EX-99.(h)(2)
FUND PARTICIPATION AGREEMENT
This Agreement is entered into as of the ___ day of ___________, 200_,
by and among _______________________________ ("Insurance Company"), a life
insurance company organized under the laws of the State of ________________,
_______________ ("Contract Distributor"), LAZARD ASSET MANAGEMENT SECURITIES LLC
("Lazard"), and LAZARD RETIREMENT SERIES, INC. ("Fund"), with respect to the
Fund's Portfolios named on Schedule 1, as it may be amended from time to time
(each a "Portfolio").
ARTICLE I.
DEFINITIONS
The following terms used in this Agreement shall have the meanings set
forth below:
1.1 "1933 Act" shall mean the Securities Act of 1933, as amended.
1.2 "1940 Act" shall mean the Investment Company Act of 1940, as amended.
1.3 "Board" shall mean Fund's Board of Directors.
1.4 "Business Day" shall mean any day for which the Portfolios calculate
net asset value per share as described in the Portfolio Prospectuses.
1.5 "Code" shall mean the Internal Revenue Code of 1986, as amended.
1.6 "Commission" shall mean the Securities and Exchange Commission.
1.7 "Contract" shall mean a variable annuity or variable life insurance
contract that uses a Portfolio as an underlying investment medium and
is named on Schedule 1.
1.8 "Contract Portfolios" shall mean investment companies, other than the
Portfolios, used by a Contract as an underlying investment medium.
1.9 "Contract Prospectus" shall mean the currently effective prospectus and
statement of additional information or other offering documents with
respect to a Contract (such as a written description of a Contract not
registered under the 1933 Act), including any supplements or amendments
thereto.
1.10 "Contractholder" shall mean any person that is a party to a Contract
with a Participating Company.
1.11 "Disinterested Board Members" shall mean those members of the Board
that are not deemed to be "interested persons" of Fund, as defined in
the 0000 Xxx.
1.12 "General Account" shall mean the general account of Insurance Company.
1.13 "IRS" shall mean the Internal Revenue Service.
1.14 "NASD" shall mean the National Association of Securities Dealers, Inc.
1.15 "Notice" shall mean the notice related to the Order.
1.16 "Order" shall mean Fund's mixed and shared funding exemptive order of
the Commission pursuant to Section 6(c) of the 0000 Xxx.
1.17 "Participants" shall mean individuals who participate under a group
Contract.
1.18 "Participating Company" shall mean any insurance company, including
Insurance Company, that offers variable annuity and/or variable life
insurance contracts and that has entered into an agreement with Fund
for the purpose of making Portfolio shares available to serve as the
underlying investment medium for Contracts.
1.19 "Parties" shall mean Insurance Company, Contract Distributor, Lazard
and Fund, collectively.
1.20 "Portfolio Prospectus" shall mean the currently effective prospectus
and statement of additional information with respect to a Portfolio,
including any supplements or amendments thereto.
1.21 "Separate Account" shall mean a separate account duly established by
Insurance Company that invests in a Portfolio and is named on
Schedule 1.
ARTICLE II.
REPRESENTATIONS, WARRANTIES AND AGREEMENTS
2.1 Insurance Company represents, warrants and covenants that:
(a) it is and shall remain an insurance company duly organized and
in good standing under applicable law;
(b) it has legally and validly established and shall maintain each
Separate Account pursuant to applicable insurance laws and
regulations;
(c) it has registered and shall maintain the registration of each
Separate Account as a unit investment trust under the 1940 Act
to serve as a segregated investment account for the Contracts,
or, alternatively, it has not so registered the Separate
Accounts in proper reliance upon an exclusion from such
registration (which exclusion shall be communicated to Fund);
(d) each Separate Account is and at all times shall be eligible to
invest in shares of a Portfolio without such investment
disqualifying Fund as an investment medium for insurance
company separate accounts supporting variable annuity and/or
variable life insurance contracts;
(e) each Separate Account is and at all times shall be a
"segregated asset account" and interests in each Separate
Account that are offered to the public shall be issued
exclusively through the purchase of a Contract that is and at
all times shall be a "variable contract," in each case within
the meaning of such terms under Section 817 of the Code and
the regulations thereunder; Insurance Company agrees to notify
Fund and Lazard
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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;
(f) the Contracts are and at all times shall be treated as life
insurance, endowment or annuity contracts under applicable
provisions of the Code, and it shall notify Fund 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; and
(g) all of its employees and agents who deal with money and/or
securities of Fund are and shall continue to be at all times
covered by a blanket fidelity bond or similar coverage, which
shall include coverage for larceny and embezzlement and shall
be issued by a reputable bonding company, in an amount not
less than that required to be maintained by Fund; Insurance
Company agrees to hold for the benefit of Fund and to pay to
Fund any amounts lost from larceny, embezzlement or other
events covered by said bond to the extent such amounts
properly belong to Fund pursuant to the terms of this
Agreement.
2.2 Insurance Company and Contract Distributor represent, warrant and
covenant that: (a) units of interest in each Separate Account available
through the purchase of Contracts are registered under the 1933 Act, or
are not so registered in proper reliance upon an exclusion from such
registration; (b) the Contracts shall be issued and sold in compliance
in all material respects with all applicable federal and state laws,
including state insurance suitability requirements; and (c) Insurance
Company and Contract Distributor will otherwise comply with all
applicable federal and state laws, including state insurance laws and
regulations, in the performance of this Agreement. Insurance Company
agrees to inform Fund promptly of any investment restrictions imposed
by state insurance law and applicable to Fund.
