PARTICIPATION AGREEMENT
Among
AYCO SERIES TRUST
XXXXXX ALLIED COMPANY, L.P.
and
XXXX XXXXXXX LIFE INSURANCE COMPANY
THIS AGREEMENT, made and entered into as of this 26th day of October, 2001
by and among XXXX XXXXXXX LIFE INSURANCE COMPANY, (hereinafter the "Company"),
organized under the laws of the Commonwealth of Massachusetts, on its own behalf
and on behalf of each segregated asset account of the Company set forth on
Schedule A hereto as such schedule may be amended from time to time (each such
account hereinafter referred to as the "Account"), AYCO SERIES TRUST, a Delaware
business trust (hereinafter the "Fund") and XXXXXX ALLIED COMPANY, L.P.
(hereinafter the "Underwriter"), a Delaware limited partnership.
WHEREAS, the Fund engages in business as an open-end management investment
company and is available to act as the investment vehicle for separate accounts
established for variable life insurance policies and variable annuity contracts
to be offered by insurance companies which have entered into participation
agreements with the Fund and the Underwriter (hereinafter "Participating
Insurance Companies"); and
WHEREAS, the Fund has obtained an order from the Securities and Exchange
Commission (hereinafter "SEC"), dated December 18, 2000 (File No. 812-12260),
granting Participating Insurance Companies and variable annuity and variable
life insurance separate accounts exemptions from the provisions of sections
9(a), 13(a), 15(a), and 15(b) of the Investment Company Act of 1940, as amended,
(hereinafter the "1940 Act") and Rules 6e-2(b)(15) and 6e-3(T)(b)(15)
thereunder, to the extent necessary to permit shares of the Fund to be sold to
and held by variable annuity and variable life insurance separate accounts of
both affiliated and unaffiliated life insurance companies (hereinafter the
"Shared Funding Exemptive Order"); and
WHEREAS, the Fund is registered as an open-end management investment
company under the 1940 Act and its shares are registered under the Securities
Act of 1933, as amended (hereinafter the "1933 Act"); and
WHEREAS, the Fund intends to offer shares of the series set forth on
Schedule C (each hereinafter a "Portfolio"), as may be amended from time to time
by mutual agreement of the parties hereto, under this Agreement to the Accounts
of the Company; and
WHEREAS, The Ayco Company, L.P. (the "Adviser") is duly registered as an
investment adviser under the Investment Advisers Act of 1940 and any applicable
state securities law; and
WHEREAS, the Company has registered or will register certain variable life
insurance policies and/or variable annuity contracts under the 1933 Act; and
WHEREAS, each Account is a duly organized, validly existing segregated
asset account, established by resolution of the Board of Directors of the
Company, on the date shown for such Account on Schedule A hereto, to set aside
and invest assets attributable to one or more variable life insurance policies
and/or variable annuity contracts; and
WHEREAS, the Underwriter is registered as a broker-dealer with 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. (hereinafter "NASD"); and
WHEREAS, the Company has registered or will register each Account as a unit
investment trust under the 1940 Act; and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares in the Fund at net asset
value on behalf of each Account to fund certain of the aforesaid variable life
insurance policies and/or variable annuity contracts.
NOW THEREFORE, in consideration of their mutual promises, the Company, the
Fund and the Underwriter agree as follows:
ARTICLE I. Sale of Fund Shares
1.1. The Fund agrees to make available to the Company those shares of each
Portfolio which each Account orders, executing such orders on a daily basis at
the net asset value next computed after receipt by the Fund or its designee of
the order for the shares of that Portfolio. For purposes of this Section 1.1,
the Company shall be the designee of the Fund for receipt of such orders from
each Account and receipt by such designee shall constitute receipt by the Fund;
provided that the Fund receives notice of such order by 9:30 a.m. Eastern time
on the next following Business Day. "Business Day" shall mean any day on which
the New York Stock Exchange is open for trading and on which the Fund calculates
its net asset value pursuant to the rules of the SEC.
1.2 The Fund agrees to make shares of each Portfolio available indefinitely
for purchase at the applicable net asset value per share by the Company and its
Accounts on those days on which that Portfolio calculates its net asset value
pursuant to rules of the SEC and the Fund shall use reasonable efforts to
calculate such net asset value on each day which the New York Stock Exchange is
open for trading. Notwithstanding the foregoing, the Board of Trustees of the
Fund (hereinafter the "Board") may refuse to sell shares of any Portfolio to any
person, or suspend or terminate the offering of its shares if such action is
required by law or by regulatory authorities having jurisdiction. Notice of
election to suspend or terminate shall be furnished in writing, by the Fund,
said termination to be effective 10 Business Days after receipt of such notice
by the Company in order to give the Company sufficient time to take appropriate
steps in response to such suspension or termination.
1.3 The Fund and the Underwriter agree that shares of the Portfolios will
only be made available to Participating Insurance Companies, their separate
accounts and certain qualified retirement plans. No shares of any Portfolio sold
to any insurance company separate account will also be sold to the general
public.
1.4 The Fund and the Underwriter will not make available shares of any
Portfolio to any insurance company or separate account unless an agreement
containing provisions substantially the same as Articles I, III, V, VII and
Section 2.5 of Article II of this Agreement is in effect to govern such sales.
1.5 The Fund agrees to redeem for cash, on the Company's request, any full
or fractional shares of any Portfolio held by the Company, executing such
requests on a daily basis at the net asset value next computed after receipt by
the Fund or its designee of the request for redemption. For purposes of this
Section 1.5, the Company shall be the designee of the Fund for receipt of
requests for redemption from each Account and receipt by such designee shall
constitute receipt by the Fund; provided that the Fund receives notice of such
request for redemption on the next following Business Day no later than 9:30
a.m. Eastern time. Proceeds shall be wired to Company as federal funds no later
than 2:00 p.m. on the same Business Day as the Fund receive notice of such
request for redemption or such longer period permitted by the Investment Company
Act of 1940, as amended (the "1940 Act") or the rules, orders or regulations
thereunder, to such accounts as shall be designated by Company, and the Fund
shall notify the person designated in writing by Company as the recipient for
such notice of such delay by 4:00 p.m. Eastern time the same Business Day that
Company transmits the redemption order to the Fund.
1.6 The Company agrees to purchase and redeem the shares of the Portfolios
in accordance with the provisions of this Agreement. The Company agrees that all
net amounts available under the variable life insurance policies and/or variable
annuity contracts with the form number(s) which are listed on Schedule B
attached hereto and incorporated herein by this reference, as such Schedule B
may be amended from time to time hereafter by mutual written agreement of all
the parties hereto (the "Contracts"), shall be invested in the Fund, in such
other Funds advised by the Adviser as may be mutually agreed to in writing by
the parties hereto, in the Company's general account, or in an investment
company other than the Fund.
1.7 The Company shall pay for shares of each Portfolio on the next Business
Day after an order to purchase shares of that Portfolio is made in accordance
with the provisions of Section 1.1 hereof. Payment shall be in federal funds
transmitted by wire. For purposes of Section 2.9 and 2.10, upon receipt by the
Fund of the federal funds so wired, such funds shall cease to be the
responsibility of the Company and shall become the responsibility of the Fund.
