Exhibit (h)(10)
PARTICIPATION AGREEMENT
Among
Xxxx Xxxxxxx Life Insurance Company,
Variable Insurance Funds,
and
HSBC Asset Management (Americas), Inc.
THIS AGREEMENT, dated as of the 15th day of October, 2001 by and among
Xxxx Xxxxxxx Life Insurance Company, (the "Company"), a Massachusetts life
insurance company, on its own behalf and on behalf of each segregated asset
account of the Company set forth on Schedule A hereto, as may be amended from
time to time (each account hereinafter referred to as the "Account"), Variable
Insurance Funds (the "Trust"), a Massachusetts business trust, and HSBC Asset
Management (Americas), Inc. (the "Adviser").
WHEREAS, the Trust 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 and variable annuity
contracts (the "Variable Insurance Products") to be offered by insurance
companies which have entered into participation agreements with the Trust
("Participating Insurance Companies");
WHEREAS, the shares of beneficial interest of the Trust are divided
into several series of shares, each designated a "Portfolio" and representing
the interest in a particular managed portfolio of securities and other assets;
WHEREAS, the Trust is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act")
and shares of the Portfolio are registered under the Securities Act of 1933, as
amended (the "1933 Act");
WHEREAS, the Trust has obtained an order (Variable Insurance Funds, et
al., Investment Company Act Rel. No. 23594 (Dec. 10, 1998)) from the Securities
and Exchange Commission ("SEC") granting Participating Insurance Companies and
their separate accounts exemptions from the provisions of Sections 9(a), 13(a),
15(a) and 15(b) of the 1940 Act, and Rules 6e-2(b)(15) and 6e-3(T)(b)(15)
thereunder, to the extent necessary to permit shares of the Trust to be sold to
and held by variable annuity and variable life insurance separate accounts of
both affiliated and unaffiliated life insurance companies and certain qualified
pension and retirement plans, among others (the "Exemptive Order"), the terms of
which qualify, in its entirety, the terms of this Agreement;
WHEREAS, the Company has issued or will issue certain variable life
insurance and/or variable annuity contracts supported wholly or partially by the
Account (the "Contracts"), and said Contracts are listed in Schedule A hereto,
as it may be amended from time to time by mutual written agreement;
WHEREAS, the Account is duly established and maintained as a
segregated asset account, duly established by the Company, on the date shown for
such Account on Schedule A hereto, to set aside and invest assets attributable
to the aforesaid Contracts;
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares in the Portfolios listed in
Schedule A hereto, as it may be amended from time to time by mutual written
agreement (the "Designated Portfolios"), on behalf of the Account to fund the
aforesaid Contracts;
WHEREAS, the Adviser, which serves as investment adviser to the
Designated Portfolios, is duly registered as an investment adviser under the
federal Investment Advisers Act of 1940, as amended;
NOW, THEREFORE, in consideration of their mutual promises, the Company,
the Trust and the Adviser agree as follows:
ARTICLE X.Xxxx of Trust Shares
1.1. Subject to Article X hereof, the Trust agrees to make available
to the Company for purchase on behalf of the Account, shares of the Designated
Portfolios, such purchases to be effected at net asset value in accordance with
Section 1.3 of this Agreement. Notwithstanding the foregoing, (i) Portfolios
(other than those listed on Schedule A) in existence now or that may be
established in the future will be made available to the Company only as the
Trust may so provide, and (ii) the Board of Trustees of the Trust (the "Board")
may suspend or terminate the offering of shares of any Designated Portfolio or
class thereof, if such action is required by law or by regulatory authorities
having jurisdiction or if, in the sole discretion of the Board acting in good
faith and in light of its fiduciary duties under federal and any applicable
state laws, suspension or termination is necessary in the best interests of the
shareholders of such Designated Portfolio.
1.2. The Trust shall redeem, at the Company's request, any full or
fractional Designated Portfolio shares held by the Company on behalf of the
Account, such redemptions to be effected at net asset value in accordance with
Section 1.3 of this Agreement. Notwithstanding the foregoing, (i) the Company
shall not redeem Trust shares attributable to Contract owners except in the
circumstances permitted in Section 10.3 of this Agreement, and (ii) the Trust
may delay redemption of such shares of any Designated Portfolio to the extent
permitted by the 1940 Act and any rules, regulations or orders thereunder.
1.3. Purchase and Redemption Procedures
(a) The Trust hereby appoints the Company as an agent of the
Trust for the limited purpose of receiving and accepting purchase and redemption
requests on behalf of the Account (but not with respect to any Trust shares that
may be held in the general account of the Company) for shares of those
Designated Portfolios made available hereunder, based on allocations of amounts
to the Account or subaccounts thereof under the Contracts and other transactions
relating to the Contracts or the Account. Receipt and acceptance of any such
request (or relevant transactional information therefor) on any day the New York
Stock Exchange is open for trading and on which a Designated Portfolio
calculates its net asset value (a "Business Day") pursuant to the rules of the
SEC by the Company as such limited agent of the Trust prior to the time that the
Trust ordinarily calculates its net asset value as described from time to time
in each Portfolio's prospectus shall constitute receipt and acceptance by the
Designated Portfolio on that same Business Day, provided that the Trust receives
notice of such request (which shall be forwarded as a net purchase or redemption
request) by 9:30 a.m. Eastern Time on the next following Business Day.
(b) The Company shall pay for shares of each Designated Portfolio
on the same day that it notifies the Trust of a purchase request for such
shares. Payment for Designated Portfolio shares shall be made in federal funds
transmitted to the Trust or other designated person by wire to be received on
the same day the Trust is notified of the purchase request for Designated
Portfolio shares. If federal funds are not received on time, such funds may be
invested, and Designated Portfolio shares purchased thereby will be issued, as
soon as practicable and the Company shall promptly, upon the Trust's request,
reimburse the Trust for any charges, costs, fees, interest or other expenses
incurred by the Trust in connection with any advances to, or borrowing or
overdrafts by, the Trust, or any similar expenses incurred by the Trust, as a
result of portfolio transactions effected by the Trust based upon such purchase
request. Upon receipt of federal funds so wired, such funds shall cease to be
the responsibility of the Company and shall become the responsibility of the
Trust.