2.3 Neither Insurance Company nor Contract Distributor will enter into any
arrangements, formal or informal, to permit or facilitate any
Contractholder's use of market timing or excessive trading strategies
with respect to Portfolio shares. Insurance Company and Contract
Distributor have implemented reasonable procedures to monitor for such
activities and will cooperate with Fund's reasonable requests in taking
steps to deter and to detect the use of market timing or excessive
trading strategies by Contractholders, including providing identity
information (solely for the purpose of deterring and detecting the use
of market timing or excessive trading strategies by Contractholders)
and other information Fund reasonably requests.
2.4 Contract Distributor represents and warrants that it is and at all
times shall be: (a) registered with the Commission as a broker-dealer;
(b) a member in good standing of the NASD; and (c) duly organized,
validly existing and in good standing under applicable law, with full
power, authority, and legal right to execute, deliver and perform its
duties and comply with its obligations under this Agreement.
2.5 Fund represents and warrants that:
(a) it is and shall remain registered with the Commission as an
open-end, management investment company under the 1940 Act;
(b) Portfolio shares are registered under the 1933 Act;
(c) it possesses and shall maintain all legal and regulatory
licenses, approvals, consents and/or exemptions required for
it to operate and offer its shares as an underlying investment
medium for the Contracts;
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(d) each Portfolio is or will be qualified as a regulated
investment company under Subchapter M of the Code, it shall
make every effort to maintain such qualification, and it shall
notify Insurance Company promptly upon having a reasonable
basis for believing that any Portfolio invested in by a
Separate Account has ceased to so qualify or that it might not
so qualify in the future; and
(e) all of its directors, officers, employees, investment
advisers, and other individuals/entities who deal with the
money and/or securities of Fund are and shall continue to be
at all times covered by a blanket fidelity bond or similar
coverage, which shall include coverage for larceny and
embezzlement and shall be issued by a reputable bonding
company, for the benefit of Fund in an amount not less than
that required by Rule 17g-1 under the 0000 Xxx.
2.6 Fund makes no representation as to whether any aspect of is operations,
including without limitation, investment policies, fees and expenses,
complies with the insurance laws of any state.
2.7 Each Portfolio's assets will be managed and invested in a manner that
complies with the requirements of Section 817(h) of the Code and
Treasury Regulation ss.1.817-5, relating to the diversification
requirements for variable annuity, endowment or life insurance
contracts. If a Portfolio fails to comply with Section 817(h) of the
Code, Fund will take all reasonable steps to adequately diversify the
Portfolio so as to achieve compliance within the grace period afforded
by Treasury Regulation ss.1.817-5. If Fund does not adequately
diversify the Portfolio during the grace period, it will take
reasonable steps to notify Insurance Company that the Portfolio has
failed to so comply. In the event the IRS asserts in writing in
connection with any governmental audit or review of Insurance Company
or, to Insurance Company's knowledge, of any Contractholder, that any
Portfolio has failed or allegedly failed to comply with the
diversification requirements of Section 817(h) of the Code or the
regulations thereunder or Insurance Company otherwise becomes aware of
any facts that could give rise to any claim against Fund or its
affiliates as a result of such a failure or alleged failure, Insurance
Company shall promptly notify Fund and Lazard of such assertion or
potential claim and shall permit Fund and Lazard and its affiliates and
their legal and accounting advisers to participate in any conferences,
discussions or proceedings with the IRS, any Contractholder or any
other claimant regarding such claims.
2.8 Each Party agrees that it will comply with all applicable laws and
regulations relating to consumer privacy ("Privacy Law") and that it is
prohibited from using or disclosing any nonpublic personal information
(as defined in Regulation S-P, or any similar term or terms as defined
in other applicable Privacy Law, "Customer Information") received from
another Party other than (a) as required by law, regulation or rule;
(b) as permitted in writing by the disclosing party; (c) to its
affiliates; or (d) as necessary to perform this Agreement or to service
Contractholders, in each case in compliance with the reuse and
redisclosure provisions of Privacy Law. Each Party shall use its best
efforts to (i) cause its employees and agents to be informed of and to
agree to be bound by Privacy Law and the provisions of this Agreement
and (ii) maintain physical, electronic and procedural safeguards
reasonably designed to protect the security, confidentiality and
integrity of, and to prevent unauthorized access to or use of, Customer
Information.
2.9 Insurance Company and Contract Distributor have adopted and implemented
compliance policies and procedures to comply with all money laundering
and currency transaction reporting laws, regulations, requirements and
guidance applicable to Fund or applicable to Insurance Company or
Contract Distributor, as the case may be, including those relating to
Contractholder identification and verification; monitoring for
Specially Designated Nationals and Blocked Persons named on
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the U.S. Treasury Department's Office of Foreign Assets Control list or
other similar governmental lists; suspicious activity reporting; and
recordkeeping requirements (collectively, "AML Requirements"), and with
any "money laundering" guidelines as may be provided by Lazard or Fund
or agreed with Lazard and Fund.
