Exhibit 8(c)
FUND PARTICIPATION AGREEMENT
This Agreement is entered into as of the day of , 2000, ALLSTATE LIFE INSURANCE
COMPANY OF NEW YORK, a life insurance company organized under the laws of the
State of New York (Insurance Company"), and each of DREYFUS VARIABLE INVESTMENT
FUND; THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC.; DREYFUS LIFE AND
ANNUITY INDEX FUND, INC. (d/b/a DREYFUS STOCK INDEX FUND); AND DREYFUS
INVESTMENT PORTFOLIOS (each a "Fund").
ARTICLE I
DEFINITIONS
1.1 "Act" shall mean the Investment Company Act of 1940, as amended.
1.2 "Board" shall mean the Board of Directors or Trustees, as the case may be,
of a Fund, which has the responsibility for management and control of the Fund.
1.3 "Business Day" shall mean any day for which a Fund calculates net asset
value per share as described in the Fund's Prospectus.
1.4 "Commission" shall mean the Securities and Exchange Commission.
1.5 "Contract" shall mean a variable annuity or life insurance contract
that uses any Participating Fund (as defined below) as an underlying
investment medium. Individuals who participate under a group Contract
are "Participants."
1.6 "Contractholder" shall mean any entity that is a party to a Contract
with a Participating Company (as defined below).
1.7 "Disinterested Board Members" shall mean those members of the Board of
a Fund that are not deemed to be "interested persons" of the Fund, as
defined by the Act.
1.8 "Dreyfus" shall mean The Dreyfus Corporation and its affiliates,
including Dreyfus Service Corporation.
1.9 "Participating Companies" shall mean any insurance company (including
Insurance Company) that offers variable annuity and/or variable life
insurance contracts to the public and that has entered into an
agreement with one or more of the Funds.
1.10 "Participating Fund" shall mean each Fund, including, as applicable,
any series thereof, specified in Exhibit A, as such Exhibit may be
amended from time to time by agreement of the parties hereto, the
shares of which are available to serve as the underlying investment
medium for the aforesaid Contracts.
1.11 "Prospectus" shall mean the current prospectus and statement of
additional information of a Fund, as most recently filed with the
Commission.
1.12 "Separate Account" shall mean Allstate Life of New York Separate
Account A, a separate account established by Insurance Company in
accordance with the laws of the State of New York.
1.13 "Software Program" shall mean the software program used by a Fund for
providing Fund and account balance information including net asset
value per share. Such Program may include the Lion System. In
situations where the Lion System or any other Software Program used by
a Fund is not available, such information may be provided by telephone.
The Lion System shall be provided to Insurance Company at no charge.
1.14 "Insurance Company's General Account(s)" shall mean the general
account(s) of Insurance Company and its affiliates that invest in a
Fund.
ARTICLE II
REPRESENTATIONS
2.1 Insurance Company represents and warrants that (a) it is an insurance
company duly organized and in good standing under applicable law; (b)
it has legally and validly established the Separate Account pursuant to
the insurance laws of the State of New York and the regulation
thereunder the purpose of offering to the public certain individual and
group variable annuity and life insurance contracts; (c) it has
registered the Separate Account as a unit investment trust under the
Act to serve as the segregated investment account for the Contracts;
and (d) the Separate Account is eligible to invest in shares of each
Participating Fund without such investment disqualifying any
Participating Fund as an investment medium for insurance company
separate accounts supporting variable annuity contracts or variable
life insurance contracts.
2.2 Insurance Company represents and warrants that (a) the Contracts will
be described in a registration statement filed under the Securities Act
of 1933, as amended ("1933 Act"); (b) the Contracts will be issued and
sold in compliance in all material respects with all applicable federal
and state laws; and (c) the sale of the Contracts shall comply in all
material respects with state insurance law requirements. Insurance
Company agrees to notify each Participating Fund promptly of any
investment restrictions imposed by state insurance law and applicable
to the Participating Fund.
2.3 Insurance Company represents and warrants that the income, gains and
losses, whether or not realized, from assets allocated to the Separate
Account are, in accordance with the applicable Contracts, to be
credited to or charged against such Separate Account without regard to
other income, gains or losses from assets allocated to any other
accounts of Insurance Company. Insurance Company represents and
warrants that the assets of the Separate Account are and will be kept
separate from Insurance Company's General Account and any other
separate accounts Insurance Company may have, and will not be charged
with liabilities from any business that Insurance Company may conduct
or the liabilities of any companies affiliated with Insurance Company.