1.8 Issuance and transfer of the Fund's shares will be by book entry only.
Stock certificates will not be issued to the Company or any Account. Shares
ordered from the Fund will be recorded in an appropriate title for each Account
or the appropriate subaccount of each Account.
1.9 The Fund shall furnish prompt notice as specified in Article XI hereto,
as may be amended from time to time, on or before the ex-dividend or
ex-distribution date , as applicable, followed by written confirmation to the
Company, of the declaration and amount per share of any income, dividends or
capital gain distributions payable on any Portfolio's shares. Notwithstanding
this Section 1.9, the Fund shall utilize its best efforts to provide the Company
with at least ten (10) Business Days advance notice of any forthcoming dividend
or capital gain distributions with respect to any Portfolio. The Company hereby
elects to receive all such income dividends and capital gain distributions as
are payable on the Portfolio shares in additional shares of that Portfolio. The
Company reserves the right to revoke this election and to receive all such
income dividends and capital gain distributions in cash. The Fund shall notify
the Company of the number of shares so issued as payment of such dividends and
distributions.
1.10 The Fund shall make the net asset value per share for each Portfolio
available to the Company on a daily basis as soon as reasonably practicable
after the Fund calculates the net asset value per share of each Portfolio and
each of the Fund and the Underwriter shall use its best efforts to make such net
asset value per share available by 7:00 p.m. Eastern time. In the event that the
Fund or the Underwriter is unable to meet the 7:00 p.m. time stated herein with
respect to any Portfolio, the Company shall be provided additional time to place
orders for the purchase and redemption of shares of that Portfolio equal to the
additional time it takes the Fund or the Underwriter to make the net asset value
available to Company. However, if net asset values for any Portfolio are not
available for inclusion in the next business cycle and purchase
order/redemptions are not able to be calculated and available for Company to
execute within the time frames identified in Sections 1.1 and 1.5 hereof,
Company and its Accounts shall be entitled to an adjustment to the number of
shares purchased or redeemed to reflect the correct share net asset value of
that Portfolio.
1.11 If the Fund provides the Company with materially incorrect net asset
value information with respect to any Portfolio through no fault of the Company,
the Company shall be entitled to an adjustment with respect to that Portfolio's
shares purchased or redeemed to reflect the correct net asset value per share.
The determination of materiality of any net asset value pricing error shall be
based on the SEC's recommended guidelines regarding such errors, a copy of which
is attached as Schedule E. Any material error in the calculation or reporting of
net asset value per share, dividend or capital gain information shall be
reported promptly upon discovery by the Fund to the Company.
1.12 The Fund shall provide written confirmation to the Company of the
amount of shares traded and the associated net asset value total trade amount
and the outstanding share balances held in the Account(s) as of the end of each
Business Day. Such information shall be furnished by 1:00 p.m. Eastern time on
the next Business Day.
1.13 The parties hereto acknowledge that the arrangement contemplated by
this Agreement is not exclusive; Portfolio shares may be sold to other insurance
companies (subject to Section 1.4 hereof) and the cash value of the Contracts
may be invested in other investment companies, provided, however, that until
this Agreement is terminated pursuant to Article X, the Company shall promote
the Fund on the same basis as other investment companies or series thereof
("funding options") available under the Contracts.
ARTICLE II. Representations and Warranties
2.1 The Company represents and warrants that the Contracts are or will be
registered under the 1933 Act or are exempt from registration thereunder; that
the Contracts will be issued and sold in compliance in all material respects
with all applicable federal and state laws and that the sale of the Contracts
shall comply in all material respects with state insurance suitability
requirements. The Company further represents and warrants that it is an
insurance company duly organized and in good standing under applicable law and
that it has legally and validly established each Account prior to any issuance
or sale of Contracts funded thereof as a segregated asset account under the
Insurance Code of the Commonwealth of Massachusetts and has registered or, prior
to any issuance or sale of the Contracts, will register each Account as a unit
investment trust in accordance with and to the extent required by the provisions
of the 1940 Act to serve as a segregated investment account for the Contracts.
2.2 The Fund represents and warrants that Fund shares sold pursuant to this
Agreement shall be registered under the 1933 Act, duly authorized for issuance
and sold in compliance with the laws of the State of Delaware, and all
applicable federal and state securities laws and that the Fund is and shall
remain registered under the 0000 Xxx. The Fund shall amend the Registration
Statement for its shares under the 1933 Act and the 1940 Act from time to time
as required in order to effect the continuous offering of its shares. The Fund
shall register and qualify the shares for sale in accordance with the laws of
the various states only if and to the extent deemed advisable by the Fund or the
Underwriter.
2.3 The Fund 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 Internal Revenue Code of 1986, as amended ("Code") and the regulations
issued thereunder. Without limiting the scope of the foregoing, the Fund will at
all times comply with Section 817(h) of the Code of Treasury Regulation 1.817-5,
relating to the diversification requirements for variable annuity, endowment, or
life insurance contracts and any amendments or other modifications to such
Section or Regulations. The Fund represents that, under the terms of its
investment advisory agreements with Adviser, the Adviser is and will be
responsible for managing each Portfolio in compliance with that Portfolio's
investment objectives, policies and restrictions as set forth in the Fund
Prospectus. The Fund represents that these objectives, policies and restrictions
do and will include operating as a regulated investment company ("RIC") in
compliance with Subchapter M of the Code ("Subchapter M") and Section 817(h) of
the Code ("Section 817(h)") and regulations thereunder. The Fund has adopted and
will maintain procedures for ensuring that each Portfolio is managed in
compliance with Subchapter M and Section 817(h) and regulations thereunder. On
request, the Fund shall also provide the Company with such materials,
cooperation and assistance as may be reasonably necessary for the Company or any
appropriate person designated by the Company to review from time to time the
procedures and practices of the Adviser or each sub-investment adviser to each
Portfolio for ensuring that that Portfolio is managed in compliance with
Subchapter M and Section 817(h) and regulations thereunder. The Fund and/or the
Underwriter shall notify the Company immediately in writing upon having a
reasonable basis for believing that any Portfolio has failed to comply or is
about to fail to comply with Subchapter M and Section 817(h) and regulations
thereunder.
In the event of any noncompliance regarding the status of any Portfolio as
a RIC in compliance with Subchapter M and/or noncompliance under Section 817(h),
the Fund will pursue those efforts necessary to enable that Portfolio to qualify
once again for treatment as a RIC in compliance with Subchapter M and/or to be
in compliance with Section 817(h), including cooperation in good faith with the
Company. If the Fund does not so cure the noncompliance regarding that
Portfolio's status as a RIC under Subchapter M and/or the noncompliance under
Section 817(h), the Fund will cooperate in good faith with the Company's efforts
to obtain a ruling and closing agreement, as provided in Revenue Procedure 92-25
issued by the Internal Revenue Service (or any applicable ruling or procedure
subsequently issued by the Internal Revenue Service), that the Portfolio
satisfies the requirements of Subchapter M and/or compliance with Section
817(h), for the period or periods of non-compliance.
