FUND PARTICIPATION AGREEMENT
THIS AGREEMENT, made and entered into this 18th day of October 1999 (the "
Agreement") by and among American Skandia Life Assurance Corporation, organized
under the laws of the State of Connecticut (the "Insurance Company"), on behalf
of itself and each separate account of the Insurance Company named in Schedule A
to this Agreement, as may be amended from time to time (each separate account
referred to as the "Separate Account" and collectively as the " Separate
Accounts"); INVESCO Variable Investment Funds, Inc., an open-end management
investment company organized under the laws of the State of Maryland (the "
Investment Company"); INVESCO Funds Group, Inc. a corporation organized under
the laws of the State of Delaware and investment adviser to the Investment
Company (the " Adviser" ); and INVESCO Distributors, Inc., a corporation
organized under the laws of the State of Delaware and principal
underwriter/distributor of the Investment Company.
WHEREAS, the Investment Company engages in business as an open-end diversified,
management investment company and was established for the purpose of serving as
the investment vehicle for separate accounts established for variable life
insurance contracts and variable annuity contracts to be offered by insurance
companies which have entered into participation agreements substantially similar
to this Agreement (the "Participating Insurance Companies"), and
WHEREAS, beneficial interests in the Investment Company are divided into several
series of shares, each representing the interest in a particular managed
portfolio of securities and other assets (each, a "Fund" and collectively, the
"Funds"); and
WHEREAS, the Insurance Company, as depositor, has established the Separate
Accounts to serve as investment vehicles for certain variable annuity contracts
and variable life insurance policies and funding agreements offered by the
Insurance Company set forth on Schedule A (the "Contracts"); and
WHEREAS, the Separate Accounts are duly organized, validly existing segregated
asset accounts, established by resolutions of the Board of Directors of the
Insurance Company under the insurance laws of the State of Connecticut. to set
aside and invest assets attributable to the Contracts; and
WHEREAS, to the extent permitted by applicable insurance laws and regulations,
the Insurance Company intends to purchase shares of the Funds named in Schedule
B, as such schedule may be amended from time to time (the " Designated Funds")
on behalf of the Separate Accounts to fund the Contracts; and
WHEREAS, the Distributor is authorized to sell such shares of the Funds to unit
investment trusts such as the Separate Accounts at net asset value.
NOW, THEREFORE, in consideration of their mutual promises, the Insurance
Company, the Investment Company, the Adviser and the Distributor agree as
follows:
ARTICLE I - SALE OF FUND SHARES
1.1 The Distributor agrees to sell to the Insurance Company those shares of the
Designated Funds which the Insurance Company orders on behalf of each
Separate Account, executing such orders on a daily basis at the net asset
value (and with no sales charges) next computed after receipt and
acceptance by the Investment Company or its designee of the order for the
shares of the Investment Company. For purposes of this Section 1.1, the
Insurance Company will be the designee of the Investment Company for
receipt of such orders from each Separate Account and receipt by such
designee will constitute receipt by the Investment Company; provided that
the Investment Company receives notice of such order by 11:00 a.m. Eastern
Time on the next following business day. "Business Day" will mean any day
on which the New York Stock Exchange is open for trading and on which the
Investment Company calculates its net asset value pursuant to the rules of
the Securities and Exchange Commission (the "Commission"). If the
Investment Company does not receive actual notice of such purchase order
before 11:00 a.m. Eastern Time on the Business Day next following Insurance
Company's acceptance of such order on behalf of each Separate Account, such
order will be executed at the net asset value next calculated by the
Investment Company or its designee pursuant to the rules of the Commission.
Payment will be made in federal funds transmitted by wire to the Investment
Company's account as designated by the Investment Company in writing from
time to time, on the same Business Day the Investment Company receives
notice of the purchase order from the Insurance Company. The Investment
Company may net the notice of redemptions it receives from the Insurance
Company under Section 1.3 of this Agreement against the notice of purchases
it receives from the Insurance Company under this Section 1.1.
1.2 The Insurance Company will pay for Designated Fund shares on the next
Business Day after an order to purchase Designated Fund shares is made in
accordance with Section 1.1. Payment will be made in federal funds
transmitted by wire. Upon receipt by the Investment Company of the payment,
such funds shall cease to be the responsibility of the Insurance Company
and shall become the responsibility of the Investment Company.
1.3 The Investment Company agrees to redeem for cash, upon the Insurance
Company's request, any full or fractional shares of the Investment Company
held by the Insurance Company, executing such requests on a daily basis at
the net asset value next computed after receipt and acceptance by the
Investment Company or its agent of the request for redemption. For purposes
of this Section 1.3, the Insurance Company will be the designee of the
Investment Company for receipt of requests for redemption from each
Separate Account and receipt by such designee will constitute receipt by
the Investment Company; provided the Investment Company receives notice of
such requests for redemption by 11:00 a.m. Eastern Time on the next
following Business Day. If the Investment Company does not receive actual
notice of such redemption order before 11:00 a.m. Eastern Time on the
Business Day next following Insurance Company's acceptance of such order on
behalf of each Separate Account, such order will be executed at the net
asset value next calculated by the Investment Company or its designee
pursuant to the rules of the Commission. Payment will be made in federal
funds transmitted by wire to the Insurance Company's account as designated
by the Insurance Company in writing from time to time, on the same Business
Day the Investment Company receives notice of the redemption order from the
Insurance Company. After consulting with the Insurance Company, the
Investment Company reserves the right to delay payment of redemption
proceeds, but in no event may such payment be delayed longer than the
period permitted under Section 22(e) of the Investment Company Act of 1940
(the " 1940 Act'). The Investment Company will not bear any responsibility
whatsoever for the proper disbursement or crediting of redemption proceeds;
the Insurance Company alone will be responsible for such action. If
notification of redemption is received after 11:00 Eastern Time, payment
for redeemed shares will be made on the next following Business Day. The
Investment Company may net the notice of purchases it receives from the
Insurance Company under Section 1. 1 of this Agreement against the notice
of redemptions it receives from the Insurance Company under this Section
1.3.
1.4 The Investment Company agrees to make shares of the Designated Funds
available continuously for purchase at the applicable net asset value per
share by Participating Insurance Companies and their separate accounts on
those days on which the Investment Company calculates the net asset value
of each Fund pursuant to rules of the Commission; provided, however, that
the Board of Directors of the Investment Company (the " Directors") may
refuse to sell shares of any Fund to any person, or suspend or terminate
the offering of shares of any Fund if such action is required by law or by
regulatory authorities having jurisdiction or is, in the sole discretion of
the Directors, acting in good faith and in light of their fiduciary duties
under federal and any applicable state laws, necessary in the best
interests of the shareholders of such Fund.
1.5 The Investment Company and the Distributor agree that shares of the
Investment Company will be sold only to Participating Insurance Companies
and their separate accounts, qualified pension and retirement plans or such
other persons as are permitted under applicable provisions of the Internal
Revenue Code of 1986, as amended, (the "Code"), and regulations promulgated
thereunder, the sale to which will not impair the tax treatment currently
afforded the Contracts. No shares of any Fund will be sold directly to the
general public.
1.6 The Investment Company will not sell Fund shares to any insurance company
or separate account unless agreement containing provisions substantially
the same as Articles I, III, V, and VII and Section 2.8 of Article II of
this Agreement are in effect to govern such sales.
1.7 The Insurance Company agrees to purchase and redeem the shares of the
Designated Funds offered by the then current prospectus of the Investment
Company in accordance with the provisions of such prospectus.
1.8 Issuance and transfer of the Investment Company's shares will be by book
entry only. Stock certificates will not be issued to the Insurance Company
or to any Separate Account. Purchase and redemption orders for Fund shares
will be recorded in an appropriate title for each Separate Account or the
appropriate sub-account of each Separate Account.
1.9 The Investment Company will furnish same day notice (by facsimile) to the
Insurance Company of the declaration of any income, dividends or capital
gain distributions payable on each Designated Fund's shares. The Insurance
Company hereby elects to receive all such dividends and distributions as
are payable on the Fund shares in the form of additional shares of that
Fund at the ex-dividend date net asset values. The Insurance Company
reserves the right to revoke this election and to receive all such
dividends and distributions in cash. The Investment Company will notify the
Insurance Company of the number of shares so issued as payment of such
dividends and distributions.
1.10 The Investment Company will make the net asset value per share for each
Designated Fund available to the Insurance Company via electronic means on
a daily basis as soon as reasonably practical after the net asset value per
share is calculated and will use its best efforts to make such net asset
value per share available by 6:00 p.m., Eastern Time, each Business Day. If
the Investment Company provides the Insurance Company materially incorrect
net asset value per share information (as determined under SEC guidelines),
the Insurance Company shall be entitled to an adjustment to the number of
shares purchased or redeemed to reflect the correct net asset value per
share. Any material error in the calculation or reporting of net asset
value per share, dividend or capital gain information shall be reported to
the Insurance Company upon discovery by the Investment Company.