(c) Payment for Designated Portfolio shares redeemed by the
Account or the Company shall be made in federal funds transmitted by wire to the
Company or any other designated person. The Trust shall use its best efforts to
transmit payment by wire to be received on the same Business Day that the Trust
is notified of the redemption order of such shares in accordance with Section
1.3(a). If federal funds are not received on time, funds may be invested in
another option under the Contract, and the Trust shall promptly, upon the
Company's request, reimburse the Company for any charges, costs, fees, interest
or other expenses incurred by the Company in connection with any advances to, or
borrowing overdrafts by, the Company, or any similar expenses incurred by the
Company as a result of investments in other investment options, except that the
Trust reserves the right to redeem Designated Portfolio shares in assets other
than cash and to delay payment of redemption proceeds to the extent permitted
under Section 22(e) of the 1940 Act and any rules thereunder, and in accordance
with the procedures and policies of the Trust as described in the then current
prospectus. The Trust shall not bear any responsibility whatsoever for the
proper disbursement or crediting of redemption proceeds by the Company, the
Company alone shall be responsible for such action.
(d) Any purchase or redemption request for Designated Portfolio
shares held or to be held in the Company's general account shall be effected at
the net asset value per share next determined after the Trust's receipt and
acceptance of such request, provided that, in the case of a purchase request,
payment for Trust shares so requested is received by the Trust in federal funds
prior to close of business for determination of such value, as defined from time
to time in each Designated Portfolio's prospectus.
(e) The Company shall not redeem Trust shares attributable to the
Contracts (as opposed to Trust shares attributable to the Company's assets held
in the Account) except (i) as necessary to implement Contract owner initiated or
approved transactions, (ii) as required by state and/or federal laws or
regulations or judicial or other legal precedent of general application
(hereinafter referred to as a "Legally Required Redemption"), (iii) upon 45 days
prior written notice to the Trust and Adviser, as permitted by an order of the
SEC pursuant to Section 26(b) of the 1940 Act, but only if a substitution of
other securities for the shares of the Designated Portfolios is consistent with
the terms of the Contracts, or (iv) as permitted under the terms of the
Contract. Upon request, the Company will promptly furnish to the Trust and the
Adviser reasonable assurance that any redemption pursuant to clause (ii) above
is a Legally Required Redemption. Furthermore, except in cases where permitted
under the terms of the Contracts, the Company shall not prevent Contract owners
from allocating payments to a Designated Portfolio that was otherwise available
under the Contracts without first giving the Trust or the Adviser 45 days notice
of its intention to do so.
1.4. The Trust shall use its best efforts to make the net asset value
per share for each Designated Portfolio available to the Company by 6:30 p.m.
Eastern Time each Business Day, and in any event, as soon as reasonably
practicable after the net asset value per share for such Designated Portfolio is
calculated, and shall calculate such net asset value in accordance with the
Trust's prospectus. However, if net asset values are not available for inclusion
in the next business cycle and purchase orders/redemptions are not able to be
calculated and available for the Company to execute within the time frames
identified in subsection 1.3(a), the Company shall be entitled to an adjustment
to the number of shares purchased or redeemed to reflect the correct share net
asset value, and the Adviser or the Trust shall reimburse Company for its
reasonable incidental expenses related to such unavailability of net asset
value(s) per share within the time specified herein.
1.5. The Trust shall furnish notice on or before the ex-dividend or
ex-distribution date, as applicable (by e-mail or fax 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 Designated
Portfolio shares. The form of such notice shall be as agreed between the Trust
and Company. Such form as of the date hereof is set for in Article XI hereof.
The Company, on its behalf and on behalf of the Account, hereby elects to
receive all such dividends and distributions as are payable on any Designated
Portfolio shares in the form of additional shares of that Designated Portfolio.
The Company reserves the right, on its behalf and on behalf of the Account, to
revoke this election and to receive all such dividends and capital gain
distributions in cash. The Trust shall notify the Company promptly of the number
of Designated Portfolio shares so issued as payment of such dividends and
distributions.
1.6. Issuance and transfer of Trust shares shall be by book entry
only. Share certificates will not be issued to the Company or the Account.
Purchase and redemption orders for Trust shares shall be recorded in an
appropriate ledger for the Account or the appropriate subaccount of the Account.
1.7. (a) The parties hereto acknowledge that the arrangement
contemplated by this Agreement is not exclusive; the Trust's shares may be sold
to other insurance companies (subject to Section 1.8 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 Designated Portfolios on the same basis as other
funding vehicles available under the Contracts. Unless otherwise agreed between
the Company and the Adviser, or between the Company and the Trust, funding
vehicles other than those listed on Schedule A to this Agreement may be
available for the investment of the cash value of the Contracts, provided,
however, (i) any such vehicle or series thereof, has investment objectives or
policies that are substantially different from the investment objectives and
policies of the Designated Portfolios available hereunder; (ii) the Company
gives the Trust and the Adviser 45 days written notice of its intention to make
such other investment vehicle available as a funding vehicle for the Contracts;
or (iii) unless such other investment company was available as a funding vehicle
for the Contracts prior to the date of this Agreement and the Company has so
informed the Trust and the Adviser prior to their signing this Agreement, the
Trust or Adviser consents in writing to the use of such other vehicle, such
consent not to be unreasonably withheld.
(b) The Company shall not, without prior notice to the Adviser
(unless otherwise required by applicable law), take any action to operate the
Account as a management investment company under the 1940 Act.