2.4 Each Participating Fund represents that it is registered with the
Commission under the Act as an open-end, management investment company
and possesses, and shall maintain, all legal and regulatory licenses,
approvals, consents and/or exemptions required for the Participating
Fund to operate and offer its shares as an underlying investment medium
for Participating Companies.
2.5 Each Participating Fund represents that it is currently qualified as a
regulated investment company under Subchapter M of the Internal Revenue
Code of 1986, as amended (the "Code"), and that it will make every
effort to maintain such qualification (under Subchapter M or any
successor or similar provision) and that it will notify Insurance
Company immediately upon having a reasonable basis for believing that
it has ceased to so qualify or that it might not so qualify in the
future.
2.6 Insurance Company represents and agrees that the Contracts are
currently, and at the time of issuance will be, treated as life
insurance policies or annuity contracts, whichever is appropriate,
under applicable provisions of the Code, and that it will make every
effort to maintain such treatment and that it will notify each
Participating Fund and Dreyfus 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. Insurance Company
agrees that any prospectus offering a Contract that is a "modified
endowment contract," as that term is defined in Section 7702A of the
Code, will identify such Contract as a modified endowment contract (or
policy).
2.7 Each Participating Fund agrees that its assets shall be managed and
invested in a manner that complies with the requirements of Section
817(h) of the Code.
2.8 Insurance Company agrees that each Participating Fund shall be
permitted (subject to the other terms of this Agreement) to make its
shares available to other Participating Companies and Contractholders.
2.9 Each Participating Fund represents and warrants that any of its
directors, trustees, officers, employees, investment advisers, and
other individuals/entities who deal with the money and/or securities of
the Participating Fund are and shall continue to be at all times
covered by a blanket fidelity bond or similar coverage for the benefit
of the Participating Fund in an amount not less than that required by
Rule 17g-1 under the Act. The aforesaid Bond shall include coverage for
larceny and embezzlement and shall be issued by a reputable bonding
company.
2.10 Insurance Company represents and warrants that all of its employees and
agents who deal with the money and/or securities of each Participating
Fund are and shall continue to be at all times covered by a blanket
fidelity bond or similar coverage in an amount not less than the
coverage required to be maintained by the Participating Fund. The
aforesaid Bond shall include coverage for larceny and embezzlement and
shall be issued by a reputable bonding company.
2.11 Insurance Company agrees that Dreyfus shall be deemed a third party
beneficiary under this Agreement and may enforce any and all rights
conferred by virtue of this Agreement.
ARTICLE III
FUND SHARES
3.1 The Contracts funded through the Separate Account will provide for the
investment of certain amounts in shares of each Participating Fund.
3.2 Each Participating Fund agrees to make its shares available for
purchase at the then applicable net asset value per share by Insurance
Company and the Separate Account on each Business Day pursuant to rules
of the Commission. Notwithstanding the foregoing, each Participating
Fund may refuse to sell its shares 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 or is, in the sole
discretion of its Board, acting in good faith and in light of its
fiduciary duties under federal and any applicable state laws, necessary
and in the best interests of the Participating Fund's shareholders.
3.3 Each Participating Fund agrees that shares of the Participating Fund
will be sold only to (a) Participating Companies and their separate
accounts or (b) "qualified pension or retirement plans" as determined
under Section 817(h)(4) of the Code. Except as otherwise set forth in
this Section 3.3, no shares of any Participating Fund will be sold to
the general public.
3.4 Each Participating Fund shall use its best efforts to provide closing
net asset value, dividend and capital gain information on a per-share
basis to Insurance Company by 6:00 p.m. Eastern time on each Business
Day. Any material errors in the calculation of net asset value,
dividend and capital gain information shall be reported immediately
upon discovery to Insurance Company. Non-material errors will be
corrected in the next Business Day's net asset value per share.
3.5 At the end of each Business Day, Insurance Company will use the
information described in Sections 3.2 and 3.4 to calculate the unit
values of the Separate Account for the day. Using this unit value,
Insurance Company will process the day's Separate Account transactions
received by it by the close of trading on the floor of the New York
Stock Exchange (currently 4:00 p.m. Eastern time) to determine the net
dollar amount of each Participating Fund's shares that will be
purchased or redeemed at that day's closing net asset value per share.