2.4 The Company represents that for purposes other than diversification
under Section 817(h) of the Code, the Contracts are currently treated as
endowment, annuity or life insurance contracts, under applicable provisions of
the Code and that it will make every effort to maintain such treatment and that
it will notify the Fund and the Underwriter 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, Company represents and
warrants that each of its Accounts is a "segregated asset account" and that
interests in the Accounts 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. Company will use every
effort to continue to meet such definitional requirements, and it will notify
the Fund and the Underwriter 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.
2.5 The Fund currently does not intend to make any payments to finance
distribution expenses pursuant to Rule 12b-1 under the 1940 Act or otherwise,
although it may make such payments in the future. To the extent that it decides
to finance distribution expenses pursuant to Rule 12b-1, the Fund undertakes to
have a board of trustees, a majority of whom are not interested persons of the
Fund, formulate and approve any plan under Rule 12b-1 to finance distribution
expenses.
2.6 The Fund represents that it is lawfully organized and validly existing
under the laws of the State of Delaware and that it does and will comply in all
material respects with the 1940 Act.
2.7 The Underwriter represents and warrants that it is duly organized and
in good standing under the laws of the State of Delaware. The Underwriter
represents and warrants that it is a member in good standing of the NASD and is
registered as a broker-dealer with the SEC. The Underwriter further represents
that it will sell and distribute the Fund shares in accordance with all
applicable state and federal securities laws, including without limitation the
1933 Act, the 1934 Act and the 0000 Xxx.
2.8 The Underwriter represents and warrants that the Adviser is and shall
remain duly registered in all material respects under all applicable federal or
state securities laws and that the Adviser shall perform its obligations for the
Fund in compliance in all material respects with any applicable state and
federal securities laws.
2.9 The Fund and Underwriter represent and warrant that all of their
directors, officers, employees, investment advisers, and other
individuals/entities dealing with the money or securities of the Fund are and
shall continue to be at all times covered by a blanket fidelity bond or similar
coverage for the benefit of the Fund in an amount not less than the minimal
coverage as required currently by Rule 17g-1 under the 1940 Act or related
provisions as may be promulgated from time to time. The aforesaid fidelity bond
shall include coverage for larceny and embezzlement and shall be issued by a
reputable bonding company.
2.10 The Company represents and warrants that all of its directors,
officers, employees, investment advisers, and other entities dealing with the
money or securities of the Fund are and shall continue to be at all times
covered by a blanket fidelity bond or similar coverage for the benefit of the
Fund, in an amount not less than two million dollars ($2 million). The aforesaid
fidelity bond shall include coverage for larceny and embezzlement and shall be
issued by a reputable bonding company.
ARTICLE III. Prospectuses and Proxy Statements; Voting
3.1 The Underwriter shall provide the Company with as many copies of the
Fund's current prospectus as the Company may reasonably request. If requested by
the Company in lieu thereof, the Fund shall provide camera-ready film or an
electronic file containing the Fund's prospectus and Statement of Additional
Information, and such other assistance as is reasonably necessary in order for
the Company once each year (or more frequently if the prospectus and/or
Statement of Additional Information for the Fund is amended during the year) to
have the prospectus for the Contracts and the Fund's prospectus printed together
in one document, and to have the Statement of Additional Information for the
Fund and the Statement of Additional Information for the Contracts printed
together in one document. Alternatively, the Company may print the Fund's
prospectus and/or its Statement of Additional Information in combination with
other fund companies' prospectuses and statements of additional information. The
Company may also utilize the Fund's current prospectus on the Company's intranet
and internet sites and other electronic and/or public media. Except as provided
in the following three sentences, all expenses of printing and distributing Fund
prospectuses and Statements of Additional Information shall be the expense of
the Company. For prospectuses and Statements of Additional Information provided
by the Company to its existing owners of Contracts in order to update disclosure
as required by the 1933 Act and/or the 1940 Act, the cost of printing shall be
borne by the Fund. If the Company chooses to receive camera-ready film in lieu
of receiving printed copies of the Fund's prospectus, the Fund will reimburse
the Company in an amount equal to the product of A and B where A is the number
of such prospectuses distributed to owners of the Contracts, and B is the Fund's
per unit cost of typesetting and printing the Fund's prospectus. The same
procedures shall be followed with respect to the Fund's Statement of Additional
Information.
The Company agrees to provide the Fund or its designee with such
information as may be reasonably requested by the Fund to assure that the Fund's
expenses do not include the cost of printing any prospectuses or Statements of
Additional Information other than those actually distributed to existing owners
of the Contracts.
The Fund and Underwriter agree that the prospectus for the Portfolio(s)
listed in Schedule C ("Authorized Portfolio(s)") will describe only the
Authorized Portfolio(s) and will not offer the shares of any other Portfolios or
series that may be in the Fund. Fund and Underwriter agree to cooperate with
Company to provide the documents on a timely basis to meet Company's reasonable
deadline requirements for production.
3.2 The Fund's prospectus shall state that the Statement of Additional
Information for the Fund is available from the Underwriter or the Fund, at its
expense.
3.3 The Fund, at its expense, shall provide the Company with copies of its
proxy material, reports to shareholders, and other communications to
shareholders in such quantity as the Company shall reasonably require for
distribution to Contract owners. Such material, reports and communications shall
describe only the Authorized Portfolios. Fund and Underwriter shall make every
effort to provide reports to shareholders and other communications to
shareholders in camera-ready format within 45 calendar days of the end of the
reporting period covered by each such report.
3.4 If and to the extent required by law the Company shall:
(i) solicit voting instructions from Contract owners;
(ii) vote the shares of each Portfolio in accordance with instructions
received from Contract owners; and
(iii)vote shares of each Portfolio for which no instructions have been
received in the same proportion as shares of such Portfolio for which
instructions have been received,
so long as and to the extent that the SEC continues to interpret the 1940 Act to
require pass-through voting privileges for variable contract owners. The Company
reserves the right to vote Fund 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
participating in the Fund calculates voting privileges in a manner consistent
with the above standards.
ARTICLE IV. Sales Material and Information
4.1 The Company shall furnish, or shall cause to be furnished, to the Fund
or its designee, each piece of sales literature or other promotional material in
which the Fund, any Portfolio, the Adviser or the Underwriter is named, at least
fifteen Business Days prior to its use. No such material shall be used if the
Fund or its designee object to such use within fifteen Business Days after
receipt of such material, provided, however, notwithstanding any such failure to
object, no such material shall be used unless and until the Fund and the
Underwriter (collectively, "Reviewing Parties") or the designee of any Reviewing
Party provides written notice of its consent to such use to the Company or its
designee. Notwithstanding that each Reviewing Party and its designee did not
initially object, each Reviewing Party and its designee reserves the right to
object at any time thereafter to the continued use of any such sales literature
or other promotional material in which the Fund, any Portfolio, the Adviser or
the Underwriter is named, and no such material shall be used if any Reviewing
Party or its designee so objects. For purposes of this Section 4.1, the phrase
"written notice" includes notice given by electronic means (i.e., e-mail and
facsimile).