(a) Insurance Company and Contract Distributor will ensure the
ability of federal examiners to obtain information and records
relating to AML Requirements and the ability of Lazard and
Fund or their agents to inspect the records and facilities of
Insurance Company and Contract Distributor regarding
compliance with AML Requirements.
(b) Insurance Company and Contract Distributor will provide Fund
with such information, representations and certifications
regarding compliance with AML Requirements as Fund may
reasonably request.
(c) Insurance Company and Contract Distributor will notify Fund if
any of Insurance Company's or Contract Distributor's
representations with respect to compliance with AML
Requirements ceases to be true.
ARTICLE III.
FUND SHARES
3.1 Fund agrees to make the shares of each Portfolio available for purchase
by Insurance Company and each Separate Account at net asset value,
subject to the terms and conditions of this Agreement and the Portfolio
Prospectus. Fund may refuse to sell the shares of any Portfolio to any
person, or suspend or terminate the offering of the shares of any
Portfolio, as permitted by law or by regulatory authorities having
jurisdiction or if, 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, suspension or termination is necessary and in
the best interests of the shareholders of such Portfolio.
3.2 Fund agrees that it shall sell shares of the Portfolios only to
Participating Companies and their separate accounts, the general
accounts of Participating Companies and their affiliates and to
qualified pension and retirement plans. No shares of any Portfolio will
otherwise be sold to the general public.
3.3 Except as noted in this Article III, Fund and Insurance Company agree
that orders and related payments to purchase and redeem Portfolio
shares shall be processed in the manner set out in Schedule 2 hereto.
(a) Insurance Company and Contract Distributor represent that they
have 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
Portfolio shares communicated by Contract Distributor to Fund
or its agent to be treated in accordance with Schedule 2 as
having been received on a Business Day have been received by
Contract Distributor by the Close of Trading (as defined in
Schedule 2) on such Business Day and were not modified after
the Close of Trading, and that all orders received from
Contractholders but not rescinded by the Close of Trading were
communicated to Fund or its agent as received for that
Business Day.
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(b) Each transmission of Share orders by Contract Distributor
shall constitute a representation by Contract Distributor that
such orders are accurate and complete and relate to orders
received by Contract Distributor by the Close of Trading on
the Business Day for which the order is to be priced and that
such transmission includes all orders relating to Portfolio
shares received from Contractholders but not rescinded by the
Close of Trading.
(c) Insurance Company and Contract Distributor will provide Fund
with (A) a copy of the Late Trading Procedures and (B) such
certifications and representations regarding the Late Trading
Procedures as Fund may reasonably request. Insurance Company
and Contract Distributor will ensure the ability of
appropriate regulatory authorities to obtain information and
records relating to the Late Trading Procedures and the
ability of Lazard and Fund or their agents to inspect the
records and facilities of Insurance Company and Contract
Distributor regarding compliance with the Late Trading
Procedures. Insurance Company or Contract Distributor will
notify Fund in writing of any material change in the Late
Trading Procedures within __ days of such change.
3.4 Fund shall confirm each purchase or redemption order made by Insurance
Company. Transfer of Portfolio shares shall be by book entry only. No
share certificates shall be issued to Insurance Company. Shares ordered
from Fund shall be recorded in an appropriate title for Insurance
Company, on behalf of each Separate Account or the General Account.
3.5 Fund shall promptly notify Insurance Company of the amount of dividend
and capital gain, if any, per share of each Portfolio to which each
Separate Account is entitled. Insurance Company hereby elects to
reinvest all dividends and capital gains of any Portfolio in additional
shares of that Portfolio at the applicable net asset value per share,
until Insurance Company otherwise notifies Fund in writing.
ARTICLE IV.
STATEMENTS AND REPORTS
4.1 Fund shall provide Insurance Company with monthly statements of account
for each Separate Account's Portfolio accounts as of the end of each
month by the fifteenth (15th) Business Day of the following month.
4.2 (a) At least annually, Fund or its designee shall provide
Insurance Company with as many copies of Portfolio
Prospectuses as Insurance Company may reasonably request for
distribution by Insurance Company to existing Contractholders
and Participants with respect to Separate Accounts invested in
the relevant Portfolios.
(b) If requested by Insurance Company, Fund or its designee shall
provide Portfolio Prospectuses in "camera ready" copy or, at
the request of Insurance Company, in the electronic format
sent to the financial printer and other assistance as is
reasonably necessary in order for the Parties once a year (or
more frequently if the Portfolio Prospectuses are supplemented
or updated) to have the Contract Prospectuses and the
Portfolio Prospectuses printed together in one document. The
expenses of such printing will be borne by Insurance Company.
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(c) Fund or its designee shall provide Insurance Company, at
Insurance Company's expense, with as many copies of Portfolio
Prospectuses as Insurance Company may reasonably request for
distribution by Insurance Company to prospective purchasers of
Contracts.
(d) The form of the Portfolio Prospectuses provided to Insurance
Company shall be the final form of Portfolio Prospectus as
filed with the Commission, which form shall include only those
Portfolios identified on Schedule 1.
4.3 Fund shall provide Insurance Company with at least one complete copy of
all registration statements, periodic reports and proxy statements and
all applications for exemptive orders and requests for no-action
letters that relate to a Separate Account.