The net purchase or redemption orders will be transmitted to each
Participating Fund by Insurance Company by 11:00 a.m. Eastern time on
the Business Day next following Insurance Company's receipt of that
information. Subject to Sections 3.6 and 3.8, all purchase and
redemption orders for Insurance Company's General Accounts shall be
effected at the net asset value per share of each Participating Fund
next calculated after receipt of the order by the Participating Fund or
its Transfer Agent.
3.6 Each Participating Fund appoints Insurance Company as its agent for the
limited purpose of accepting orders for the purchase and redemption of
Participating Fund shares for the Separate Account. Each Participating
Fund will execute orders at the applicable net asset value per share
determined as of the close of trading on the day of receipt of such
orders by Insurance Company acting as agent ("effective trade date"),
provided that the Participating Fund receives notice of such orders by
11:00 a.m. Eastern time on the next following Business Day and, if such
orders request the purchase of Participating Fund shares, the
conditions specified in Section 3.8, as applicable, are satisfied. A
redemption or purchase request that does not satisfy the conditions
specified above and in Section 3.8, as applicable, will be effected at
the net asset value per share computed on the Business Day immediately
preceding the next following Business Day upon which such conditions
have been satisfied in accordance with the requirements of this Section
and Section 3.8. Insurance Company represents and warrants that all
orders submitted by the Insurance Company for execution on the
effective trade date shall represent purchase or redemption orders
received from Contractholders prior to the close of trading on the New
York Stock Exchange on the effective trade date.
3.7 Insurance Company will make its best efforts to notify each applicable
Participating Fund in advance of any unusually large purchase or
redemption orders.
3.8 If Insurance Company's order requests the purchase of a Participating
Fund's shares, Insurance Company will pay for such purchases by wiring
Federal Funds to the Participating Fund or its designated custodial
account on the day the order is transmitted. Insurance Company shall
make all reasonable efforts to transmit to the applicable Participating
Fund payment in Federal Funds by 12:00 noon Eastern time on the
Business Day the Participating Fund receives the notice of the order
pursuant to Section 3.5. Each applicable Participating Fund will
execute such orders at the applicable net asset value per share
determined as of the close of trading on the effective trade date if
the Participating Fund receives payment in Federal Funds by 12:00
midnight Eastern time on the Business Day the Participating Fund
receives the notice of the order pursuant to Section 3.5. If payment in
Federal Funds for any purchase is not received or is received by a
Participating Fund after 12:00 noon Eastern time on such Business Day,
Insurance Company shall promptly, upon each applicable Participating
Fund's request, reimburse the respective Participating Fund for any
charges, costs, fees, interest or other expenses incurred by the
Participating Fund in connection with any advances to, or borrowings or
overdrafts by, the Participating Fund, or any similar expenses incurred
by the Participating Fund, as a result of portfolio transactions
effected by the Participating Fund based upon such purchase request. If
Insurance Company's order requests the redemption of any Participating
Fund's shares valued at or greater than $1 million dollars, the
Participating Fund will wire such amount to Insurance Company within
seven days of the order.
3.9 Each Participating Fund has the obligation to ensure that its shares
are registered with applicable federal agencies at all times.
3.10 Each Participating Fund will confirm each purchase or redemption order
made by Insurance Company. Transfer of Participating Fund shares will
be by book entry only. No share certificates will be issued to
Insurance Company. Insurance Company will record shares ordered from a
Participating Fund in an appropriate title for the corresponding
account.
3.11 Each Participating Fund shall credit Insurance Company with the
appropriate number of shares.
3.12 On each ex-dividend date of a Participating Fund or, if not a Business
Day, on the first Business Day thereafter, each Participating Fund
shall communicate to Insurance Company the amount of dividend and
capital gain, if any, per share. All dividends and capital gains shall
be automatically reinvested in additional shares of the applicable
Participating Fund at the net asset value per share on the ex-dividend
date. Each Participating Fund shall, on the day after the ex-dividend
date or, if not a Business Day, on the first Business Day thereafter,
notify Insurance Company of the number of shares so issued.
ARTICLE IV
STATEMENTS AND REPORTS
4.1 Each Participating Fund shall provide monthly statements of account as
of the end of each month for all of Insurance Company's accounts by the
fifteenth (15th) Business Day of the following month.
