FUND PARTICIPATION AGREEMENT
TIAA-CREF LIFE INSURANCE COMPANY
XXXXXX ADVISORS TRUST
COLUMBIA XXXXXX ASSET MANAGEMENT, LLP
AND
COLUMBIA MANAGEMENT DISTRIBUTORS, INC.
MARCH 1, 2006
TABLE OF CONTENTS
ARTICLE I. Sale of Fund Shares.................................................2
ARTICLE II. Representations and Warranties.....................................5
ARTICLE III. Prospectuses and Proxy Statements; Voting.........................9
ARTICLE IV. Sales Material and Information....................................10
ARTICLE V. Fees and Expenses..................................................11
ARTICLE VI. Diversification and Qualification.................................11
ARTICLE VII. Potential Conflicts and Compliance With Mixed and Shared
Funding Exemptive Order.....................................................13
ARTICLE VIII. Indemnification.................................................15
ARTICLE IX. Applicable Law....................................................19
ARTICLE X. Termination........................................................19
ARTICLE XI. Notices...........................................................21
ARTICLE XII. Miscellaneous....................................................22
SCHEDULE A....................................................................25
SCHEDULE B....................................................................26
SCHEDULE C....................................................................27
PARTICIPATION AGREEMENT
Among
TIAA-CREF LIFE INSURANCE COMPANY
XXXXXX ADVISORS TRUST
COLUMBIA XXXXXX ASSET MANAGEMENT, LLP
and
COLUMBIA MANAGEMENT DISTRIBUTORS, INC.
THIS AGREEMENT, made and entered into as of this 1st day of March,
2006, by and among TIAA-CREF LIFE INSURANCE COMPANY (the "Company"), a New York
life insurance company, on its own behalf and on behalf of its separate accounts
(the "Accounts"); XXXXXX ADVISORS TRUST, an open-end management investment
company organized under the laws of Massachusetts (the "Fund"); COLUMBIA XXXXXX
ASSET MANAGEMENT, LLP (the "Adviser"), a Delaware limited partnership; and
COLUMBIA MANAGEMENT DISTRIBUTORS, INC. (the "Distributor"), a Massachusetts
corporation.
WHEREAS, the Fund engages in business as an open-end management
investment company and is available to act as the investment vehicle for
separate accounts established for variable life insurance policies and/or
variable annuity contracts (collectively, the "Variable Insurance Products") to
be offered by insurance companies, many of which have entered into participation
agreements similar to this Agreement (hereinafter "Participating Insurance
Companies"); and
WHEREAS, the beneficial interest in the Fund is divided into several
series of shares, each designated a portfolio and representing the interest in a
particular managed portfolio of securities and other assets; and
WHEREAS, the Fund is able to rely on an order from the Securities and
Exchange Commission (hereinafter the "SEC") granting Participating Insurance
Companies and variable annuity and variable life insurance 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, (hereinafter the "1940 Act") and
Rules 6e-2(b)(15) and 6e-3(T)(b)(15) thereunder, to the extent necessary to
permit shares of the Fund to be sold to and held by variable annuity and
variable life insurance separate accounts of life insurance companies that may
or may not be affiliated with one another and qualified pension and retirement
plans ("Qualified Plans") (hereinafter the "Mixed and Shared Funding Exemptive
Order"); and
1
WHEREAS, the Fund is registered as an open-end management investment
company under the 1940 Act and shares of the portfolios are registered under the
Securities Act of 1933, as amended (hereinafter the "1933 Act"); and
WHEREAS, the Adviser is duly registered as an investment adviser under
the Investment Advisers Act of 1940, as amended; and
WHEREAS, the Distributor is duly registered as a broker-dealer under
the Securities Exchange Act of 1934, as amended, (the "1934 Act") and is a
member in good standing of the National Association of Securities Dealers, Inc.
(the "NASD"); and
WHEREAS, the Company has issued and plans to continue to issue certain
variable life insurance policies and variable annuity contracts supported wholly
or partially by the Accounts (the "Contracts"), and the Contracts are listed on
Schedule A attached hereto and incorporated herein by reference, as such
schedule may be amended from time to time by mutual written agreement of the
parties; and
WHEREAS, each Account is a duly organized, validly existing segregated
asset account, established by resolution of the Board of Directors of the
Company under the insurance laws of the State of New York to set aside and
invest assets attributable to the Contracts; and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares in the Portfolios listed on
Schedule B attached hereto and incorporated herein by reference, as such
schedule may be amended from time to time by mutual written agreement of the
parties (the "Portfolios"), on behalf of the Accounts to fund the Contracts, and
the Fund is authorized to sell such shares to unit investment trusts such as the
Accounts at net asset value; and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company also intends to continue to purchase shares in other
open-end investment companies or series thereof not affiliated with the Fund
(the "Unaffiliated Funds") on behalf of the Accounts to fund the Contracts.
NOW, THEREFORE, in consideration of their mutual promises, the Company,
the Fund, the Distributor and the Adviser agree as follows:
ARTICLE I. Sale of Fund Shares
1.1. The Fund agrees to sell to the Company those shares of the
Portfolios which the Account orders, executing such orders on each Business Day
at the net asset value next computed after receipt by the Fund or its designee
of the order for the shares of the Portfolios. For purposes of this Section 1.1,
the Company shall be the designee of the Fund for receipt of such orders and
receipt by such designee shall constitute receipt by the Fund, provided that the
Fund receives notice of any such order by 10:00 a.m. Eastern time on the next
following Business Day. "Business Day" shall mean any day on which the New York
Stock Exchange is open for trading and on which the Portfolio calculates its net
asset value pursuant to the rules of the SEC. "Valuation Time" shall mean the
time as of which the Fund calculates net asset value for the shares of the
Portfolios on the relevant Business Day.
2
1.2. The Fund agrees to make shares of the Portfolios available for
purchase at the applicable net asset value per share by the Company and the
Accounts on those days on which the Fund calculates its Portfolios' net asset
value pursuant to rules of the SEC, and the Fund shall calculate such net asset
value on each day which the New York Stock Exchange is open for trading.
Notwithstanding the foregoing, the Fund may refuse 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 Fund acting in good faith,
necessary or appropriate in the best interests of the shareholders of such
Portfolio. All orders accepted by the Company shall be subject to the terms of
the then current prospectus of the Fund, including the Fund's excessive trading
policies. The Company shall use its best efforts, and shall reasonably cooperate
with, the Fund to enforce stated prospectus policies regarding transactions in
Portfolio shares. The Company acknowledges that orders accepted by it in
violation of the Fund's stated policies may be subsequently revoked or cancelled
by the Fund and that the Fund shall not be responsible for any losses incurred
by the Company or the Contract owner as a result of such cancellation. In
addition, the Company acknowledges that the Fund has the right to refuse any
purchase order for any reason, particularly if the Fund determines that a
Portfolio would be unable to invest the money effectively in accordance with its
investment policies or would otherwise be adversely affected due to the size of
the transaction, frequency of trading, or other factors.