4.4 Fund shall provide Insurance Company with copies of each Portfolio's
periodic reports, proxy statements and other printed materials (which
the Portfolio customarily provides to its shareholders) in quantities
as Insurance Company may reasonably request for distribution by
Insurance Company to each Contractholder and Participant with respect
to Separate Accounts invested in that Portfolio.
4.5 Insurance Company shall provide Fund with at least one complete copy of
all registration statements, periodic reports, proxy statements,
applications for exemptive orders, requests for no-action letters, and
all amendments to any of the above, that are material to a Portfolio
promptly after the filing of such document with the Commission or other
regulatory authorities or, if such materials are not filed,
contemporaneously with first use. Insurance Company shall provide to
Fund and Lazard any complaints received from Contractholders pertaining
to Fund or a Portfolio.
ARTICLE V.
EXPENSES
5.1 Except as otherwise specifically provided herein, each Party will bear
all expenses incident to its performance under this Agreement.
5.2 Lazard may pay Contract Distributor for distribution and/or other
services relating to Portfolio shares pursuant to any distribution plan
adopted by Fund in accordance with Rule 12b-1 under the 1940 Act,
subject to the terms of an agreement between Contract Distributor and
Lazard related to such plan.
ARTICLE VI.
EXEMPTIVE RELIEF
6.1 Insurance Company acknowledges that it has reviewed a copy of the Order
and, in particular, has reviewed the conditions to the relief set forth
in the Notice. As required by the conditions set forth in the Notice,
Insurance Company shall report any potential or existing conflicts
promptly to the Board. In addition, Insurance Company shall be
responsible for assisting the Board in carrying out its
responsibilities under the Order by providing the Board with all
information necessary for the Board to consider any issues raised
including, without limitation, information whenever Contract voting
instructions are disregarded. Insurance Company, at least annually (but
more frequently if requested by Fund), shall submit to the Board such
reports, materials, or data as the Board may reasonably request so that
the Board may carry out fully the obligations
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imposed upon it by the Order. Insurance Company agrees to carry out
such responsibilities with a view only to the interests of existing
Contractholders.
6.2 If a majority of the Board, or a majority of Disinterested Board
Members, determines that a material irreconcilable conflict exists with
regard to Contractholder investments in Fund, the Board shall give
prompt notice to all Participating Companies. If the Board determines
that Insurance Company is a Participating Company for whom the conflict
is relevant, Insurance Company shall at its sole cost and expense, and
to the extent reasonably practicable (as determined by a majority of
the Disinterested Board Members), take such action as is necessary to
remedy or eliminate the irreconcilable material conflict. Such
necessary action may include, but shall not be limited to:
(a) withdrawing the assets allocable to some or all Separate
Accounts from Fund or any Portfolio and reinvesting such
assets in a different investment medium (which may include
another Portfolio);
(b) submitting the question of whether such segregation should be
implemented to a vote of all affected Contractholders and, as
appropriate, segregating the assets of any appropriate group
(i.e. variable annuity or variable life insurance
Contractholders) that votes in favor of such segregation;
and/or
(c) establishing a new registered management investment company or
managed separate account.
6.3 If a material irreconcilable conflict arises as a result of a decision
by Insurance Company to disregard Contractholder voting instructions
and that decision represents a minority position or would preclude a
majority vote, Insurance Company may be required, at the Board's
election, to withdraw the investments of its Separate Accounts in Fund.
6.4 For the purpose of this Article, a majority of the Disinterested Board
Members shall determine whether any proposed action adequately remedies
any material irreconcilable conflict, but in no event shall Fund or
Lazard or any other investment adviser of Fund be required to bear the
expense of establishing a new funding medium for any Contract.
Insurance Company shall not be required by this Article to establish a
new funding medium for any Contract if an offer to do so has been
declined by vote of a majority of the Contractholders materially and
adversely affected by the material irreconcilable conflict.
6.5 No action by Insurance Company taken or omitted, and no action by a
Separate Account or Fund taken or omitted as a result of any act or
failure to act by Insurance Company pursuant to this Article VI shall
relieve Insurance Company of its obligations under, or otherwise affect
the operations of, this Article VI.
ARTICLE VII.
VOTING OF FUND SHARES
7.1 Insurance Company shall provide pass-through voting privileges to all
Contractholders and Participants so long as and to the extent the
Commission continues to interpret the 1940 Act as requiring
pass-through voting privileges or to the extent otherwise required by
law. Accordingly, Insurance Company, where applicable, shall vote
shares of a Portfolio held in each Separate Account in a manner
consistent with voting instructions timely received from its
Contractholders
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and Participants. Insurance Company shall be responsible for assuring
that the Separate Account determines voting privileges in a manner
consistent with other Participating Companies. Insurance Company shall
vote shares for which it has not received timely voting instructions,
as well as shares it owns, in the same proportion as it votes those
shares for which it has received voting instructions.
7.2 If and to the extent Rule 6e-2 and Rule 6e-3(T) under the 1940 Act are
amended, or if Rule 6e-3 is adopted, to provide exemptive relief from
any provision of the 1940 Act or the rules thereunder with respect to
mixed and shared funding on terms and conditions materially different
from any exemptions granted in the Order, then Fund, and/or the
Participating Companies, as appropriate, shall take such steps as may
be necessary to comply with Rule 6e-2 and Rule 6e-3(T), as amended, and
Rule 6e-3, as adopted, to the extent such Rules are applicable.