ARTICLE II - REPRESENTATIONS AND WARRANTIES
2.1 The Insurance Company represents and warrants that the Contracts are or
will be registered under the Securities Act of 1933 (the " 1933 Act"), or
are exempt from registration thereunder, and that the Contracts will be
issued and sold in compliance with all applicable federal and state laws.
The Insurance Company further represents and warrants that: (i) it is an
insurance company duly organized and in good standing under applicable law;
(ii) it has legally and validly established each Separate Account as a
separate account under Section 38a-433 of the General Statutes of
Connecticut; (iii) each Separate Account is or will be registered as a unit
investment trust in accordance with the provisions of the 1940 Act to serve
as a segregated investment account for the Contracts, or is exempt from
registration thereunder; and (iv) it will maintain such registration for so
long as any Contracts are outstanding. The Insurance Company will amend
each registration statement under the 1933 Act for the Contracts and the
registration statement under the 1940 Act for the Separate Account 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 Insurance
Company will register and qualify the Contracts for sale in accordance with
the securities laws of the various states only if, and to the extent,
deemed necessary by the Insurance Company.
2.2 Subject to the Investment Company's representations in Article III, the
Insurance Company represents that the contracts are currently and at the
time of issuance will be treated as annuity contracts and/or life insurance
policies (as applicable) under applicable provisions of the Code, and that
it will make every effort to maintain such treatment and that it will
notify the Investment Company and the Distributor 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.
2.3 The Insurance Company represents and warrants to the Investment Company,
the Adviser, and the Distributor that its has a Year 2000 compliance
program in existence and that each reasonably intends to be Year 2000
compliant so as to be able perform all of the services and/or obligations
contemplated by or under this Agreement without interruption. The Insurance
Company shall immediately notify the Investment Company, the Adviser, and
the Distributor if it determines that it will be unable perform all of the
services and/or obligations contemplated by or under this Agreement in a
manner that is Year 2000 compliant.
2.4 The Insurance Company represents and warrants that it will not purchase
shares of the Designated Fund(s) with assets derived from tax-qualified
retirement plans except, indirectly, through Contracts purchased in
connection with such plans.
2.5 The Investment Company represents and warrants that shares of the
Designated Fund(s) sold pursuant to this Agreement will be registered under
the 1933 Act and duly authorized for issuance in accordance with applicable
law and that the Investment Company is and will remain registered as an
open-end diversified, management investment company under the 1940 Act for
as long as such shares of the Designated Fund(s) are sold. The Investment
Company will 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 Investment Company will register and
qualify the shares of the Designated Fund(s) for sale in accordance with
the laws of the various states only if and to the extent deemed advisable
by the Investment Company or the Distributor.
2.6 The Investment Company represents that it will use its best efforts to
comply with any applicable state insurance laws or regulations as they may
apply to the investment objectives, policies and restrictions of the Funds,
to the extent specifically requested in writing by the Insurance Company.
If the Investment Company cannot comply with such state insurance laws or
regulations, it will so notify the Insurance Company in writing. The
Investment Company makes no other representation as to whether any aspect
of its operations (including, but not limited to, fees and expenses, and
investment policies) complies with the insurance laws or regulations of any
state. The Insurance Company represents that it will use its best efforts
to notify the Investment Company of any restrictions imposed by state
insurance laws that may become applicable to the Investment Company as a
result of the Separate Accounts' investments therein. The Investment
Company and the Adviser agree that they will furnish the information
required by state insurance laws to assist the Insurance Company in
obtaining the authority needed to issue the Contracts in various states.
2.7 The Investment Company represents and warrants that, to the extent that it
decides to finance distribution expenses pursuant to Rule 12b-1 under the
1940 Act, the Investment Company undertakes to have the Directors, a
majority of whom are not " interested" persons of the Investment Company,
formulate and approve any plan under Rule 12b-1 to finance distribution
expenses. The Investment Company shall notify the Insurance Company
immediately upon determining to finance distribution expenses pursuant to
Rule 12b-1.
2.8 The Investment Company represents that it is lawfully organized and validly
existing under the laws of the State of Maryland and that it does and will
comply in all material respects with applicable provisions of the 1940 Act.
2.9 The Investment Company represents and warrants that all of its directors,
officers, employees, investment advisers, and other individuals/entities
having access to the funds and/or securities of the Investment Company are
and continue to be at all times covered by a blanket fidelity bond or
similar coverage for the benefit of the Investment Company in an amount not
less than the minimal coverage as required currently by Rule 17g-(1) of the
1940 Act or related provisions as may be promulgated from time to time. The
aforesaid bond includes coverage for larceny and embezzlement and is issued
by a reputable bonding company.
2.10 The Adviser represents and warrants that: (i) it is duly registered as an
investment adviser under the Investment Advisers Act of 1940, as amended,
and will remain duly registered under all applicable federal and state
securities laws; and (ii) it will perform its obligations for the
Investment Company in accordance in all material respects with the laws of
the State of Delaware and any applicable state and federal securities laws.
2.11 The Distributor represents and warrants that it: (i) is registered as a
broker-dealer under the Securities and Exchange Act of 1934, as amended
(the " 1934 Act") and will remain duly registered under all applicable
federal and state securities laws; (ii) is a member in good standing of the
National Association of Securities Dealers, Inc. ("NASD"); (iii) serves as
principal underwriter/distributor of the Investment Company; and (iv) will
perform its obligations for the Investment Company in accordance in all
material respects with the laws of the State of Delaware and any applicable
state and federal securities laws.
2.12 The Investment Company, the Adviser and the Distributor represent and
warrant to the Insurance Company that each has a Year 2000 compliance
program in existence and that each reasonably intends to be Year 2000
compliant so as to be able to perform all of the services and/or
obligations contemplated by or under this Agreement without interruption.
The Investment Company, the Adviser, and the Distributor shall immediately
notify the Insurance Company if it determines that it will be unable to
perform all of the services and/or obligations contemplated by or under
this Agreement in a manner that is Year 2000 compliant.
ARTICLE III - FUND COMPLIANCE
3.1 The Investment Company, the Adviser and the Distributor acknowledge that
any failure (whether intentional or in good faith or otherwise) to comply
with the requirements of Subchapter M of the Code or the diversification
requirements of Section 817(h) of the Code may result in the Contracts not
being treated as variable contracts for federal income tax purposes, which
would have adverse tax consequences for Contract owners and could also
adversely affect the Insurance Company's corporate tax liability. The
Investment Company, the Adviser and the Distributor further acknowledge
that any such failure may result in costs and expenses being incurred by
the Insurance Company in obtaining whatever regulatory authorizations are
required to substitute shares of another investment company for those of
the failed Fund as well as fees and expenses of legal counsel and other
advisors to the Insurance Company and any federal income taxes, interest or
tax penalties incurred by the Insurance Company in connection with any such
failure.
3.2 The Investment Company represents and warrants that it is currently
qualified as a Regulated Investment Company under Subchapter M of the Code,
and that it will maintain such qualification (under Subchapter M or any
successor or similar provision) and that it will notify the Insurance
Company immediately upon having a reasonable basis for believing that it
has ceased to so qualify or that it might not so qualify in the future.
3.3 The Investment Company represents that it will at all times invest money
from the Contracts in such a manner as to ensure that the Contracts will be
treated as variable contracts under the Code and the regulations issued
thereunder; including, but not limited to, that the Investment Company will
at all times comply with Section 817(h) of the Code and Treasury Regulation
1.817-5, as amended from time to time, relating to the diversification
requirements for variable annuity, endowment, or life insurance contracts,
and with Section 817(d) of the Code, relating to the definition of a
variable contract, and any amendments or other modifications to such
Section or Regulation. The Investment Company will notify the Insurance
Company immediately upon having a reasonable basis for believing that the
Investment Company or a Fund thereunder has ceased to comply with the
diversification requirements or that the Investment Company or Fund might
not comply with the diversification requirements in the future. In the
event of a breach of this representation by the Investment Company, it will
take all reasonable steps to adequately diversify the Investment Company so
as to achieve compliance within the grace period afforded by Treasury
Regulation 1.817-5.
3.4 The Adviser agrees to provide the Insurance Company with a certificate or
statement indicating compliance by each Fund of the Investment Company with
Section 817(h) of the Code, such certificate or statement to be sent to the
Insurance Company no later than thirty (30) days following the end of each
calendar quarter.
