Fund via Fund/SERV and accepted by Fund/SERV prior to 6:00 a.m. Eastern Time on
Day 2, the Company or its designee shall transmit such Orders to the Fund in
accordance with the Manual Procedures below. If such Orders are not transmitted
to the Fund in accordance with the Manual
D-1
Procedures, the Fund reserves the right, in its sole discretion, to reject,
reverse or re-price the Orders (notwithstanding that the Company may have
received Fund/SERV confirmation of the Orders) and the Company will be
responsible for reimbursement of any loss sustained by the Fund that may arise
out of the improper transmittal of such Orders.
All Orders transmitted to the Fund via Fund/SERV will be communicated in
accordance with Fund/SERV rules, guidelines and procedures. The Company
acknowledges that certain cash flows may be known on or before a trade date,
and the Company agrees to use its reasonable efforts to notify the Fund of such
cash flows before such trade date.
D. Fund/SERV Confirmation. All Orders transmitted in accordance with Section
C of these Fund/SERV and Networking Procedures are subject to acceptance by the
Fund and shall become effective only upon confirmation by the Fund. The Fund or
its designee will transmit a confirmation via Fund/SERV that will set forth,
for each T/A Account, the number of Portfolio shares purchased, exchanged and
redeemed, the beginning and ending share balances, and the net asset value per
share. The Fund reserves the right, in its sole discretion, (i) to reject any
Order (notwithstanding that Company may have received Fund/SERV confirmation of
the Order), and (ii) to require any Order to be settled outside of Fund/SERV,
in which case the Fund shall not confirm such Order via Fund/SERV and such
Order shall settle in accordance with the Manual Procedures discussed below.
E. Pricing of Orders. Day 1 Trades communicated to the Fund as provided
under Section C of these Fund/SERV Procedures will be effected at the Share
Price for the applicable Portfolio on Day 1.
F. Settlement. Day 1 Trades confirmed by the Fund via Fund/SERV will settle
in U.S. dollars in accordance with the Fund's profile within Fund/SERV
applicable to the Company.
G. Dividends and Other Distributions. The Fund or designee will furnish the
Company or its designee notice of any dividends or other distributions payable
on the shares of each Portfolio via Networking. Dividends and distributions
with respect to a Portfolio will be automatically reinvested in additional
shares of the Portfolio held by the T/A Account(s) and the Fund or its designee
will notify the Company or its designee, via Networking, as to the number of
shares so issued.
H. Account Reporting and Verification. The Fund or its designee will
transmit or make available to the Company, via Networking, a report containing
any transactions or other activity occurring in a T/A Account on a Business
Day, including any Fund/SERV transactions, and the share balance for each T/A
Account in accordance with Fund/SERV's Networking guidelines. The Company will
promptly review and verify this information on Networking and immediately
advise the Fund or designee in writing of any discrepancies between the
Company's records and the balance in the T/A Account(s).
If the Company chooses not to utilize Networking, the Fund or designee will
deliver to the Company a physical statement for the preceding calendar month
reflecting the shares of each Portfolio held by the T/A Account(s) as of the
end of such preceding month and all purchases,
D-2
exchanges and redemptions by the Company of shares of a Portfolio during such
preceding month. The Company will, immediately on receipt of any physical
confirmation or statement concerning an Account, verify the information
contained therein against the information contained on the Company's
record-keeping system and immediately advise the Fund in writing of any
discrepancies between such information.
The Fund and the Company will cooperate to resolve any such discrepancies
mentioned in this Section H as soon as reasonably practicable.
I. Processing Adjustments. In the event of any error or delay with respect
to these Fund/SERV and Networking Procedures that is caused by the Fund or its
designee, the Fund will make any adjustments on its (or its transfer agent's)
accounting system necessary to correct such error or delay. The Company will
make the corresponding adjustments on its record-keeping system. The Company
and the Fund will each provide the other with prompt notice of any errors or
delays of the type referred to in these Fund/SERV and Networking Procedures.
J. Fund/SERV Unavailability. If the Fund/SERV and Networking systems are
unavailable for any reason, or if it is otherwise impracticable to operate in
accordance with these Fund/SERV and Networking Procedures, transactions shall
be processed in accordance with the Manual Procedures below.
II. MANUAL PROCEDURES
A. Transmittal of Portfolio Information. With respect to each Portfolio, the
Fund or it transfer agent will provide the Company with (i) the Share Price
determined as of the Close of Trading on each Business Day; (ii) dividend and
capital gains distribution information on ex-date, but no later than the first
Business Day following each ex-date established for the payment of dividends or
capital gains distributions by the Portfolio; and (iii) in the case of fixed
income and money market Portfolios which declare dividends daily, the daily
accrual interest rate factor. The Fund will use its best efforts to
communicate, or have its transfer agent communicate, such information to the
Company or its designee by 6:00 p.m. Eastern Time each Business Day; however,
the Fund reserves the right to communicate the Share Price at a time later than
7:00 p.m. Eastern Time due to extraordinary or unforeseen circumstances.
B. Transmittal of Orders. The Company agrees that, unless otherwise agreed
to in writing with the Fund, Instructions received by the Company prior to the
Close of Trading on any Business Day ("Day 1") will be transmitted to the Fund
by facsimile no later than 9:00 a.m. Eastern Time on the following Business Day
("Day 2") (such Orders are referred to as "Day 1 Trades"). Each transmission by
the Company or its designee of a purchase, exchange or redemption order
relating to a Business Day ("Order") will constitute a representation by the
Company that such Order was based on Instructions that the Company received and
accepted as being in good order prior to the Close of Trading on that Business
Day, and that the Order included all purchase, exchange and redemption
Instructions so received by the Company.