7.3 Insurance Company agrees that it shall not, without the prior written
consent of Fund and Lazard, solicit, introduce or encourage
Contractholders or Participants to (a) change or supplement Fund's
investment adviser or (b) change, modify, substitute, add to or delete
a Portfolio from the current investment options under the Contracts.
ARTICLE VIII.
MARKETING
8.1 Fund or its designee shall periodically furnish Insurance Company with
sales literature or other promotional materials for each Portfolio, in
quantities as Insurance Company may reasonably request, for
distribution to prospective purchasers of Contracts. Expenses for the
printing and distribution of such documents shall be borne by Insurance
Company.
8.2 Insurance Company shall designate certain persons or entities that
shall have the requisite licenses to solicit applications for the sale
of Contracts.
8.3 Insurance Company shall furnish, or shall cause to be furnished, to
Fund each piece of sales literature or other promotional material in
which Fund, Lazard or Fund's investment adviser or administrator is
named, at least five (5) Business Days prior to its use. No such
material shall be used unless Fund and Lazard or their respective
designees approve such material in writing.
8.4 Fund shall furnish, or shall cause to be furnished, to Insurance
Company each piece of Fund's sales literature or other promotional
material in which Insurance Company or a Separate Account is named, at
least five (5) Business Days prior to its use. No such material shall
be used unless Insurance Company approves such material in writing.
8.5 Insurance Company shall not give any information or make any
representations or statements on behalf of Fund or Lazard or concerning
Fund or any Portfolio other than the information or representations
contained in a Portfolio Prospectus, periodic reports, proxy statements
or in sales literature or other promotional material approved by Fund.
8.6 Fund shall not, in connection with the sale of Portfolio shares, give
any information or make any representations on behalf of Insurance
Company or concerning Insurance Company, a Separate Account, or the
Contracts other than the information or representations contained in a
Contract Prospectus, in published reports for each Separate Account
that are in the public domain or approved by Insurance Company for
distribution to Contractholders or Participants, or in sales literature
or other promotional material approved by Insurance Company.
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8.7 For purposes of this Agreement, the phrase "sales literature or other
promotional material" or words of similar import include, without
limitation, advertisements (such as material published, or designed for
use, in a newspaper, magazine or other periodical, radio, television,
telephone or tape recording, videotape display, signs or billboards,
motion pictures or other public media), sales literature (such as any
written communication distributed or made generally available to
customers or the public, including brochures, circulars, research
reports, market letters, form letters, seminar texts, or reprints or
excerpts of any other advertisement, sales literature or published
article), educational or training materials or other communications
distributed or made generally available to some or all agents or
employees, prospectuses, statements of additional information,
shareholder reports and proxy materials, and any other material
constituting sales literature or advertising under the rules of the
NASD, the 1940 Act or the 1933 Act.
ARTICLE IX.
INDEMNIFICATION
9.1 Insurance Company and Contract Distributor each agree to indemnify and
hold harmless Fund, Lazard, any investment adviser of a Portfolio, and
their affiliates, and each of their respective directors, trustees,
general members, officers, employees, agents and each person, if any,
who controls any of the foregoing entities or persons within the
meaning of the 1933 Act (collectively, the "Indemnified Parties" for
purposes of this Section 9.1), against any and all losses, claims,
damages or liabilities, joint or several (including any investigative,
legal and other expenses reasonably incurred in connection with or any
amounts paid in settlement of, any action, suit or proceeding or any
claim asserted and any income taxes, penalties or toll charges)
(collectively, "Losses") for which the Indemnified Parties may become
subject insofar as such Losses (or actions in respect thereof):
(a) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any
registration statement, Contract Prospectus, Contract or sales
literature or other promotional material relating to a
Separate Account or the Contracts (collectively, "Account
documents") or arise out of or are based upon the omission or
the alleged omission to state in any Account documents a
material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances in
which they were made, not misleading; provided, however, that
neither Insurance Company nor Contract Distributor shall be
liable in any such case to the extent that any such Loss
arises out of or is based upon any such materially untrue
statement or material omission made in any Account document
which materially untrue statement or material omission was
made in reliance upon and in conformity with written
information furnished by or on behalf of Fund specifically for
use therein;
(b) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any
registration statement, Portfolio Prospectus or sales
literature or other promotional material relating to Fund or a
Portfolio (collectively, "Portfolio documents") or arise out
of or are based upon the omission or the alleged omission to
state in any Portfolio documents a material fact required to
be stated therein or necessary to make the statements therein,
in light of the circumstances in which they were made, not
misleading, provided such materially untrue statement or
material omission was made in reliance upon and in conformity
with information furnished to Fund or Lazard by or on behalf
of Insurance Company or Contract Distributor specifically for
use therein;
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(c) arise out of or as a result of statements or representations
(other than statements or representations contained in any
Portfolio document not made in reliance upon and in conformity
with information furnished to Fund or Lazard by or on behalf
of Insurance Company or Contract Distributor specifically for
use therein and on which Insurance Company or Contract
Distributor have reasonably relied) or wrongful conduct of
Insurance Company or Contract Distributor or their respective
agents and persons under their respective control with respect
to the sale and distribution of Contracts or Portfolio shares;
(d) arise out of any material breach of any representation,
warranty and/or covenant made by Insurance Company or Contract
Distributor in this Agreement, or arise out of or result from
any other material breach of this Agreement by Insurance
Company or Contract Distributor;
(e) arise out of Insurance Company's incorrect calculation and/or
incorrect or untimely reporting of net purchase or redemption
orders; or
(f) arise out of or are related to any tax liability under Section
851 of the Code arising from purchases or redemptions by the
General Account or the accounts of Insurance Company's
affiliates.