ARTICLE IV - PROSPECTUS AND PROXY STATEMENTS; VOTING
4.1 The Investment Company or the Distributor will provide the Insurance
Company with as many copies of the current Investment Company prospectus
and any supplements thereto for the Designated Fund(s) as the Insurance
Company may reasonably request, at the Investment Company's or
Distributor's expense, for distribution to Contract owners at the time of
Contract fulfillment and confirmation. To the extent that the Designated
Fund(s) are one or more of several Funds of the Investment Company, the
Investment Company shall bear the cost of providing the Insurance Company
only with disclosure related to the Designated Fund(s). The Investment
Company will provide as many copies of said prospectus as necessary for
distribution, at the Investment Company's or Distributor's expense, to
existing Contract owners. The Investment Company will provide the copies of
said prospectus to the Insurance Company or to its mailing agent. The
Insurance Company will distribute the prospectus to existing Contract
owners and will xxxx the Investment Company or the Distributor for the
reasonable cost of such distribution. If requested by the Insurance
Company, in lieu thereof, the Investment Company or the Distributor will
provide such documentation, including a final copy of a current prospectus
set in type at the Investment Company's or the Distributor's expense, and
other assistance as is reasonably necessary in order for the Insurance
Company at least annually (or more frequently if the Investment Company
prospectus is amended more frequently) to have the new prospectus for the
Contracts and the Investment Company's new prospectus printed together, in
which case the Investment Company or the Distributor agrees to pay its
proportionate share of reasonable expenses directly related to the required
disclosure of information concerning the Investment Company. The Investment
Company or the Distributor will, upon request, provide the Insurance
Company with a copy of the Investment Company's prospectus through
electronic means to facilitate the Insurance Company's efforts to provide
Investment Company prospectuses via electronic delivery, in which case the
Investment Company or the Distributor agrees to pay its proportionate share
of reasonable expenses related to the required disclosure of information
concerning the Investment Company.
4.2 The Investment Company's prospectus will state that the Statement of
Additional Information (the " SAI") for the Investment Company is available
from the Distributor or, in the Investment Company's discretion, the
Prospectus shall state that such statement is available from the Investment
Company.
4.3 The Investment Company, at its expense, will provide the Insurance Company
or its mailing age copies of its proxy material, if any, reports to
shareholders/Contract owners and other communications to shareholders/
Contract owners in such quantity as the Insurance Company will reasonably
require. The Insurance Company will distribute this proxy material, reports
and other communications to existing Contract owners and will xxxx the
Investment Company for the reasonable cost of such distribution.
4.4 If and to the extent required by law, the Insurance Company will:
(a) solicit voting instructions from Contract owners;
(b) vote the shares of the Designated Funds held in the Separate
Account in accordance with instructions received from Contract
owners;
(c) and vote shares of the Designated Funds held in the Separate
Account for which no timely instructions have been received, in
the same proportion as shares of such Designated Fund for which
instructions have been received from the Insurance Company's
Contract owners,
so long as and to the extent that the Commission continues to
interpret the 1940 Act to require pass-through voting privileges
for variable Contract owners. The Insurance Company reserves the
right to vote Investment Company shares held in any segregated
asset account in its own right, to the extent permitted by law.
The Insurance Company will be responsible for assuring that the
Separate Accounts participating in the Investment Company
calculates voting privileges in a manner consistent with all
legal requirements, including the Proxy Voting Procedures set
forth in Schedule C and the Mixed and Shared Funding Order, as
described in Section 7. 1.
4.5 The Investment Company will comply with all provisions of the 1940 Act
requiring voting by shareholders, and in particular, the Investment Company
either will provide for annual meetings (except insofar as the Commission
may interpret Section 16 of the 1940 Act not to require such meetings) or,
as the Investment Company currently intends, to comply with Section 16(c)
of the 1940 Act (although the Investment Company is not one of the trusts
described in Section 16(c) of the 0000 Xxx) as well as with Sections 16(a)
and, if and when applicable, 16(b) of the 1940 Act. Further, the Investment
Company will act in accordance with the Commission's interpretation of the
requirements of Section 16(a) with respect to periodic elections of
directors and with whatever rules the Commission may promulgate with
respect thereto.
ARTICLE V - SALES MATERIAL AND INFORMATION
5.1 The Insurance Company will furnish, or will cause to be furnished, to the
Investment Company or the Distributor, each piece of sales literature or
other promotional material in which the Investment Company, the Adviser or
the Distributor is named, at least ten (10) business days prior to its use.
No such material will be used if the Investment Company or the Distributor
reasonably objects to such use within five (5) business days after receipt
of such material.
5.2 The Insurance Company will not give any information or make any
representations or statements on behalf of the Investment Company or
concerning the Investment Company in connection with the sale of the
Contracts other than the information or representations contained in the
registration statement, prospectus or SAI for Investment Company shares, as
such registration statement, prospectus and SAI may be amended or
supplemented from time to time, or in reports or proxy statements for the
Investment Company, or in published reports for the Investment Company
which are in the public domain or approved by the Investment Company, the
Adviser or the Distributor for distribution, or in sales literature or
other material provided by the Investment Company, the Adviser or the
Distributor, except with permission of the Investment Company, the Adviser
or the Distributor. The Investment Company, the Adviser or the Distributor
agree to respond to any request for approval on a prompt and timely basis.
5.3 The Investment Company, the Adviser or the Distributor will furnish, or
will cause to be furnished, to the Insurance Company or its designee, each
piece of sales literature or other promotional material in which the
Insurance Company or its separate account is named, at least ten (10)
business days prior to its use. No such material will be used if the
Insurance Company reasonably objects to such use within five (5) business
days after receipt of such material.
5.4 The Investment Company, the Adviser or the Distributor will not give any
information or make any representations or statements on behalf of the
Insurance Company or concerning the Insurance Company, each Separate
Account, or the Contracts other than the information or representations
contained in a registration statement, prospectus or SAI for the Contracts,
as such registration statement, prospectus and SAI may be amended or
supplemented from time to time, or in published reports for each Separate
Account or the Contracts which are in the public domain or approved by the
Insurance Company for distribution to Contract owners, or in sales
literature or other material provided by the Insurance Company, except with
permission of the Insurance Company. The Insurance Company agrees to
respond to any request for approval on a prompt and timely basis.
5.5 The Investment Company will provide to the Insurance Company at least one
complete copy of all registration statements, prospectuses, SAIs, reports,
proxy statements, sales literature and other promotional materials,
applications for exemptions, requests for no-action letters, and all
amendments to any of the above, that relate to the Investment Company or
its shares, within a reasonable time after filing of each such document
with the Commission or the NASD.
5.6 The Insurance Company will provide to the Investment Company at least one
complete copy of all definitive prospectuses, definitive SAI, reports,
solicitations for voting instructions, sales literature and other
promotional materials, applications for exemptions, requests for no action
letters, and all amendments to any of the above, that relate to the
Contracts or each Separate Account, contemporaneously with the filing of
each such document with the Commission or the NASD (Except that with
respect to post-effective amendments to such prospectuses and SAIs and
sales literature and promotional material, only those prospectuses and SAIs
and sales literature and promotional material that relate to or refer to
the Investment Company or one or more of the Designated Funds will be
provided.) In addition, the Insurance Company will provide to the
Investment Company at least one complete copy of (i) a registration
statement that relates to the Contracts or each Separate Account,
containing representative and relevant disclosure concerning the Investment
Company; and (ii) any post-effective amendments to any registration
statements relating to the Contracts or such Separate Account that refer to
or relate to the Investment Company.
5.7 For purposes of this Article V, 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 or tape recording, videotape
display, signs or billboards, motion pictures, or other public media,
(i.e., on-line networks such as the Internet or other electronic
messages)), sales literature (i.e., any written communication distributed
or made generally available to customers or the public, including
brochures, circulars, research reports, market letters, form letters,
seminar texts, reprints or excerpts of any other advertisement, sales
literature, or published article), educational or training materials or
other communications distributed or made generally available to some or all
agents or employees, registration statements, prospectuses, SAIs,
shareholder reports, and proxy materials and any other material
constituting sales literature or advertising under the NASD Conduct Rules,
the 1933 Act or the 1940 Act.
5.8 The Investment Company, the Adviser and the Distributor hereby consent to
the Insurance Company's use of the names of the INVESC0, AMVESCAP and
INVESCO Funds Group, Inc. as well as the names of the Designated Funds set
forth in Schedule B of this Agreement, in connection with marketing the
Contracts, subject to the terms of Sections 5.1 of this Agreement.
