EXHIBIT 8(x)
PARTICIPATION AGREEMENT
AMONG
PIONEER VARIABLE CONTRACTS TRUST,
XXXXXXX XXXXX LIFE INSURANCE COMPANY OF NEW YORK
PIONEER INVESTMENT MANAGEMENT, INC.
AND
PIONEER FUNDS DISTRIBUTOR, INC.
THIS AGREEMENT, made and entered into this March 1, 2005, by and among
PIONEER VARIABLE CONTRACTS TRUST, a Delaware business trust (the "Trust"),
XXXXXXX XXXXX LIFE INSURANCE COMPANY OF NEW YORK, a New York domiciled insurance
company (the "Company") on its own behalf and on behalf of each of the
segregated asset accounts of the Company set forth in Schedule A hereto, as may
be amended from time to time (the "Accounts"), PIONEER INVESTMENT MANAGEMENT,
INC., a Delaware corporation ("PIM") and PIONEER FUNDS DISTRIBUTOR, INC.
("PFD"), a corporation organized under the laws of The Commonwealth of
Massachusetts. PIM and PFD are members of the UniCredito Italiano banking group,
register of banking groups.
WHEREAS, the Trust is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act"),
and its shares are registered or will be registered under the Securities Act of
1933, as amended (the "1933 Act");
WHEREAS, shares of beneficial interest of the Trust are divided into
several series and classes of shares, each series being designated a "Portfolio"
and representing an interest in a particular managed pool of securities and
other assets;
WHEREAS, the Trust is available to act as the investment vehicle for
separate accounts established for variable life insurance policies and/or
variable annuity contracts to be offered by insurance companies, including
Xxxxxxx Xxxxx Life Insurance Company of New York, which have entered into
participation agreements with the Trust (the "Participating Insurance
Companies");
WHEREAS, the Trust has obtained an order from the Securities and Exchange
Commission (the "SEC"), dated July 9, 1997 (File No. 812-10494) (the "Mixed and
Shared Funding Exemptive Order") 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 1940 Act and
Rules 6e-2(b)(15) and 6e-3(T)(b)(15) thereunder, to the extent necessary to
permit shares of the Trust to be sold to and held by variable annuity and
variable life insurance companies that may or may not be affiliated with one
another and qualified pension and retirement plans ("Qualified Plans");
WHEREAS, PIM is duly registered as an investment adviser under the
Investment Advisers Act of 1940, as amended, and any applicable state securities
law, and is the Trust's investment adviser;
WHEREAS, the Company will issue certain variable annuity and/or variable
life insurance contracts (individually, the "Contract" or, collectively, the
"Contracts") which, if required by applicable law, will be registered under the
1933 Act;
WHEREAS, the Accounts are duly organized, validly existing segregated
asset accounts, established by resolution of the Board of Directors of the
Company, to set aside and invest assets attributable to the aforesaid variable
annuity and/or variable life insurance contracts that are allocated to the
Accounts (the Contracts and the Accounts covered by this Agreement, and each
corresponding Portfolio covered by this Agreement in which the Accounts may
invest, is specified in Schedule A attached hereto as may be modified from time
to time);
WHEREAS, the Company has registered or will register the Accounts as unit
investment trusts under the 1940 Act (unless exempt therefrom);
WHEREAS, the Portfolios offered by the Trust to the Company and the
Accounts are set forth on Schedule A attached hereto;
WHEREAS, PFD is registered as a broker-dealer with the Securities and
Exchange Commission (the "SEC") under the Securities Exchange Act of 1934, as
amended (hereinafter the "1934 Act"), and is a member in good standing of the
National Association of Securities Dealers, Inc. (the "NASD") and is authorized
to sell shares of the Portfolios to unit investment trusts such as the Accounts;
WHEREAS, Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx ("Policy Underwriter"), the
underwriter for the variable annuity and the variable life policies, is
registered as a broker-dealer with the SEC under the 1934 Act and is a member in
good standing of the NASD; and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares in one or more of the
Portfolios specified in Schedule A attached hereto (the "Shares") on behalf of
the Accounts to fund the Contracts, and PFD intends to sell such Shares to the
Accounts at net asset value;
NOW, THEREFORE, in consideration of their mutual promises, the Trust, PIM,
PFD and the Company agree as follows:
ARTICLE I. SALE OF TRUST SHARES
1.1. PFD and the Company agree to provide pricing information, execute
orders and wire payments for purchases and redemptions of Fund shares as
set forth in this Article I until such time as they mutually agree to
utilize the National Securities Clearing Corporation ("NSCC"). Upon such
mutual agreement, PFD and the Company agree to provide pricing
information, execute orders and wire payments for purchases and
redemptions of Fund shares through NSCC and its subsidiary systems as set
forth in Exhibit I.
1.2 PFD agrees to sell to the Company those Shares which the Accounts
order in accordance with the terms of this Agreement (based on orders
placed by Contract owners or participants on that Business Day, as defined
below) and which are available for purchase by such Accounts. Each such
order will be executed on a daily basis at the net asset value next
computed after receipt by the Trust or its designee of the order for the
Shares. For purposes of this Section 1.2, the Company shall be the
designee of the Trust for receipt of such orders from Contract owners or
participants
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and receipt by such designee shall constitute receipt by the Trust;
provided that the Company receives such orders before the time the Trust
ordinarily calculates its net asset value as described from time to time
in the Trust's prospectus (which as of the date of this Agreement is 4:00
p.m. New York time on such Business Day) and provided the Trust or its
designee received written (or facsimile) notice of such orders by 10:00
a.m. New York time on the next following Business Day. "Business Day"
shall mean any day on which the New York Stock Exchange, Inc. (the "NYSE")
is open for trading and on which the Trust calculates its net asset value
pursuant to the rules of the SEC.
1.3. PFD agrees to make the Shares available for purchase at the
applicable net asset value per share by the Company and the Accounts on
those days on which the Trust calculates its net asset value in accordance
with the rules of the SEC. Notwithstanding the foregoing, the Board of
Trustees of the Trust (the "Board") may refuse to sell any Shares to the
Company and the Accounts, or suspend or terminate the offering of the
Shares to the Company and the Accounts if such action is required by law
or by regulatory authorities having jurisdiction over PIM, PFD or the
Trust or is, in the sole discretion of the Board acting in good faith and
in light of its fiduciary duties under federal and any applicable state
laws, in the best interest of the Shareholders of such Portfolio.
1.4. The Trust and PFD will sell Trust shares only to Participating
Insurance Companies and Qualified Plans which have agreed to participate
in the Trust to fund their Separate Accounts and/or Qualified Plans all in
accordance with the requirement of Section 817(h) of the Internal Revenue
Code, as amended (the "Code") and the Treasury regulations thereunder. The
Company will not resell the Shares except to the Trust or its agents.
1.5. The Trust agrees, upon the Company's request, to redeem for cash, any
full or fractional Shares held by the Accounts (based on orders placed by
Contract owners on that Business Day). Each such redemption request shall
be executed on a daily basis at the net asset value next computed after
receipt by the Trust or its designee of the request for redemption. For
purposes of this Section 1.5, the Company shall be the designee of the
Trust for receipt of requests for redemption from Contract owners or
participants and receipt by such designee shall constitute receipt by the
Trust; provided that the Company receives such request before the time the
Trust calculates its net asset value (which as of the date of this
Agreement is 4:00 p.m. New York time) and provided the Trust or its
designee receives written (or facsimile) notice of such request for
redemption by 10:00 a.m. New York time on the next following Business Day
1.6. Each purchase, redemption and exchange order placed by the Company
shall be placed separately for each Portfolio and shall not be netted with
respect to any Portfolio. However, with respect to payment of the purchase
price by the Company and of redemption proceeds by the Trust, the Company
and the Trust shall net purchase and redemption orders with respect to
each Portfolio and shall transmit one net payment for all of the
Portfolios in accordance with Section 1.7 hereof.