9.2 Lazard agrees to indemnify and hold harmless Insurance Company and
Contract Distributor and each of their respective directors, trustees,
general members, officers, employees, agents and each person, if any,
who controls Insurance Company or Contract Distributor within the
meaning of the 1933 Act (collectively, the "Indemnified Parties" for
purposes of this Section 9.2), against Losses for which Indemnified
Parties may become subject insofar as such Losses (or actions in
respect thereof):
(a) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any
Portfolio documents or arise out of or are based upon the
omission or the alleged omission to state in any Portfolio
documents a material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading;
provided, however, that Lazard shall not be liable in any such
case to the extent that any such Loss arises out of or is
based upon any such materially untrue statement or material
omission made in any Portfolio document which materially
untrue statement or material omission was made in reliance
upon and in conformity with information furnished by or on
behalf of Insurance Company or Contract Distributor
specifically for use therein;
(b) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in Account
documents or arise out of or are based upon the omission or
the alleged omission to state in any Account documents a
material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances in
which they were made, not misleading, provided such materially
untrue statement or material omission was made in reliance
upon and in conformity with written information furnished to
Insurance Company or Contract Distributor by or on behalf of
Fund specifically for use therein;
(c) arise out of or as a result of statements or representations
(other than statements or representations contained in any
Account document on which Fund or Lazard have reasonably
relied) or wrongful conduct of Fund or Lazard or their
respective agents and
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persons under their respective control with respect to the
sale and distribution of Portfolio shares;
(d) arise out of any material breach of any representation and/or
warranty made by Fund or Lazard in this Agreement, or arise
out of or result from any other material breach of this
Agreement by Fund or Lazard; or
(e) arise out of Fund's failure to correct in a timely manner any
incorrect calculation and/or reporting of the daily net asset
value, dividend rate or capital gain distribution rate of a
Portfolio; provided, however, that Fund shall have no
obligation to indemnify and hold harmless the Indemnified
Parties if the incorrect calculation or reporting was the
result of incorrect information furnished by or on behalf of
Insurance Company or Contract Distributor or otherwise as a
result of or relating to Insurance Company's or Contract
Distributor's negligence or breach of this Agreement.
9.3 In no event shall Fund or Lazard be liable for any consequential,
incidental, special or indirect damages resulting to Insurance Company
or Contract Distributor hereunder.
9.4 Notwithstanding anything herein to the contrary, in no event shall Fund
or Lazard be liable to any individual or entity including, without
limitation, Insurance Company, Contract Distributor or any
Contractholder or Participant, with respect to any Losses that arise
out of or result from a breach of any representation, warranty, and/or
covenant made by Insurance Company or Contract Distributor hereunder or
by any Participating Company under an agreement containing
substantially similar representations, warranties and covenants.
9.5 (a) Promptly after receipt by a Party that may be entitled to
indemnification under this Article ("Indemnified Party" for
purposes of this Section) of notice of the commencement of any
action which may result in Losses, such Indemnified Party
shall, if a claim in respect thereof is to be made against the
indemnifying party under this Article ("Indemnifying Party"
for purposes of this Section), notify Indemnifying Party of
the commencement thereof. The failure to so notify shall not
relieve Indemnifying Party from any liability under this
Article IX, except to the extent that Indemnifying Party is
damaged as a result of the failure to give such notice. If
Indemnified Party notifies Indemnifying Party of the
commencement of any such action, Indemnifying Party shall be
entitled to participate therein and, to the extent that it may
wish, assume the defense thereof, with counsel reasonably
satisfactory to Indemnified Party, and to the extent that
Indemnifying Party has given notice to such effect and is
performing its obligations under this Article, Indemnifying
Party shall not be liable for any legal or other expenses
subsequently incurred by Indemnified Party in connection with
the defense thereof, other than reasonable costs of
investigation. Notwithstanding the foregoing, in any such
proceeding, any Indemnified Party shall have the right to
retain its own counsel, but the fees and expenses of such
counsel shall be at its expense unless (a) Indemnifying Party
and Indemnified Party shall have mutually agreed to the
retention of such counsel or (b) the named parties to any such
proceeding (including any impleaded parties) include both
Indemnifying Party and Indemnified Party and representation of
both parties by the same counsel would be inappropriate due to
actual or potential differing interests between them.
Indemnifying Party shall not be liable for any settlement of
any proceeding effected without its written consent.
(b) No party shall be liable under any of the foregoing
indemnification provisions with respect to any Losses or
litigation to which an Indemnified Party would otherwise be
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subject by reason of such Indemnified Party's willful
misfeasance, bad faith or gross negligence in the performance
of such Indemnified Party's duties or by reason of such
Indemnified Party's reckless disregard of obligations and
duties under this Agreement.