Insurance Company acknowledges and agrees that Adviser and Distributor
and/or their affiliates own all right, title and interest in an to the name
INVESCO and the INVESCO open circle design, and covenants not, at any time,
to challenge the rights of Adviser and Distributor and/or their affiliates
to such name or design, or the validity or distinctiveness thereof. The
Investment Company, the Adviser and the Distributor hereby consent to the
use of any trademark, trade name, service xxxx or logo used by the
Investment Company, the Adviser and the Distributor, subject to the
Investment Company's, the Adviser's and/or the Distributor's approval of
such use and in accordance with reasonable requirements of the Investment
Company, the Adviser or the Distributor. Such consent will terminate with
the termination of this Agreement. Adviser or Distributor may withdraw this
consent as to any particular use of any such name or identifying marks at
any time (i) upon Adviser's or Distributor's reasonable determination that
such use would have a material adverse effect on the reputation or
marketing efforts of Adviser, Distributor or such Funds or (ii) if no
investment company, or series or class of shares of any investment company
advised by Adviser or distributed by Distributor continues to be offered
through variable insurance contracts issued by Insurance Company; provided
however, that Adviser or Distributor may, in eithers individual discretion,
continue to use materials prepared or printed prior to the withdrawal of
such authorization. The Insurance Company agrees and acknowledges that all
use of any designation comprised in whole or in part of the name,
trademark, trade name, service xxxx and logo under this Agreement shall
inure to the benefit of the Investment Company, Adviser and/or the
Distributor.
5.9 The Investment Company, the Adviser, the Distributor and the Insurance
Company agree to adopt and implement procedures reasonably designed to
ensure that information concerning the Insurance Company, the Investment
Company, the Adviser or the Distributor, respectively, and their respective
affiliated companies, that 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 owners) and is
properly marked as "Not For Use With The Public" or "For Broker-Dealer Use
Only" and that such information is only so used.
ARTICLES VI - FEES, COSTS AND EXPENSES
6.1 The Investment Company will pay no fee or other compensation to the
Insurance Company under this Agreement, except subject to a plan pursuant
to Rule 12b-1 under the 1940 Act to finance distribution expenses, in which
case, subject to obtaining any required exemptive orders or other
regulatory approvals, the Investment Company or Distributor may make
payments to the Insurance Company or to the underwriter for the Contracts
if and in such amounts agreed to by the Investment Company in writing. Each
party, however, shall, in accordance with the allocation of expenses
specified in this Agreement, 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 administrative
services provided to Contract owners relating to the Investment Company
that are not primarily intended to result in the sale of shares of the
Designated Funds.
6.2 All expenses incident to performance by the Investment Company of this
Agreement will be paid by the Investment Company or the Distributor to the
extent permitted by law. All shares of the Designated Funds will be duly
authorized for issuance and registered in accordance with applicable
federal law and, to the extent deemed advisable by the Investment Company,
in accordance with applicable state law, prior to sale. The Investment
Company will bear the expenses for the cost of registration and
qualification of the Investment Company's shares, including without
limitation, the preparation of and filing with the SEC of Forms N-SAR and
Rule 24-2 Notices and payment of all applicable registration or filing fees
(if applicable) with respect to shares of the Investment Company;
preparation and filing of the Investment Company's prospectus, SAI and
registration statement, proxy materials and reports; typesetting the
Investment Company's prospectus; typesetting and printing proxy materials
and reports to Contract owners (including the costs of printing an
Investment Company prospectus that constitutes an annual report); the
preparation of all statements and notices required by any federal or state
law; all taxes on the issuance or transfer of the Investment Company's
shares; any expenses permitted to be paid or assumed by the Investment
Company pursuant to a plan, if any, under Rule 12b-1 under the 1940 Act;
and other costs associated with preparation of prospectuses and SAIs for
the Designated Funds in electronic or typeset format.
6.3 The Insurance 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 Contracts' prospectus and SAI; and the cost
of printing and distributing annual individual account statements for
Contract owners are required by state law.
ARTICLE VII - MIXED & SHARED FUNDING RELIEF
7.1 The Investment Company represents and warrants that it has received an
order from the Commission granting Participating Insurance Companies and
variable annuity separate accounts and variable life insurance separate
accounts relief from the provisions of Sections 9(a), 13(a), 15(a), and
15(b) of the 1940 Act and Rules 6e-2(b)(I 5) and 6e-3(T)(b)(15) thereunder,
to the extent necessary to permit shares of the Investment Company to be
sold to and held by variable annuity separate accounts and variable life
insurance separate accounts of both affiliated and unaffiliated
Participating Insurance Companies and qualified pension and retirement
plans outside of the separate account context (the "Mixed and Shared
Funding Order"). The parties to this Agreement agree that the conditions or
undertakings specified in the Mixed and Shared Funding Order and that may
be imposed on the Insurance Company, the Investment Company and/or the
Adviser by virtue of the receipt of such order by the Commission, will be
incorporated herein by reference, and such parties agree to comply with
such conditions and undertakings to the extent applicable to each such
party.
7.2 The Directors will monitor the Investment Company for the existence of any
material irreconcilable conflict among the interests of the Contract owners
of all separate accounts investing in the Investment Company. A material
irreconcilable conflict may arise for a variety of reasons, including, but
not limited to: (a) an action by any state insurance regulatory authority;
(b) a change in applicable federal or state insurance, tax, or securities
laws or regulations, or a public ruling, private letter ruling, no action
or interpretative letter, or any similar action by insurance, tax, or
securities regulatory authorities; (c) an administrative or judicial
decision in any relevant proceeding; (d) the manner in which the
investments of any Fund are being managed; (e) a difference in voting
instructions given by Participating Insurance Companies or by variable
annuity and variable life insurance Contract owners; or (f) a decision by
an insurer to disregard the voting instructions of Contract owners. The
Directors will promptly inform the Insurance Company if it determines that
a material irreconcilable conflict exists and the implications thereof. A
majority of the Directors will consist of persons who are not " interested"
persons of the Investment Company.
7.3 The Insurance Company will report any potential or existing conflicts of
which it is aware to the Directors. The Insurance Company agrees to assist
the Directors in carrying out its responsibilities under the Mixed and
Shared Funding Order by providing the Directors with all information
reasonably necessary for the Directors to consider any issues raised. This
includes, but is not limited to, an obligation by the Insurance Company to
inform the Directors whenever Contract owner voting instructions are to be
disregarded. The Directors will record in its minutes, or other appropriate
records, all reports received by it and all action with regard to a
conflict.
7.4 If it is determined by a majority of the Directors, or a majority of the
disinterested Directors of the Fund's Board, that a material irreconcilable
conflict exists, the Insurance Company and other Participating Insurance
Companies will, at their expense and to the extent reasonably practicable
(as determined by a majority of the disinterested Directors), take whatever
steps are necessary to remedy or eliminate the material irreconcilable
conflict, up to and including: (a) withdrawing the assets allocable to some
or all of the Separate Accounts from the Investment Company or any Fund and
reinvesting such assets in a different investment medium, including (but
not limited to) another Fund of the Investment Company, or submitting the
question whether such segregation should be submitted to a vote of all
affected Contract owners and, as appropriate, segregating the assets of any
appropriate group (i.e., variable annuity Contract owners or variable life
insurance Contract owners of one or more Participating Insurance Companies)
that votes in favor of such segregation, or offering to the affected
Contract owners the option of making such a change; and (b) establishing a
new registered management investment company or managed separate account.
7.5 If a material irreconcilable conflict arises because of a decision by the
Insurance Company to disregard Contract owner voting instructions, and such
disregard of voting instructions could conflict with the majority of
Contract owner voting instructions, and the Insurance Company's judgment
represents a minority position or would preclude a majority vote, the
Insurance Company may be required, at the Investment Company's election, to
withdraw the affected sub-account of the Separate Accounts investment in
the Investment Company and terminate this Agreement with respect to such
sub-account; provided, however, that such withdrawal and termination will
be limited to the extent required by the foregoing material irreconcilable
conflict as determined by a majority of the disinterested Directors of the
Fund's Board. No charge or penalty will be imposed as a result of such
withdrawal. Any such withdrawal and termination must take place within six
(6) months after the Investment Company gives written notice to the
Insurance Company that this provision is being implemented. Until the end
of such six-month period the Adviser and Investment Company will, to the
extent permitted by law and any exemptive relief previously granted to the
Investment Company, continue to accept and implement orders by the
Insurance Company for the purchase (and redemption) of shares of the
Investment Company.