4.2 Each Participating Fund shall distribute to Insurance Company copies of
the Participating Fund's Prospectuses, proxy materials, notices,
periodic reports and other printed materials (which the Participating
Fund customarily provides to its shareholders) in quantities as
Insurance Company may reasonably request for distribution to each
Contractholder and Participant. Insurance Company may elect to print
the Participating Fund's prospectus and/or its statement of additional
information in combination with other fund companies' prospectuses and
statements of additional information, which are also offered in
Insurance Companies insurance product at their own cost. At Insurance
Company's request, the Participating Fund will provide, in lieu of
printed documents, camera-ready copy or diskette of prospectuses,
annual and semi-annual reports for printing by the Insurance Company.
4.3 Each Participating Fund will provide to Insurance Company at least one
complete copy of all registration statements, Prospectuses, 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 Participating Fund
or its shares, contemporaneously with the filing of such document with
the Commission or other regulatory authorities.
4.4 Insurance Company will provide to each Participating Fund at least one
copy of all registration statements, Prospectuses, 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 Contracts or the
Separate Account, contemporaneously with the filing of such document
with the Commission.
4.5 Insurance Company will provide Participating Funds on a semi-annual
basis, or more frequently as reasonably requested by the Participating
Funds, with a current tabulation of the number of existing Variable
Contract owners of Insurance Company whose Variable Contract values are
invested in the Participating Funds. This tabulation will be sent to
Participating Funds in the form of a letter signed by a duly authorized
officer of the Insurance Company attesting to the accuracy of the
information contained in the letter.
ARTICLE V
EXPENSES
5.1 The charge to each Participating Fund for all expenses and costs of the
Participating Fund, including but not limited to management fees,
administrative expenses and legal and regulatory costs, will be
included in the determination of the Participating Fund's daily net
asset value per share.
5.2 Except as provided in Article IV and V, in particular in the next
sentence, Insurance Company shall not be required to pay directly any
expenses of any Participating Fund or expenses relating to the
distribution of its shares. Insurance Company shall pay the following
expenses or costs:
a. Such amount of the production expenses of any Participating
Fund materials, including the cost of printing a Participating
Fund's Prospectus, or marketing materials for prospective
Insurance Company Contractholders and Participants as Dreyfus
and Insurance Company shall agree from time to time.
b. Distribution expenses of any Participating Fund
materials or marketing materials for prospective Insurance
Company Contractholders and Participants.
c. Distribution expenses of any Participating Fund
materials or marketing materials for
Insurance Company Contractholders and Participants.
Except as provided herein, all other expenses of each Participating
Fund shall not be borne by Insurance Company.
ARTICLE VI
EXEMPTIVE RELIEF
6.1 Insurance Company has reviewed a copy of (i) the amended order dated
December 31, 1997 of the Securities and Exchange Commission under
Section 6(c) of the Act with respect to Dreyfus Variable Investment
Fund and Dreyfus Life and Annuity Index Fund, Inc.; and (ii) the order
dated February 5, 1998 of the Securities and Exchange Commission under
Section 6(c) of the Act with respect to The Dreyfus Socially
Responsible Growth Fund, Inc. and Dreyfus Investment Portfolios, and,
in particular, has reviewed the conditions to the relief set forth in
each related Notice. As set forth therein, if Dreyfus Variable
Investment Fund, Dreyfus Life and Annuity Index Fund, Inc., The Dreyfus
Socially Responsible Growth Fund, Inc. or Dreyfus Investment Portfolios
is a Participating Fund, Insurance Company agrees, as applicable, to
report any potential or existing conflicts promptly to the respective
Board of Dreyfus Variable Investment Fund, Dreyfus Life and Annuity
Index Fund, Inc., The Dreyfus Socially Responsible Growth Fund, Inc.
and/or Dreyfus Investment Portfolios, and, in particular, whenever
contract voting instructions are disregarded, and recognizes that it
will be responsible for assisting each applicable Board in carrying out
its responsibilities under such application. Insurance Company agrees
to carry out such responsibilities with a view to the interests of
existing Contractholders.
6.2 If a majority of the Board, or a majority of Disinterested Board
Members, determines that a material irreconcilable conflict exists with
regard to Contractholder investments in a Participating Fund, the Board
shall give prompt notice to all Participating Companies and any other
Participating Fund. If the Board determines that Insurance Company is
responsible for causing or creating said conflict, Insurance Company
shall at its sole cost and expense, and to the extent reasonably
practicable (as determined by a majority of the Disinterested Board
Members), take such action as is necessary to remedy or eliminate the
irreconcilable material conflict. Such necessary action may include,
but shall not be limited to:
a. Withdrawing the assets allocable to the Separate Account
from the Participating Fund and reinvesting such assets in
another Participating Fund (if applicable) or a different
investment medium, or submitting the question of whether such
segregation should be implemented to a vote of all affected
Contractholders; and/or
b. Establishing a new registered management investment company.