1.3. The Fund will not sell shares of the Portfolios to any other
Participating Insurance Company separate account unless an agreement containing
provisions the substance of which are the same as Sections 2.1, 2.2 (except with
respect to designation of applicable law), 3.6, 3.7, 3.8, and Article VII of
this Agreement is in effect to govern such sales.
1.4. The Fund agrees to redeem for cash, on the Company's request, any
full or fractional shares of the Fund held by the Company, executing such
requests on each Business Day at the net asset value next computed after receipt
by the Fund or its designee of the request for redemption. For purposes of this
Section 1.4, the Company shall be the designee of the Fund for receipt of
requests for redemption and receipt by such designee shall constitute receipt by
the Fund, provided that the Fund receives notice of any such request for
redemption by 10:00 a.m. Eastern time on the next following Business Day.
1.5. The parties hereto acknowledge that the arrangement contemplated
by this Agreement is not exclusive; the Fund's shares may be sold to other
Participating Insurance Companies (subject to Section 1.3) and the cash value of
the Contracts may be invested in other investment companies.
1.6. The Company shall pay for Fund shares by 3:00 p.m. Eastern time on
the next Business Day after an order to purchase Fund shares is received in
accordance with the provisions of Section 1.1 hereof. Payment shall be in
federal funds transmitted by wire and/or by a credit for any shares redeemed the
same day as the purchase.
1.7. The Fund shall pay and transmit the proceeds of redemptions of
Fund shares by 11:00 a.m. Eastern Time on the next Business Day after a
redemption order is received in accordance with Section 1.4 hereof; provided,
however, that the Fund may delay payment in extraordinary circumstances to the
extent permitted under Section 22(e) of the 1940 Act.
3
Payment shall be in federal funds transmitted by wire and/or a credit for any
shares purchased the same day as the redemption.
Each party has the right to rely on information or confirmations
provided by the other party (or by an affiliate of the other party), and shall
not be liable in the event that an error is a result of any misinformation
supplied by the other party.
1.8. Issuance and transfer of the Fund's shares will be by book entry
only. Stock certificates will not be issued to the Company or the Accounts.
Shares purchased from the Fund will be recorded in an appropriate title for the
relevant Account or the relevant sub-account of an Account.
1.9. The Fund shall furnish same day notice (by electronic
communication or telephone, followed by electronic confirmation) to the Company
of any income, dividends or capital gain distributions payable on a Portfolio's
shares. The Company hereby elects to receive all such income dividends and
capital gain distributions as are payable on a Portfolio's shares in additional
shares of that Portfolio. The Company reserves the right to revoke this election
and to receive all such income dividends and capital gain distributions in cash.
The Fund shall notify the Company by the end of the next following Business Day
of the number of shares so issued as payment of such dividends and
distributions.
1.10. The Fund shall make the net asset value per share for each
Portfolio available to the Company on each Business Day as soon as reasonably
practicable after the net asset value per share is calculated and shall use its
best efforts to make such net asset value per share available by 6:00 p.m.
Eastern time. In the event of an error in the computation of a Portfolio's net
asset value per share ("NAV") or any dividend or capital gain distribution
(each, a "pricing error"), the Adviser or the Fund shall immediately notify the
Company as soon as possible after discovery of the error. Such notification may
be verbal, but shall be confirmed promptly in writing. A pricing error shall be
corrected as follows: (a) if the pricing error results in a difference between
the erroneous NAV and the correct NAV of less than $0.01 per share, then no
corrective action need be taken; (b) if the pricing error results in a
difference between the erroneous NAV and the correct NAV equal to or greater
than $0.01 per share, but less than 1/2 of 1% of the Portfolio's NAV at the time
of the error, then the Adviser shall reimburse the Portfolio for any loss, after
taking into consideration any positive effect of such error; however, no
adjustments to Contract owner accounts need be made; and (c) if the pricing
error results in a difference between the erroneous NAV and the correct NAV
equal to or greater than 1/2 of 1% of the Portfolio's NAV at the time of the
error, then the Adviser shall reimburse the Portfolio for any loss (without
taking into consideration any positive effect of such error) and shall reimburse
the Company for the costs of adjustments made to correct Contract owner
accounts. Upon notification by the Adviser of any overpayment due to a material
error, the Company shall promptly remit to the Adviser any overpayment that has
not been paid to Contract owners. In no event shall the Company be liable to
Contract owners for any such adjustments or underpayment amounts. A pricing
error within categories (b) or (c) above shall be deemed to be "materially
incorrect" or constitute a "material error" for purposes of this Agreement. The
standards set forth in this Section 1.10 are based on the parties' understanding
of the views expressed by the staff of the SEC as of the date of this Agreement.
In the event the views of the SEC staff are later modified or superseded by SEC
or judicial interpretation, the parties shall amend the
4
foregoing provisions of this Agreement to comport with the appropriate
applicable standards, on terms mutually satisfactory to all parties.
1.11. The parties agree to mutually cooperate with respect to any state
insurance law restriction or requirement applicable to the Fund's investments;
provided, however, that the Fund reserves the right not to implement
restrictions or take other actions required by state insurance law if the Fund
or the Adviser determines that the implementation of the restriction or other
action is not in the best interest of Fund shareholders.
ARTICLE II. Representations and Warranties
2.1. The Company represents and warrants that: (a) the securities
issued by the Accounts under the Contracts are or will be registered under the
1933 Act, or are not so registered in proper reliance upon an exemption from
such registration requirements; (b) the Contracts will be issued and sold in
compliance in all material respects with all applicable federal and state laws;
and (c) the sale of the Contracts shall comply in all material respects with
state insurance suitability requirements.
2.2. The Company represents and warrants that: (a) it is an insurance
company duly organized and in good standing under applicable law; (b) it has
legally and validly established each Account prior to any issuance or sale of
units thereof as a segregated asset account under New York law; and (c) it has
registered each Account as a unit investment trust in accordance with the
provisions of the 1940 Act to serve as a segregated investment account for the
Contracts and will maintain such registration for so long as any Contracts are
outstanding as required by applicable law or, alternatively, the Company has not
registered one or more Accounts in proper reliance upon an exclusion from such
registration requirements.
2.3. The Fund represents and warrants that: (a) the Fund shares sold
pursuant to this Agreement shall be registered under the 1933 Act; (b) the Fund
shares sold pursuant to this Agreement shall be duly authorized for issuance and
sold in compliance with all applicable federal securities laws including without
limitation the 1933 Act, the 1934 Act, and the 1940 Act; (c) the Fund is and
shall remain registered under the 1940 Act; and (d) the Fund shall amend the
registration statement for its shares under the 1933 Act and the 1940 Act from
time to time as required in order to effect the continuous offering of its
shares.
2.4. The Fund represents and warrants that it shall register and
qualify the shares for sale in accordance with the laws of the various states if
and to the extent required by applicable law.