4.2 The Company shall not give any information or make any representations
or statements on behalf of the Fund or concerning the Fund in connection with
the sale of the Contracts other than the information or representations
contained in the registration statement or prospectus for the Fund shares, as
such registration statement and prospectus may be amended or supplemented from
time to time, or in reports or proxy statements for the Fund, or in sales
literature or other promotional material approved by the Fund or its designee or
by the Underwriter, except with the permission of the Fund or the Underwriter or
the designee of either.
4.3 The Fund, the Underwriter, or its designee shall furnish, or shall
cause to be furnished, to the Company or its designee, each piece of sales
literature or other promotional material in which the Company or its Account(s),
is named at least fifteen Business Days prior to its use. No such material shall
be used if the Company or its designee object to such use within fifteen
Business Days after receipt of such material, provided, however, notwithstanding
any such failure to object, no such material shall be used unless and until the
Company or its designee provides written notice of its consent to such use to
the Fund, the Underwriter, or its designee. Notwithstanding that the Company did
not initially object, the Company reserves the right to object at any time
thereafter to the continued use of any such sales literature or other
promotional material in which the Company, any Contract, or "Xxxx Xxxxxxx" is
named, and no such material shall be used if the Company so objects. For
purposes of this Section 4.3, the phrase "written notice" includes notice given
by electronic means (i.e., e-mail and facsimile).
4.4 The Fund and the Underwriter shall not give any information or make any
representations on behalf of the Company or concerning the Company, each
Account, or the Contracts other than the information or representations
contained in a registration statement or prospectus for the Contracts, as such
registration statement and prospectus may be amended or supplemented from time
to time, or in published reports for each Account which are in the public domain
or approved by the Company for distribution to Contract owners, or in sales
literature or other promotional material approved by the Company or its
designee, except with the permission of the Company.
4.5 The Fund will provide to the Company at least one complete copy of all
registration statements, prospectuses, Statements of Additional Information,
reports, proxy statements, sales literature and other promotional materials,
applications for exemptions, requests for no-action letters, and notices, orders
or responses relating thereto and all supplements and amendments to any of the
above, that relate to the Fund or its shares, contemporaneously with the filing
of such document with, or the issuance of such documents by, the SEC or other
regulatory authorities.
4.6 The Company will provide to the Fund at least one complete copy of all
registration statements, prospectuses, Statements of Additional Information,
reports, solicitations for voting instructions, sales literature and other
promotional materials, applications for exemptions, requests for no action
letters, and notices, orders or responses relating thereto and all supplements
and amendments to any of the above, that relate to the Fund or its shares,
contemporaneously with the filing of such document with, or the issuance of such
documents by, the SEC or other regulatory authorities.
4.7 For purposes of this Article IV, 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, telephone directories (other than routine
listings), electronic or other pubic media), sales literature (i.e., any written
or electronic communication distributed or made generally available to customers
or the public, including brochures, circulars, research reports, market letters,
performance reports or summaries, form letters, telemarketing scripts, seminar
texts, reprints or excerpts of any other advertisement, sales literature, or
published article), educational or training materials or other communications
distributed or made generally available to some or all agents or employees, and
registration statements, prospectuses, Statements of Additional Information,
shareholder reports, and proxy materials.
4.8 The Fund 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 Fund's registration statement or prospectus, particularly any
change resulting in a change to the registration statement or prospectus for any
Account. The Fund will work with the Company so as to enable the Company to
solicit proxies from Contract owners, or to make changes to its registration
statement and prospectus, in an orderly manner. The Fund will make reasonable
efforts to attempt to have changes affecting Contract prospectuses become
effective simultaneously with the annual updates for such prospectuses.
ARTICLE V. Fees and Expenses
5.1 The Fund and Underwriter shall pay no fee or other compensation to the
Company under this Agreement, except that if the Fund adopts and implements a
plan pursuant to Rule 12b-1 to finance distribution expenses, then the
Underwriter may make payments to the Company or to the underwriter for the
Contracts if and in amounts agreed to by the Underwriter in writing and such
payments will be made out of existing fees otherwise payable to the Underwriter,
past profits of the Underwriter or other resources available to the Underwriter.
No such payments shall be made directly by the Fund. Currently, no such payments
are contemplated.
5.2 All expenses incident to performance by the Fund under this Agreement
shall be paid by the Fund. The Fund shall be responsible for ensuring that all
its shares are registered and authorized for issuance in accordance with
applicable federal law and, if and to the extent deemed advisable by the Fund,
in accordance with applicable state laws prior to their sale. The Fund shall
bear the expenses for the cost of registration and qualification of the Fund's
shares, preparation and filing of the Fund's prospectus and Registration
Statement, proxy materials and reports, setting the prospectus in type, setting
in type and printing the proxy materials and reports to shareholders (including
the costs of printing a 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 Fund's shares.
5.3 The Fund shall bear the expenses of printing and distributing the
Fund's prospectus to existing owners of Contracts issued by the Company and of
providing or printing and distributing the Fund's proxy materials and reports to
such Contract owners, except to the extent that any such proxy materials have
been prepared as a result of a material irreconcilable conflict between the
interests of the contract owners of all separate accounts investing in any
Portfolio that has arisen due to the act or failure to act of the Company or
Xxxx Xxxxxxx Variable Life Insurance Company.
5.4 All reimbursements due to Company shall be accrued monthly and paid to
Company within 15 days of the end of the month of accrual in accordance with the
wire transfer instructions shown on Schedule D hereto, as may be amended by
Company from time to time in writing.
ARTICLE VI. Foreign Tax Credits
6.1 The Fund agrees to consult in advance with the Company concerning any
decision to elect or not to elect pursuant to Section 853 of the Code to pass
through the benefit of any foreign tax credits to its shareholders.
ARTICLE VII. Diversification and Compliance
7.1 The Board will monitor the Fund for the existence of any material
irreconcilable conflict between the interests of the contract owners of all
separate accounts investing in any Portfolio. 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 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 a Portfolio are being managed; (e) a difference in voting
instructions given by variable annuity contract and variable life insurance
contract owners; or (f) a decision by an insurer to disregard the voting
instructions of contract owners. The Board shall promptly inform the Company if
it determines that a material irreconcilable conflict exists and the
implications thereof.
7.2 The Company will report any potential or existing conflicts of which it
is aware to the Board. The Company will assist the Board in carrying out its
responsibilities under the Shared Funding Exemptive Order, by providing the
Board with all information reasonably necessary for the Board to consider any
issues raised. This includes, but is not limited to, an obligation by the
Company to inform the Board whenever Contract owner voting instructions are
disregarded.