6.3 If a material irreconcilable conflict arises as a result of a decision
by Insurance Company to disregard Contractholder voting instructions
and said decision represents a minority position or would preclude a
majority vote by all Contractholders having an interest in a
Participating Fund, Insurance Company may be required, at the Board's
election, to withdraw the investments of the Separate Account in that
Participating Fund.
6.4 For the purpose of this Article, a majority of the Disinterested Board
Members shall determine whether or not any proposed action adequately
remedies any irreconcilable material conflict, but in no event will any
Participating Fund be required to bear the expense of establishing a
new funding medium for any Contract. Insurance Company shall not be
required by this Article to establish a new funding medium for any
Contract if an offer to do so has been declined by vote of a majority
of the Contractholders materially adversely affected by the
irreconcilable material conflict.
6.5 No action by Insurance Company taken or omitted, and no action by the
Separate Account or any Participating Fund taken or omitted as a result
of any act or failure to act by Insurance Company pursuant to this
Article VI, shall relieve Insurance Company of its obligations under,
or otherwise affect the operation of, Article V.
ARTICLE VII
VOTING OF PARTICIPATING FUND SHARES
7.1 Each Participating Fund shall provide Insurance Company with copies, at
no cost to Insurance Company, of the Participating Fund's proxy
material, reports to shareholders and other communications to
shareholders in such quantity as Insurance Company shall reasonably
require for distributing to Contractholders or Participants.
Insurance Company shall:
(a) solicit voting instructions from Contractholders or
Participants on a timely basis and in accordance with
applicable law;
(b) vote the Participating Fund shares in accordance
with instructions received from Contractholders or
Participants; and
(c) vote the Participating Fund shares for which no
instructions have been received in the same proportion as
Participating Fund shares for which instructions have been
received.
Insurance Company agrees at all times to vote its General Account
shares in the same proportion as the Participating Fund shares for
which instructions have been received from Contractholders or
Participants. Insurance Company further agrees to be responsible for
assuring that voting the Participating Fund shares for the Separate
Account is conducted in a manner consistent with other Participating
Companies.
7.2 Insurance Company agrees that it shall not, without the prior written
consent of each applicable Participating Fund and Dreyfus, solicit,
induce or encourage Contractholders to (a) change or supplement the
Participating Fund's current investment adviser or (b) change, modify,
substitute, add to or delete from the current investment media for the
Contracts.
ARTICLE VIII
MARKETING AND REPRESENTATIONS
8.1 Each Participating Fund or its underwriter shall periodically furnish
Insurance Company with the following documents, in quantities as
Insurance Company may reasonably request:
a. Current Prospectus and any supplements thereto; and
b. Other marketing materials.
Expenses for the production of such documents shall be borne by
Insurance Company in accordance with Section 5.2 of this Agreement.
8.2 Insurance Company shall designate certain persons or entities that
shall have the requisite licenses to solicit applications for the sale
of Contracts. No representation is made as to the number or amount of
Contracts that are to be sold by Insurance Company. Insurance Company
shall make reasonable efforts to market the Contracts and shall comply
with all applicable federal and state laws in connection therewith.
8.3 Insurance Company shall furnish, or shall cause to be furnished, to
each applicable Participating Fund or its designee, each piece of sales
literature or other promotional material in which the Participating
Fund, its investment adviser or the administrator is named, at least
fifteen Business Days prior to its use. No such material shall be used
unless the Participating Fund or its designee approves such material.
Such approval (if given) must be in writing and shall be presumed not
given if not received within ten Business Days after receipt of such
material. Each applicable Participating Fund or its designee, as the
case may be, shall use all reasonable efforts to respond within ten
days of receipt.
8.4 Insurance Company shall not give any information or make any
representations or statements on behalf of a Participating Fund or
concerning a Participating Fund in connection with the sale of the
Contracts other than the information or representations contained in
the registration statement or Prospectus of, as may be amended or
supplemented from time to time, or in reports or proxy statements for,
the applicable Participating Fund, or in sales literature or other
promotional material approved by the applicable Participating Fund.