2.5. The Fund represents and warrants that it is lawfully organized and
validly existing under the laws of the Commonwealth of Massachusetts and that it
does and will comply in all material respects with the 1940 Act.
2.6. The Adviser represents and warrants that it is and shall remain
duly registered under all applicable federal and state securities laws and that
it shall perform its obligations for the Fund in compliance in all material
respects with any applicable state and federal securities laws.
5
2.7. The Distributor represents and warrants that it is and shall
remain duly registered under all applicable federal and state securities laws
and that it shall perform its obligations for the Fund in compliance in all
material respects with the laws of any applicable state and federal securities
laws.
2.8. The Fund and the Adviser represent and warrant that all of their
respective officers, employees, investment advisers, and other individuals or
entities dealing with the money and/or securities of the Fund are, and shall
continue to be at all times, covered by one or more blanket fidelity bonds or
similar coverage for the benefit of the Fund in an amount not less than the
minimal coverage required by Rule 17g-1 under the 1940 Act or related provisions
as may be promulgated from time to time. The aforesaid bonds shall include
coverage for larceny and embezzlement and shall be issued by a reputable bonding
company.
2.9. The Fund and the Adviser represent and warrant that they will
provide the Company with as much advance notice as is reasonably practicable of
any material change affecting the Portfolios (including, but not limited to, any
material change in the registration statement or prospectus affecting the
Portfolios) and any proxy solicitation affecting the Portfolios and consult with
the Company in order to implement any such change in an orderly manner,
recognizing the expenses of changes and attempting to minimize such expenses by
implementing them in conjunction with regular annual updates of the prospectus
for the Contracts.
2.10. The Company represents and warrants, for purposes other than
diversification under Section 817 of the Internal Revenue Code of 1986 as
amended (the "Code"), that the Contracts are currently and at the time of
issuance will be treated as annuity contracts or life insurance policies under
applicable provisions of the Code, and that it will make every effort to
maintain such treatment and that it will notify the Fund, the Distributor and
the Adviser immediately upon having a reasonable basis for believing that the
Contracts have ceased to be so treated or that they might not be so treated in
the future. In addition, the Company represents and warrants that each Account
is a "segregated asset account" and that interests in each Account are offered
exclusively through the purchase of or transfer into a "variable contract"
within the meaning of such terms under Section 817 of the Code and the
regulations thereunder. The Company will use every effort to continue to meet
such definitional requirements, and it will notify the Fund, the Distributor and
the Adviser immediately upon having a reasonable basis for believing that such
requirements have ceased to be met or that they might not be met in the future.
The Company represents and warrants that it will not purchase Fund shares with
assets derived from tax-qualified retirement plans except, indirectly, through
Contracts purchased in connection with such plans.
2.11. The Company represents and warrants that it is currently in
compliance, and will remain in compliance, with all applicable anti-money
laundering laws, regulations, and requirements. In addition, the Company
represents and warrants that it has adopted and implemented policies and
procedures reasonably designed to achieve compliance with the applicable
requirements administered by the Office of Foreign Assets Control ("OFAC") of
the U.S. Department of the Treasury.
6
2.12. The Company represents and warrants that it is currently in
compliance, and will remain in compliance, with all applicable laws, rules and
regulations relating to consumer privacy, including, but not limited to,
Regulation S-P.
2.13. The Company represents and warrants that it has adopted, and will
at all times during the term of this Agreement maintain, reasonable and
appropriate procedures ("Late Trading Procedures") designed to ensure that any
and all orders relating to the purchase, sale or exchange of Fund shares
communicated to the Fund to be treated in accordance with Article I of this
Agreement as having been received on a Business Day have been received by the
Valuation Time on such Business Day and were not modified after the Valuation
Time, and that all orders received from Contract owners but not rescinded by the
Valuation Time were communicated to the Fund or its agent as received for that
Business Day. The Company further represents and warrants that it has adopted
and implemented controls reasonably designed to ensure that all orders received
by the Company after the close of the New York Stock Exchange on a particular
Business Day will not be aggregated with orders received by the Company before
the close of the New York Stock Exchange on such Business Day. Each transmission
of orders by the Company shall constitute a representation by the Company that
such orders are accurate and complete and relate to orders received by the
Company by the Valuation Time on the Business Day for which the order is to be
priced and that such transmission includes all orders relating to Fund shares
received from Contract owners but not rescinded by the Valuation Time. The
Company agrees to provide the Fund or its designee with a copy of the Late
Trading Procedures and such certifications and representations regarding the
Late Trading Procedures as the Fund or its designee may reasonably request. The
Company will promptly notify the Fund in writing of any material change to the
Late Trading Procedures.
2.14. The Company represents and warrants that it has adopted, and will
at all times during the term of this Agreement maintain, reasonable and
appropriate procedures ("Market Timing Procedures") designed to minimize any
adverse impact on other Fund investors due to excessive trading. The Company
agrees to provide the Fund or its designee with a copy of the Market Timing
Procedures and such certifications and representations regarding the Market
Timing Procedures as the Fund or its designee may reasonably request. The
Company will promptly notify the Fund in writing of any material change to the
Market Timing Procedures. The parties agree that in light of any conflict
between the Market Timing Procedures and actions taken or policies adopted by
the Fund designed to minimize any adverse impact on other Fund investors due to
excessive trading, the stricter policy, as determined by the parties, will
apply.
2.15.
(a) You agree to cooperate with all requests by the Fund with respect
to discouraging, monitoring and terminating patterns of trading that the Fund
deems disruptive, including providing, upon written request by the Fund, the
Taxpayer Identification Number ("TIN"), if known, of any and all Shareholder(s)
of the account and the amount, date, name or other identifier of any investment
professional(s) associated with the Shareholder(s) or account (if known) and
transaction type (purchase, redemption, transfer, or exchange) of every
purchase, redemption, transfer or exchange of the Funds' shares held through an
account maintained by you during the period covered by the request.
7
(i) You will provide the Fund or its designee a weekly feed of
the transaction information sought. The Fund may request transaction information
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 issued by the Fund. If you provide the Fund a daily feed,
unless otherwise directed by the Fund, you agree to provide the information
specified in this Section 2.15 for each trading day.
(ii) You agree to transmit the requested information that is
on your books and records to the Fund or its designee promptly upon conclusion
of each week. If the requested information is not on your books and records, you
agree to use reasonable efforts to: (A) promptly obtain and transmit the
requested information; (B) obtain assurances from the accountholder that the
requested information will be provided to the Fund promptly; or (C) if directed
by the Fund, restrict or prohibit further purchases of the Fund's shares from
such accountholder. In such instance, you agree to inform the Fund whether you
plan to perform (A), (B), or (C). Responses required by this sub-Section 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 National Securities Clearing
Corporation's Standardized Data Reporting Format.
(iii) The Fund agrees not to use the information received
pursuant to this Section 2.15(i) for marketing or any other similar purpose
without your prior written consent.