9.6 A successor by law of any Party to this Agreement shall be entitled to
the benefits of the indemnification contained in this Article IX.
ARTICLE X.
COMMENCEMENT AND TERMINATION
10.1 This Agreement shall continue in force until terminated in accordance
with the provisions herein.
10.2 This Agreement shall terminate without penalty as to one or more
Portfolios:
(a) at any time from the date hereof upon 60 days' written notice;
(b) at the option of Insurance Company if it determines that
shares of any Portfolio are not reasonably available to meet
the requirements of the Contracts; Insurance Company shall
furnish prompt written notice of election to terminate and
termination shall be effective ten days after receipt of
written notice unless Fund makes available a sufficient number
of shares to meet the requirements of the Contracts within
such ten day period;
(c) at the option of Insurance Company upon the institution of
formal proceedings against Fund or Lazard or their respective
affiliates by the Commission or any other regulatory body, the
expected or anticipated ruling, judgment or outcome of which
would, in Insurance Company's reasonable judgment, materially
impair the other's ability to meet and perform its obligations
and duties hereunder; prompt written notice of election to
terminate shall be furnished with termination to be effective
as specified therein;
(d) at the option of Fund upon the institution of formal
proceedings against Insurance Company or Contract Distributor
or their respective affiliates by the Commission, the NASD or
any other regulatory body, the expected or anticipated ruling,
judgment or outcome of which would, in Fund's reasonable
judgment, materially impair the other's ability to meet and
perform its obligations and duties hereunder; prompt written
notice of election to terminate shall be furnished with
termination to be effective as specified therein;
(e) upon termination of the Investment Management Agreement
between Fund, on behalf of its Portfolios, and Lazard Asset
Management LLC or its successors unless Insurance Company
specifically approves the selection of a new investment
adviser for the Portfolios;
(f) at the option of Fund upon a determination by the Board in
good faith that it is no longer advisable and in the best
interests of shareholders for Fund to continue to operate
pursuant to this Agreement; termination shall be effective
upon notice by Fund to Insurance Company of such termination;
(g) at the option of any Party, upon another's breach of any
material representation, warranty or other provision of this
Agreement; or
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(h) upon assignment (as defined in the 0000 Xxx) of this
Agreement, unless made with the written consent of the
non-assigning Parties.
Any such termination pursuant to this Article X shall not affect the
operation of Articles V or IX of this Agreement. The Parties agree that
any termination pursuant to Article VI shall be governed by that
Article.
10.3 Notwithstanding any termination of this Agreement, Fund and Lazard may,
at the option of Fund, continue to make available additional Portfolio
shares for so long as Fund desires pursuant to the terms and conditions
of this Agreement as provided below, for all Contracts in effect on the
effective date of termination of this Agreement (hereinafter referred
to as the "Existing Contracts"). Specifically, without limitation, if
Fund so elects to make additional Portfolio shares available, the
owners of the Existing Contracts or Insurance Company, whichever shall
have legal authority to do so, shall be permitted to reallocate
investments among the Portfolios, redeem investments in the Portfolios
and/or invest in the Portfolios upon the making of additional purchase
payments under the Existing Contracts. In the event of a termination of
this Agreement pursuant to Section 10.2 hereof, Fund, as promptly as is
practicable under the circumstances, shall notify Insurance Company as
to whether Fund shall continue to make Portfolio shares available after
such termination. If Portfolio shares continue to be made available
after such termination, the provisions of this Agreement shall remain
in effect and thereafter either Fund or Insurance Company may terminate
the Agreement, as so continued pursuant to this Section 10.3, upon
prior written notice to the other Parties, such notice to be for a
period that is reasonable under the circumstances but, if given by
Fund, need not be for more than six months.
10.4 In the event of any termination of this Agreement, the Parties agree to
cooperate and give reasonable assistance to one another in taking all
necessary and appropriate steps for the purpose of ensuring that a
Separate Account owns no shares of a Portfolio beyond six months from
the date of termination. Such steps may include, without limitation,
substituting other investment company shares for those of the affected
Portfolio.
ARTICLE XI.
AMENDMENTS
11.1 Any changes in the terms of this Agreement shall be made by agreement
in writing by the Parties hereto, except as otherwise specified herein.
ARTICLE XII.
NOTICE
12.1 Each notice required by this Agreement shall be given by certified
mail, return receipt requested, to the appropriate Parties at the
following addresses:
Insurance Company:
Contract Distributor:
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Fund: Lazard Retirement Series, Inc.
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxxxx
Lazard: Lazard Asset Management Securities LLC
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxx, Esq.
with a copy to: Stroock & Stroock & Xxxxx LLP
000 Xxxxxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Notice shall be deemed to be given on the date of receipt by the
addresses as evidenced by the return receipt.
ARTICLE XIII.
MISCELLANEOUS
13.1 If any provision of this Agreement is held or made invalid by a court
decision, statute, rule, or otherwise, the remainder of this Agreement
will not be affected thereby.
13.2 The rights, remedies, indemnities and obligations contained in this
Agreement are cumulative and are in addition to any and all rights,
remedies, indemnities and obligations, at law or in equity, to which
the Parties are entitled.