8.5 Each Participating Fund shall furnish, or shall cause to be furnished,
to Insurance Company, each piece of the Participating Fund's sales
literature or other promotional material in which Insurance Company or
the Separate Account is named, at least fifteen Business Days prior to
its use. No such material shall be used unless Insurance Company
approves such material. Such approval (if given) must be in writing and
shall be presumed not given if not received within ten Business Days
after receipt of such material. Insurance Company shall use all
reasonable efforts to respond within ten days of receipt.
8.6 Each Participating Fund shall not, in connection with the sale of
Participating Fund shares, give any information or make any
representations on behalf of Insurance Company or concerning Insurance
Company, the Separate Account, or the Contracts other than the
information or representations contained in a registration statement
or prospectus for the Contracts, as may be amended or supplemented
from time to time, or in published reports for the Separate Account
that are in the public domain or approved by Insurance Company for
distribution to Contractholders or Participants, or in sales
literature or other promotional material approved by Insurance
Company.
8.7 For purposes of this Agreement, the phrase "sales literature or other
promotional material" or words of similar import include, without
limitation, advertisements (such as material published, or designed for
use, in a newspaper, magazine or other periodical, radio, television,
telephone or tape recording, videotape display, signs or billboards,
motion pictures or other public media), sales literature (such as any
written communication distributed or made generally available to
customers or the public, including brochures, circulars, research
reports, market letters, form letters, seminar texts, or reprints or
excerpts of any other advertisement, sales literature, or published
article), educational or training materials or other communications
distributed or made generally available to some or all agents or
employees, registration statements, prospectuses, statements of
additional information, shareholder reports and proxy materials, and
any other material constituting sales literature or advertising under
National Association of Securities Dealers, Inc. rules, the Act or the
1933 Act.
ARTICLE IX
INDEMNIFICATION
9.1 Insurance Company agrees to indemnify and hold harmless each
Participating Fund, Dreyfus, each respective Participating Fund's
investment adviser and sub-investment adviser (if applicable), each
respective Participating Fund's distributor, and their respective
affiliates, and each of their directors, trustees, officers, employees,
agents and each person, if any, who controls or is associated with any
of the foregoing entities or persons within the meaning of the 1933 Act
(collectively, the "Indemnified Parties" for purposes of Section 9.1),
against any and all losses, claims, damages or liabilities joint or
several (including any investigative, legal and other expenses
reasonably incurred in connection with, and any amounts paid in
settlement of, any action, suit or proceeding or any claim asserted)
for which the Indemnified Parties may become subject, under the 1933
Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect to thereof) (i) arise out of or are
based upon any untrue statement or alleged untrue statement of any
material fact contained in information furnished by Insurance Company
for use in the registration statement or Prospectus or sales literature
or advertisements of the respective Participating Fund or with respect
to the Separate Account or Contracts, 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; (ii) arise out of or as a result of conduct,
statements or representations (other than statements or representations
contained in the Prospectus and sales literature or advertisements of
the respective Participating Fund) of Insurance Company or its agents,
with respect to the sale and distribution of Contracts for which the
respective Participating Fund's shares are an underlying investment;
(iii) arise out of the wrongful conduct of Insurance Company or persons
under its control with respect to the sale or distribution of the
Contracts or the respective Participating Fund's shares; (iv) arise out
of Insurance Company's incorrect calculation and/or untimely reporting
of net purchase or redemption orders; or (v) arise out of any breach by
Insurance Company of a material term of this Agreement or as a result
of any failure by Insurance Company to provide the services and furnish
the materials or to make any payments provided for in this Agreement.
Insurance Company will reimburse any Indemnified Party in connection
with investigating or defending any such loss, claim, damage, liability
or action; provided, however, that with respect to clauses (i) and (ii)
above Insurance Company will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or
is based upon any untrue statement or omission or alleged omission made
in such registration statement, prospectus, sales literature, or
advertisement in conformity with written information furnished to
Insurance Company by the respective Participating Fund specifically for
use therein. This indemnity agreement will be in addition to any
liability which Insurance Company may otherwise have.