(b) You agree to execute written instructions from the Fund to restrict
or prohibit further purchases or exchanges of the Fund's shares by a Shareholder
that has been identified by a Fund as having engaged in transactions of such
Fund's shares (directly or indirectly through your account) that violate
policies established by the Fund for the purpose of eliminating or reducing any
dilution of the value of the outstanding securities issued by the Fund.
(i) Instructions must include the TIN, if known, and the specific
restriction(s) to be executed. If the TIN is not known, the
instructions must include an equivalent identifying number of
the Shareholder(s) or account(s) or other agreed upon
information to which the instruction relates.
(ii) You agree to execute instructions as soon as reasonably
practicable, but not later than five (5) business days after
receipt by you of the instructions.
(iii) You must provide written confirmation to the Funds that
instructions have been executed. You agree to provide
confirmation as soon as reasonably practicable, but not later
than ten (10) business days after the instructions have been
executed.
(c) For purposes of this Section 2.15:
(i) The term "Fund" includes us and the Transfer Agent, but does not
include any "excepted funds" as defined in Rule 22c-2(b) under
the 1940 Act.
(ii) The term "Shareholder" means the beneficial owner of the
Funds' shares, whether such shares are held directly or by you
in nominee name.
8
(iii) The term "written" includes electronic writings and facsimile
transmissions.
2.16 The Company agrees to cooperate fully with any and all efforts by
the Fund to assure the Fund that the Company has implemented effective
compliance policies and procedures administered by qualified personnel as
required by and in accordance with any and all applicable laws, rules and
regulations.
ARTICLE III. Prospectuses and Proxy Statements; Voting
3.1. At least annually, the Adviser or Distributor shall provide the
Company with as many copies of the Fund's current prospectus and amendments
thereto as the Company may reasonably request, with expenses to be borne in
accordance with Schedule A hereof. If requested by the Company in lieu thereof,
the Adviser, Distributor or Fund shall provide such documentation (including an
electronic version of the current prospectus) and other assistance as is
reasonably necessary in order for the Company once each year (or more frequently
if the prospectus for the Fund is amended) to have the prospectus for the
Contracts and the prospectus for the Fund printed together in one document.
3.2 The Fund will provide the Company with at least one complete copy
of all prospectuses, statements of additional information, annual and
semi-annual reports, proxy statements, exemptive applications and all amendments
or supplements to any of the above that relate to the Portfolios promptly after
the filing of each such document with the SEC or other regulatory authority. The
Company will provide the Fund with at least one complete copy of all
prospectuses, statements of additional information, annual and semi-annual
reports, proxy statements, exemptive applications and all amendments or
supplements to any of the above that relate to a Separate Account promptly after
the filing of each such document with the SEC or other regulatory authority.3.3.
If applicable state or federal laws or regulations require that the Statement of
Additional Information ("SAI") for the Fund be distributed to all Contract
owners, then the Fund, Distributor and/or the Adviser shall provide the Company
with copies of the Fund's SAI in such quantities, with expenses to be borne in
accordance with Schedule A hereof, as the Company may reasonably require to
permit timely distribution thereof to Contract owners. The Adviser, Distributor
and/or the Fund shall also provide an SAI to any Contract owner or prospective
owner who requests such SAI from the Fund.
3.4. The Fund, Distributor and/or Adviser shall provide the Company
with copies of the Fund's proxy material, reports to shareholders and other
communications to shareholders in such quantity, with expenses to be borne in
accordance with Schedule A hereof, as the Company may reasonably require to
permit timely distribution thereof to Contract owners.
3.5. It is understood and agreed that, except with respect to
information regarding the Company provided in writing by that party, the Company
shall not be responsible for the content of the prospectus or SAI for the Fund.
It is also understood and agreed that, except with respect to information
regarding the Fund, the Distributor, the Adviser or the Portfolios provided in
writing by the Fund, the Distributor or the Adviser, neither the Fund, the
Distributor nor Adviser are responsible for the content of the prospectus or SAI
for the Contracts.
3.6. If and to the extent required by law the Company shall:
9
(a) solicit voting instructions from Contract owners;
(b) vote the Portfolio shares held in the Accounts in accordance
with instructions received from Contract owners;
(c) vote Portfolio shares held in the Accounts for which no
instructions have been received in the same proportion as Portfolio shares for
which instructions have been received from Contract owners, 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; and
(d) vote Portfolio shares held in its general account or otherwise
in the same proportion as Portfolio shares for which instructions have been
received from Contract owners, so long as and to the extent that the SEC
continues to interpret the 1940 Act to require such voting by the insurance
company. The Company reserves the right to vote Fund shares in its own right, to
the extent permitted by law.
3.7. The Company shall be responsible for assuring that each of its
separate accounts holding shares of a Portfolio calculates voting privileges as
directed by the Fund and agreed to by the Company and the Fund. The Fund agrees
to promptly notify the Company of any changes of interpretations or amendments
of the Mixed and Shared Funding Exemptive Order.
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, as the Fund currently intends, comply with
Section 16(c) of the 1940 Act (although the Fund is not one of the trusts
described in Section 16(c) of that Act) as well as with Sections 16(a) and, if
and when applicable, 16(b). Further, the Fund will act in accordance with the
SEC's interpretation of the requirements of Section 16(a) with respect to
periodic elections of directors or trustees and with whatever rules the SEC may
promulgate with respect thereto.
ARTICLE IV. Sales Material and Information
4.1. The Company shall furnish, or shall cause to be furnished, to the
Fund or its designee, a copy of each piece of sales literature or other
promotional material that the Company develops or proposes to use and in which
the Fund (or Portfolio thereof), the Adviser or the Distributor is named in
connection with the Contracts, at least ten (10) business days prior to its use.
No such material shall be used if the Fund objects to such use within five (5)
business days after receipt of such material.
4.2. The Company shall not give any information or make any
representations or statements on behalf of the Fund in connection with the sale
of the Contracts other than the information or representations contained in the
registration statement, including the prospectus or SAI for the Fund shares, as
the same may be amended or supplemented from time to time, or in sales
literature or other promotional material approved by the Fund, Distributor or
Adviser, except with the permission of the Fund, Distributor or Adviser.
4.3. The Fund, the Adviser or the Distributor shall furnish, or shall
cause to be furnished, to the Company, a copy of each piece of sales literature
or other promotional material
10
in which the Company and/or its accounts are named at least ten (10) business
days prior to its use. No such material shall be used if the Company objects to
such use within five (5) business days after receipt of such material.
4.4. The Fund, the Distributor and the Adviser shall not give any
information or make any representations on behalf of the Company or concerning
the Company, the Accounts, or the Contracts other than the information or
representations contained in a registration statement, including the prospectus
or SAI for the Contracts, as the same may be amended or supplemented from time
to time, or in sales literature or other promotional material approved by the
Company or its designee, except with the permission of the Company.