13.3 This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the
same instrument.
ARTICLE XIV.
LAW
14.1 This Agreement shall be construed in accordance with the internal laws
of the State of New York, without giving effect to principles of
conflict of laws.
IN WITNESS WHEREOF, this Agreement has been executed and attested on behalf of
the Parties as of the date first above written.
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[INSURANCE COMPANY]
By:___________________________
Attest:_____________________
[CONTRACT DISTRIBUTOR]
By:___________________________
Attest:_____________________
LAZARD RETIREMENT SERIES, INC.
By:___________________________
Attest:_____________________
LAZARD ASSET MANAGEMENT SECURITIES LLC
By:___________________________
Attest:______________________
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SCHEDULE 1
PORTFOLIOS
SEPARATE ACCOUNTS AND CONTRACTS
SCHEDULE 2
PORTFOLIO SHARE ORDER PROCESSING
PRICING
1. Each Business Day, Fund shall use its best efforts to make each
Portfolio's closing net asset value per share ("NAV") available to
Insurance Company by 6:30 p.m. Eastern time.
2. At the end of each Business Day, Insurance Company shall calculate each
Separate Account's unit values. Using this unit value, Insurance
Company shall process that Business Day's Contract and Separate Account
transactions to determine the net dollar amount of each Portfolio's
shares to be purchased or redeemed.
3. Fund hereby appoints Insurance Company as its agent for the limited
purpose of receiving orders for the purchase and redemption of
Portfolio shares for the Separate Accounts. Orders that Insurance
Company receives from Contractholders by the close of regular trading
(the "Close of Trading") on the New York Stock Exchange (the "NYSE")
(usually 4:00 p.m., Eastern time) on each Business Day shall be treated
by Fund and Insurance Company as though received on that Business Day.
Orders that Insurance Company receives after the Close of Trading shall
be treated by Fund and Insurance Company as though received on the next
Business Day. All orders are subject to acceptance or rejection in the
sole discretion of Lazard or Fund or its agent, and orders shall be
effective only upon receipt in proper form.
4. Insurance Company shall transmit net purchase or redemption orders to
Fund or its designee by 9:30 a.m. Eastern time on the Business Day next
following the effective trade date. For informational purposes only,
Insurance Company shall separately describe the amount of shares of
each Portfolio that are being purchased, redeemed, or exchanged from
one Portfolio to the other. In addition, Insurance Company shall use
its best efforts to notify Fund in advance of any unusually large
purchase or redemption orders.
5. Fund shall execute purchase and redemption orders for a Portfolio's
shares that relate to Insurance Company's General Account, or that do
not relate to Contract transactions, at that Portfolio's NAV next
determined after Fund (not Insurance Company) receives the order and
any related purchase payments in accordance with this Schedule.
6. Fund shall execute purchase and redemption orders for a Portfolio's
shares that relate to Contracts funded by Separate Accounts either
registered under the 1940 Act or not so registered in the same manner,
but only to the extent that Insurance Company represents and warrants
that it is legally or contractually obligated to treat such orders in
the same manner. Each order for Portfolio shares placed by Insurance
Company that is attributable, in whole or in part, to Contracts funded
by an unregistered Separate Account shall be deemed to constitute such
representation and warranty by Insurance Company unless the order
specifically states to the contrary. Otherwise, Fund shall treat orders
attributable to unregistered Separate Account Contracts in the same
manner as orders for the General Account.
7. Fund shall execute purchase or redemption orders for a Portfolio's
shares that do not satisfy the conditions specified in this Schedule at
the Portfolio's NAV next determined after such conditions have been
satisfied.
8. If Fund provides Insurance Company with materially incorrect net asset
value per share information through no fault of Insurance Company,
Insurance Company, on behalf of the Separate Account, may be entitled
to an adjustment to the number of shares purchased or redeemed to
reflect the correct net asset value per share in accordance with Fund's
current policies for correcting pricing errors. Any material error in
the calculation of net asset value per share, dividend rate or capital
gain distribution rate information shall be reported promptly upon
discovery to Insurance Company.
PAYMENT
9. Insurance Company shall pay for any net purchase order by wiring
Federal Funds to Fund or its designated custodial account by 4:00 p.m.
Eastern time on the same Business Day it transmits the order to Fund.
If Fund does not receive such payment by 4:00 p.m., Insurance Company
shall promptly, upon Fund's request, reimburse Fund for any charges,
costs, fees, interest or other expenses incurred by Fund in connection
with any advances to, or borrowings or overdrafts by, Fund, or any
similar expenses incurred by Fund, as a result of portfolio
transactions effected by Fund based upon such purchase request.
10. Fund shall pay for any net redemption order by wiring the redemption
proceeds to Insurance Company, except as provided below, within two
Business Days after Insurance Company transmits such order to Fund or,
upon notice to Insurance Company, such longer period as permitted by
the 1940 Act or the rules, orders or regulations thereunder. In the
case of any net redemption order valued at or greater than $1 million,
Fund shall wire such amount to Insurance Company within seven days of
the order. In the case of any net redemption order requesting the
application of proceeds from the redemption of one Portfolio's shares
to the purchase of another Portfolio's shares, Fund shall so apply such
proceeds the same Business Day that Insurance Company transmits such
order to Fund.
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