7.3 If it is determined by a majority of the Board, or a majority of its
disinterested directors, that a material irreconcilable conflict exists, the
Company and other Participating Insurance Companies shall, at their expense and
to the extent reasonably practicable (as determined by a majority of the
disinterested trustees), 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 affected Portfolio and reinvesting such assets in a different investment
medium or submitting the question whether such segregation should be implemented
to a vote of all affected Contract owners and, as appropriate, segregating the
assets of any appropriate group (i.e., annuity contract owners, life insurance
contract owners, or variable contract owners of one or more Participating
Insurance Companies) that votes in favor of such segregation, or offering to the
affected contract owners the option of making such a change; and (b)
establishing a new registered management investment company or managed separate
account. The Company will not be responsible for expenses relating to material
irreconcilable conflicts of interest that arise due to the act or failure to act
of: (a) the Fund; (b) the Underwriter, or (c) any Participating Insurance
Company, other than the Company or Xxxx Xxxxxxx Variable Life Insurance Company.
7.4 If a material irreconcilable conflict arises because of a decision by
the Company to disregard Contract owner voting instructions and that decision
represents a minority position or would preclude a majority vote, the Company
may be required, at the Fund's election, to withdraw the affected Account's
investment in the affected Portfolio and terminate this Agreement with respect
to such Account; provided, however that such withdrawal and termination shall be
limited to the extent required by the foregoing material irreconcilable conflict
as determined by a majority of the disinterested members of the Board. Any such
withdrawal and termination must take place within six (6) months after the Fund
gives written notice that this provision is being implemented, and until the end
of that six month period the Fund shall continue to accept and implement orders
by the Company for the purchase (and redemption) of shares of the affected
Portfolio.
7.5 If a material irreconcilable conflict arises because a particular state
insurance regulator's decision applicable to the Company conflicts with the
majority of other state regulators, then the Company will withdraw the affected
Account's investment in the affected Portfolio and terminate this Agreement with
respect to such Account within six months after the 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 Board.
Until the end of the foregoing six month period, the Fund shall continue to
accept and implement orders by the Company for the purchase (and redemption) of
shares of the affected Portfolio.
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 Fund be required to establish a new funding medium for the Contracts.
The Company shall not be required by Section 7.3 to establish a new funding
medium for the Contracts if an offer to do so has been declined by vote of a
majority of Contract owners materially adversely affected by the material
irreconcilable conflict. 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 Fund and
terminate this Agreement within six (6) months after the Board informs the
Company in writing of the foregoing determination, provided, however, that such
withdrawal and termination shall be limited to the extent required by such a
material irreconcilable conflict as determined by a majority of the
disinterested members of the Board.
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 of the rules promulgated thereunder with respect to mixed or shared funding
(as defined in the Shared Funding Exemptive Order) on terms and conditions
materially different from those contained in the Shared Funding Exemptive Order,
then (a) the Fund or the Participating Insurance Companies, as appropriate,
shall take such steps as may be necessary to comply with Rules 6e-2 and 6e-3(T),
as amended and Rule 6e-3, as adopted, to the extent such rules are applicable;
and (b) Sections 3.4, 7.1, 7.2, 7.3, 7.4, and 7.5 of this Agreement shall
continue in effect only to the extent that terms and conditions substantially
identical to such Sections are contained in such Rule(s) as so amended or
adopted.
7.8 The Fund and Underwriter agree to maintain a strong commitment to
compliance as demonstrated by such factors as, without limit, a strong Code of
Ethics policy and procedures, monitoring procedures for compliance with
applicable tax requirements (e.g., Section 817(h) of the Code), restrictions in
the Prospectus or Statement of Additional Information, other legal requirements
(e.g., 1940 Act), and internal compliance policies and procedures, and to
respond promptly to periodic requests from Company or its designee for
information on compliance matters no less frequently than annually, and at such
other times as may be reasonably requested by Company or its designee to keep
them apprised of the Trust's activities.
ARTICLE VIII. Indemnification
8.1 Indemnification By The Company
8.1(a) The Company agrees to indemnify and hold harmless the Fund and each
trustee of the Board and officers (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 litigation (including 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 actions in respect thereof) or settlements are related to the sale
or acquisition of a Portfolio's shares or the Contracts and:
(i) arise out of or are based upon any untrue statements or alleged untrue
statements of any material fact contained in the Registration
Statement or prospectus for the Contracts or contained in the
Contracts or advertisements or sales literature for the Contracts (or
any amendment or supplement to any of the foregoing), or arise out of
or are based upon the omission or the alleged omission to state
therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, provided that this
agreement to indemnify shall not apply as to any Indemnified Party if
such statement or omission or such alleged statement or omission was
made in reliance upon and in conformity with information furnished to
the Company by or on behalf of the Fund for use in the Registration
Statement or prospectus for the Contracts or in the Contracts or
advertisements or sales literature (or any amendment or supplement) or
otherwise for use in connection with the sale of the Contracts or
shares of that Portfolio; or
(ii) arise out of or as a result of statements or representations (other
than statements or representations contained in the Registration
Statement, prospectus or sales literature of the Fund not supplied by
the Company, or persons under its control) or wrongful conduct of the
Company or persons under its control, with respect to the sale or
distribution of the Contracts or shares of that Portfolio; or
(iii)arise out of any untrue statement or alleged untrue statement of a
material fact contained in a Registration Statement, prospectus,
advertisements or sales literature of the Fund or any amendment
thereof or supplement thereto or the omission or alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading if such a
statement or omission was made in reliance upon information furnished
to the Fund by or on behalf of the Company; or
(iv) arise as a result of any failure by the Company to provide the
services and furnish the materials under the terms of this Agreement;
or
(v) arise out of or result from any material breach of any representation
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, as limited by and in accordance with the provisions of
Sections 8.1 (b) and 8.1 (c) hereof.
8.1(b) The Company shall not be liable under this indemnification provision
with respect to any losses, claims, damages, liabilities or litigation incurred
or assessed against an Indemnified Party as such may arise from such Indemnified
Party's willful misfeasance, bad faith, or gross negligence in the performance
of such Indemnified Party's duties or by reason of such Indemnified Party's
reckless disregard of obligations or duties under this Agreement or to the Fund,
whichever is applicable.
8.1(c) The Company shall not be liable under this indemnification provision
with respect to any claim made against an Indemnified Party unless such
Indemnified Party shall have notified the Company in writing within a reasonable
time after the summons or other first legal process giving information of the
nature of the claim shall have been served upon such Indemnified Party (or after
such Indemnified Party shall have received notice of such service on any
designated agent), but failure to notify the Company of any such claim shall not
relieve the Company from any liability which it may have to the Indemnified
Party against whom such action is brought otherwise than on account of this
indemnification provision. In case any such action is brought against the
Indemnified Parties, the Company shall be entitled to participate, at its own
expense, in the defense of such action. The Company also shall be entitled to
assume the defense thereof, with counsel satisfactory to the party named in the
action. After notice from the Company to such party of the Company's election to
assume the defense thereof, the Indemnified Party shall bear the fees and
expenses of any additional counsel retained by it, and the Company will not be
liable to such party under this Agreement for any legal or other expenses
subsequently incurred by such party independently in connection with the defense
thereof other than reasonable costs of investigation.