4.5. For purposes of Articles IV and VIII, the phrase "sales literature
and other promotional material" includes, but is not limited to, advertisements
(such as material published, or designed for use in, a newspaper, magazine, or
other periodical, radio, television, telephone or tape recording, videotape
display, signs or billboards, motion pictures, or other public media; e.g.,
on-line networks such as the Internet or other electronic 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 shareholder reports, and proxy
materials (including solicitations for voting instructions) and any other
material constituting sales literature or advertising under the NASD rules, the
1933 Act or the 0000 Xxx.
4.6. At the request of any party to this Agreement, each other party
will make available to the other party's independent auditors and/or
representatives of the appropriate regulatory agencies, all records, data and
access to operating procedures that may be reasonably requested in connection
with compliance and regulatory requirements related to this Agreement or any
party's obligations under this Agreement.
ARTICLE V. Fees and Expenses
5.1. The Fund, the Distributor and the Adviser shall pay no fee or
other compensation to the Company under this Agreement, and the Company shall
pay no fee or other compensation to the Fund, the Distributor or Adviser under
this Agreement; provided, however, (a) the parties will bear their own expenses
as reflected in Schedule C and other provisions of this Agreement, and (b) the
parties may enter into other agreements relating to the Company's investment in
the Fund, including services agreements.
ARTICLE VI. Diversification and Qualification
6.1. The Fund, Distributor and Adviser represent and warrant that the
Fund and each Portfolio thereof will at all times comply with Section 817(h) of
the Code and Treasury Regulation ss.1.817-5, as amended from time to time, and
any Treasury interpretations thereof, relating to the diversification
requirements for variable annuity, endowment, or life insurance contracts and
any amendments or other modifications or successor provisions to such Section or
Regulations. The Fund, the Distributor or the Adviser shall, upon request,
provide to the
11
Company a quarterly written diversification report, which shall show the results
of the quarterly Section 817(h) diversification test and include a certification
as to whether each Portfolio complies with the Section 817(h) diversification
requirement.
6.2. The Fund, the Distributor and the Adviser agree that shares of the
Portfolios will be sold only to Participating Insurance Companies and their
separate accounts and to Qualified Plans. No shares of any Portfolio of the Fund
will be sold to the general public.
6.3. The Fund, the Distributor and the Adviser represent and warrant
that the Fund and each Portfolio is currently qualified as a Regulated
Investment Company under Subchapter M of the Code, and that each Portfolio will
maintain such qualification (under Subchapter M or any successor or similar
provisions) as long as this Agreement is in effect.
6.4. The Fund, the Distributor or the Adviser will notify the Company
immediately upon having a reasonable basis for believing that the Fund or any
Portfolio has ceased to comply with the aforesaid Section 817(h) diversification
or Subchapter M qualification requirements or might not so comply in the future.
6.5. Without in any way limiting the effect of Sections 8.2, 8.3 and
8.4 hereof and without in any way limiting or restricting any other remedies
available to the Company, the Adviser or Distributor will pay all costs
associated with or arising out of any failure, or any anticipated or reasonably
foreseeable failure, of the Fund or any Portfolio to comply with Sections 6.1,
6.2, or 6.3 hereof, including all costs associated with reasonable and
appropriate corrections or responses to any such failure; such costs may
include, but are not limited to, the costs involved in creating, organizing, and
registering a new investment company as a funding medium for the Contracts
and/or the costs of obtaining whatever regulatory authorizations are required to
substitute shares of another investment company for those of the failed
Portfolio (including but not limited to an order pursuant to Section 26(c) of
the 1940 Act).
6.6. The Company agrees that if the Internal Revenue Service ("IRS")
asserts in writing in connection with any governmental audit or review of the
Company (or, to the Company's knowledge, of any Contract owner) that any
Portfolio has failed to comply with the diversification requirements of Section
817(h) of the Code or the Company otherwise becomes aware of any facts that
could give rise to any claim against the Fund, Distributor or Adviser as a
result of such a failure or alleged failure:
(a) The Company shall promptly notify the Fund, the Distributor
and the Adviser of such assertion or potential claim;
(b) The Company shall consult with the Fund, the Distributor and
the Adviser as to how to minimize any liability that may arise as a result of
such failure or alleged failure;
(c) The Company shall use its best efforts to minimize any
liability of the Fund, the Distributor and the Adviser resulting from such
failure, including, without limitation, demonstrating, pursuant to Treasury
Regulations, Section 1.817-5(a)(2), to the commissioner of the IRS that such
failure was inadvertent;
12
(d) Any written materials to be submitted by the Company to the
IRS, any Contract owner or any other claimant in connection with any of the
foregoing proceedings or contests (including, without limitation, any such
materials to be submitted to the IRS pursuant to Treasury Regulations, Section
1.817-5(a)(2)) shall be provided by the Company to the Fund, the Distributor and
the Adviser (together with any supporting information or analysis) within at
least two (2) business days prior to submission;
(e) The Company shall provide the Fund, the Distributor and the
Adviser with such cooperation as the Fund, the Distributor and the Adviser shall
reasonably request (including, without limitation, by permitting the Fund, the
Distributor and the Adviser to review the relevant books and records of the
Company) in order to facilitate review by the Fund, the Distributor and the
Adviser of any written submissions provided to it or its assessment of the
validity or amount of any claim against it arising from such failure or alleged
failure;
(f) The Company shall not with respect to any claim of the IRS or
any Contract owner that would give rise to a claim against the Fund, the
Distributor and the Adviser (i) compromise or settle any claim, (ii) accept any
adjustment on audit, or (iii) forego any allowable administrative or judicial
appeals, without the express written consent of the Fund, the Distributor and
the Adviser, which shall not be unreasonably withheld; provided that, the
Company shall not be required to appeal any adverse judicial decision unless the
Fund and the Adviser shall have provided an opinion of independent counsel to
the effect that a reasonable basis exists for taking such appeal; and further
provided that the Fund, the Distributor and the Adviser shall bear the costs and
expenses, including reasonable attorney's fees, incurred by the Company in
complying with this clause (f).
ARTICLE VII. Potential Conflicts and Compliance With Mixed and Shared Funding
Exemptive Order
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 is being managed; (e) a difference in voting instructions given by
variable annuity contract and variable life insurance contract owners or by
contract owners of different Participating Insurance Companies; or (f) a
decision by a Participating Insurance Company to disregard the voting
instructions of contract owners. The Board shall promptly inform the Company if
it 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 Mixed and Shared Funding Exemptive Order, by
providing the Board with all information reasonably necessary for the Board to
consider any issues raised. This includes, but is not limited to, an obligation
by the Company to inform the Board whenever Contract owner voting
13
instructions are to be disregarded. Such responsibilities shall be carried out
by the Company with a view only to the interests of its Contract owners.