(c) The Company shall not, without prior notice to the Adviser
(unless otherwise required by applicable law), induce Contract owners to change
or modify the Trust or change the Trust's investment adviser.
(d) The Company shall not, without prior notice to the Trust,
induce Contract owners to vote on any matter submitted for consideration by the
shareholders of the Trust in a manner other than as recommended by the Board.
1.8. The Designated Portfolios shall sell their shares only to
Participating Insurance Companies and their separate accounts and to persons or
plans that communicate to the Trust that they qualify to purchase shares of the
Designated Portfolios under Section 817(h) of the Internal Revenue Code of 1986,
as amended (the "Code"), and the regulations thereunder without impairing the
ability of the Account to consider the portfolio investments of the Trust as
constituting investments of the Account for the purpose of satisfying the
diversification requirements of Section 817(h) ("Qualified Persons"). The Trust
shall not sell shares of the Designated Portfolios to any insurance company or
separate account unless an agreement complying with Article VI of this Agreement
is in effect to govern such sales, to the extent required. ARTICLE II.
Representations and Warranties
2.1. The Company represents and warrants that the Contracts (a) are,
or prior to issuance will be, registered under the 1933 Act, or (b) are not
registered because they are properly exempt from registration under the 1933 Act
or will be offered exclusively in transactions that are properly exempt from
registration under the 1933 Act. The Company further represents and warrants
that the Contracts will be issued and sold in compliance in all material
respects with all applicable federal securities and state securities and
insurance 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, that it has legally and validly established
the Account prior to any issuance or sale thereof as a segregated asset account
under Massachusetts insurance laws, and that it (a) has registered or, prior to
any issuance or sale of the Contracts, will register the Account as a unit
investment trust in accordance with the provisions of the 1940 Act, and will
cause the Account to remain so registered, to serve as a segregated investment
account for the Contracts, or alternatively (b) has not registered the Account
in proper reliance upon an exclusion from registration under the 1940 Act. The
Company also represents and warrants that it and the Account are Qualified
Persons. The Company shall register and qualify the Contracts or interests
therein as securities in accordance with the laws of the various states only if
and to the extent required by applicable law.
2.2. The Trust represents and warrants that Designated Portfolio
shares sold pursuant to this Agreement shall be registered under the 1933 Act
(to the extent required by that Act), duly authorized for issuance and sold in
compliance with applicable state and federal securities laws and that the Trust
is and shall remain registered under the 1940 Act. The Trust shall amend the
registration statement for its shares under the 1933 Act and the 1940 Act from
time to time as required in order to effect the continuous offering of its
shares. The Trust shall register and qualify the shares for sale in accordance
with the laws of the various states only if and to the extent required by
applicable law.
2.3. Prior to financing distribution expenses pursuant to Rule 12b-1,
the Trust will have the Board formulate and approve a plan pursuant to Rule
12b-1 under the 1940 Act to finance distribution expenses.
2.4. The Trust makes no representations as to whether any aspect of
its operations, including, but not limited to, investment policies, fees and
expenses, complies with the insurance laws of the various states.
2.5. The Trust represents that it is lawfully organized and validly
existing under the laws of the Commonwealth of Massachusetts and that it does
and will comply in all material respects with the 1940 Act.
2.6. The Adviser represents and warrants that it is registered as an
investment adviser with the SEC.
2.7. The Trust and the Adviser represent and warrant that all of their
trustees/directors, officers, employees, and other individuals or entities
dealing with the money and/or securities of the Trust are and shall continue to
be at all times covered by a blanket fidelity bond or similar coverage for the
benefit of the Trust in an amount not less than the minimum coverage as required
by Rule 17g-1 of the 1940 Act or related provisions as may be promulgated from
time to time. The aforesaid bond shall include coverage for larceny and
embezzlement and shall be issued by a reputable bonding company.
2.8. The Company represents and warrants that all of its directors,
officers, employees, and other individuals/entities employed or controlled by
the Company dealing with the money and/or securities of the Account are covered
by a blanket fidelity bond or similar coverage for the benefit of the Account in
an amount of not less than $1 million. The aforesaid bond includes coverage for
larceny and embezzlement and is issued by a reputable bonding company. The
Company agrees to hold for the benefit of the Trust and to pay to the Trust any
amounts lost from larceny, embezzlement or other events covered by the aforesaid
bond to the extent such amounts properly belong to the Trust pursuant to the
terms of this Agreement. The Company agrees to make all reasonable efforts to
see that this bond or another bond containing these provisions is always in
effect, and agrees to notify the Trust and the Adviser in the event that such
coverage no longer applies.
ARTICLE III. Prospectuses and Proxy Statements; Voting
3.1. The Trust or its agent shall provide the Company with as many
copies of the Trust's current prospectus (describing only the Designated
Portfolios listed on Schedule A), any supplements thereto or, to the extent
permitted and requested by Company, the Trust's profiles as the Company may
reasonably request. If requested by the Company in lieu thereof, the Trust shall
provide such documentation (including a "camera ready" final copy of such
documentation on diskette) and other assistance as is reasonably necessary in
order for the Company once each year (or more frequently if the prospectus for
the Trust is amended) to have the prospectus for the Contracts and the Trust's
prospectus or profile printed together in one or more documents. The Trust and
Adviser 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 Trust's prospectus(es) shall state that the current Statement
of Additional Information ("SAI") for the Designated Portfolios is available.
3.3. The Trust shall provide the Company with information regarding
the Designated Portfolios' expenses, which information may include a table of
fees and related narrative disclosure for use in any prospectus or other
descriptive document relating to a Contract. The Company shall provide prior
written notice of any proposed modification of such information, which notice
will describe in detail the manner in which the Company proposes to modify the
information, and agrees to provide the Trust or its agent with an opportunity to
review such proposed modification prior to its use by the Company (any review
not to construed as approval or adoption of the modification on the part of the
Trust or its agent).