1.7. In the event of net purchases, the Company shall pay for the Shares
by 11:00 a.m. New York time on the next Business Day after an order to
purchase the Shares is made in accordance with the provisions of Section
1.2. hereof. Company shall transmit all such payments in federal funds by
wire. If payment in federal funds for any purchase is not received or is
received by the Trust after 11:00 a.m. on such Business Day, the Company
shall promptly, upon the Trust's request, reimburse the Trust for any
charges, costs, fees, interest or other expenses incurred by the Trust in
connection with any advances to, or borrowings or overdrafts by, the
Trust, or any similar expenses (including the cost of and any loss
incurred by the Trust in unwinding any purchase of
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securities by the Trust) incurred by the Trust as a result of portfolio
transactions effected by the Trust based upon such purchase request. In
the event of net redemptions, the Trust ordinarily shall pay and transmit
the proceeds of redemptions of Shares by 11:00 a.m. New York time on the
next Business Day after a redemption order is received from the Company in
accordance with Section 1.5. hereof, although the Trust reserves the right
to postpone the date of payment or satisfaction upon redemption consistent
with Section 22(e) of the 1940 Act and any rules pomulgated thereunder.
Payments for net redemptions shall be in federal funds transmitted by
wire.
1.8. Issuance and transfer of the Shares will be by book entry only. Stock
certificates will not be issued to the Company or the Accounts. The Shares
ordered from the Trust will be recorded in an appropriate title for the
Accounts or the appropriate subaccounts of the Accounts.
1.9. The Trust shall furnish notice (by wire or telephone, followed by
written confirmation) no later than 7:00 p.m. New York time on the
ex-dividend date to the Company of any dividends or capital gain
distributions payable on the Shares. The Company hereby elects to receive
all such dividends and distributions as are payable in cash or Shares on a
Portfolio's Shares in additional Shares of that Portfolio. The Trust 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 Trust or its custodian shall make the net asset value per share
for each Portfolio available to the Company on each Business Day as soon
as reasonably practical 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. New York time. In the event the Trust is unable to
make the 6:00 p.m. deadline stated herein, it shall provide additional
time for the Company to place orders for the purchase and redemption of
shares. Such additional time shall be equal to the additional time that
the Trust takes to make the closing net asset value available to the
Company. 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"), PIM or the Trust shall notify the Company as
soon as possible after the discovery of the error. Such notification may
be verbal, but shall be confirmed promptly in writing in accordance with
Article XII of this Agreement. A pricing error shall be corrected in
accordance with the Trust's internal policies and procedures. If an
adjustment is necessary to correct a material error that occurred through
no fault of the Company and such adjustment has caused Contract owners to
receive less than the number of Shares or redemption proceeds to which
they are entitled, the number of Shares of the applicable Account will be
adjusted and the amount of any underpayments will be paid by the Trust or
PIM to the Company for crediting of such amounts to the Contract owners'
accounts. Upon notification by PIM of any overpayment due to a material
error, the Company shall promptly remit to the Trust or PIM, as
appropriate, any overpayment that has not been paid to Contract owner;
however, PIM acknowledges that the Company does not intend to seek
additional payments form any Contract owner who, because of a pricing
error, may have underpaid for units of interest credited to his/her
account. The costs of correcting such adjustments shall be borne by the
Trust or PIM unless the Company is at fault in which case such costs shall
be borne by the Company.
ARTICLE II. CERTAIN REPRESENTATIONS, WARRANTIES AND COVENANTS
2.1. The Company represents and warrants that the Contracts are or will be
registered under the 1933 Act or are exempt from or not subject to
registration thereunder, and that the Contracts will be issued, sold, and
distributed in compliance in all material respects with all applicable
state and federal laws, including without limitation the 1933 Act, the
Securities Exchange Act of 1934, as
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amended (the "1934 Act"), and the 1940 Act. The Company further represents
and warrants that it (i) is an insurance company duly organized and in
good standing under applicable law; (ii) has legally and validly
established each Account as a segregated asset account under applicable
law; (iii) has registered or, prior to any issuance or sale of the
Contracts, will register the Accounts as unit investment trusts in
accordance with the provisions of the 1940 Act (unless exempt therefrom)
to serve as segregated investment accounts for the Contracts, and (iv)
will maintain such registration for so long as any Contracts are
outstanding. The Company shall amend the registration statements under the
1933 Act for the Contracts and the registration statements under the 1940
Act for the Accounts from time to time as required in order to effect the
continuous offering of the Contracts or as may otherwise be required by
applicable law. The Company shall register and qualify the Contracts for
sales in accordance with the securities laws of the various states only if
and to the extent deemed necessary by the Company. At the time the Company
is required to deliver the Trust's prospectus or statement of additional
information to a purchaser of Shares in accordance with the requirements
of federal or state securities laws, the Company shall distribute to such
Contract purchasers the then current Trust prospectus, as supplemented.
2.2. The Company represents and warrants that Policy Underwriter, the
underwriter for the individual variable annuity contracts and the variable
life policies, is a member in good standing of the NASD and is a
registered broker-dealer with the SEC. The Company represents and warrants
that the Company and Policy Underwriter will sell and distribute such
contracts and policies in accordance in all material respects with all
applicable state and federal securities laws, including without limitation
the 1933 Act, the 1934 Act, and the 1940 Act and state insurance law
suitability requirements.
2.3. The Trust represents and warrants that the Shares sold pursuant to
this Agreement shall be registered under the 1933 Act, duly authorized for
issuance in compliance with the laws of Delaware and that the Trust is and
shall remain registered under the 1940 Act. The Trust shall amend the
registration statement for its Shares under the 1933 Act and the 1940 Act
from time to time as required in order to effect the continuous offering
of its Shares. The Trust shall register and qualify the Shares for sale in
accordance with the laws of the various states only if and to the extent
deemed necessary by the Trust. However, the Trust, PFD and PIM agree to
reasonably comply with any applicable state insurance laws or regulations
(including the furnishing of information not otherwise available to the
Company which is required by state insurance law to enable the Company to
obtain the authority needed to issue the Contracts in any applicable
state, so long as furnishing such information is not otherwise prohibited,
and including reasonably cooperating with the Company in any filings of
sales literature for the Contracts), to the extent notified thereof in
writing by the Company.
2.4. The Trust represents that it is lawfully organized and validly
existing under the laws of the State of Delaware. The Trust further
represents that it has adopted a plan pursuant to Rule 12b-1 under the
1940 Act and imposes an asset-based charge to finance its distribution
expenses with respect to the Class II shares of certain of the Trust's
Portfolios as permitted by applicable law and regulation.
2.5. PFD represents and warrants that it is a member in good standing of
the NASD and is registered as a broker-dealer with the SEC. PFD represents
that it will sell and distribute the Shares in accordance in all material
respects with all applicable state and federal securities laws, including
without limitation the 1933 Act, the 1934 Act, and the 0000 Xxx.
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2.6. PIM represents and warrants that it is and shall remain duly
registered as an investment adviser under the Investment Advisers Act of
1940, as amended.
2.7. No less frequently than annually, the Company shall submit to the
Board such reports, material or data as the Board may reasonably request
so that it may carry out fully the obligations imposed upon it by the
conditions contained in the Mixed and Shared Funding Exemptive Order
pursuant to which the SEC has granted exemptive relief to permit mixed and
shared funding.