8.1(d) The Indemnified Parties will promptly notify the Company of the
commencement of any litigation or proceedings against them in connection with
the issuance or sale of the shares of any Portfolio or the Contracts or the
operation of the Fund.
8.2 Indemnification by the Underwriter
8.2(a) The Underwriter agrees to indemnify and hold harmless the Company
and the principal underwriter for the Contracts and each of their respective
directors and officers and the principal underwriter for the Contracts and each
person, if any, who controls the Company within the meaning of Section 15 of the
1933 Act (collectively, the "Indemnified Parties" for purposes of this Section
8.2) against any and all losses, claims, damages, liabilities (including amounts
paid in settlement with the written consent of the Underwriter, which consent
shall not be unreasonably refused) or litigation (including legal and other
expenses) to which the Indemnified Parties 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 of any Portfolio or the Contracts and:
(i) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Registration Statement
or prospectus or advertisements or sales literature of the Fund (or
any amendment or supplement to any of the foregoing), or arise out of
or are based upon the omission or the alleged omission to state
therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, provided that this
agreement to indemnify shall not apply as to any Indemnified Party if
such statement or omission or such alleged statement or omission was
made in reliance upon and in conformity with information furnished to
the Underwriter or Fund by or on behalf of the Company for use in the
Registration Statement or prospectus for the Fund or in sales
literature (or any amendment or supplement) or otherwise for use in
connection with the sale of the Contracts or shares of that Portfolio;
or
(ii) arise out of or as a result of statements or representations (other
than statements or representations contained in the Registration
Statement, prospectus or sales literature for the Contracts not
supplied by the Underwriter or persons under its control) or wrongful
conduct of the Fund, Adviser or Underwriter or persons under their
control, with respect to the sale or distribution of the Contracts or
shares of that Portfolio; or
(iii)arise out of any untrue statement or alleged untrue statement of a
material fact contained in a Registration Statement, prospectus,
advertisements or sales literature covering the Contracts, or any
amendment thereof or supplement thereto, or the omission or alleged
omission to state therein a material fact required to be stated
therein or necessary to make the statement or statements therein not
misleading, if such statement or omission was made in reliance upon
information furnished to the Company by or on behalf of the Fund; or
(iv) arise as a result of any failure by the Fund to provide the services
and furnish the materials under the terms of this Agreement (including
a failure whether unintentional or in good faith or otherwise, to
comply with the diversification requirements specified in Article II,
Section 2.3 of this Agreement, or to qualify as a regulated investment
company under Subchapter M of the Code); or
(v) arise as a result of the Fund's or Adviser's (or their designated
agent's) (i) incorrect calculation of the daily net asset value,
dividend rate or capital gain distribution rate of any Portfolio; (ii)
incorrect reporting of the daily net asset value, dividend rate or
capital gain distribution rate of any Portfolio; or (iii) untimely
reporting of the net asset value, dividend rate or capital gain
distribution rate of any Portfolio; or
(vi) arise out of or result from any material breach of any representation
or warranty made by the Fund or the Underwriter in this Agreement or
arise out of or result from any other material breach of this
Agreement by the Fund or the Underwriter; as limited by and in
accordance with the provisions of Section 8.2(b) and 8.2(c) hereof.
8.2(b) The Underwriter shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
to which an Indemnified Party would otherwise be subject by reason of such
Indemnified Party's willful misfeasance, bad faith, or gross negligence in the
performance of such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations and duties under this Agreement or to
each Company or the Account, whichever is applicable.
8.2(c) The Underwriter shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Underwriter in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Underwriter of
any such claim shall not relieve the Underwriter from any liability which it may
have to the Indemnified Party against whom such action is brought otherwise than
on account of this indemnification provision. In case any such action is brought
against the Indemnified Parties, the Underwriter also shall be entitled to
assume the defense thereof, with counsel satisfactory to the party named in the
action. After notice from the Underwriter to such party of the Underwriter's
election to assume the defense thereof, the Indemnified Party shall bear the
fees and expenses of any additional counsel retained by it, and the Underwriter
will not be liable to such party under this Agreement for any legal or other
expenses subsequently incurred by such party independently in connection with
the defense thereof other than reasonable costs of investigation.
8.2(d) The Company agrees promptly to notify the Underwriter of the
commencement of any litigation or proceedings against it or any of its officers
or directors in connection with the issuance or sale of the Contracts or the
operation of each Account.
8.3 Indemnification By the Fund
8.3(a) The Fund agrees to indemnify and hold harmless the Company and the
principal underwriter for Contracts and each of their respective directors and
officers and each person, if any, who controls the Company within the meaning of
Section 15 of the 1933 Act (collectively, the "Indemnified Parties" for purposes
of this Section 8.3) against any and all losses, claims, damages, liabilities
(including amounts paid in settlement with the written consent of the Fund,
which consent shall not be unreasonably refused) or litigation (including legal
and other expenses) to which the Indemnified Parties 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
result from the gross negligence, bad faith or willful misconduct of the Board
or any member thereof, are related to the operations of the Fund and:
(i) arise as a result of any failure by the Fund to provide the services
and furnish the materials under the terms of this Agreement (including
a failure to comply with the diversification requirements specified in
Article II, Section 2.3 of this Agreement, or to qualify as a
regulated investment company under Subchapter M of the Code); or
(ii) arise as a result of the Fund's (or its designated agent's) (i)
incorrect calculation of the daily net asset value, dividend rate or
capital gain distribution rate of any Portfolio; (ii) incorrect
reporting of the daily net asset value, dividend rate or capital gain
distribution rate of any Portfolio; or (iii) untimely reporting of the
net asset value, dividend rate or capital gain distribution rate of
any Portfolio; or
(iii)arise out of or result from any material breach of any
representations or warranty made by the Fund in this Agreement or
arise out of or result from any other material breach of this
Agreement by the Fund;
as limited by and in accordance with the provisions of Sections 8.3(b) and
8.3(c) hereof.
8.3(b) The Fund shall not be liable under this indemnification provision
with respect to any losses, claims, damages, liabilities or litigation incurred
or assessed against an Indemnified Party as such may arise from such Indemnified
Party's willful misfeasance, bad faith, or gross negligence in the performance
of such Indemnified Party's duties or by reason of such Indemnified Party's
reckless disregard of obligations and duties under this Agreement or to the
Company, the Fund, the Underwriter or each Account, whichever is applicable.
8.3(c) The Fund shall not be liable under this indemnification provision
with respect to any claim made against an Indemnified Party unless such
Indemnified Party shall have notified the Fund in writing within a reasonable
time after the summons or other first legal process giving information of the
nature of the claim shall have been served upon such Indemnified Party (or after
such Indemnified Party shall have received notice of such service on any
designated agent), but failure to notify the Fund of any such claim shall not
relieve the Fund from any liability which it may have to the Indemnified Party
against whom such action is brought otherwise than on account of this
indemnification provision. In case any such action is brought against the
Indemnified Parties, the Fund will be entitled to participate, at its own
expense, in the defense thereof. The Fund also shall be entitled to assume the
defense thereof, with counsel satisfactory to the party named in the action.