3.4. The Trust shall provide the Company with copies of the Designated
Portfolios' proxy material, reports to shareholders (describing only the
Designated Portfolios listed on Schedule A), and other communications to
shareholders (each, a "Shareholder Communication") in such quantity as the
Company shall reasonably require for distributing to Contract owners. If
requested by the Company in lieu thereof, the Trust shall provide Shareholder
Communications in "camera ready" format on diskette. The Trust agrees to provide
such Shareholder Communications on a timely basis to meet Company's reasonable
deadline requirements for production and delivery.
3.5. The Company shall:
(i) solicit voting instructions from Contract owners;
(ii) vote the Trust shares in accordance with instructions
received from Contract owners in that Account; and
(iii)vote Trust shares for which no instructions have been
received in the same proportion as Trust shares of such
portfolio held by an Account 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 or to the
extent otherwise required by law. The Company will vote Trust shares held in any
segregated asset account in the same proportion as Trust shares of such
Designated Portfolio for which voting instructions have been received from
Contract owners, to the extent permitted by law.
3.6. Participating Insurance Companies shall be responsible for
assuring that each of their separate accounts participating in a Designated
Portfolio calculates voting privileges as required by the Mixed and Shared
Funding Exemptive Order (See Section 7.1) and consistent with any reasonable
standards that the Trust may adopt and provide in writing.
ARTICLE IV. Sales Material and Information
4.1. The Company shall furnish, or shall cause to be furnished, to the
Adviser and the Trust (or its designee), each piece of sales literature or other
promotional material that the Company develops and in which the Trust (or a
Designated Portfolio thereof) or the Adviser is named. No such material shall be
used until approved by the Adviser and the Trust (or its designee), and the
Adviser and the Trust will use their best efforts to review such sales
literature or promotional material within ten Business Days after receipt of
such material. The Adviser and the Trust (or its designee) each reserves the
right to reasonably object to the continued use of any such sales literature or
other promotional material in which the Trust (or a Designated Portfolio
thereof) or the Adviser is named, and no such material shall be used if the
Adviser or the Trust (or its designee) so objects. For purposes of this Section
4.1, the designee of the Trust is the Adviser, subject to the Trust's
reservation of the right to modify, terminate or revive such designation by
notice to the other parties hereto.
4.2. The Company shall not give any information or make any
representations or statements on behalf of the Trust or concerning the Trust or
the Adviser in connection with the sale of the Contracts other than the
information or representations contained in the registration statement or
prospectus or SAI for the Trust shares, as such registration statement and
prospectus or SAI may be amended or supplemented from time to time, published
reports which are in the public domain or approved by the Trust or the Adviser,
proxy statements for the Trust, or in sales literature or other promotional
material approved by the Trust or its designee, except with the permission of
the Trust or its designee.
4.3. The Trust and the Adviser, or their designee, shall furnish, or
cause to be furnished, to the Company, each piece of sales literature or other
promotional material that it develops and in which the Company, and/or its
Account, is named. No such material shall be used until approved by the Company,
and the Company will use its best efforts to review such sales literature or
promotional material within ten Business Days after receipt of such material.
The Company reserves the right to reasonably object to the continued use of any
such sales literature or other promotional material in which the Company and/or
its Account is named, and no such material shall be used if the Company so
objects.
4.4. The Trust shall not give any information or make any
representations on behalf of the Company or concerning the Company, the Account,
or the Contracts other than the information or representations contained in a
registration statement, prospectus (which shall include an offering memorandum,
if any, if the Contracts issued by the Company or interests therein are not
registered under the 1933 Act), or SAI for the Contracts, as such registration
statement, prospectus, or SAI may be amended or supplemented from time to time,
or in published reports for the 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 Trust will provide to the 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 Designated Portfolios or their shares, promptly after the filing
of such document(s) with the SEC or other regulatory authorities.
4.6. The Company will provide to the Trust at least one complete copy
of all registration statements, prospectuses (which shall include an offering
memorandum, if any, if the Contracts issued by the Company or interests therein
are not registered under the 1933 Act), SAIs, 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 the Account, promptly after the filing of
such document(s) with the SEC or other regulatory authorities. The Company shall
provide to the Trust and the Adviser any complaints received from the Contract
owners pertaining to the Trust or a Designated Portfolio.
4.7. The Trust will provide the Company with as much notice as is
reasonably practicable of any proxy solicitation for any Designated Portfolio,
and of any material change in the Trust's registration statement, particularly
any change resulting in a change to the registration statement or prospectus for
any Account. The Trust will work with the Company so as to enable the Company to
solicit proxies from Contract owners, or to make changes to its prospectus or
registration statement, in an orderly manner. The Trust will make reasonable
efforts to attempt to have changes affecting Contract prospectuses become
effective simultaneously with the annual updates for such prospectuses.
4.8. For purposes of this Article IV, the phrase "sales literature and
other promotional materials" includes, but is not limited to, any of the
following that refer to the Adviser, the Trust, any Designated Portfolio, or any
affiliate of the Trust and/or the Adviser: advertisements (such as material
published, or designed for use in, a newspaper, magazine, or other periodical,
radio, television, telephone or tape recording, videotape display, signs or
billboards, motion pictures, or other public media), sales literature (i.e., any
written communication distributed or made generally available to customers or
the public, including brochures, circulars, reports, market letters, form
letters, seminar texts, reprints or excerpts of any other advertisement, sales
literature, or published article), educational or training materials or other
communications distributed or made generally available to some or all agents or
employees, and registration statements, prospectuses, SAIs, shareholder reports,
proxy materials, and any other Shareholder Communications distributed or made
generally available with regard to the Trust.