All Orders transmitted to the Fund will be communicated in U.S. dollars and
will indicate the date of the transaction. On Business Days where there are no
Orders, or where the net dollar amount for purchases and redemptions for an
Account equals zero, the communication will so
D-3
indicate. The Company acknowledges that certain cash flows may be known on or
before a trade date, and the Company agrees to use its reasonable efforts to
notify the Fund of such cash flows before such trade date.
C. Confirmation. All Orders transmitted in accordance with Section B of
these Manual Procedures are subject to acceptance by the Fund and shall become
effective only upon confirmation by the Fund, which confirmation shall be sent
to the Company or its designee via facsimile. The Fund reserves the right, in
its sole discretion, to reject any Order.
D. Pricing of Orders. Day 1 Trades communicated to the Fund by 9:00 a.m.
Eastern Time on Day 2 will be effected at the Share Price for the applicable
Portfolio on Day 1.
E. Settlement.
1. Purchase Orders. In the case of Day 1 Trades that constitute a net
purchase (including exchanges) Order, the Company or its designee will arrange
for a federal funds wire transfer of the net purchase amount to a custodial
account designated by the Fund by 3:00 p.m. Eastern Time on Day 2.
2. Redemption Orders. In the case of Day 1 Trades that constitute a net
redemption (including exchanges) Order, the Fund or its designee will arrange
for a federal funds wire transfer of the net redemption amount to a custodial
account designated by the Company on Day 2, or in no instance later than the
time provided for in the applicable Portfolio's Prospectus.
3. Generally. Settlements will be in U.S. dollars, except that each
Portfolio reserves the right, in cases of substantial liquidations, to pay
redemption proceeds in whole or in part by a distribution in-kind of readily
marketable securities that it holds in lieu of cash in accordance with
applicable law, and the Portfolio's redemption policy as described in the
Prospectus. On any Business Day when the Federal Reserve Wire Transfer System
is closed, all communication and processing rules will be suspended for the
settlement of Orders. Orders will be settled on the next Business Day on which
the Federal Reserve Wire Transfer System is open. Transactions that are the
subject of such Orders will be processed at the Share Price for the applicable
Portfolio on the Business Day to which the Orders originally relate.
F. Dividends and Other Distributions. The Fund or its designee will furnish
the Company or its designee written notice of any dividends or other
distributions payable on the shares of each Portfolio, via facsimile or other
method agreed upon by the parties. Dividends and distributions with respect to
a Portfolio will be automatically reinvested in additional shares of the
Portfolio held by the T/A Account(s) and the Fund or designee will notify the
Company or its designee as to the number of shares so issued.
G. Account Reporting and Verification. The Fund or its designee will deliver
to the Company or its designee in writing, via facsimile or other method agreed
upon by the parties a statement for the preceding calendar month reflecting the
shares of each Portfolio held by the T/A Account(s) as of the end of such
preceding month and all purchases, exchanges and redemptions by the Company of
shares of a Portfolio during such preceding month. The Company will,
immediately on receipt of any statement concerning a T/A Account, verify the
information
D-4
contained therein against the information contained on the Company's
record-keeping system and immediately advise the Fund or its designee, in
writing of any discrepancies between such information. The Fund and the Company
will cooperate to resolve any such discrepancies as soon as reasonably
practicable.
H. Processing Adjustments. In the event of any error or delay with respect
to these Manual Procedures that is caused by the Fund or its designee, the Fund
will make any adjustments on its (or its transfer agent's) recordkeeping system
necessary to correct such error or delay. The Company will make the
corresponding adjustments on its accounting system. The Company and the Fund
will each provide the other with prompt notice of any errors or delays of the
type referred to in these Manual Procedures.
D-5
PARTICIPATION AGREEMENT
Among
THE UNIVERSAL INSTITUTIONAL FUNDS, INC.,
XXXXXX XXXXXXX DISTRIBUTION, INC.,
XXXXXX XXXXXXX INVESTMENT MANAGEMENT INC.,
and
GENWORTH LIFE INSURANCE COMPANY OF NEW YORK
Dated as of
January 10, 2007
TABLE OF CONTENTS
Page
----
ARTICLE I Purchase and Redemption of Fund Shares 3
ARTICLE II Representations and Warranties 4
ARTICLE III Prospectuses, Reports to Shareholders
and Proxy Statements; Voting 6
ARTICLE IV Sales Material and Information 9
ARTICLE V Fees and Expenses 10
ARTICLE VI Diversification 10
ARTICLE VII Potential Conflicts 11
ARTICLE VIII Contract Holder Information 12
ARTICLE IX Anti-Money Laundering 14
ARTICLE X Indemnification 14
ARTICLE XI Applicable Law 20
ARTICLE XII Termination 20
ARTICLE XIII Notices 22
ARTICLE XIV Miscellaneous 23
SCHEDULE A Separate Accounts and Associated Contracts A-1
SCHEDULE B Portfolios of The Universal Institutional Funds, Inc.
Available Under this Agreement B-1
SCHEDULE C Proxy Voting Procedures C-1
SCHEDULE D Operating Procedures D-1