7.3. If it is determined by a majority of the Board, or a majority of
its directors who are not interested persons of the Fund, the Distributor, the
Adviser or any subadviser to any of the Portfolios (the "Independent
Directors"), 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 Independent
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, 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 contract 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.
7.4. If a material irreconcilable conflict arises because of a decision
by the Company to disregard Contract owner voting instructions and that decision
represents a minority position or would preclude a majority vote, the Company
may be required, at the Fund's election, to withdraw the Account's investment in
the Fund and terminate this Agreement; 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 Independent
Directors. Any such withdrawal and termination must take place within six (6)
months after the Fund gives written notice that this provision is being
implemented, and until the end of that six-month period the Adviser, the
Distributor and the Fund shall continue to accept and implement orders by the
Company for the purchase (and redemption) of shares of the Fund.
7.5. If a material irreconcilable conflict arises because a particular
state insurance regulator's decision applicable to the Company conflicts with
the majority of other state regulators, then the Company will withdraw the
Account's investment in the Fund and terminate this Agreement within six months
after the Board informs the Company in writing that it has determined that such
decision has created an irreconcilable material conflict; provided, however,
that such withdrawal and termination shall be limited to the extent required by
the foregoing material irreconcilable conflict as determined by a majority of
the Independent Directors. Until the end of the foregoing six-month period, the
Fund shall continue to accept and implement orders by the Company for the
purchase (and redemption) of shares of the Fund.
7.6. For purposes of Sections 7.3 through 7.5 of this Agreement, a
majority of the Independent Directors 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 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 affected by the irreconcilable material conflict. In
the event that the Board determines that any proposed action does not adequately
remedy any
14
irreconcilable material conflict, then the Company will withdraw the Account's
investment in the Fund and terminate this Agreement within six (6) months after
the Board informs the Company in writing of the foregoing determination;
provided, however, that such withdrawal and termination shall be limited to the
extent required by any such material irreconcilable conflict as determined by a
majority of the Independent Directors.
7.7. 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 Mixed and Shared Funding Exemptive Order) on terms
and conditions materially different from those contained in the Mixed and Shared
Funding Exemptive Order, then (a) the Fund and/or the Participating Insurance
Companies, as appropriate, shall take such steps as may be necessary to comply
with Rules 6e-2 and 6e-3(T), as amended, and Rule 6e-3, as adopted, to the
extent such rules are applicable: and (b) Sections 3.6, 3.7, 3.8, 7.1, 7.2, 7.3,
7.4, and 7.5 of this Agreement shall continue in effect only to the extent that
terms and conditions substantially identical to such Sections are contained in
such Rule(s) as so amended or adopted.
ARTICLE VIII. Indemnification
8.1. Indemnification By The Company
(a) The Company agrees to indemnify and hold harmless the Fund,
the Distributor and the Adviser and each of their respective officers and
directors or trustees and each person, if any, who controls the Fund,
Distributor or Adviser within the meaning of Section 15 of the 1933 Act
(collectively, the "Indemnified Parties" for purposes of this Section 8.1)
against any and all losses, claims, expenses, damages and 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, expenses, damages or
liabilities (or actions in respect thereof) or settlements are related to the
sale or acquisition of the Fund's shares or the Contracts and:
(i) arise out of or are based upon any untrue
statements or alleged untrue statements of any material fact
contained in the registration statement or prospectus or SAI
covering the Contracts or contained in the Contracts or sales
literature or other promotional material 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 in writing to the
Company by or on behalf of the Adviser, Distributor or Fund
for use in the registration statement or prospectus for the
Contracts or in the Contracts or sales literature or other
promotional material (or any amendment or supplement to any of
the foregoing) or otherwise for use in connection with the
sale of the Contracts or Fund shares; or
15
(ii) arise out of or as a result of statements or
representations (other than statements or representations
contained in the registration statement, prospectus or sales
literature or other promotional material of the Fund not
supplied by the Company or persons under its control) or
wrongful conduct of the Company or persons under its control,
with respect to the sale or distribution of the Contracts or
Fund Shares; or
(iii) arise out of any untrue statement or alleged
untrue statement of a material fact contained in a
registration statement, prospectus, SAI, or sales literature
or other promotional material 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 information furnished in writing 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, including
without limitation Section 2.11 and Section 6.6 hereof,
as limited by and in accordance with the provisions of Sections 8.1(b) and
8.1(c) hereof.
(b) The Company shall not be liable under this indemnification
provision with respect to any losses, claims, expenses, damages, liabilities or
litigation to which an Indemnified Party would otherwise be subject by reason of
such Indemnified Party's willful misfeasance, bad faith, or gross negligence in
the performance of such Indemnified Party's duties or by reason of such
Indemnified Party's reckless disregard of obligations or duties under this
Agreement or to any of the Indemnified Parties.
(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, except to the extent that the Company
has been prejudiced by such failure to give notice. 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
16
expenses subsequently incurred by such party independently in connection with
the defense thereof other than reasonable costs of investigation.
(d) The Indemnified Parties will promptly notify the Company of
the commencement of any litigation or proceedings against them in connection
with the issuance or sale of the Fund Shares or the Contracts or the operation
of the Fund.
8.2. Indemnification by the Adviser
(a) The Adviser agrees to indemnify and hold harmless the
Company and its directors and officers and each person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act (collectively, the
"Indemnified Parties" for purposes of this Section 8.2) against any and all
losses, claims, expenses, 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 the Fund's
shares or the Contracts and:
(i) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact
contained in the registration statement or prospectus or SAI
or sales literature or other promotional material of the Fund
prepared by the Fund, the Distributor or the Adviser (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 in writing to
the Adviser, the Distributor or the Fund by or on behalf of
the Company for use in the registration statement,
prospectus or SAI for the Fund or in sales literature or
other promotional material (or any amendment or supplement
to any of the foregoing) or otherwise for use in connection
with the sale of the Contracts or the 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, SAI or
sales literature or other promotional material for the
Contracts not supplied by the Adviser or persons under its
control) or wrongful conduct of the Fund, the Distributor or
the Adviser or persons under their control, with respect to
the sale or distribution of the Contracts or Fund shares; or
(iii) arise out of any untrue statement or alleged
untrue statement of a material fact contained in a
registration statement, prospectus, SAI, or sales literature
or other promotional material 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
17
statements therein not misleading, if such statement or
omission was made in reliance upon information furnished in
writing to the Company by or on behalf of the Adviser, the
Distributor or the Fund; or
(iv) arise as a result of any failure by the Fund,
the Distributor or the Adviser to provide the services and
furnish the materials under the terms of this Agreement
(including a failure, whether unintentional or in good faith
or otherwise, to comply with the diversification and other
qualification requirements specified in Article VI of this
Agreement); or
(v) arise out of or result from any material breach
of any representation and/or warranty made by the Fund, the
Distributor or the Adviser in this Agreement or arise out of
or result from any other material breach of this Agreement by
the Adviser, the Distributor or the Fund; or
(vi) arise out of or result from the incorrect or
untimely calculation or reporting by the Fund, the Distributor
or the Adviser of the daily net asset value per share (subject
to Section 1.10 of this Agreement) or dividend or capital gain
distribution rate;
as limited by and in accordance with the provisions of Sections 8.2(b) and
8.2(c) hereof. This indemnification is in addition to and apart from the
responsibilities and obligations of the Adviser specified in Article VI hereof.