ARTICLE V. Fees and Expenses
5.1. Except as otherwise provided herein, the Trust shall pay no fee
or other compensation to the Company under this Agreement. If the Trust or any
Designated Portfolio adopts and implements a plan pursuant to Rule 12b-1 to
finance distribution expenses, the Trust may make payments to the Company or to
the underwriter for the Contracts if and in amounts agreed to by the Trust in
writing.
5.2. All expenses incident to performance by the Trust under this
Agreement shall be paid by the Trust. The Trust shall see to it 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 Trust, in
accordance with applicable state laws prior to their sale. The Trust shall bear
the expenses for the cost of registration and qualification of the Trust's
shares; preparation and filing of the Trust's prospectus, SAI and registration
statement, profiles, proxy materials and reports; setting the prospectus and
profiles in type; printing copies of the prospectus and profiles to be delivered
to existing Contract owners investing in the Designated Portfolios; providing a
reasonable number of copies of the SAI to the Company for itself and for any
current owner of a Contract who requests such SAI; 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; and all taxes on
the issuance or transfer of the Trust's shares.
5.3. The Company shall bear the expenses of printing copies of the
current prospectus and profiles for the Contracts; printing copies of the
Trust's prospectus and profiles that are used in connection with offering the
Contracts; distributing the Trust's prospectus to owners of Contracts issued by
the Company; and of distributing the Trust's reports to such Contract owners. If
the prospectus for the Contracts and the Trust's prospectus are printed together
in one or more documents, the Trust agrees to allocate printing costs to reflect
the Trust's share of the total costs for printing the Trust's prospectus(es) to
be delivered to existing Contract owners investing in the Designated
Portfolio(s), determined according to the number of pages of the Trust's
respective portions of the documents.
5.4. The parties to this Agreement agree to negotiate in good faith
the allocation of expenses of distributing the Trust's proxy materials to
Contract owners.
5.5. All fees and reimbursements due to Company shall be accrued
monthly and paid to Company within 15 days of receipt of Company's invoice and
appropriate documentation of such fees and reimbursements in accordance with the
wire transfer instructions shown in Article XI hereto, or as may be amended by
Company from time to time in writing.
ARTICLE VI. Diversification and Qualification
6.1. Subject to Company's representations and warranties in Section
2.1 and 6.3, the Trust represents and warrants that it will invest the assets of
each Designated Portfolio in such a manner as to ensure that the Contracts will
be treated as annuity or life insurance contracts, whichever is appropriate,
under the Code and the regulations issued thereunder (or any successor
provisions). Without limiting the scope of the foregoing, the Trust represents
and warrants that each Designated Portfolio has complied and will continue to
comply with Section 817(h) of the Code and Treasury Regulation ss.1.817-5, and
any Treasury interpretations thereof, relating to the diversification
requirements for variable annuity, endowment, or life insurance contracts, and
any amendments or other modifications or successor provisions to such Section or
Regulation. In the event of a breach of this Section 6.1, the Trust will use
every effort (a) to notify the Company immediately upon having a reasonable
basis for believing that such requirements have ceased to be met or that they
may not be met in the future, and (b) to adequately diversify the Designated
Portfolio so as to achieve compliance within the grace period afforded by
Treasury Regulation ss.1.817-5.
6.2. The Trust represents and warrants that each Designated Portfolio
is or will be qualified as a Regulated Investment Company under Subchapter M of
the Code, that it will make every effort to maintain such qualification (under
Subchapter M or any successor or similar provisions) and that it will notify the
Company immediately upon having a reasonable basis for believing that a
Designated Portfolio has ceased to so qualify or that it might not so qualify in
the future.
6.3. The Company represents and warrants that the Contracts are
currently, and at the time of issuance shall be, treated as life insurance or
annuity contracts, under applicable provisions of the Code (except to the extent
that such treatment depends upon a Designated Portfolio's compliance with the
diversification requirements of Section 817(h) of the Code and Treasury
Regulation ss.1.817-5), and that it will make every effort to maintain such
treatment, and that it will notify the Trust and the Adviser immediately upon
having a reasonable basis for believing 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 Trust and the Adviser immediately upon having a reasonable basis for
believing that such requirements have ceased to be met or that they might not be
met in the future.
ARTICLE VII. Potential Conflicts
7.1. The parties to this Agreement agree that the conditions or
undertakings required by the Exemptive Order that may be imposed on the Company,
the Trust and/or the Adviser by virtue of such order by the SEC: (i) shall apply
only upon the sale of shares of the Designated Portfolios to variable life
insurance separate accounts (and then only to the extent required under the 1940
Act); (ii) will be incorporated herein by reference; and (iii) such parties
agree to comply with such conditions and undertakings to the extent applicable
to each such party notwithstanding any provision of this Agreement to the
contrary.
7.2. If and to the extent that Rule 6e-2 and Rule 6e-3(T) are amended,
or Rule 6e-3 is adopted, to provide exemptive relief from any provision of the
1940 Act or the rules promulgated thereunder with respect to mixed or shared
funding (as defined in the Exemptive Order) on terms and conditions materially
different from those contained in the Exemptive Order, then (a) the Trust and/or
the Participating Insurance Companies, as appropriate, shall take such steps as
may be necessary to comply with 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 3.5
and 3.6 of this Agreement shall continue in effect only to the extent that terms
and conditions substantially identical to such Sections are contained in such
Rule(s) as so amended or adopted.