2.8. The Trust and PIM 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 Trust 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 Trust 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 form time to time. The
aforesaid bonds shall include coverage for larceny and embezzlement and
shall be issued by a reputable bonding company. The Company represents and
warrants that all of its respective officers, employees, and other
individuals or entities employed or controlled by the Company dealing with
the money and/or securities of the Trust are, and shall continue to be at
all times, covered by a blanket fidelity bond or similar coverage in an
amount deemed appropriate by the Company. The aforesaid bond shall include
coverage for larceny and embezzlement and shall be issued by a reputable
bonding company. The Company agrees that any amounts received under such
bond relating to a claim arising under this Agreement will be held by the
Company for the benefit of the Trust. The Company agrees to make all
reasonable efforts to maintain such bond and agrees to notify the Trust
and PIM in writing in the event such coverage terminates.
2.9. The Company represents and warrants, for purposes other than
diversification under Section 817 of the Code, that the Contracts are
currently at the time of issuance and, assuming the Trust meets the
requirements of Article VI, will be treated as annuity contracts under
applicable provisions of the Code, and that it will make every effort to
maintain such treatment and that it will notify the Trust, PFD and PIM
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
the 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 Trust, PFD and PIM 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 Trust shares with assets derived from tax-qualified
retirement plans except, indirectly, through Contracts purchased in
connection with such plans.
ARTICLE III. PROSPECTUS AND PROXY STATEMENTS; VOTING
3.1. At least annually, the Trust or its designee shall provide the
Company, free of charge, with as many copies of the current prospectus
(describing only the Portfolios listed in Schedule A hereto) for the
Shares as the Company may reasonably request for distribution to existing
Contract owners whose Contracts are funded by such Shares. The Trust or
its designee shall provide the Company, at the Company's expense, with as
many copies of the current prospectus for the Shares as the Company may
reasonably request for distribution to prospective purchasers of
Contracts. If requested by the Company in lieu thereof, the Trust or its
designee shall provide such documentation (including a "camera ready" copy
of the new prospectus as set in type or, at the
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request of the Company, as a diskette in the form sent to the financial
printer) and other assistance as is reasonably necessary in order for the
parties hereto once each year (or more frequently if the prospectus for
the Shares is supplemented or amended) to have the prospectus for the
Contracts and the prospectus for the Shares printed together in one
document; the expenses of such printing to be apportioned between (a) the
Company and (b) the Trust or its designee in proportion to the number of
pages of the Contract and Shares' prospectuses, taking account of other
relevant factors affecting the expense of printing, such as covers,
columns, graphs and charts; the Trust or its designee to bear the cost of
printing the Trust's prospectus portion of such document for distribution
to owners of existing Contracts funded by the Shares and the Company to
bear the expenses of printing the portion of such document relating to the
Accounts; provided, however, that the Company shall bear all printing
expenses of such combined documents where used for distribution to
prospective purchasers or to owners of existing Contracts not funded by
the Shares. In the event that the Company requests that the Trust or its
designee provides the Trust's prospectus in a "camera ready," diskette
format or other mutually agreed upon format, the Trust shall be
responsible for providing the prospectus in the format in which it or PIM
is accustomed to formatting prospectuses and shall bear the expense of
providing the prospectus in such format (e.g., typesetting expenses), and
the Company shall bear the expense of adjusting or changing the format to
conform with any of its prospectuses, subject to PIM's approval which
shall not be unreasonably withheld. Notwithstanding the foregoing, the
Trust shall also provide the Company, at the Trust's expense, no less
frequently than annually, copies of the Portfolios prospectuses in PDF
format for use on the Company's and/or affiliated producer's websites.
3.2. The prospectus for the Shares shall state that the statement of
additional information for the Shares is available from the Trust or its
designee. The Trust or its designee, at its expense, shall print and
provide such statement of additional information to the Company (or a
master of such statement suitable for duplication by the Company) for
distribution to any owner of a Contract funded by the Shares. The Trust
shall also provide such statement of additional information to the Company
in a mutually agreed upon electronic format. The Trust or its designee, at
the Company's expense, shall print and provide such statement to the
Company (or a master of such statement suitable for duplication by the
Company) for distribution to a prospective purchaser who requests such
statement or to an owner of a Contract not funded by the Shares.
3.3. The Trust or its designee shall provide the Company free of charge,
if and to the extent applicable to the Shares, copies of the Trust's proxy
materials, reports to Shareholders and other communications to
Shareholders in such quantity as the Company shall reasonably require for
distribution to Contract owners. The cost of distributing such documents
shall be borne by the Trust or its designee.
3.4 The Trust or PIM will provide the Company with as much notice as is
reasonably practicable of any proxy solicitation for any Portfolio, and of
any material change in the Trust's registration statement, particularly
any change resulting in change to the registration statement or prospectus
or statement of additional information for any Account. The Trust and PIM
will cooperate with the Company so as to enable the Company to solicit
proxies from Contract owners or to make changes to its prospectus,
statement of additional information or registration statement, in an
orderly manner. The Trust and PIM will make reasonable efforts to attempt
to have changes affecting Contract prospectuses become effective
simultaneously with the annual updates for such prospectuses.
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3.5. The Trust hereby notifies the Company that it may be appropriate to
include in the prospectus pursuant to which a Contract is offered
disclosure regarding the potential risks of mixed and shared funding.
3.6. If and to the extent required by law, the Company shall:
(a) solicit voting instructions from Contract owners;
(b) vote the Shares in accordance with instructions received from
Contract owners; and
(c) vote the Shares for which no instructions have been received
in the same proportion as the Shares of such Portfolio 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. The Company will in no way recommend action in connection with or
oppose or interfere with the solicitation of proxies for the Shares held
for such Contract owners. The Company reserves the right to vote shares
held in any segregated asset account in its own right, to the extent
permitted by law. Participating Insurance Companies shall be responsible
for assuring that each of their separate accounts holding Shares
calculates voting privileges in the manner required by the Mixed and
Shared Funding Exemptive Order. The Trust and PIM will notify the Company
of any changes of interpretations or amendments to the Mixed and Shared
Funding Exemptive Order.
ARTICLE IV. SALES MATERIAL AND INFORMATION
4.1. The Company shall furnish, or shall cause to be furnished, to PFD or
its designee, each piece of sales literature or other promotional material
in which the Trust, PIM, any other investment adviser to the Trust, or any
affiliate of PIM are named, at least five (5) Business Days prior to its
use. No such material shall be used if PFD or its designee reasonably
objects to such use within five (5) Business Days after receipt of such
material. PFD or its designee shall notify the Company within five (5)
Business Days of receipt of its approval or disapproval of such materials.
4.2. The Company shall not make any representation on behalf of the Trust,
PIM, any other investment adviser to the Trust or any affiliate of PIM and
shall not give any information on behalf of the Trust, PIM, any other
investment adviser to the Trust, or any affiliate of PIM or concerning the
Trust or any other such entity in connection with the sale of the
Contracts other than the information contained in the registration
statement, prospectus or statement of additional information for the
Shares, as such registration statement, prospectus and statement of
additional information may be amended or supplemented from time to time,
or in reports or proxy statements for the Trust, or in sales literature or
other promotional material approved by the Trust, PIM, PFD or their
respective designees, except with the permission of the Trust, PIM or
their respective designees. The Trust, PIM, PFD or their respective
designees each agrees to respond to any request for approval on a prompt
and timely basis. The Company shall adopt and implement procedures
reasonably designed to ensure that information concerning the Trust, PIM,
PFD or any of their affiliates which is intended for use only by brokers
or agents selling the Contracts (i.e., information that is not intended
for distribution to Contract owners or prospective Contract
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owners) is so used, and neither the Trust, PIM, PFD nor any of their
affiliates shall be liable for any losses, damages or expenses relating to
the improper use of such broker only materials.