9.2 Each Participating Fund severally agrees to indemnify and hold harmless
Insurance Company and each of its directors, officers, employees,
agents and each person, if any, who controls Insurance Company within
the meaning of the 1933 Act against any losses, claims, damages or
liabilities to which Insurance Company or any such director, officer,
employee, agent or controlling person may become subject, under the
1933 Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) (1) 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
sales literature or advertisements of the respective Participating
Fund; (2) arise out of or are based upon the omission to state in the
registration statement or Prospectus or sales literature or
advertisements of the respective Participating Fund any material fact
required to be stated therein or necessary to make the statements
therein not misleading; or (3) 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 sales
literature or advertisements with respect to the Separate Account or
the Contracts and such statements were based on information provided to
Insurance Company by the respective Participating Fund; and the
respective Participating Fund will reimburse any legal or other
expenses reasonably incurred by Insurance Company or any such director,
officer, employee, agent or controlling person in connection with
investigating or defending any such loss, claim, damage, liability or
action; provided, however, that the respective Participating Fund will
not be liable in any such case to the extent that any such loss, claim,
damage or liability arises out of or is based upon an untrue statement
or omission or alleged omission made in such registration statement,
Prospectus, sales literature or advertisements in conformity with
written information furnished to the respective Participating Fund by
Insurance Company specifically for use therein. This indemnity
agreement will be in addition to any liability which the respective
Participating Fund may otherwise have.
9.3 Each Participating Fund severally shall indemnify and hold Insurance
Company harmless against any and all liability, loss, damages, costs or
expenses which Insurance Company may incur, suffer or be required to
pay due to the respective Participating Fund's (1) incorrect
calculation of the daily net asset value, dividend rate or capital gain
distribution rate; (2) incorrect reporting of the daily net asset
value, dividend rate or capital gain distribution rate; and (3)
untimely reporting of the net asset value, dividend rate or capital
gain distribution rate; provided that the respective Participating Fund
shall have no obligation to indemnify and hold harmless Insurance
Company if the incorrect calculation or incorrect or untimely reporting
was the result of incorrect information furnished by Insurance Company
or information furnished untimely by Insurance Company or otherwise as
a result of or relating to a breach of this Agreement by Insurance
Company.
9.4 Promptly after receipt by an indemnified party under this Article of
notice of the commencement of any action, such indemnified party will,
if a claim in respect thereof is to be made against the indemnifying
party under this Article, notify the indemnifying party of the
commencement thereof. The omission to so notify the indemnifying party
will not relieve the indemnifying party from any liability under this
Article IX, except to the extent that the omission results in a failure
of actual notice to the indemnifying party and such indemnifying party
is damaged solely as a result of the failure to give such notice. In
case any such action is brought against any indemnified party, and it
notified the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the
extent that it may wish, assume the defense thereof, with counsel
satisfactory to such indemnified party, and to the extent that the
indemnifying party has given notice to such effect to the indemnified
party and is performing its obligations under this Article, the
indemnifying party shall not be liable for any legal or other expenses
subsequently incurred by such indemnified party in connection with the
defense thereof, other than reasonable costs of investigation.
Notwithstanding the foregoing, in any such proceeding, any indemnified
party shall have the right to retain its own counsel, but the fees and
expenses of such counsel shall be at the expense of such indemnified
party unless (i) the indemnifying party and the indemnified party shall
have mutually agreed to the retention of such counsel or (ii) the named
parties to any such proceeding (including any impleaded parties)
include both the indemnifying party and the indemnified party and
representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between
them. The indemnifying party shall not be liable for any settlement of
any proceeding effected without its written consent.
A successor by law of the parties to this Agreement shall be entitled
to the benefits of the indemnification contained in this Article IX.
The provisions of this Article IX shall survive termination of this
Agreement.
9.5 Insurance Company shall indemnify and hold each respective
Participating Fund, Dreyfus and sub-investment adviser of the
Participating Fund harmless against any tax liability incurred by the
Participating Fund under Section 851 of the Code arising from purchases
or redemptions by Insurance Company's General Accounts or the account
of its affiliates.
ARTICLE X
COMMENCEMENT AND TERMINATION
10.1 This Agreement shall be effective as of the date hereof and shall
continue in force until terminated in accordance with the provisions
herein.