ARTICLE VIII. Indemnification
8.1. Indemnification By the Company
(a) The Company agrees to indemnify and hold harmless each of the
Trust and the Adviser and each of its trustees/directors and officers, and each
person, if any, who controls the Trust or Adviser within the meaning of Section
15 of the 1933 Act or who is under common control with the Trust or Adviser
(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 or regulation, at common law or otherwise, insofar as such
losses, claims, damages, liabilities or expenses (or actions in respect thereof)
or settlements (consent to which shall not be unreasonably withheld):
(i) arise out of or are based upon any untrue statement or
alleged untrue statements of any material fact contained in
the registration statement, prospectus (which shall include
a written description of a Contract that is not registered
under the 1933 Act), or SAI for the Contracts or contained
in the Contracts 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 Trust 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 Trust shares; or
(ii) arise out of or as a result of statements or representations
(other than statements or representations contained in the
registration statement, prospectus, SAI, or sales literature
of the Trust not supplied by the Company or persons under
its control) or wrongful conduct of the Company or its
agents or persons under the Company's authorization or
control, with respect to the sale or distribution of the
Contracts or Trust shares; or
(iii)arise out of any untrue statement or alleged untrue
statement of a material fact contained in a registration
statement, prospectus, SAI, or sales literature of the Trust
or any amendment thereof or supplement thereto or the
omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the
statements therein not misleading if such a statement or
omission was made in reliance upon information furnished to
the Trust or the Adviser by or on behalf of the Company; or
(iv) arise as a result of any material failure by the Company to
provide the services and furnish the materials under the
terms of this Agreement (including a material failure,
whether unintentional or in good faith or otherwise, to
comply with the qualification requirements specified in
Section 6.3 of this Agreement); or
(v) arise out of or result from any material breach of any
representation and/or warranty made by the Company in this
Agreement or arise out of or result from any other material
breach of this Agreement by the Company;
as limited by and in accordance with the provisions of Sections 8.1(b) and
8.1(c) hereof.
(b) The Company shall not be liable under this indemnification
provision with respect to any losses, claims, 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 its obligations or duties under this Agreement.
(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 an Indemnified Party, 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.
(d) Each of the Trust and the Adviser agrees promptly to notify the
Company of the commencement of any litigation or proceedings, of which it has
knowledge, against an Indemnified Party in connection with the issuance or sale
of the Trust shares or the Contracts or the operation of the Trust.
8.2. Indemnification by the Adviser
(a) The Adviser agrees to indemnify and hold harmless the Company and
each of its directors and officers and each person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act (collectively, the
"Indemnified Parties" for purposes of this Section 8.2) against any and all
losses, claims, damages, liabilities (including amounts paid in settlement with
the written consent of the Adviser) or litigation (including legal and other
expenses) to which the Indemnified Parties may become subject under any statute
or regulation, at common law or otherwise, insofar as such losses, claims,
damages, liabilities or expenses (or actions in respect thereof) or settlements
(consent to which shall not be unreasonably withheld):
(i) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in
the registration statement or prospectus or SAI or sales
literature of the Trust (or any amendment or supplement to
any of the foregoing), or arise out of or are based upon the
omission or the alleged omission to state therein a material
fact required to be stated therein or necessary to make the
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 Adviser or
Trust by or on behalf of the Company for use in the
registration statement, prospectus or SAI for the Trust or
in sales literature (or any amendment or supplement) or
otherwise for use in connection with the sale of the
Contracts or Trust shares; or
(ii) arise out of or as a result of statements or representations
(other than statements or representations contained in the
registration statement, prospectus, SAI or sales literature
for the Contracts not supplied by the Trust or the Adviser)
or wrongful conduct of the Trust or Adviser with respect to
the sale or distribution of the Contracts or Trust shares;
or
(iii)arise out of any untrue statement or alleged untrue
statement of a material fact contained in a registration
statement, prospectus, SAI or sales literature 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
Trust or the Adviser; or
(iv) arise as a result of any material failure by the Trust or
the Adviser to provide the services and furnish the
materials under the terms of this Agreement (including a
material failure of the Trust, whether unintentional or in
good faith or otherwise, to comply with the diversification
and other qualification requirements specified in Sections
6.1 and 6.2 of this Agreement); or
(v) arise out of or result from any material breach of any
representation and/or warranty made by the Adviser in this
Agreement or arise out of or result from any other material
breach of this Agreement by the Adviser;
as limited by and in accordance with the provisions of Sections 8.2(b) and
8.2(c) hereof.
(b) The Adviser 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 or 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 or the Account, whichever is applicable.
(c) The Adviser shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Adviser in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Adviser of any
such claim shall not relieve the Adviser from any liability which it may have to
the Indemnified Party against whom such action is brought otherwise than on
account of this indemnification provision. In case any such action is brought
against the Indemnified Party, the Adviser will be entitled to participate, at
its own expense, in the defense thereof. The Adviser also shall be entitled to
assume the defense thereof, with counsel satisfactory to the party named in the
action. After notice from the Adviser to such party of the Adviser's election to
assume the defense thereof, the Indemnified Party shall bear the fees and
expenses of any additional counsel retained by it, and the Adviser will not be
liable to such party under this Agreement for any legal or other expenses
subsequently incurred by such party independently in connection with the defense
thereof other than reasonable costs of investigation.
(d) The Company agrees promptly to notify the Adviser of the
commencement of any litigation or proceedings, of which if has knowledge,
against an Indemnified Party in connection with the issuance or sale of the
Contracts or the operation of the Account.
8.3. Indemnification By the Trust
(a) The Trust agrees to indemnify and hold harmless the Company and
each of its directors and officers and each person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act (collectively, the
"Indemnified Parties" for purposes of this Section 8.3) against any and all
losses, claims, expenses, damages, liabilities (including amounts paid in
settlement with the written consent of the Trust) or litigation (including legal
and other expenses) to which the Indemnified Parties may be required to pay or
may become subject under any statute or regulation, at common law or otherwise,
insofar as such losses, claims, expenses, damages, liabilities or expenses (or
actions in respect thereof) or settlements (consent to which shall not be
unreasonably withheld) are related to the operations of the Trust and:
(i) arise as a result of any material failure by the Trust to
provide the services and furnish the materials under the
terms of this Agreement (including a material failure,
whether unintentional or in good faith or otherwise, to
comply with the diversification and other qualification
requirements specified in Sections 6.1 and 6.2 of this
Agreement); or
(ii) arise out of or result from any material breach of any
representation and/or warranty made by the Trust in this
Agreement or arise out of or result from any other material
breach of this Agreement by the Trust;
as limited by and in accordance with the provisions of Sections 8.3(b) and
8.3(c) hereof. The parties acknowledge that the Trust's indemnification
obligations under this Section 8.3 are subject to applicable law. The Company
agrees that, in the event an obligation to indemnify exists pursuant to Section
8.3 as well as Section 8.2 hereof, it will seek satisfaction under the
indemnification provisions of Section 8.2 before seeking indemnification under
this Section 8.3
(b) The Trust 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 the
Company, the Trust, the Adviser or the Account, whichever is applicable.