4.3. PFD shall furnish, or shall cause to be furnished, to the Company or
its designee, each piece of sales literature or other promotional material
in which the Company and/or the Accounts is named, at least five (5)
Business Days prior to its use. No such material shall be used if the
Company or its designee reasonably objects to such use within five (5)
Business Days after receipt of such material. The Company shall notify PFD
within five (5) Business Days of receipt of its approval or disapproval of
such materials.
4.4. The Trust, PIM and PFD shall not give any information or make any
representations on behalf of the Company or concerning the Company, the
Accounts, or the Contracts in connection with the sale of the Contracts
other than the information or representations contained in a registration
statement, prospectus, or statement of additional information for the
Contracts, as such registration statement, prospectus and statement of
additional information may be amended or supplemented from time to time,
or in reports for the Accounts, or in sales literature or other
promotional material approved by the Company or its designee, except with
the permission of the Company. The Company or its designee agrees to
respond to any request for approval on a prompt and timely basis. The
parties hereto agree that this Section 4.4. is neither intended to
designate nor otherwise imply that PIM is an underwriter or distributor of
the Contracts.
4.5. The Company and the Trust shall provide, or shall cause to be
provided, to the other at least one complete copy of all registration
statements, prospectuses, statements of additional information, reports,
proxy statements, sales literature and other promotional materials, and
all amendments to any of the above, that relate to the Contracts, or to
the Trust or its Shares, prior to or contemporaneously with the filing of
such document with the SEC or other regulatory authorities.
4.6. For purpose of this Article IV and Article VIII, the phrase "sales
literature or 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,
electronic messages or tape recording, videotape display, signs or
billboards, motion pictures, or other public media, including, for
example, on-line networks such as the Internet or other electronic media),
and sales literature (such as brochures, electronic messages, circulars,
reprints or excerpts or any other advertisement, sales literature, or
published articles), distributed or made generally available to customers
or the public, educational or training materials or communications
distributed or made generally available to some or all agents or
employees, and shareholder reports, proxy materials (including
solicitations for voting instructions) and any other material constituting
sales literature or advertising under the NASDR Conduct Rules, the 1933
Act or the 1940 Act. However, such phrase "sales literature or other
promotional material" shall not include any material that simply lists the
names of Portfolios of the Trust in a list of investment options.
4.7. At the request of any party to this Agreement, each other party will
make available to the other party's independent auditors and/or
representative of the appropriate regulatory agencies, all records, data,
access to operating procedures that may be reasonably requested in
connection with compliance and regulatory requirements related to the
Agreement or any party's obligations under this Agreement.
4.8 Subject to the terms of Sections 4.1 and 4.2 of this Agreement, the
Trust (and its Portfolios), PIM and PFD hereby each consents in connection
with the marketing of the
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Contracts to the Company's use of their names or other identifying marks,
including PIONEER INVESTMENTS(R) and Pioneer's sail logo, in connection
with the marketing of the Contracts. The Trust, PIM or PFD or their
affiliates may withdraw this authorization as to any particular use of any
such name or identifying xxxx at any time: (i) upon a reasonable
determination that such use would have a material adverse effect on its
reputation or marketing efforts or its affiliates or (ii) if any of the
Portfolios of the Trust cease to be available through the Company. Except
as set forth in the previous sentence, the Company will not cause or
permit, without prior written permission, the use, description or
reference to a Pioneer party's name, or to the relationship contemplated
in this Agreement, in any advertisement, or promotional materials or
activities, including without limitation, any advertisement or promotional
materials published, distributed, or made available, or any activity
conducted through, the Internet or any other electronic medium.
ARTICLE V. FEES AND EXPENSES
5.1. Neither the Trust, PIM nor PFD shall pay any fee or other
compensation to the Company under this Agreement, other than pursuant to
Schedule B attached hereto, and the Company shall pay no fee or other
compensation to the Trust, PIM or PFD under this Agreement.
Notwithstanding the foregoing, the parties hereto will bear certain
expenses under the provisions of this Agreement and shall reimburse other
parties for expenses initially paid by one party but allocated to another
party. In addition, nothing herein shall prevent the parties hereto from
otherwise agreeing to perform, and arranging for appropriate compensation
for, other services relating to the Trust and/or to the Accounts pursuant
to this Agreement.
5.2. The Trust or its designee shall bear the expenses for the cost of
registration and qualification of the Shares under all applicable federal
and state laws, including preparation and filing of the Trust's
registration statement, and payment of filing fees and registration fees;
preparation and filing of the Trust's proxy materials and reports to
Shareholders; setting in type and printing its prospectus and statement of
additional information (to the extent provided by and as determined in
accordance with Article III above); setting in type and printing the proxy
materials and reports to Shareholders (to the extent provided by and as
determined in accordance with Article III above); the preparation of all
statements and notices required of the Trust by any federal or state law
with respect to its Shares; all taxes on the issuance or transfer of the
Shares; and the costs of distributing the Trust's prospectuses, reports to
Shareholders and proxy materials to owners of Contracts and participants
funded by the Shares and any expenses permitted to be paid or assumed by
the Trust pursuant to a plan, if any, under Rule 12b-1 under the 1940 Act.
The Trust shall not bear any expenses of marketing the Contracts.
5.3. The Company shall bear the expenses of distributing the Shares'
prospectus or prospectuses in connection with new sales of the Contracts
and of distributing the Trust's Shareholder reports to Contract owners.
The Company shall bear all expenses associated with the registration,
qualification, and filing of the Contracts under applicable federal
securities and state insurance laws; the cost of preparing, printing and
distributing the Contract prospectus and statement of additional
information; and the cost of preparing, printing and distributing annual
individual account statements for Contract owners as required by state
insurance laws.
5.4. The Company agrees to provide certain administrative services,
specified in Schedule B attached hereto, in connection with the
arrangements contemplated by this Agreement. The parties intend that the
services referred to in the Section 5.4 be recordkeeping, shareholder
10
communication, and other transaction facilitation and processing, and
related administrative services and are not the services of an underwriter
or principal underwriter of the Trust and the Company is not an
underwriter for Shares within the meaning of the 1933 Act.
ARTICLE VI. DIVERSIFICATION AND RELATED LIMITATIONS
6.1. The Trust and PIM represent and warrant that each Portfolio of the
Trust in which an Account invests will meet the diversification
requirements of Section 817(h)(1) of the Code and Treas. Reg. 1.817-5,
relating to the diversification requirements for variable annuity,
endowment, or life insurance contracts, as they may be amended from time
to time (and any revenue rulings, revenue procedures, notices, and other
published announcements of the Internal Revenue Service interpreting these
sections), as if those requirements applied directly to each such
Portfolio.
6.2. The Trust and PIM represent that each Portfolio will elect to be
qualified as a Regulated Investment Company under Subchapter M of the Code
and that they will maintain such qualification (under Subchapter M or any
successor or similar provision).
6.3. No Shares of the Trust will be sold directly to the general public.
ARTICLE VII. POTENTIAL MATERIAL CONFLICTS
7.1. The Trust agrees that the Board, constituted with a majority of
disinterested trustees, will monitor each Portfolio of the Trust for the
existence of any material irreconcilable conflict between the interests of
the variable annuity contract owners and the variable life insurance
policy owners of the Company and/or affiliated companies ("contract
owners") investing in the Trust. A material irreconcilable 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 interpretive letter, or any
similar action by insurance, tax or securities regulatory authorities; (c)
an administrative or judicial decision in any relevant proceeding; (d) the
manner in which the investments of any Portfolio are being managed; (e) a
difference in voting instructions given by variable annuity contract and
variable life insurance contract 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 have the sole authority to determine if a material
irreconcilable conflict exists, and such determination shall be binding on
the Company only if approved in the form of a resolution by a majority of
the Board, or a majority of the disinterested trustees of the Board. The
Board will give prompt notice of any such determination to the Company.