7.6 If a material irreconcilable conflict arises because a particular state
insurance regulator's decision applicable to the Insurance Company
conflicts with the majority of other state insurance regulators, then the
Insurance Company will withdraw the affected sub-account of the Separate
Account's investment in the Investment Company and terminate this Agreement
with respect to such sub-account; provided, however, that such withdrawal
and termination will be limited to the extent required by the foregoing
material irreconcilable conflict as determined by a majority of the
disinterested Directors of the Fund's Board. No charge or penalty will be
imposed as a result of such withdrawal. Any such withdrawal and termination
must take place within six (6) months after the Investment Company gives
written notice to the Insurance Company that this provision is being
implemented. Until the end of such six-month period the Advisor and
Investment Company will, to the extent permitted by law and any exemptive
relief previously granted to the Investment Company, continue to accept and
implement orders by the Insurance Company for the purchase (and redemption)
of shares of the Investment Company.
7.7 For purposes of Sections 7.4 through 7.7 of this Agreement, a majority of
the disinterested members of the Directors will determine whether any
proposed action adequately remedies any material irreconcilable conflict,
but in no event, other than as specified in Section 7.4, will the
Investment Company be required to establish a new funding medium for the
Contracts. The Insurance Company will not be required by Section 7.4 to
establish a new funding medium for the Contracts if an offer to do so has
been declined by vote of a majority of Contract owners affected by the
material irreconcilable conflict.
7.8 The Insurance Company will at least annually submit to the Directors such
reports, materials or data as the Directors may reasonably request so that
the Directors may fully carry out the duties imposed upon it as delineated
in the Mixed and Shared Funding Order, and said reports, materials and data
will be submitted more frequently if deemed appropriate by the Directors.
7.9 If and to the extent that Rule 6e-2 and Rule 6e-3(T) are amended, or Rule
6e-3(T) is adopted, to provide 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 Order) on terms and conditions
materially different from those contained in the Mixed and Shared Funding
Order, then: (a) the Investment Company and/or the Participating Insurance
Companies, as appropriate, will take such steps as may be necessary to
comply with Rules 6e-2 and 6e-3(T), as amended, and Rule 6e-3, as adopted,
to the extent such rules are applicable; and (b) Sections 4.4, 4.5, 7.1,
7.2, 7.3, 7.4, and 7.5 of this Agreement will 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 INSURANCE COMPANY
(a) The Insurance Company agrees to indemnify and hold harmless the
Investment Company, the Adviser, the Distributor, and each of the
Investment Company's or the Adviser's or the Distributor's directors,
officers, employees or agents and each person, if any, who controls or
is associated with the Investment Company, the Adviser, the
Distributor within the meaning of such terms under the federal
securities laws (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 Insurance Company) or actions in respect thereof
(including reasonable legal and other expenses), to which the
Indemnified Parties may become subject under any statute, regulation,
at common law or otherwise, insofar as such losses, claims, damages,
liabilities or expenses (or litigations in respect thereof) or
settlements:
(1) arise out of or are based upon any untrue statements or alleged
untrue statements of any material fact contained in the
registration statement, prospectus or SAI for the Contracts or
contained in the Contracts or sales literature or other
promotional material for the Contracts (or any amendment or
supplement to any of the foregoing), or arise out of or are based
upon the omission or the alleged omission to state therein a
material fact required to be stated or necessary to make such
statements not misleading in light of the circumstances in which
they were made; provided that this agreement to indemnify will
not apply as to any Indemnified Party if such statement or
omission of such alleged statement or omission was made in
reliance upon and in conformity with information furnished to the
Insurance Company in writing by or on behalf of the Investment
Company, the Adviser, of the Distributor for use in the
registration statement, prospectus or SAI for the Contracts or in
the Contracts or sales literature (or any amendment or
supplement) or otherwise for use in connection with the sale of
the Contracts or Investment Company shares; or
(2) arise out of or as a result of statements or representations by
or on behalf of the Insurance Company (other than statements or
representations contained in the Investment Company registration
statement, prospectus, SAI or sales literature or other
promotional material of the Investment Company, or any amendment
or supplement to the foregoing, not supplied by the Insurance
Company or persons under its control) or wrongful conduct of the
Insurance Company or persons under its control, with respect to
the sale or distribution of the Contracts or Investment Company
shares; or
(3) arise out of untrue statement or alleged untrue statement of a
material fact contained in the Investment Company registration
statement, prospectus, SAI or sales literature or other
promotional material of the Investment Company (or amendment or
supplement) or the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to
make such statements not misleading in light of the circumstances
in which they were made, if such a statement or omission was made
in reliance upon and in conformity with information furnished to
the Investment Company by or on behalf of the Insurance Company
or persons under its control; or
(4) arise as a result of any failure by the Insurance Company to
provide the services and furnish the materials under the terms of
this Agreement; or
(5) arise out of any material breach of any representation and/or
warranty made by the Insurance Company in this Agreement or arise
out of or result from any other material breach by the Insurance
Company of this Agreement;
except to the extent provided in Sections 8.1(b) and 8.4 hereof. This
indemnification will be in addition to any liability that the
Insurance Company otherwise may have.
(b) No party will be entitled to indemnification under Section 8.1(a) if
such loss, claim, damage, liability or litigation is due to the
willful misfeasance, bad faith, gross negligence, or reckless
disregard in the performance of such party's duties and obligations
under this Agreement.
(c) The Indemnified Parties promptly will notify the Insurance Company of
the commencement of any litigation, proceedings, complaints or
litigation by regulatory authorities against them in connection with
the issuance or sale of the Investment Company shares or the Contracts
or the operation of the Investment Company.
8.2 IDEMNIFICATION BY THE ADVISER & DISTRIBUTOR
(a) The Adviser and Distributor agree to indemnify and hold harmless the
Insurance Company and each of its directors, officers, employees or
agents and each person, if any, who controls or is associated with the
Insurance Company within the meaning of such terms under the federal
securities (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 Adviser and Distributor) or litigation in respect
thereof (including reasonable legal and other expenses) to which the
Indemnified Parties may become subject under any statute, regulation,
at common law or otherwise, insofar as such losses, claims, damages,
liabilities or expenses (or litigation in respect thereof) or
settlements:
(1) 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 SAI for the Investment
Company or sales literature or other promotional material of the
Investment Company (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 or necessary to make such statements not misleading in
light of the circumstances in which they were made; provided that
this agreement to indemnify will not apply as to any Indemnified
Party if such statement or omission of such alleged statement or
omission was made in reliance upon and in conformity with
information furnished in writing to the Adviser or Investment
Company by or on behalf of the Insurance Company for use in the
registration statement, prospectus or SAI for the Investment
Company or in sales literature of the Investment Company (or any
amendment or supplement thereto) or otherwise for use in
connection with the sale of the Contracts or Investment Company
shares; or
(2) arise out of or as a result of statements or representations
(other than statements or representations contained in the
Contracts or in the Contract or Investment Company registration
statements, prospectuses or statements of additional information
or sales literature or other promotional material for the
Contracts or of the Investment Company, or any amendment or
supplement to the foregoing, not supplied by the Adviser or the
Investment Company or persons under the control of the Adviser or
the Investment Company respectively) or wrongful conduct of the
Adviser or the Investment Company or persons under the control of
the Adviser or the Investment Company respectively, with respect
to the sale or distribution of the Contracts or Investment
Company shares; or
(3) arise out of any untrue statement or alleged untrue statement of
a material fact contained in a registration statement,
prospectus, SAI or sales literature or other promotional material
covering the Contracts (or any amendment or supplement thereto),
or the omission or alleged omission to state therein a material
fact required to be stated or necessary to make such statement or
statements not misleading in light of the circumstances in which
they were made, if such statement or omission was made in
reliance upon and in conformity with information furnished to the
Insurance Company by or on behalf of the Adviser or the
Investment Company or persons under the control of the Adviser or
the Investment Company; or
(4) arise as a result of any failure by the Investment Company or the
Adviser to provide the services and furnish the materials under
the terms of this Agreement; or
(5) arise out of or result from any material breach of any
representation and/or warranty made by the Adviser or the
Investment Company in this Agreement, or arise out of or result
from any other material breach of this Agreement by the Adviser
or the Investment Company (including a failure, whether
intentional or in good faith or otherwise, to comply with the
requirements of Subchapter M of the Code specified in Article
III, Section 3.2 of this Agreement and the diversification
requirements specified in Article III, Section 3.3 of this
Agreement, as described more fully in Section 8.5 below);
except to the extent provided in Sections 8.2(b) and 8.4 hereof. This
indemnification will be in addition to any liability that the Adviser
or Distributor otherwise may have.
(b) No party will be entitled to indemnification under Section 8.2(a) if
such loss, claim, damage, liability or litigation is due to the
willful misfeasance, bad faith, gross negligence, or reckless
disregard in the performance of such party's duties and obligations
under this Agreement.
(c) The Indemnified Parties will promptly notify the Adviser and the
Investment Company of the commencement of any litigation, proceedings,
complaints or litigation by regulatory authorities against them in
connection with the issuance or sale of the Contracts or the operation
of the Separate Account.