After notice from the Fund to such party of the Fund's election to assume the
defense thereof, the Indemnified Party shall bear the fees and expenses of any
additional counsel retained by it, and the Fund 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.
8.3(d) The Company and the Underwriter agree promptly to notify the Fund of
the commencement of any litigation or proceedings against it or any of its
respective officers or directors in connection with this Agreement, the issuance
or sale of the Contracts, with respect to the operation of either Account, or
the sale or acquisition of shares of the Fund.
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 State of New York.
9.2 This Agreement shall be subject to the provisions of the 1933 Act, 1934
Act and 1940 Act, and the rules and regulations and rulings thereunder,
including such exemptions from those statutes, rules and regulations as the SEC
may grant (including, but not limited to, the Shared Funding Exemptive Order)
and the terms hereof shall be interpreted and construed in accordance therewith.
ARTICLE X. Termination
10.1 This Agreement shall continue in full force and effect with respect to
the Portfolios until the first to occur of:
(a) termination by any party for any reason by one hundred eighty (180)
days advance written notice delivered to the other parties; or
(b) termination by the Company with respect to any Portfolio by written
notice to the Fund and Underwriter based upon the Company's reasonable
determination that shares of that Portfolio are not reasonably
available to meet the requirements of the Contracts, provided,
however, that the Company shall provide the Fund and the Underwriter a
reasonable opportunity to make shares of that Portfolio reasonably
available to meet the requirements of the Contracts before exercising
its right to terminate this Agreement with respect to that Portfolio
pursuant to this Section 10.1(b); or
(c) termination by the Company by written notice to the Fund and the
Underwriter in the event the Fund's shares are not registered, issued
or sold in accordance with applicable state or federal law or such law
precludes the use of such shares as the underlying investment media of
the Contracts issued or to be issued by the Company; or
(d) termination by the Company with respect to any Portfolio by written
notice to the Fund and the Underwriter in the event that that
Portfolio ceases to qualify as a Regulated Investment Company under
Subchapter M of the Code or under any successor or similar provision,
or if the Company reasonably believes that that Portfolio may fail to
so qualify; or
(e) termination by the Company with respect to any Portfolio by written
notice to the Fund and the Underwriter in the event that that
Portfolio fails to meet the diversification requirements specified in
Article II, Section 2.3 hereof; or
(f) termination by either the Fund or the Underwriter by written notice to
the Company, if either one or both of the Fund or the Underwriter,
respectively, shall determine, in their sole judgment exercised in
good faith, that the Company or any of its affiliated companies has
suffered a material adverse change in its business, operations,
financial condition or prospects since the date of this Agreement or
is the subject of material adverse publicity; or
(g) termination by the Company by written notice to the Fund and the
Underwriter, if the Company shall determine, in its sole judgment
exercised in good faith, that either the Fund, the Adviser or the
Underwriter has suffered a material adverse change in its business,
operations, financial condition or prospects since the date of this
Agreement or is the subject of material adverse publicity; or
(h) termination by any party by written notice upon the institution of
formal proceedings against the Company, the Fund, the Adviser or the
Underwriter by the NASD, the SEC or other regulatory body; or
(i) termination by the Company or the Fund with respect to a Portfolio by
written notice to the other party upon a determination by the majority
of the Board that, with respect to that Portfolio, a material
irreconcilable conflict exists among the interests of (i) all contract
owners of all separate accounts or (ii) the interests of the
Participating Insurance Companies; or
(j) termination by any party by advance written notice upon the
"assignment" of the Agreement (as defined under the 0000 Xxx) unless
made with the written consent of each party to the Agreement; or
(k) termination by the Company by written notice upon the sale,
acquisition or change of control of the Adviser, unless done with the
written consent of each party to the agreement; or
(l) termination by the Company with respect to a Portfolio arising from
the substitution of that Portfolio's shares with the shares of another
investment company for the Contracts for which the Portfolio's shares
have been selected to serve as the underlying investment medium,
subject to compliance with the 1940 Act and applicable regulations of
the SEC, Company will give 60 days written notice to the Fund and the
Underwriter of any proposed action to replace shares of any Portfolio;
or
(m) termination by the Company, the Fund or the Underwriter by written
notice to the other parties upon a material breach of the Agreement by
the other party.
10.2. Effect of Termination. Notwithstanding any termination of this
Agreement, the Fund and the Underwriter shall, at the option of the Company,
continue 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 (hereinafter referred to as
"Existing Contracts"). Specifically, without limitation, the owners of the
Existing Contracts shall be permitted to reallocate investments in the
Portfolios, redeem investments in the Portfolios or invest in the Portfolios
upon the making of additional purchase payments under the Existing Contracts.
The parties agree that this Section 10.2 shall not apply to any terminations
under Article VII and the effect of such Article VII terminations shall be
governed by Article VII of this Agreement.
ARTICLE XI. Notices
Any notice shall be sufficiently given when sent by registered or certified
mail, overnight delivery 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 Fund:
Ayco Series Trust
c/o Ayco Asset Management
Xxx Xxxx Xxxxxx
Xxxxxx, Xxx Xxxx 00000-0000
c/o Xxxx Xxxxxxxxx
copies to General Counsel
Fax No. (000) 000-0000
If to the Underwriter:
Xxxxxx Allied Company, L.P.
Xxx Xxxx Xxxxxx
Xxxxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxx
copies to General Counsel
Fax No. (000) 000-0000
If to the Company:
Xxxx Xxxxxxx Life Insurance Company
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxx Xxxx, Senior Vice President
Fax No. (000) 000-0000
copies to:
Xxxxxx X. Xxxxxx
Vice President & Counsel
Xxxx Xxxxxxx Life Insurance Company
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Fax No. (000) 000-0000
ARTICLE XII. Miscellaneous
12.1 All persons dealing with the Fund must look solely to the property of
the Fund for the enforcement of any claims against the Fund as neither the
Board, officers, agents nor shareholders assume any personal liability for
obligations entered into on behalf of the Fund.
12.2 Subject to the requirements of legal process and regulatory authority,
each party hereto shall treat as confidential the names and addresses of the
owners of the Contracts and all information reasonably identified as
confidential in writing by any other party hereto and, except as permitted by
this Agreement, shall not disclose, disseminate or utilize such names and
addresses and other confidential information until such time as it may come into
the public domain without the express written consent of the affected party.
Without limiting the foregoing, no party hereto shall disclose any information
that another party has reasonably designated as proprietary.
12.3 Subject to the requirements of legal process and regulatory authority,
each Party hereto shall treat as confidential any "non-public personal
information" about any "consumer" of another Party as such terms are defined in
SEC regulation S-P, and shall not disclose or use such information other than
carry out the purposes stated herein, or to process and service transactions at
the consumer's request, or as necessary to effect, administer, or enforce a
transaction.
12.4 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.
12.5 This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
12.6 If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the Agreement shall
not be affected thereby.