7.2. The Company agrees that it will be responsible for assisting the
Board in carrying out its responsibilities under the conditions set forth
in the Trust's exemptive application pursuant to which the SEC has granted
the Mixed and Shared Funding Exemptive Order by providing the Board, as it
may reasonably request, with all information necessary for the Board to
consider any issues raised and agrees that it will be responsible for
promptly reporting any potential or existing conflicts of which it is
aware to the Board including, but not limited to, an obligation by the
Company to inform the Board whenever contract owner voting instructions
are disregarded. The Company also agrees that, if a material
irreconcilable conflict arises, it will at its own cost remedy such
conflict up to and including (a) withdrawing the assets allocable to some
or all of the
11
Accounts from the Trust or any Portfolio and reinvesting such assets in a
different investment medium, including (but not limited to) another
Portfolio of the Trust, or submitting to a vote of all affected contract
owners whether to withdraw assets from the Trust or any Portfolio and
reinvesting such assets in a different investment medium and, as
appropriate, segregating the assets attributable to any appropriate group
of contract owners (e.g., annuity contract owners, life insurance owners
or variable contract owners of one or more Participating Insurance
Companies) that votes in favor of such segregation, or offering to any of
the affected contract owners the option of segregating the assets
attributable to their contracts or policies, and (b) establishing a new
registered management investment company and segregating the assets
underlying the Contracts, unless a majority of Contract owners materially
adversely affected by the conflict have voted to decline the offer to
establish a new registered management investment company.
7.3. A majority of the disinterested trustees of the Board shall determine
whether any proposed action by the Company adequately remedies any
material irreconcilable conflict. In the event that the Board determines
that any proposed action does not adequately remedy any material
irreconcilable conflict, the Company will withdraw from investment in the
Trust each of the Accounts designated by the disinterested trustees 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 to
remedy any such material irreconcilable conflict as determined by a
majority of the disinterested trustees of the Board.
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 Trust's election, to withdraw the
Account's investment in the Trust 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 Trust's independent trustees. Any such
withdrawal and termination must take place within six (6) months after the
Trust gives written notice that this provision is being implemented, and
until the end of that six-month period PFD and the Trust shall continue to
accept and implement orders by the Company for the purchase and redemption
of shares of the Trust.
7.5. If material irreconcilable conflict arises because of 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 Trust and terminate this
Agreement within six (6) months after the Trust's Board informs the
Company in writing that it has determined that such decision has created a
material irreconcilable 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
disinterested members of the Trust's Board. Until the end of the foregoing
six (6) month period, the Trust and PFD shall continue to accept and
implement orders by the Company for the purchase and redemption of shares
of the Trust.
7.6 For purposes of Sections 7.3 through 7.6 of this Agreement, a majority
of the disinterested members of the Board shall determine whether any
proposed action adequately remedies any material irreconcilable conflict,
but in no event will the Trust be required to establish a new funding
medium for the Contracts. The Company shall not be required by Section 7.2
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
material irreconcilable conflict.
12
In the event that the Board determines that any proposed action does not
adequately remedy any material irreconcilable conflict, then the Company
will withdraw the Account's investment in the Trust 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 trustees.
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 Trust and/or
the Participating Insurance Companies, as appropriate, shall take such
steps as may be necessary to comply with Rule 6e-2 and 6e-3(T), as
amended, and Rule 6e-3, as adopted, to the extent such rules are
applicable; and (b) Sections 3.5, 3.6, 7.1, 7.2, 7.3 and 7.7 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
The Company agrees to indemnify and hold harmless the Trust, PIM,
PFD, any affiliates of PIM, and each of their respective directors,
trustees, officers and each person, if any, who controls the Trust or PIM
within the meaning of Section 15 of the 1933 Act, and any agents or
employees of the foregoing (each an "Indemnified Party," or collectively,
the "Indemnified Parties" for purposes of this Section 8.1) against any
and all losses, claims, damages, liabilities (including amounts paid in
settlement with the written consent of the Company) or expenses (including
reasonable counsel fees) to which any Indemnified Party may become subject
under any statute, regulation, at common law or otherwise, insofar as such
losses, claims, damages, liabilities or expenses (or actions in respect
thereof) or settlements:
(a) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the
registration statement, prospectus or statement of additional
information for the Contracts or contained in 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 reasonable reliance
upon and in conformity with information furnished to the
Company or its designee by or on behalf of the Trust, PIM or
PFD for use in the registration statement, prospectus or
statement of additional information for the Contracts or in
the Contracts or sales literature or other promotional
material (or any amendment or supplement) or otherwise for use
in connection with the sale of the Contracts or Shares; or
13
(b) arise out of or as a result of statements or representations not
supplied by the Company or its designee, or persons under its
control (other than statements or representations contained in the
Trust's registration statement, prospectus, statement of additional
information or in sales literature or other promotional material of
the Trust and on which the Company has reasonably relied) or
wrongful conduct of the Company or persons under its control, with
respect to the sale or distribution of the Contracts or Shares; or
(c) arise out of any untrue statement or alleged untrue statement of a
material fact contained in the registration statement, prospectus,
statement of additional information, or sales literature or other
promotional literature of the Trust, or any amendment thereof or
supplement thereto, or the omission or alleged omission to state
therein a material fact required to be stated therein or necessary
to make the statement or statements therein not misleading, if such
statement or omission was made in reliance upon information
furnished to the Trust by or on behalf of the Company; or
(d) arise out of or result from any material breach of any
representation and/or warranty made by the Company in this Agreement
or arise out of or result from any other material breach of this
Agreement by the Company; or
(e) arise as a result of any failure by the Company to perform any of
its obligations under this Agreement;
as limited by and in accordance with the provisions of this Article VIII.
8.2. INDEMNIFICATION BY PIM AND PFD
PIM and PFD agree to indemnify and hold harmless the Company and Policy
Underwriter and each of their trustees and officers and each person, if any, who
controls the Company or Policy Underwriter within the meaning of Section 15 of
the 1933 Act, and any agents or employees of the foregoing (each an "Indemnified
Party," or collectively, the "Indemnified Parties" for purposes of this Section
8.2) against any and all losses, claims, damages, liabilities (including amounts
paid in settlement with the written consent of the Trust) or expenses (including
reasonable counsel fees) to which any Indemnified Party may become subject under
any statute, 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 Shares or the Contracts and:
(a) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the registration
statement, prospectus, statement of additional information or sales
literature or other promotional material of the Trust (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 statement 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 reasonable reliance upon and in conformity with information
furnished to the Trust, PIM, PFD or their respective designees by or
on behalf of the Company for use in the registration statement,
prospectus or statement of additional information for the Trust or
in sales literature or other
14
promotional material for the Trust (or any amendment or supplement)
or otherwise for use in connection with the sale of the Contracts or
Shares; or
(b) arise out of or as a result of statements or representations (other
than statements or representations contained in the Contract's
registration statement, prospectus, statement of additional
information or in sales literature or other promotional material for
the Contracts not supplied by the Trust, PIM, PFD or any of their
respective designees or persons under their respective control and
on which any such entity has reasonably relied) or wrongful conduct
of the Trust, PIM, PFD or persons under their control, with respect
to the sale or distribution of the Contracts or Shares; or
(c) arise out of any untrue statement or alleged untrue statement of a
material fact contained in the registration statement, prospectus,
statement of additional information, or sales literature or other
promotional literature of the Accounts or relating to the Contracts,
or any amendment thereof or supplement thereto, or the omission or
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statement or statements
therein not misleading, if such statement or omission was made in
reliance upon information furnished to the Company by or on behalf
of the Trust, PIM or PFD; or
(d) arise out of or result from any material breach of any
representation and/or warranty made by the Trust in this Agreement
(including a failure, whether unintentional or in good faith or
otherwise, to comply with the diversification requirements specified
in Article VI of this Agreement) or arise out of or result from any
other material breach of this Agreement by the Trust; or
(e) arise out of or result from the materially incorrect or untimely
calculation or reporting of the daily net asset value per share or
dividend or capital gain distribution rate; or
(f) arise as a result of any failure by PIM or PFD to perform any of
their respective obligations under this Agreement;
as limited by and in accordance with the provisions of this Article VIII.