8.3 INDEMNIFICATION BY THE INVESTMENT COMPANY
(a) The Investment Company agrees to indemnify and hold harmless the
Insurance Company and each of its directors, officers, employees or
agents and each person, if any, who controls or is associated with the
Insurance Company within the meaning of such terms under the federal
securities (collectively, the "Indemnified Parties" for purposes of
this Section 8.3) against any and all losses, claims, damages,
liabilities (including amounts paid in settlement with the written
consent of the Investment Company) or litigation in respect thereof
(including reasonable legal and other expenses) to which the
Indemnified Parties may become subject under any statute, regulation,
at common law or otherwise, insofar as such losses, claims, damages,
liabilities or expenses (or litigation in respect thereof) or
settlements, are related to the operations of the Investment Company
and:
(1) arise as a result of any failure by the Investment Company to
provide the services and furnish the materials under the terms of
this Agreement; or
(2) arise out of or result from any material breach of any
representation and/or warranty made by the Investment Company in
this Agreement or arise out of or result from any other material
breach of this Agreement by the Investment Company (including a
failure, whether intentional or in good faith or otherwise, to
comply with the requirements of Subchapter M of the Code
specified in Article III, Section 3.2 of this Agreement and the
diversification requirements specified in Article III, Section
3.3 of this Agreement as described more fully in Section 8.5
below); or
(3) arise out of or result from the incorrect or untimely calculation
or reporting of daily net asset value per share or dividend or
capital gain distribution rate;
except to the extent provided in Sections 8.3(b) and 8.4 hereof. This
indemnification will be in addition to any liability that the
Investment Company otherwise may have.
(b) No party will be entitled to indemnification under Section 8.3(a) if
such loss, claim, damage, liability or litigation is due to the
willful misfeasance, bad faith, gross negligence, or reckless
disregard in the performance of such party's duties and obligations
under this Agreement.
(c) The Indemnified Parties will promptly notify the Investment Company of
the commencement of any litigation, proceedings, complaints or actions
by regulatory authorities against them in connection with the issuance
or sale of the Contracts or the operation of the Separate Account.
8.4 INDEMNIFICATION PROCEDURE
Any person obligated to provide indemnification under this Article VIII
("Indemnifying Party" for the purpose of this Section 8.4) will not be
liable under the indemnification provisions of this Article VIII with
respect to any claim made against a party entitled to indemnification under
this Article VIII ("Indemnified Party" for the purpose of this Section 8.4)
unless such Indemnified Party will have notified the Indemnifying Party in
writing within a reasonable time after the summons or other first legal
process giving information of the nature of the claim will have been served
upon such Indemnified Party (or after such party will have received notice
of such service on any designated agent), but failure to notify the
Indemnifying Party of any such claim will not relieve the Indemnifying
Party from any liability which it may have to the Indemnified Party against
whom such action is brought otherwise than on account of the
indemnification provision of this Article VIII, except to the extent that
the failure to notify results in the failure of actual notice to the
Indemnifying Party and such Indemnifying Party is damaged solely as a
result of failure to give such notice. In case any such action is brought
against the Indemnified Party, the Indemnifying Party will be entitled to
participate, at its own expense, in the defense thereof. The Indemnifying
Party also will be entitled to assume the defense thereof, with counsel
satisfactory to the party named in the action. After notice from the
Indemnifying Party to the Indemnified Party of the Indemnifying Party's
election to assume the defense thereof, the Indemnified Party will bear the
fees and expenses of any additional counsel retained by it, and the
Indemnifying Party will not be liable to such party under this Agreement
for any legal or other expenses subsequently incurred by such party
independently in connection with the defense thereof other than reasonable
costs of investigation, unless: (a) the Indemnifying Party and the
Indemnified Party will have mutually agreed to the retention of such
counsel; or (b) the named parties to any such proceeding (including any
impleaded parties) include both the Indemnifying Party and the Indemnified
Party and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them.
The Indemnifying Party will not be liable for any settlement of any
proceeding effected without its written consent but if settled with such
consent or if there is a final judgment for the plaintiff, the Indemnifying
Party agrees to indemnify the Indemnified Party from and against any loss
or liability by reason of such settlement or judgment. A successor by law
of the parties to this Agreement will be entitled to the benefits of the
indemnification contained in this Article VIII. The indemnification
provisions contained in this Article VIII will survive any termination of
this Agreement.
8.5 INDEMNIFICATION FOR FAILURE TO COMPLY WITH DIVERSIFICATION REQUIREMENTS
The Investment Company and the Adviser acknowledge that any failure
(whether intentional or in good faith or otherwise) to comply with the
diversification requirements specified in Article III, Section 3.3 of this
Agreement may result in the Contracts not being treated as variable
contracts for federal income tax purposes, which would have adverse tax
consequences for Contract owners and could also adversely affect the
Insurance Company's corporate tax liability. Accordingly, without in any
way limiting the effect of Sections 8.2(a) and 8.3(a) hereof and without in
any way limiting or restricting any other remedies available to the
Insurance Company, the Investment Company, the Adviser and the distributor
will pay on a joint and several basis all costs associated with or arising
out of any failure, or any anticipated or reasonably foreseeable failure,
of the Investment Company or any Fund to comply with Section 3.3 of this
Agreement, including all costs associated with correcting or responding to
any such failure; such costs may include, but are not limited to, the costs
involved in creating, organizing, and registering a new investment company
as a funding medium for the Contracts and/or the costs of obtaining
whatever regulatory authorizations are required to substitute shares of
another investment company for those of the failed Investment Company or
Fund (including but not limited to an order pursuant to Section 26(b) of
the 1940 Act); fees and expenses of legal counsel and other advisors to the
Insurance Company and any federal income taxes or tax penalties (or "toll
charges" or exactments or amounts paid in settlement) incurred by the
Insurance Company in connection with any such failure or anticipated or
reasonably foreseeable failure. Such indemnification and reimbursement
obligation shall be in addition to any other indemnification and
reimbursement obligations of the Investment Company, the Adviser and/or the
Distributor under this Agreement.
ARTICLE IX - APPLICABLE LAW
9.1 This Agreement will be construed and the provisions hereof interpreted
under and in accordance with the laws of the State of Delaware
9.2 This Agreement will be subject to the provisions of the 1933 Act, the 1934
Act and the 1940 Act, and the rules and regulations and rulings thereunder,
including such exemptions from those statutes, rules and regulations as the
Commission may grant (including, but not limited to, the Mixed and Shared
Funding Order) and the terms hereof will be interpreted and construed in
accordance therewith.