12.7 Each party hereto shall cooperate with each other party and all
appropriate governmental authorities (including without limitation the SEC, the
NASD and state insurance regulators) and shall permit such authorities
reasonable access to its books and records in connection with any investigation
or inquiry relating to this Agreement or the transactions contemplated hereby to
the extent practicable and except where a party's respective interests are
adverse to or in conflict with another party's interests.
12.8 The rights, remedies and obligations contained in this Agreement are
cumulative and are in addition to any and all rights, remedies and obligations,
at law or in equity, which the parties hereto are entitled to under state and
federal laws.
12.9 This Agreement or any of the rights and obligations hereunder may not
be assigned by any party without the prior consent of all parties hereto;
provided, however, that the Underwriter may assign this Agreement or any rights
or obligations hereunder to any affiliate of or company under common control
with the Underwriter, if such assignee is duly organized, licensed and
registered to perform the obligations of the Underwriter under this Agreement.
12.10 Neither the Fund nor the Underwriter shall use any designation
comprised in whole or in part of the names or marks "Xxxxxxx," "Xxxx Xxxxxxx,"
or any other trademark belonging to the Company in materials relating to the
Contracts or the Funds without the prior written consent of the Company. Upon
termination of this Agreement for any reason, the Fund shall cease all use any
such name or xxxx as soon as reasonably practicable.
12.11 The Company shall not use any designation comprised in whole or in
part of the names or marks "Ayco" "Xxxxxx Allied," or any other trademark
belonging to the Fund, the Adviser or the Underwriter in materials relating to
the Company, the Contracts or the Funds without the prior written consent of
each Reviewing Party, or its designee, which consent shall not be unreasonably
refused. Upon termination of this Agreement for any reason, the Fund shall cease
all use any such name or xxxx as soon as reasonably practicable.
IN WITNESS HEREOF, each of the parties 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 as of the date specified below.
XXXX XXXXXXX LIFE -INSURANCE COMPANY AYCO SERIES TRUST
By:______________________________ By: _______________________________
Xxxx X. Xxxxxxx, III
Title: ____________________________ Title:Chief Financial Officer & Controller
Date: ____________________________ Date: ______________________________
XXXXXX ALLIED COMPANY, L.P.
By: Breham, Inc., General Partner
By: _______________________________
Xxxxx X. Xxxxxx
Title:______________________________
Vice President & Secretary
Date: ______________________________
Schedule A
Accounts
------------------------------------- --------------------------------------
Name of Account Date of Resolution of Company's Board
which Established the Account
------------------------------------- --------------------------------------
------------------------------------- --------------------------------------
Xxxx Xxxxxxx Variable Life Account UV May 10, 1993
------------------------------------- --------------------------------------
Schedule B
Contracts
-----------------------------------------------------------
Xxxx Xxxxxxx Life Insurance Company
-----------------------------------------------------------
-----------------------------------------------------------
Medallion Variable Universal Life Plus
-----------------------------------------------------------
-----------------------------------------------------------
Medallion Variable Universal Life Edge
-----------------------------------------------------------
-----------------------------------------------------------
Variable Estate Protection
-----------------------------------------------------------
-----------------------------------------------------------
Variable Estate Protection Plus
-----------------------------------------------------------
-----------------------------------------------------------
Variable Estate Protection Edge
-----------------------------------------------------------
-----------------------------------------------------------
Medallion Executive Variable Life III
-----------------------------------------------------------
Schedule C
Series of the Fund
Ayco Growth Fund
Schedule D
Notification and Wire Transfer Instructions
(As of October 26, 2001)
In accordance with sections 1.9 and 5.4 of the Agreement:
1. Prior notification of dividends, distributions and wire transfers shall be
provided by e-mail or fax to:
Xxxxxx X. Xxxxxx and Xxxx Xxxxxxxx
Separate Account Accounting
Email: xxxxxxx@xxxxxxxx.xxx and xxxxxxxx@xxxxxxxx.xxx
Fax:(000) 000-0000
2. Wire instructions for service fees and reimbursements:
Federal funds to be wired to:
Bank: FleetBank, Boston, MA
ABA# 000000000
Account Name: Xxxx Xxxxxxx Life Insurance Company
Account Number: 279-80008
Reference: Attention: Xxxxxx X. Xxxxxx - 375-1725
Administrative Service Fees/ Reimbursements
Name of Financial Institution: AYCO Series Trust
Schedule E
SEC Recommended Guidelines Regarding Correction of Pricing Errors
A pricing error shall be corrected as follows: (a) if the pricing error results
in a difference between the erroneous NAV and the correct NAV of less than $0.01
per share, then no corrective action need be taken; (b) if the pricing error
results in a difference between the erroneous NAV and the correct NAV equal to
or greater than $0.01 per share, but less than 1/2 of 1% of the Portfolio's NAV
at the time of the error, then the Underwriter shall reimburse the Fund for any
loss, after taking into consideration any positive effect of such error;
however, no adjustments to Contract owner accounts need be made; and (c) if the
pricing error results in a difference between the erroneous NAV and the correct
NAV equal to or greater than 1/2 of 1% of the Portfolio's NAV at the time of the
error, then the Underwriter shall reimburse the Fund for any loss (without
taking into consideration any positive effect of such error) and shall reimburse
the Company for the costs of adjustments made to correct Contract owner
accounts, including the cost of the error to such accounts and the cost of the
administrative work by or on behalf of the Company to correct the error;
provided, however, that in the event of unusual circumstances, such as when the
error in computation involves an unusually large dollar amount with respect to
the aggregate amount of the Portfolio's shares held by the Company, then (a) and
(b) shall not apply and the pricing error shall be corrected pursuant to (c)
above without regard to the difference between the erroneous NAV and the correct
NAV.
If an adjustment is necessary to correct a material error which has caused
Contract owners to receive less than the amount to which they are entitled, the
number of shares of the appropriate Portfolio(s) attributable to the accounts of
the Contract owners will be adjusted and the amount of any underpayments shall
be credited by the Underwriter to the Company for crediting of such amounts to
the applicable Contract owners accounts. Upon notification by the Fund of any
overpayment due to a material error, the Company shall promptly remit to
Underwriter any overpayment that has not been paid to Contract owners; however,
Underwriter and the Fund each acknowledge that the Company does not intend to
seek additional payments from any Contract owner who, because of a pricing
error, may have underpaid for units of interest credited to his/her account. In
no event shall the Company be liable to Contract owners for any such adjustments
or underpayment amounts. A pricing error within Sections 1.11, 8.2(a)(v) or
8.3(a)(ii) above shall be deemed to constitute a "material error" for purposes
of this Agreement.
The standards set forth in this Section 1.11 and this Appendix are based on the
Parties' understanding of industry practices as of the date of this Agreement.
In the event the industry practices are later changed, modified or superseded as
a result of SEC or judicial interpretation, the Parties shall amend the
foregoing provisions of this Agreement to comport with the appropriate
applicable standards, on terms mutually satisfactory to all Parties.
The provisions of Section 1.11 and this Appendix shall survive termination of
the Agreement.