8.3. In no event shall the Trust, PIM or PFD be liable under the indemnification
provisions contained in this Agreement to any individual or entity, including
without limitation, the Company, or any Participating Insurance Company or any
Contract owner, with respect to any losses, claims, damages, liabilities or
expenses that arise out of or result from (i) a breach of any representation,
warranty, and/or covenant made by the Company hereunder or by any Participating
Insurance Company under an agreement containing substantially similar
representations, warranties and covenants; (ii) the failure by the Company or
any Participating Insurance Company to maintain its segregated asset account
(which invests in any Portfolio) as a legally and validly established segregated
asset account under applicable state law and as a duly registered unit
investment trust under the provisions of the 1940 Act (unless exempt therefrom);
or (iii) subject to Article VI, the failure by the Company or any Participating
Insurance Company to maintain its variable annuity and/or variable life
insurance contracts (with respect to which any Portfolio serves as an underlying
funding vehicle) as life insurance, endowment or annuity contracts under
applicable provisions of the Code.
15
8.4. Neither the Company, the Trust, PIM nor PFD shall be liable under the
indemnification provisions contained in this Agreement with respect to any
losses, claims, damages, liabilities or expenses to which an Indemnified
Party would otherwise be subject by reason of such Indemnified Party's
willful misfeasance, willful misconduct, 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.
8.5. Promptly after receipt by an Indemnified Party under this Section
8.5. of notice of commencement of any action, such Indemnified Party will,
if a claim in respect thereof is to be made against the indemnifying party
under this section, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not
relieve it from any liability which it may have to any Indemnified Party
otherwise than under this section. In case any such action is brought
against any Indemnified Party, and it notified the indemnifying party of
the commencement thereof, the indemnifying party will be entitled to
participate therein and, to the extent that it may wish, assume the
defense thereof, with counsel satisfactory to such Indemnified Party.
After notice from the indemnifying party of its intention to assume the
defense of an action, the Indemnified Party shall bear the expenses of any
additional counsel obtained by it, and the indemnifying party shall not be
liable to such Indemnified Party under this section for any legal or other
expenses subsequently incurred by such Indemnified Party in connection
with the defense thereof other than reasonable costs of investigation.
8.6. A successor by law of the parties to this Agreement shall be entitled
to the benefits of the indemnification contained in this Article VIII. The
indemnification provisions contained in this Article VIII shall survive
any termination of this Agreement.
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.
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. NOTICE OF FORMAL PROCEEDINGS OR LITIGATION
The Trust, PIM, PFD and the Company agree that each such party shall
promptly notify the other parties to this Agreement, in writing, of the
institution of any formal proceedings brought against such party or its
designees by the NASD, the SEC, or any insurance department or any other
regulatory body regarding such party's duties under this Agreement or
related to the sale of the Contracts, the operation of the Accounts, or
the purchase of the Shares. Each of the parties further agrees promptly to
notify the other parties of the commencement of any litigation or
proceeding against it or any of its respective officers, directors,
trustees, employees or 1933 Act control persons in connection with this
Agreement, the issuance or sale of the Contracts, the operation of the
Accounts, or the sale or acquisition of Shares. The indemnification
provisions contained in this Article X shall survive any termination of
this Agreement.
16
ARTICLE XI. TERMINATION
11.1. This Agreement shall terminate with respect to the Accounts, or one,
some, or all Portfolios:
(a) at the option of any party upon six (6) months' advance
written notice delivered to the other parties; provided,
however, that such notice shall not be given earlier than six
(6) months following the date of this Agreement; or
(b) at the option of the Company to the extent that the Shares of
Portfolios are not reasonably available to meet the
requirements of the Contracts or are not "appropriate funding
vehicles" for the Contracts, as reasonably determined by the
Company. Without limiting the generality of the foregoing, the
Shares of a Portfolio would not be "appropriate funding
vehicles" if, for example, such Shares did not meet the
diversification or other requirements referred to in Article
VI hereof; or if the Company would be permitted to disregard
Contract owner voting instructions pursuant to Rule 6e-2 or
6e-3(T) under the 1940 Act. Prompt notice of the election to
terminate for such cause and an explanation of such cause
shall be furnished to the Trust by the Company; or
(c) at the option of the Trust, PIM or PFD upon institution of
formal proceedings against the Company by the NASD, the SEC,
or any insurance department or any other regulatory body
regarding the Company's duties under this Agreement or related
to the sale of the Contracts, the operation of the Accounts,
or the purchase of the Shares; provided that the party
terminating this Agreement under this provision shall give
notice of such termination to the other parties to this
Agreement; or
(d) at the option of the Company upon institution of formal
proceedings against the Trust, PIM or PFD by the NASD, the
SEC, or any state securities or insurance department or any
other regulatory body regarding the duties of the Trust, PIM
or PFD under this Agreement or related to the sale of the
Shares; provided that the party terminating this Agreement
under this provision shall give notice of such termination to
the other parties to this Agreement; or
(e) at the option of the Company upon receipt of any necessary
regulatory approvals and/or the vote of the Contract owners
having an interest in the Accounts (or any subaccounts) to
substitute the shares of another investment company for the
corresponding Portfolio Shares in accordance with the terms of
the Contracts for which those Portfolio Shares had been
selected to serve as the underlying investment media. The
Company will give thirty (30) days' prior written notice to
the Trust of the Date of any proposed vote or other action
taken to replace the Shares; or
(f) at the option of the Trust, PIM or PFD by written notice to
the Company, if any one or all of the Trust, PIM or PFD
respectively, shall determine, in their sole judgment
exercised in good faith, that the Company has suffered a
material
17
adverse change in its business, operations, financial
condition, or prospects since the date of this Agreement or is
the subject of material adverse publicity; or
(g) at the option of the Company by written notice to the Trust,
PIM or PFD, if the Company shall determine, in its sole
judgment exercised in good faith, that the Trust, PIM or PFD
has suffered a material adverse change in this business,
operations, financial condition or prospects since the date of
this Agreement or is the subject of material adverse
publicity;
(h) at the option of the Company by written notice to the Trust,
PIM and PFD with respect to any Portfolio in the event that
such Portfolio ceases to qualify as a Regulated Investment
Company under Subchapter M or fails to comply with Section
817(h) diversification requirements as specified in Sections
6.1 and 6.2 hereof, or if the Company reasonably believes that
such Portfolio may fail to so qualify or comply; or
(i) at the option of any party to this Agreement, upon another
unaffiliated party's material breach of (and failure to cure)
any provision of or representation contained in this
Agreement.
11.2. The notice shall specify the Portfolio or Portfolios, Contracts and,
if applicable, the Accounts as to which the Agreement is to be terminated.