ARTICLE X - TERMINATION
10.1 This Agreement will terminate automatically in the event of its assignment,
unless made with the written consent of each party, or:
(a) at the option of any party, with or without cause, with respect to
one, some or all of the Funds, upon six (6) month's advance written
notice to the other parties or, if later, upon receipt of any required
exemptive relief or orders from the SEC, unless otherwise agreed in a
separate written agreement among the parties; or
(b) at the option of the Insurance Company, upon written notice to the
other parties, with respect to any Fund if shares of the Fund are not
reasonably available to meet the requirements of the Contracts as
determined in good faith by the Insurance Company; or
(c) at the option of the Insurance Company, upon written notice to the
other parties, with respect to any Fund in the event any of the Fund's
shares are not registered, issued or sold in accordance with
applicable state and/or federal law or such law precludes the use of
such shares as the underlying investment media of the Contracts issued
or to be issued by Insurance Company; or
(d) at the option of the Investment Company upon institution of formal
proceedings against the Insurance Company by the NASD, the Commission,
the insurance commission of any state or any other regulatory body
regarding the Insurance Company's duties under this Agreement or
related to the sale of the Contracts, the administration of the
Contracts, the operation of the Separate Account, or the purchase of
the Investment Company shares, provided that the Investment Company
determines in its sole judgment that any such proceeding would have a
October 7, 1999 material adverse effect on the Insurance Company's
ability to perform its obligations under this Agreement; or
(e) at the option of the Insurance Company upon institution of formal
proceedings against Investment Company, the Adviser or the Distributor
by the NASD, the Commission or any state securities or insurance
commission or any other regulatory body, provided that the Insurance
Company determines in its sole judgment that any such proceeding would
have a material adverse effect on the Investment Company's, the
Adviser's or the Distributor's ability to perform its obligations
under this Agreement; or
(f) at the option of the Insurance Company, if the Investment Company
ceases to qualify as a Regulated Investment Company under Subchapter M
of the Code, or under any successor or similar provision, or if the
Insurance Company reasonably believes that the Investment Company may
fail to so qualify; or
(g) at the option of the Insurance Company, with respect to any Fund, if
the Investment Company fails to meet the diversification requirements
specified in Section 3.3 hereof or if the Insurance Company reasonably
believes the Investment Company may fail to meet such requirements; or
(h) at the option of any party to this Agreement, upon another party's
material breach of any provision of this Agreement; or
(i) at the option of the Insurance Company, if the Insurance Company
determines in its sole judgment exercised in good faith that either
the Investment Company, the Adviser or the Distributor has suffered a
material adverse change in its business, operations or financial
condition since the date of this Agreement or is the subject of
material adverse publicity which is likely to have a material adverse
impact upon the business and operations of the Insurance Company or
the Contracts (including the sale thereof); or
(j) at the option of the Investment Company, the Adviser or the
Distributor, if the Investment Company, the Adviser or the Distributor
respectively, determines in its sole judgment exercised in good faith
that the Insurance Company has suffered a material adverse change in
its business, operations or financial condition since the date of this
Agreement or is the subject of material adverse publicity which is
likely to have a material adverse impact upon the business and
operations of the Investment Company, the Adviser or the Distributor;
or
(k) at the option of the Insurance Company or the Investment Company upon
receipt of any necessary regulatory approvals and/or the vote of the
Contract owners having an interest in the Separate Account (or any
sub-account) to substitute the shares of another investment company
for the corresponding Fund's shares of the Investment Company in
accordance with the terms of the Contracts for which those Fund shares
had been selected to serve as the underlying portfolio. The Insurance
Company will give sixty (60) days' prior written notice to the
Investment Company of the date of any proposed vote or other action
taken to replace the Investment Company's shares or of the filing of
any required regulatory approval(s); or
(1) at the option of the Insurance Company or the Investment Company upon
a determination by a majority of the Investment Company Board, or a
majority of the disinterested Directors, material irreconcilable
conflict exists among the interests of: (1) all Contract owners of
variable insurance products of all separate accounts; or (2) the
interests of the Participating Insurance Companies investing in the
Investment Company as set forth in Article VII of this Agreement; or
(m) subject to the Investment Company's compliance with Article III, at
the option of the Investment Company in the event any of the Contracts
are not issued or sold in accordance with applicable federal and/or
state law. Termination will be effective immediately upon occurrence
without notice.
10.2 NOTICE REQUIREMENT
(a) In the event that any termination of this Agreement is based upon the
provisions of Article VII, such prior written notice will be given in
advance of the effective date of termination as required by such
provisions.
(b) In the event that a party to this Agreement terminates the Agreement
based upon the provisions of Sections 10.1(b)-(h), prompt written
notice of the election to terminate this Agreement for cause shall be
furnished by the party terminating the Agreement to the
non-terminating party. The Agreement shall be terminated effective
upon receipt of such notice by the nonterminating party(ies).
(c) In the event that a party to this Agreement terminates the Agreement
based upon the provisions of Sections 10.1(i) or (j), prior written
notice of the election to terminate this Agreement for cause shall be
furnished by the party terminating the Agreement to the
non-terminating party(ies). Such prior written notice shall be given
by the party terminating this Agreement to the non-terminating
party(ies) at least sixty (60) days before the effective date of
termination.
10.3 EFFECT OF TERMINATION
Notwithstanding any termination of this Agreement, the Investment Company,
the Adviser and the Distributor will, at the option of the Insurance
Company, continue to make available additional shares of the Investment
Company pursuant to the terms and conditions of this Agreement, for all
Contracts in effect on the effective date of termination of this Agreement
(hereinafter referred to as "Existing Contracts"). Specifically, without
limitation, the owners of the Existing Contracts will be permitted to
reallocate investments in the Designated Funds (as in effect on such date),
redeem investments in the Designated Funds and/or invest in the Designated
Funds upon the making of additional purchase payments under the Existing
Contracts. The parties agree that this Section 10.3 will not apply to any
terminations under Article VII and the effect of such Article VII
terminations will be governed by Article VII of this Agreement. 10.4
Surviving Provisions Notwithstanding any termination of this Agreement,
each party's obligations under Article VIII to indemnify other parties will
survive and not be affected by any termination of this Agreement. In
addition, with respect to Existing Contracts, all provisions of this
Agreement also will survive and not be affected by any termination of this
Agreement.
ARTICLE XI - NOTICES
Any notice will be deemed duly given when sent by certified mail, return receipt
requested, to the other party at the address of such party set forth below or at
such other address as such party may from time to time specify in writing to the
other parties. All notices will be deemed given three (3) business days after
the date received or rejected by the addressee:
If to the Insurance Company:
---------------------------
American Skandia Life Assurance Corporation
I Xxxxxxxxx Xxxxx
X.X. Xxx 000
Xxxxxxx, Xxxxxxxxxxx 00000-0000
Attn: Xx. Xxxxxx X. Xxxxxxx
If to the Fund:
--------------
INVESCO Variable Investment Funds, Inc.
0000 X. Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000-0000
Attn: Xx. Xxxxxx X. Xxxxxx
If to the Adviser:
-----------------
INVESCO Funds Group, Inc.
0000 X. Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000-0000
Attn: Xx. Xxxxxx X. Xxxxxx
If to the Distributor:
---------------------
INVESCO Distributors, Inc.
0000 X. Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000-0000
Attn: Xx. Xxxxxx X. Xxxxxx]
ARTICLE XII - MISCELLANEOUS
12.1 All persons dealing with the Investment Company must look solely to the
property of the Investment Company for the enforcement of any claims
against the Investment Company as neither the Directors, officers, agents
or shareholders assume any personal liability for obligations entered into
on behalf of the Investment Company.
12.2 The Investment Company, the Adviser and the Distributor acknowledge that
the identities of the customers of the Insurance Company or any of its
affiliates (collectively the "Protected Parties" for purposes of this
Section 12.2), information maintained regarding those customers, and all
computer programs and procedures developed by the Protected Parties or any
of their employees or agents in connection with the Insurance Company's
performance of its duties under this Agreement are the valuable property of
the Protected Parties. The Investment Company, the Adviser and the
Distributor agree that if they come into possession of any list or
compilation of the identities of or other information about the Protected
Parties' customers, or any other property of the Protected Parties, other
than such information as may be independently developed or compiled by the
Investment Company, the Adviser and the Distributor from information
supplied to them by the Protected Parties' customers who also maintain
accounts directly with the Investment Company, the Adviser and the
Distributor, the Investment Company, the Adviser and the Distributor will
hold such information or property in confidence and refrain from using,
disclosing or distributing any of such information or other property
except: (a) with the Insurance Company's prior written consent; or (b) as
required by law or judicial process. The Investment Company and the Adviser
acknowledge that any breach of the agreements in this Section 12.2 would
result in immediate and irreparable harm to the Protected Parties for which
there would be no adequate remedy at law and agree that in the event of
such a breach, the Protected Parties will be entitled to equitable relief
by way of temporary and permanent injunctions, as well as such other relief
as any court of competent jurisdiction deems appropriate.
12.3 The captions in this Agreement are included for convenience of reference
only and in no way define or delineate any of the provisions hereof or
otherwise affect their construction or effect.
12.4 This Agreement may be executed simultaneously in two or more counterparts,
each of which taken together will constitute one and the same instrument.
12.5 If any provision of this Agreement will be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of the Agreement will
not be affected thereby.
12.6 This Agreement will not be assigned by any party hereto without the prior
written consent of all the parties.
12.7 The rights, remedies and obligations contained in this Agreement are
cumulative and are in addition to any and all rights, remedies and
obligations, at law or in equity, which the parties hereto are entitled to
under state and federal law.
12.8 The parties to this Agreement acknowledge and agree that this Agreement
shall not be exclusive in any respect.
12.9 Each party to this Agreement will cooperate with each other party and all
appropriate governmental authorities (including without limitation the
Commission, the NASD and state insurance regulators) and will permit each
other and such authorities reasonable access to its books and records in
connection with any investigation or inquiry relating to this Agreement or
the transactions contemplated hereby.
12.10Each party represents that the execution and delivery of this Agreement and
the consummation of the transactions contemplated herein have been duly
authorized by all necessary corporate action, as applicable, by such party
and when so executed and delivered this Agreement will be the valid and
binding obligation of such party enforceable in accordance with its terms.
12.11The parties to this Agreement may amend the schedules to this Agreement
from time to time to reflect changes in or relating to the Contracts, the
Separate Accounts or the Funds of the Investment Company or other
applicable terms of this Agreement.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed in its name and behalf by its duly authorized representative and its
seal to be hereunder affixed hereto as of the date specified below.
AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
By: /s/Xxxxxx X. Xxxxxxx
---------------------
Xxxxxx X. Xxxxxxx
Deputy Chief Executive Officer and President
INVESCO VARIABLE INVESTMENT FUNDS, INC.
By: /s/Xxxxxx X. Xxxxxx
-------------------
Xxxxxx X. Xxxxxx
Treasurer
INVESCO FUNDS GROUP INC.
By: /s/Xxxx X. Xxxxx
----------------
Xxxx X. Xxxxx
Senior Vice President
INVESCO DISTRIBUTORS, INC.
By: /s/Xxxxxx X. Xxxxxx
-------------------
Xxxxxx X. Xxxxxx
Senior Vice President
PARTICIPATION AGREEMENT
SCHEDULE A
The following Separate Accounts and Associated Contracts of American Skandia
Life Assurance Corporation are permitted in accordance with the provisions of
this Agreement to invest in Funds of the Investment
Company shown in Schedule B:
NAME OF SEPARATE ACCOUNT:
American Skandia Life Assurance Corporation Variable
Account B (Class I Sub-accounts)
CONTRACT(S):
American Skandia Advisor Plan (ASAP(SM))
American Skandia Advisor Plan II(SM)(ASAP II)
American Skandia XTra Creditsm(SM) (ASXT)
American Skandia LifeVest(R)(ASL(R))
American Skandia Protector(SM)(AS Pros(SM))
Xxxxx Fargo Stagecoach Variable Annuity Plus
Xxxxx Fargo Stagecoach Extra Credit
Xxxxx Fargo Stagecoach Variable Annuity Flex
NAME OF SEPARATE ACCOUNT:
American Skandia Life Assurance Corporation Variable
Account B (Class 2 Sub-accounts)
CONTRACT(S):
American Skandia Advisors Choice(R)(2000) (Choice(2000))
NAME OF SEPARATE ACCOUNT:
American Skandia Life Assurance Corporation Variable
Account B (Class 3 Sub-accounts)
CONTRACT(S):
American Skandia Impact (AS Impact(SM))
NAME OF SEPARATE ACCOUNT:
American Skandia Life Assurance Corporation Separate Account Q
CONTRACT(S):
American Skandia AS(k) Group Variable Annuity
NAME OF SEPARATE ACCOUNT:
American Skandia Life Assurance Corporation Separate Account F
CONTRACT(S):
American Skandia Trophy (AS Trophy) Modified Single Premium Variable Life
Insurance
American Skandia Life Champion (AS Life Champion) Flexible Premium Variable Life
Insurance
PARTICIPATION AGREEMENT
SCHEDULE B
The Separate Account(s) shown on Schedule A may invest in the following Funds of
the Investment Company.
INVESCO VIF - Health Sciences Fund
INVESCO VIF - Technology Fund
INVESCO VIF - Financial Services Fund
INVESCO VIF - Telecommunications Fund
INVESCO VIF - Dynamics Fund
PARTICIPATION AGREEMENT
SCHEDULE C
PROXY VOTING PROCEDURES
The following is a list of procedures and corresponding responsibilities for the
handling of proxies and voting instructions relating to the Investment Company.
The defined terms herein shall have the meanings assigned in the Participation
Agreement except that the term "Insurance Company" shall also include the
department or third party assigned by the Insurance Company to perform the steps
delineated below.
1. The proxy proposals are given to the Insurance Company by the Investment
Company as early as possible before the date set by the Investment Company
for the shareholder meeting to enable the Insurance Company to consider and
prepare for the solicitation of voting instructions from owners of the
Contracts and to facilitate the establishment of tabulation procedures. At
this time the Investment Company will inform the Insurance Company of the
Record, Mailing and Meeting dates. This will be done verbally approximately
two months before meeting.
2. Promptly after the Record Date, the Insurance Company will perform a "tape
run", or other activity, which will generate the names, addresses and
number of units which are attributed to each contract owner/policyholder
(the "Customer") as of the Record Date. Allowance should be made for
account adjustments made after this date that could affect the status of
the Customers' accounts as of the Record Date.
Note: The number of proxy statements is determined by the activities
described in this Step #2. The Insurance Company will use its best efforts
to call 'in the number of Customers to the Investment Company, as soon as
possible, but no later than two weeks after the Record Date.
3. The Investment Company's Annual Report must be sent to each Customer by the
Insurance Company either before or together with the Customers' receipt of
voting, instructional solicitation material. The Investment Company will
provide the last Annual Report to the Insurance Company pursuant to the
terms of Section 6.2 of the Agreement to which this Schedule relates.
4. The text and format for the Voting Instruction Cards ("Cards" or "Card") is
provided to the Insurance Company by the Investment Company. The Insurance
Company, at its expense, shall produce and personalize the Voting
Instruction Cards. The Investment Company or its affiliate must approve the
Card before it is printed. Allow approximately 2-4 business days for
printing information on the Cards. Information commonly found on the Cards
includes:
* name (legal name as found on account registration)
* address
* Investment Company or account number
* coding to state number of units
* individual Card number for use in tracking and verification of votes
(already on Cards as printed by the Investment Company).
(This and related steps may occur later in the chronological process due to
possible uncertainties relating to the proposals.)
5. During this time, the Investment Company will develop, produce and pay for
the Notice of Proxy and the Proxy Statement (one document). Printed and
folded notices and statements will be sent to Insurance Company for
insertion into envelopes (envelopes and return envelopes are provided and
paid for by the Insurance Company). Contents of envelope sent to Customers
by the Insurance Company Will include:
* Voting Instruction Card(s)
* one proxy notice and statement (One document)
* return envelope (postage pre-paid by Insurance Company) addressed to
the Insurance Company or its tabulation agent
* "urge buckslip" - optional, but recommended. (This is a small, single
sheet of paper that requests Customers to vote as quickly as possible
and that their vote is important. One copy will be supplied by the
Investment Company.)
* cover letter - optional, supplied by Insurance Company and reviewed
and approved in advance by the Investment Company
6. The above contents should be received by the Insurance Company
approximately 3-5 business days before mail date. Individual in charge at
Insurance Company reviews and approves the contents of the mailing package
to ensure correctness and completeness. Copy of this approval sent to the
Investment Company.
7. Package mailed by the Insurance Company.
* The Investment Company must allow at least a 15-day solicitation time to
the Insurance Company as the shareowner. (A 5-week period is recommended.)
Solicitation time is calculated as calendar days from (but NOT including,)
the meeting, counting backwards.
8. Collection and tabulation of Cards begins. Tabulation usually takes place
in another department or another vendor depending on process used. An often
used procedure is to sort Cards on arrival by proposal into vote categories
of all yes, no, or mixed replies, and to begin data entry.
NOTE: Postmarks are not generally needed. A need for postmark information
would be due to an insurance company's internal procedure and has not been
required by the Investment Company in the past.
9. Signatures on Card checked against legal name on account registration which
was printed on the Card.
NOTE: For Example, if the account registration is under "Xxxx X. Xxxxx,
Trustee," then that is the exact legal name to be printed on the Card and
is the signature needed on the Card.
10. If Cards are mutilated, or for any reason are illegible or are not signed
properly, they are sent back to Customer with an explanatory letter and a
new Card and return envelope. The mutilated or illegible Card is
disregarded and considered to be NOT RECEIVED for purposes of vote
tabulation. Any Cards that have been "kicked out" (e.g. mutilated,
illegible) of the procedure are "hand verified," i.e., examined as to why
they did not complete the system. Any questions on those Cards are usually
remedied individually.
11. There are various control procedures used to ensure proper tabulation of
votes and accuracy of that tabulation. The most prevalent is to sort the
Cards as they first arrive into categories depending upon their vote; an
estimate of how the vote is progressing may then be calculated. If the
initial estimates and the actual vote do not coincide, then an internal
audit of that vote should occur. This may entail a recount.
12. The actual tabulation of votes is done in units which is then converted to
shares. (It is very important that the Investment Company receives the
tabulations stated in terms of a percentage and the number of SHARES.) The
Investment Company must review and approve tabulation format.
13. Final tabulation in shares is verbally given by the Insurance Company to
the Investment Company on the morning of the meeting not later than 10:00
a.m. Eastern time. The Investment Company may request an earlier deadline
if reasonable and if required to calculate the vote in time for the
meeting.
14. A Certification of Mailing and Authorization to Vote Shares will be
required from the Insurance Company as well as an original copy of the
final vote. The Investment Company will provide a standard form for each
Certification.
15. The Insurance Company will be required to box and archive the Cards
received from the Customers. In the event that any vote is challenged or if
otherwise necessary for legal, regulatory, or accounting purposes, the
Investment Company will be permitted reasonable access to such Cards.
16. All approvals and "signing-off' may be done orally, but must always be
followed up in writing.