(c) The Trust 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 Trust 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 Trust of any such claim shall not
relieve the Trust 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 Trust will be entitled to participate, at its own
expense, in the defense thereof. The Trust also shall be entitled to assume the
defense thereof, with counsel satisfactory to the party named in the action.
After notice from the Trust to such party of the Trust'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 Trust 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.
(d) The Company agrees promptly to notify the Trust of the
commencement of any litigation or proceedings, of which it has knowledge,
against an Indemnified Party in connection with the Agreement, the issuance or
sale of the Contracts, the operation of the Account, or the sale or acquisition
of shares of the Trust.
ARTICLE IX. Applicable Law
9.1. This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the Commonwealth of
Massachusetts.
9.2. This Agreement shall be subject to the provisions of the 1933,
1934 and 1940 Acts, and the rules and regulations and rulings thereunder,
including such exemptions from those statutes, rules and regulations as the SEC
may grant (including, but not limited to, the Exemptive Order) and the terms
hereof shall be interpreted and construed in accordance therewith. If, in the
future, the Exemptive Order should no longer be necessary under applicable law,
then Article VII shall no longer apply.
ARTICLE X. Termination
10.1. This Agreement shall continue in full force and effect until the
first to occur of:
(a) termination by any party, for any reason with respect to
some or all Designated Portfolios, by three (3) months
advance written notice delivered to the other parties; or
(b) termination by the Company by written notice to the Trust
and the Adviser based upon the Company's determination that
shares of the Trust are not reasonably available to meet the
requirements of the Contracts; or
(c) termination by the Company by written notice to the Trust
and the Adviser in the event any of the Designated
Portfolio's shares are not registered, issued or sold in
accordance with applicable state and/or federal law or such
law precludes the use of such shares as the underlying
investment media of the Contracts issued or to be issued by
the Company; or
(d) termination by the Trust or Adviser in the event that formal
administrative proceedings are instituted against the
Company by the NASD, the SEC, the Insurance Commissioner or
like official of any state or any other regulatory body
regarding the Company's duties under this Agreement or
related to the sale of the Contracts, the operation of any
Account, or the purchase of the Designated Portfolios'
shares; provided, however, that the Trust or Adviser
determines in its sole judgment exercised in good faith,
that any such administrative proceedings will have a
material adverse effect upon the ability of the Company to
perform its obligations under this Agreement; or
(e) termination by the Company in the event that formal
administrative proceedings are instituted against the Trust
or Adviser by the SEC or any state securities or insurance
department or any other regulatory body; provided, however,
that the Company determines in its sole judgment exercised
in good faith, that any such administrative proceedings will
have a material adverse effect upon the ability of the Trust
or Adviser to perform its obligations under this Agreement;
or
(f) termination by the Company by written notice to the Trust
and the Adviser with respect to any Designated Portfolio in
the event that such Portfolio ceases to qualify as a
Regulated Investment Company under Subchapter M or fails to
comply with the Section 817(h) diversification requirements
specified in Section 6.1 hereof, or if the Company
reasonably believes that such Portfolio may fail to so
qualify or comply; or
(g) termination by the Trust or Adviser by written notice to the
Company in the event that the Contracts fail to meet the
qualifications specified in Section 6.3 hereof; or
(h) termination by either the Trust or the Adviser by written
notice to the Company, if either one or both of the Trust or
the Adviser respectively, shall determine, in their sole
judgment exercised in good faith, that the Company 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
(i) termination by the Company by written notice to the Trust
and the Adviser, if the Company shall determine, in its sole
judgment exercised in good faith, that the Trust or the
Adviser 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
(j) termination by the Company upon any substitution of the
shares of another investment company or series thereof for
shares of a Designated Portfolio of the Trust in accordance
with the terms of the Contracts, provided that the Company
has given at least 45 days prior written notice to the Trust
and Adviser of the date of substitution; or
(k) termination by any party in the event that the Board
determines that a material irreconcilable conflict exists as
provided in Article VII.
10.2. Notwithstanding any termination of this Agreement, the Trust and
the Adviser shall, at the option of the Company, continue to make available
additional shares of the Trust 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"), unless the
Adviser requests that the Company seek an order pursuant to Section 26(c) of the
1940 Act to permit the substitution of other securities for the shares of the
Designated Portfolios, or the Company provides written notice of its intention
to seek such an order. In such event: (a) the Adviser and the Company agree to
split the cost of seeking such an order; (b) the Adviser and the Company agree
to reasonably cooperate in seeking such an order; and (c) the Trust and the
Adviser agree to continue to make available additional shares of the Trust
pursuant to the terms and conditions of this Agreement for all Existing
Contracts until such order is issued and the shares of the Trust are redeemed
pursuant to the substitution transaction contemplated by such order.
Specifically, the owners of the Existing Contracts may be permitted to
reallocate Contract investments to or from the Trust, redeem investments in the
Trust and/or invest in the Trust upon the making of additional purchase payments
under the Existing Contracts (subject to any such election by the Adviser). The
parties agree that this Section 10.2 shall not apply with respect to Existing
Contracts that were issued as variable life insurance contracts for any
terminations with respect to Existing Contracts under Article VII (the effect of
such Article VII terminations shall be governed by Article VII of this
Agreement). The parties further agree that this Section 10.2 shall not apply to
any terminations under Section 10.1(g) of this Agreement.