11.3. It is understood and agreed that the right of any party hereto to
terminate this Agreement pursuant to Section 11.1(a) may be exercised for
cause or for no cause.
11.4. Except as necessary to implement Contract owner initiated
transactions, or as required by state insurance laws or regulations, the
Company shall not redeem the Shares attributable to the Contracts (as
opposed to the Shares attributable to the Company's assets held in the
Accounts), and the Company shall not prevent Contract owners from
allocating payments to a Portfolio that was otherwise available under the
Contracts, until thirty (30) days after the Company shall have notified
the Trust of its intention to do so.
11.5. Notwithstanding any termination of this Agreement, the Trust and PFD
shall, at the option of the Company, continue for a period not exceeding
one year (unless otherwise agreed to by the Company, the Trust and PFD) to
make available additional shares of the Portfolios pursuant to the terms
and conditions of this Agreement, for all Contracts in effect on the
effective date of termination of this Agreement (the "Existing
Contracts"), except as otherwise provided under Article VII of this
Agreement; provided, however, that in the event of a termination pursuant
to Section 11.1. (c), (f) or (h), the Trust, PIM and PFD shall at their
option have the right to terminate immediately all sales of Shares to the
Company. Specifically, without limitation, the owners of the Existing
Contracts shall be permitted to transfer or reallocate investment under
the Contracts, redeem investments in any Portfolio and/or invest in the
Trust upon the making of additional purchase payments under the Existing
Contracts. The parties agree that this Section 11.5 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.
11.6 Notwithstanding any termination of this Agreement, each party's
obligations under Article VIII to indemnify the other parties shall
survive and not be affected by any termination of
18
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 XII. NOTICES
Any notice shall be sufficiently given when sent by registered or
certified mail, overnight courier or facsimile to the other party at the address
of such party set forth below or at such other address as such party may from
time to time specify in writing to the other party.
If to the Trust:
PIONEER VARIABLE CONTRACTS TRUST
c/o Xxxxxx Xxxxxx Xxxxxxxxx Xxxx & Xxxx LLP
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxx Xxxxxx, Esq.
If to the Company:
XXXXXXX XXXXX LIFE INSURANCE COMPANY OF NEW YORK
1300 Xxxxxxx Xxxxx Xxxxx, 0xx Xxxxx
Xxxxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx, Xx.
If to PIM:
PIONEER INVESTMENT MANAGEMENT, INC.
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxxx, General Counsel
If to PFD:
PIONEER FUNDS DISTRIBUTOR, INC.
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxx, Senior Vice President
ARTICLE XIII. MISCELLANEOUS
13.1. Subject to the requirements of legal process and regulatory
authority, each party hereto shall treat as confidential all
information reasonably identified as confidential in writing by any
party hereto and, except as permitted by this Agreement or as
otherwise required by applicable law or regulation, shall not
disclose, disseminate or utilize such other confidential information
without the express written consent of the affected party until such
time as it may come into the public domain. Notwithstanding anything
to the contrary in this Agreement, in addition to and not in lieu of
other provisions in this Agreement:
19
(a) "Confidential Information" includes without limitation all
information regarding the customers of the Company, the Trust,
PIM, PFD or any of their subsidiaries, affiliates or
licensees; or the accounts, account numbers, names, addresses,
social security numbers or any other personal identifier of
such customers; or any information derived therefrom.
(b) Neither the Company, the Trust, PIM or PFD may disclose
Confidential Information for any purpose other than to carry
out the purpose for which Confidential Information was
provided to the Company, the Trust, PIM or PFD as set forth in
this Agreement; and the Company, the Trust, PIM and PFD agree
to cause their employees, agents and representatives, or any
other party to whom the Company, the Trust, PIM or PFD may
provide access to or disclose Confidential Information to
limit the use and disclosure of Confidential Information to
that purpose.
(c) The Company, the Trust, PIM and PFD agree to implement
appropriate measures designed to ensure the security and
confidentiality of Confidential Information, to protect such
information against any anticipated threats or hazards to the
security and integrity of such information, and to protect
against unauthorized access to, or use of, Confidential
Information that could result in substantial harm or
inconvenience to any of the customers of the Company or any of
its subsidiaries, affiliates or licensees; the Company, the
Trust, PIM and PFD further agree to cause all their respective
agents, representatives or subcontractors, or any other party
to whom they provide access to or disclose Confidential
Information, to implement appropriate measures to meet the
objectives set forth in this Section 13.1.
13.2. 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.
13.3. This Agreement may be executed simultaneously in one or more
counterparts, each of which taken together shall constitute one and the
same instrument.
13.4. 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.
13.5. The Schedule attached hereto, as modified from time to time, is
incorporated herein by reference and is part of this Agreement.
13.6. Each party hereto shall cooperate with each other party in
connection with inquiries by 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.
13.7. 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.
20
13.8. A copy of the Trust's Certificate of Trust is on file with the
Secretary of State of Delaware. The Company acknowledges that the
obligations of or arising out of this instrument are not binding upon any
of the Trust's trustees, officers, employees, agents or shareholders
individually, but are binding solely upon the assets and property of the
Trust in accordance with its proportionate interest hereunder. The Company
further acknowledges that the assets and liabilities of each Portfolio are
separate and distinct and that the obligations of or arising out of this
instrument are binding solely upon the assets or property of the Portfolio
on whose behalf the Trust has executed this instrument. The Company also
agrees that the obligations of each Portfolio hereunder shall be several
and not joint, in accordance with its proportionate interest hereunder,
and the Company agrees not to proceed against any Portfolio for the
obligations of another Portfolio.
13.9. Neither this Agreement nor any of the rights and obligations
hereunder may be assigned by any party without the prior written consent
of all parties hereto.
13.10. The Trust, PIM and PFD agree that the obligations assumed by the
Company shall be limited in any case to the Company and its assets and
neither the Trust, PIM nor PFD shall seek satisfaction of any such
obligation from the shareholders of Company, the directors, officers,
employees or agents of the Company, or any of them.
13.11. No provision of the Agreement may be deemed or construed to modify
or supersede any contractual rights, duties, or indemnifications, as
between PIM and the Trust and PFD and the Trust.
13.12. This Agreement, including any Schedules or Exhibits hereto, may be
amended only by a written instrument executed by each party hereto.
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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 above.
XXXXXX XXXXX LIFE INSURANCE COMPANY OF NEW YORK
By its authorized officer,
By: ______________
Name:
Title:
Date:
PIONEER VARIABLE CONTRACTS TRUST,
ON BEHALF OF THE PORTFOLIOS
By its authorized officer and not individually,
By: __________________
Xxxxxxxxxxx Xxxxxx
Assistant Secretary
Date:
PIONEER INVESTMENT MANAGEMENT, INC.
By its authorized officer,
By: __________________
Xxxx Xxxxxxx
Senior Vice President
Date:
PIONEER FUNDS DISTRIBUTOR, INC.