(b) The Adviser shall not be liable under this indemnification
provision with respect to any losses, claims, expenses, damages, liabilities or
litigation to which an Indemnified Party would otherwise be subject by reason of
such Indemnified Party's willful misfeasance, bad faith, or gross negligence in
the performance of such Indemnified Party's duties or by reason of such
Indemnified Party's reckless disregard of obligations or duties under this
Agreement or to any of the Indemnified Parties.
(c) The Adviser shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Adviser in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Adviser of any
such claim shall not relieve the Adviser from any liability which it may have to
the Indemnified Party against whom such action is brought otherwise than on
account of this indemnification provision, except to the extent that the Adviser
has been prejudiced by such failure to give notice. 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
18
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.
(d) The Company agrees promptly to notify the Adviser of the
commencement of any litigation or proceedings against it or any of its officers
or directors in connection with the issuance or sale of the Contracts or the
operation of the Account.
ARTICLE IX. Applicable Law
9.1. This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the Commonwealth of
Massachusetts, without regard to conflict of laws provisions.
9.2. 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 Mixed and Shared Funding Exemptive
Order) and the terms hereof shall be interpreted and construed in accordance
therewith.
ARTICLE X. Termination
10.1. This Agreement shall terminate:
(a) at the option of any party, with or without cause, with
respect to some or all Portfolios, upon sixty (60) days advance written notice
delivered to the other parties; or
(b) at the option of the Company by written notice to the other
parties 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; or
(c) at the option of the Company by written notice to the other
parties with respect to any Portfolio in the event 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) at the option of the Fund, Distributor or Adviser in the event
that formal administrative proceedings are instituted against the Company by the
NASD, the SEC, the Insurance Commissioner or like official of any state 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 shares, if, in each case, the Fund, Distributor or Adviser,
as the case may be, reasonably 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
(e) at the option of the Company in the event that formal
administrative proceedings are instituted against the Fund, the Distributor or
the Adviser by the NASD, the SEC, or any state securities or insurance
department or any other regulatory body, if the
19
Company reasonably 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 Distributor or the Adviser to perform their obligations
under this Agreement; or
(f) at the option of the Company by written notice to the Fund
with respect to any Portfolio if the Company reasonably believes that the
Portfolio will fail to meet the Section 817(h) diversification requirements or
Subchapter M qualifications specified in Article VI hereof; or
(g) at the option of any non-defaulting party hereto in the event
of a material breach of this Agreement by any party hereto (the "defaulting
party") other than as described in Section 10.1(a)-(h); provided, that the
non-defaulting party gives written notice thereof to the defaulting party, with
copies of such notice to all other non-defaulting parties, and if such breach
shall not have been remedied within thirty (30) days after such written notice
is given, then the non-defaulting party giving such written notice may terminate
this Agreement by giving thirty (30) days written notice of termination to the
defaulting party; or
(h) at any time upon written agreement of all parties to this
Agreement.
10.2. Notice Requirement
No termination of this Agreement shall be effective unless and until
the party terminating this Agreement gives prior written notice to all other
parties of its intent to terminate, which notice shall set forth the basis for
the termination. Furthermore,
(a) in the event any termination is based upon the provisions
of Article VII, or the provisions of Section 10.1(a) of this Agreement, the
prior written notice shall be given in advance of the effective date of
termination as required by those provisions unless such notice period is
shortened by mutual written agreement of the parties;
(b) in the event any termination is based upon the provisions
of Section 10.1(d), 10.1(e) or 10.1(g) of this Agreement, the prior written
notice shall be given at least sixty (60) days before the effective date of
termination; and
(c) in the event any termination is based upon the provisions
of Section 10.1(b), 10.1(c) or 10.1(f), the prior written notice shall be given
in advance of the effective date of termination, which date shall be determined
by the party sending the notice.
10.3. Effect of Termination
Notwithstanding any termination of this Agreement, other than as a
result of a failure by either the Fund or the Company to meet Section 817(h) of
the Code diversification requirements, the Fund, the Distributor and the Adviser
shall, at the option of the Company, continue to make available additional
shares of the Fund pursuant to the terms and conditions of this Agreement, for
all Contracts in effect on the effective date of termination of this Agreement
(hereinafter referred to as "Existing Contracts"). Specifically, without
limitation, the owners of the Existing Contracts shall be permitted to
reallocate investments in the Fund, redeem investments in the
20
Fund and/or invest in the Fund upon the making of additional purchase payments
under the Existing Contracts. The parties agree that this Section 10.3 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.
10.4. Surviving Provisions
Notwithstanding any termination of this Agreement, each party's
obligations under Article VIII to indemnify other parties shall survive and not
be affected by any termination of this Agreement. In addition, with respect to
Existing Contracts, all provisions of this Agreement shall also survive and not
be affected by any termination of this Agreement.
ARTICLE XI. 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 parties.
If to the Company:
TIAA-CREF Life Insurance Company
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Secretary
If to the Fund:
Xxxxxx Advisors Trust
000 X. Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx XX 00000
Attention: Secretary
If to the Adviser:
Columbia Xxxxxx Asset Management, LLP
000 X. Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx XX 00000
Attention: Secretary
If to the Distributor:
Columbia Management Distributors, Inc.
Xxx Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Secretary
21
ARTICLE XII. Miscellaneous
12.1. Subject to the requirements of legal process and regulatory
authority, each party hereto shall treat as confidential the names and addresses
of the owners of the Contracts and all information reasonably identified as
confidential in writing by any other party hereto and, except as permitted by
this Agreement, shall not disclose, disseminate or utilize such names and
addresses and other confidential information without the express written consent
of the affected party until such time as such information may come into the
public domain. Without limiting the foregoing, no party hereto shall disclose
any information that another party has designated as proprietary.
12.2. The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions hereof or
otherwise affect their construction or effect.
12.3. This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
12.4. 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.
12.5. Each party hereto shall cooperate with each other party and all
appropriate governmental authorities (including without limitation the SEC, the
NASD and state insurance regulators) and shall permit such authorities
reasonable access to its books and records in connection with any investigation
or inquiry relating to this Agreement or the transactions contemplated hereby.
12.6. Any controversy or claim arising out of or relating to this
Agreement, or breach thereof, shall be settled by arbitration in a forum jointly
selected by the relevant parties (but if applicable law requires some other
forum, then such other forum) in accordance with the Commercial Arbitration
Rules of the American Arbitration Association, and judgment upon the award
rendered by the arbitrators may be entered in any court having jurisdiction
thereof.
12.7. 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.