10.3. Notwithstanding any termination of this Agreement, each party's
obligation under Article VIII to indemnify the other parties shall survive.
ARTICLE XI. Notices
In accordance with Sections 1.5 and 5.4 hereof, (a) prior notification
of dividends, distributions and wire transfers shall be provided by the Trust or
its designee via e-mail or fax, followed by written confirmation, to: Xxxxxx X.
Xxxxxx and Xxxx Xxxxxxxx, Separate Account Accounting
(email:xxxxxxx@xxxxxxxx.xxx and xxxxxxxx@xxxxxxxx.xxx, fax: (000) 000-0000), and
(b) reimbursements shall be wired in federal funds to:
Bank: FleetBank, Boston, MA
ABA# 000000000
Account: Xxxx Xxxxxxx Life Insurance Company
Account Number: 279-80008
Reference: Attention: Xxxxxx X. Xxxxxx - 375-1725
Reimbursements
Name of Financial Institution:
(HSBC) Variable Insurance Funds
or to such other person, address, facsimile numbers or accounts as the Company
may subsequently direct in writing.
Any notice shall be sufficiently given when sent by registered or
certified mail to the other party at the address of such party set forth below
or at such other address as such party may from time to time specify in writing
to the other party.
If to the Trust: Variable Insurance Funds
0000 Xxxxxxx Xxxx
Xxxxxxxx, Xxxx 00000-0000
Attention: President
If to Adviser: HSBC Asset Management (Americas), Inc.
000 Xxxxxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention:
If to the Company: Xxxx Xxxxxxx Life Insurance Company
Xxxx Xxxxxxx Xxxxx
X.X. Xxx 000
Xxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx,
Vice President and Counsel
ARTICLE XII. Miscellaneous
12.1. All persons dealing with the Trust must look solely to the
property of the respective Designated Portfolios listed on Schedule A hereto as
though each such Designated Portfolio had separately contracted with the Company
and the Adviser for the enforcement of any claims against the Trust. The parties
agree that neither the Board, officers, agents or shareholders of the Trust
assume any personal liability or responsibility for obligations entered into by
or on behalf of the Trust. It is expressly agreed that the obligations of the
Trust hereunder shall not be binding upon any of the Trustees, shareholders,
nominees, officers, agents or employees of the Trust personally, but shall bind
only the trust property of the Trust. The execution and delivery of this
Agreement have been authorized by the Trustees, and this Agreement has been
signed and delivered by an authorized officer of the Trust, acting as such, and
neither such authorization by the Trustees nor such execution and delivery by
such officer shall be deemed to have been made by any of them individually or to
impose any liability on any of them personally, but bind only the trust property
of the Trust as provided in the Trust's Declaration of Trust. Subject to the
requirements of legal process and regulatory authority, the Trust and Adviser
shall treat as confidential the names and addresses of the owners of the
Contracts and any "non-public personal information" about any "consumer" of the
Company as such terms are defined in SEC Regulation S-P. Except as may be
otherwise permitted by this Agreement, the Trust and Adviser shall not disclose,
disseminate or utilize such names and addresses and non-public personal
information without the Company's express written consent. Such written consent
shall specify the purposes for which such information may be disclosed or used.
Without limiting the foregoing, no party hereto shall disclose any information
that another party reasonably has identified in writing as confidential, or has
designated as proprietary. The provisions of this section 12.1 shall survive
termination of the Agreement.
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 without the express written consent
of the affected party until such time as such information has come into the
public domain.
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 shall constitute one and the same
instrument.
12.5. 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.
12.6. 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.
Notwithstanding the generality of the foregoing, each party hereto further
agrees to furnish the [insert state] Insurance Commissioner with any information
or reports in connection with services provided under this Agreement which such
Commissioner may request in order to ascertain whether the variable insurance
operations of the Company are being conducted in a manner consistent with the
[insert state] insurance laws and regulations and any other applicable law or
regulations.
12.7. The rights, remedies and obligations contained in this Agreement
are cumulative and are in addition to any and all rights, remedies, and
obligations, at law or in equity, which the parties hereto are entitled to under
state and federal laws.
12.8. This Agreement or any of the rights and obligations hereunder
may not be assigned by any party without the prior written consent of all
parties hereto.
12.9. The Company shall furnish, or shall cause to be furnished, to
the Trust or its designee copies of the following reports:
(a) the Company's annual statement (prepared under statutory
accounting principles) and annual report (prepared under generally accepted
accounting principles) filed with any state or federal regulatory body or
otherwise made available to the public, as soon as practicable and in any event
within 90 days after the end of each fiscal year; and
(b) any registration statement (without exhibits) and financial
reports of the Company filed with the Securities and Exchange Commission or any
state insurance regulatory, as soon as practicable after the filing thereof.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed in its name and on its behalf by its duly authorized
representative as of the date specified below.
Xxxx Xxxxxxx Life Insurance Company: By its authorized officer
By:
-----------------------------------
Title:
--------------------------------
Date:
---------------------------------
Variable Insurance Funds: By its authorized officer
By:
-----------------------------------
Title:
--------------------------------
Date:
---------------------------------
HSBC Asset Management By its authorized officer
(Americas), Inc.:
By:
-----------------------------------
Title:
--------------------------------
Date:
---------------------------------
October 15, 2001
Schedule A
Account(s) Contract(s) Designated Portfolio(s)
Xxxx Xxxxxxx Wealth Builder HSBC Variable Growth and Income Fund
Variable Annuity Variable Annuity HSBC Variable Fixed Income
Account H HSBC Variable Cash Management