By its authorized officer,
By: ________________
Xxxxxxx X'Xxxxx
Executive Vice President
Date:
22
SCHEDULE A
ACCOUNTS, CONTRACTS AND PORTFOLIOS
SUBJECT TO THE PARTICIPATION AGREEMENT
As of March 1st, 2005
NAME OF SEPARATE PORTFOLIOS AND
ACCOUNT AND DATE CONTRACTS FUNDED CLASS OF SHARES
ESTABLISHED BY BOARD OF DIRECTORS BY SEPARATE ACCOUNT AVAILABLE TO CONTRACTS
--------------------------------- ------------------- ----------------------
XXXXXXX XXXXX OF NEW YORK VARIABLE ML-NY-VA-010 PIONEER HIGH YIELD VCT PORTFOLIO
ANNUITY SEPARATE ACCOUNT A XXXXXXX XXXXX INVESTORS CHOICE (CLASS II)
FLEXIBLE PREMIUM VARIABLE ANNUITY
PIONEER FUND VCT PORTFOLIO (CLASS II)
PIONEER SMALL CAP VALUE VCT PORTFOLIO
(CLASS II)
23
SCHEDULE B
1. Administrative Services
Administrative services to Contract owners and participants shall be the
responsibility of the Company and shall not be the responsibility of the Trust
or PFD. The Company will provide properly registered and licensed personnel and
any systems needed for all Contract owners servicing and support - for both fund
and annuity and life insurance information and questions, including:
- Communicate all purchase, withdrawal, and exchange orders it
receives from its customers to PFD;
- Respond to Contract owner and participant inquires;
- Delivery of both Trust and Contract prospectuses as required under
applicable law;
- Entry of initial and subsequent orders;
- Transfer of cash to Portfolios;
- Explanations of Portfolio objectives and characteristics;
- Entry of transfers between Portfolios;
- Portfolio balance and allocation inquires; and
- Mail Trust proxies.
2. Administrative Service Fees
For the administrative services set forth above, PIM or any of its affiliates
shall pay a servicing fee based on the annual rate of [redacted]% of the average
aggregate net daily assets invested in the Class I Shares of the Portfolios and
[redacted]% of the average aggregate net daily assets invested in the Class II
Shares of the Portfolios through the Accounts at the end of each calendar
quarter. Such payments will be made to the Company within thirty (30) days after
the end of each calendar quarter. Such fees shall be paid quarterly in arrears.
Each payment will be accompanied by a statement showing the calculation of the
fee payable to the Company for the quarter and such other supporting data as may
be reasonably requested by the Company. The Company will calculate the asset
balance on each day on which the fee is to be paid pursuant to this Agreement
with respect to each Portfolio for the purpose of reconciling its calculation of
average aggregate net daily assets with PIM's calculation. Annually (as of
December 31) or upon reasonable request of PIM, Company will provide PIM a
statement showing the number of subaccounts in each Class of Shares of each
Portfolio as of the most recent calendar quarter end.
3. 12b-1 Distribution Related Fees (Class II Shares Only)
In accordance with the Portfolios' plans pursuant to Rule 12b-1 under the
Investment Company Act of 1940, PFD will make payments to the Company at an
annual rate of [redacted]% of the average daily net assets invested in the Class
II shares of the Portfolios through the Accounts in each calendar quarter. PFD
will make such payments to the Company within thirty (30) days after the end of
each calendar quarter. Each payment will be accompanied by a statement showing
the calculation of the fee payable to the Company for the quarter and such other
supporting data as may be reasonably requested by the Company. The Rule 12b-1
distribution related fees will be paid to the Company for as long as the
Accounts own any Shares of a Portfolio and (i) distribution services are being
provided pursuant to this Agreement and (ii) a Rule 12b-1 plan is in effect with
respect to such Portfolio.
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EXHIBIT I
TO
PARTICIPATION AGREEMENT
Procedures for Pricing and Order/Settlement Through National Securities Clearing
Corporation's Mutual Fund Profile System and Mutual Fund Settlement, Entry and
Registration Verification System
1. As provided in Section 1.1 of the Participation Agreement, the parties
hereby agree to provide pricing information, execute orders and wire
payments for purchases and redemptions of Fund shares through National
Securities Clearing Corporation ("NSCC") and its subsidiary systems as
follows:
(a) PFD or its affiliates will furnish to Company or its affiliate
through NSCC's Mutual Fund Profile System ("MFPS") (1) the most
current net asset value information for each Fund, (2) a schedule of
anticipated dividend and distribution payment dates for each Fund,
which is subject to change without prior notice, ordinary income and
capital gain dividend rates on the Fund's ex-date, and (3) in the
case of fixed income funds that declare daily dividends, the daily
accrual or the interest rate factor. All such information shall be
furnished to Company or its affiliate by 6:30 p.m. Eastern Time on
each business day that the Fund is open for business (each a
"Business Day") or at such other time as that information becomes
available. Changes in pricing information will be communicated to
both NSCC and Company.
(b) Upon receipt of Fund purchase, exchange and redemption instructions
for acceptance as of the time at which a Fund's net asset value is
calculated as specified in such Fund's prospectus ("Close of
Trading") on each Business Day ("Instructions"), and upon its
determination that there are good funds with respect to Instructions
involving the purchase of Shares, Company or its affiliate will
calculate the net purchase or redemption order for each Fund. Orders
for net purchases or net redemptions derived from Instructions
received by Company or its affiliate prior to the Close of Trading
on any given Business Day will be sent to the Defined Contribution
Interface of NSCC's Mutual Fund Settlement, Entry and Registration
Verification System ("Fund/SERV") by 5:00 a.m. Eastern Time on the
next Business Day. Subject to Company's or its affiliate's
compliance with the foregoing, Company or its affiliate will be
considered the agent of the Distributor and the Funds, and the
Business Day on which Instructions are received by Company or its
affiliate in proper form prior to the Close of Trading will be the
date as of which shares of the Funds are deemed purchased, exchanged
or redeemed pursuant to such Instructions. Instructions received in
proper form by Company or its affiliate after the Close of Trading
on any given Business Day will be treated as if received on the next
following Business Day. Dividends and capital gains distributions
will be automatically reinvested at net asset value in accordance
with the Fund's then current prospectuses.
(c) Company or its affiliate will wire payment for net purchase orders
by the Fund's NSCC Firm Number, in immediately available funds, to
an NSCC settling bank account designated by Company or its affiliate
no later than 5:00 p.m. Eastern time on the same Business Day such
purchase orders are communicated to NSCC. For purchases of shares of
daily dividend accrual funds, those shares will not begin to accrue
dividends until the day the payment for those shares is received.
(d) NSCC will wire payment for net redemption orders by Fund, in
immediately available funds, to an NSCC settling bank account
designated by Company or its affiliate, by 5:00 p.m. Eastern Time on
the Business Day such redemption orders are communicated to NSCC,
except as provided in a Fund's prospectus and statement of
additional information.
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(e) With respect to (c) or (d) above, if Distributor does not send a
confirmation of Company's or its affiliate's purchase or redemption
order to NSCC by the applicable deadline to be included in that
Business Day's payment cycle, payment for such purchases or
redemptions will be made the following Business Day.
(f) If on any day Company or its affiliate, or Distributor is unable to
meet the NSCC deadline for the transmission of purchase or
redemption orders, it may at its option transmit such orders and
make such payments for purchases and redemptions directly to
Distributor or Company or its affiliate, as applicable, as is
otherwise provided in the Agreement.
(g) These procedures are subject to any additional terms in each Fund's
prospectus and the requirements of applicable law. The Funds reserve
the right, at their discretion and without notice, to suspend the
sale of shares or withdraw the sale of shares of any Fund.
2. Company or its affiliate, Distributor and clearing agents (if applicable) are
each required to have entered into membership agreements with NSCC and met all
requirements to participate in the MFPS and Fund/SERV systems before these
procedures may be utilized. Each party will be bound by the terms of their
membership agreement with NSCC and will perform any and all duties, functions,
procedures and responsibilities assigned to it and as otherwise established by
NSCC applicable to the MFPS and Fund/SERV system and the Networking Matrix Level
utilized.
3. Except as modified hereby, all other terms and conditions of the Agreement
shall remain in full force and effect. Unless otherwise indicated herein, the
terms defined in the Agreement shall have the same meaning as in this Exhibit.
26