12.8. 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.
12.9. The Company agrees that the obligations assumed by the Fund,
Distributor and the Adviser pursuant to this Agreement shall be limited in any
case to the Fund, Distributor and Adviser and their respective assets and the
Company shall not seek satisfaction of any such obligation from the shareholders
of the Fund, Distributor or the Adviser, the Directors, officers, employees or
agents of the Fund, Distributor or Adviser, or any of them.
22
12.10. The Fund, the Distributor and the Adviser agree that the
obligations assumed by the Company pursuant to this Agreement shall be limited
in any case to the Company and its assets and neither the Fund, Distributor nor
Adviser shall seek satisfaction of any such obligation from the shareholders of
the Company, the directors, officers, employees or agents of the Company, or any
of them.
12.11. No provision of this Agreement may be deemed or construed to
modify or supersede any contractual rights, duties, or indemnifications, as
between the Adviser and the Fund, and the Distributor and the Fund.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed in its name and on its behalf by its duly authorized
representative and its seal to be hereunder affixed hereto as of the date
specified below.
TIAA-CREF LIFE INSURANCE COMPANY
By its authorized officer,
By: /s/ Xxxx X. Xxxxxx
--------------------------------------------
Title: Senior Vice President
XXXXXX ADVISORS TRUST
By its authorized officer,
By: /s/ Xxxxx X. Xxxxx
--------------------------------------------
Title: President
COLUMBIA XXXXXX ASSET MANAGEMENT, LLP
By its authorized officer,
By: /s/ Xxxxx X. Xxxxx
--------------------------------------------
Title: President
COLUMBIA MANAGEMENT DISTRIBUTORS, INC.
By its authorized officer,
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------------------
Title: President
23
SCHEDULE A
CONTRACTS
TIAA-CREF INTELLIGENT LIFE FLEXIBLE PREMIUM VARIABLE UNIVERSAL
LIFE INSURANCE POLICY
24
SCHEDULE B
DESIGNATED PORTFOLIO(S)
Xxxxxx U.S. Smaller Companies
Xxxxxx International Small Cap
Xxxxxx Select
25
SCHEDULE C
EXPENSES
The Fund and/or the Distributor and/or Adviser, and the Company will
coordinate the functions and pay the costs of the completing these functions
based upon an allocation of costs in the tables below. Costs shall be allocated
to reflect the Fund's share of the total costs determined according to the
number of pages of the Fund's respective portions of the documents.
------------------------------ --------------------------- --------------------------- ---------------------------
ITEM FUNCTION PARTY RESPONSIBLE FOR PARTY RESPONSIBLE FOR
COORDINATION EXPENSE
------------------------------ --------------------------- --------------------------- ---------------------------
Mutual Fund Prospectus Printing of combined Company Inforce - Fund
prospectuses Prospective - Company
------------------------------ --------------------------- --------------------------- ---------------------------
Distribution (including Company Fund
postage) to New and Inforce
Clients
------------------------------ --------------------------- --------------------------- ---------------------------
Distribution (including Company Company
postage) to Prospective
Clients
------------------------------ --------------------------- --------------------------- ---------------------------
Product Prospectus Printing and Distribution Company Company
for Inforce and
Prospective Clients
------------------------------ --------------------------- --------------------------- ---------------------------
Mutual Fund Prospectus If Required by Fund, Fund, Distributor or Fund, Distributor or
Update & Distribution Distributor or Adviser Adviser Adviser
------------------------------ --------------------------- --------------------------- ---------------------------
If Required by Company Company (Fund, Company
Distributor or Adviser to
provide Company with
document in PDF format)
------------------------------ --------------------------- --------------------------- ---------------------------
26
------------------------------ --------------------------- --------------------------- ---------------------------
ITEM FUNCTION PARTY RESPONSIBLE FOR PARTY RESPONSIBLE FOR
COORDINATION EXPENSE
------------------------------ --------------------------- --------------------------- ---------------------------
------------------------------ --------------------------- --------------------------- ---------------------------
Product Prospectus Update & If Required by Fund, Company Fund, Distributor or
Distribution Distributor or Adviser Adviser
------------------------------ --------------------------- --------------------------- ---------------------------
If Required by Company Company Company
------------------------------ --------------------------- --------------------------- ---------------------------
Mutual Fund SAI Printing Fund, Distributor or Fund, Distributor or
Adviser Adviser
------------------------------ --------------------------- --------------------------- ---------------------------
Distribution (including Party who receives the Party who receives the
postage) request request
------------------------------ --------------------------- --------------------------- ---------------------------
Product SAI Printing Company Company
------------------------------ --------------------------- --------------------------- ---------------------------
Distribution Company Company
------------------------------ --------------------------- --------------------------- ---------------------------
Proxy Material for Mutual Printing if proxy Fund, Distributor or Fund, Distributor or
Fund required by Law Adviser Adviser
------------------------------ --------------------------- --------------------------- ---------------------------
Distribution (including Company Fund, Distributor or
labor) if proxy required Adviser
by Law
------------------------------ --------------------------- --------------------------- ---------------------------
Printing & distribution Company Company
if required by Company
------------------------------ --------------------------- --------------------------- ---------------------------
Mutual Fund Annual & Printing of reports Fund, Distributor or Fund, Distributor or
Semi-Annual Report Adviser Adviser
------------------------------ --------------------------- --------------------------- ---------------------------
Distribution Company Fund, Distributor or
Adviser
------------------------------ --------------------------- --------------------------- ---------------------------
Other communication to New If Required by the Fund, Company Distributor or Adviser
and Prospective clients Distributor or Adviser
------------------------------ --------------------------- --------------------------- ---------------------------
If Required by Company Company Company
------------------------------ --------------------------- --------------------------- ---------------------------
27
------------------------------ --------------------------- --------------------------- ---------------------------
ITEM FUNCTION PARTY RESPONSIBLE FOR PARTY RESPONSIBLE FOR
COORDINATION EXPENSE
------------------------------ --------------------------- --------------------------- ---------------------------
------------------------------ --------------------------- --------------------------- ---------------------------
Other communication to Distribution (including Company Fund, Distributor or
inforce labor and printing) if Adviser
required by the Fund,
Distributor or Adviser
------------------------------ --------------------------- --------------------------- ---------------------------
Distribution (including Company Company
labor and printing) if
required by Company
------------------------------ --------------------------- --------------------------- ---------------------------
Operations of the Fund All operations and Fund, Distributor or Fund or Adviser
related expenses, Adviser
including the cost of
registration and
qualification of shares,
taxes on the issuance or
transfer of shares, cost
of management of the
business affairs of the
Fund, and expenses paid
or assumed by the fund
pursuant to any Rule
12b-1 plan
------------------------------ --------------------------- --------------------------- ---------------------------
Operations of the Accounts Federal registration of Company Company
units of separate account
(24f-2 fees)
------------------------------ --------------------------- --------------------------- ---------------------------
28