10.2 This Agreement shall terminate without penalty:
a. As to any Participating Fund, at the option of Insurance
Company or the Participating Fund at any time from the date
hereof upon 180 days' notice, unless a shorter time is
agreed to by the respective Participating Fund and Insurance
Company;
b. As to any Participating Fund, at the option of Insurance
Company, if shares of that Participating Fund are not
reasonably available to meet the requirements of the
Contracts as determined by Insurance Company. Prompt notice
of election to terminate shall be furnished by Insurance
Company, said termination to be effective ten days after
receipt of notice unless the Participating Fund makes
available a sufficient number of shares to meet the
requirements of the Contracts within said ten-day period;
c. As to a Participating Fund, at the option of Insurance
Company, upon the institution of formal proceedings against
that Participating Fund by the Commission, National
Association of Securities Dealers or any other regulatory
body, the expected or anticipated ruling, judgment or
outcome of which would, in Insurance Company's reasonable
judgment, materially impair that Participating Fund's
ability to meet and perform the Participating Fund's
obligations and duties hereunder. Prompt notice of election
to terminate shall be furnished by Insurance Company with
said termination to be effective upon receipt of notice;
d. As to a Participating Fund, at the option of each
Participating Fund, upon the institution of formal
proceedings against Insurance Company by the Commission,
National Association of Securities Dealers or any other
regulatory body, the expected or anticipated ruling,
judgment or outcome of which would, in the Participating
Fund's reasonable judgment, materially impair Insurance
Company's ability to meet and perform Insurance Company's
obligations and duties hereunder. Prompt notice of election
to terminate shall be furnished by such Participating Fund
with said termination to be effective upon receipt of
notice;
e. As to a Participating Fund, at the option of that
Participating Fund, if the Participating Fund shall
determine, in its sole judgment reasonably exercised in good
faith, that Insurance Company has suffered a material
adverse change in its business or financial condition or is
the subject of material adverse publicity and such material
adverse change or material adverse publicity is likely to
have a material adverse impact upon the business and
operation of that Participating Fund or Dreyfus, such
Participating Fund shall notify Insurance Company in writing
of such determination and its intent to terminate this
Agreement, and after considering the actions taken by
Insurance Company and any other changes in circumstances
since the giving of such notice, such determination of the
Participating Fund shall continue to apply on the sixtieth
(60th) day following the giving of such notice, which
sixtieth day shall be the effective date of termination;
f. As to a Participating Fund, at the option of Insurance
Company, if Insurance Company shall determine, in its sole
judgment reasonably exercised in good faith that the
Participating Fund has suffered a material adverse change in
its business or financial condition or is the subject of
material adverse publicity and such material adverse change
or material adverse publicity is likely to have a material
adverse impact upon the business and operations of Insurance
Company or its Separate Account, the Insurance Company shall
notify the Participating Fund in writing of such
determination and its intent to terminate this Agreement,
and after considering the actions taken by the Participating
Fund and any other changes in circumstances since the giving
of such notice, such determination of Insurance Company
shall continue to apply to the sixtieth (60th) day following
the giving of such notice, which sixtieth day shall be the
effective date of termination;
g. Upon termination of the Investment Advisory Agreement
between that Participating Fund and Dreyfus or its
successors unless Insurance Company specifically approves
the selection of a new Participating Fund investment
adviser. Such Participating Fund shall promptly furnish
notice of such termination to Insurance Company;
h. As to a Participating Fund, in the event that Participating
Fund's shares are not registered, issued or sold in
accordance with applicable federal law, or such law
precludes the use of such shares as the underlying
investment medium of Contracts issued or to be issued by
Insurance Company. Termination shall be effective
immediately as to that Participating Fund only upon such
occurrence without notice;
i. At the option of a Participating Fund upon a determination
by its Board in good faith that it is no longer advisable
and in the best interests of shareholders of that
Participating Fund to continue to operate pursuant to this
Agreement. Termination pursuant to this Subsection (h) shall
be effective upon notice by such Participating Fund to
Insurance Company of such termination;
j. At the option of a Participating Fund if the Contracts cease
to qualify as annuity contracts or life insurance policies,
as applicable, under the Code, or if such Participating Fund
reasonably believes that the Contracts may fail to so
qualify;
k. At the option of any party to this Agreement, upon another
party's breach of any material provision of this Agreement;
l. At the option of a Participating Fund, if the Contracts are
not registered, issued or sold in accordance with applicable
federal and/or state law; or
m. Upon assignment of this Agreement, unless made with the
written consent of every other
non-assigning party.
Any such termination pursuant to Section 10.2a, 10.2d, 10.2e, 10.2f or
10.2k herein shall not affect the operation of Article V of this
Agreement. Any termination of this Agreement shall not affect the
operation of Article IX of this Agreement.
10.3 Notwithstanding any termination of this Agreement pursuant to Section
10.2 hereof, each Participating Fund and Dreyfus may, at the option of
the Participating Fund, continue to make available additional shares of
that Participating Fund for as long as the Participating Fund desires
pursuant to the terms and conditions of this Agreement as provided
below, for all Contracts in effect on the effective date of termination
of this Agreement (hereinafter referred to as "Existing Contracts").
Specifically, without limitation, if that Participating Fund and
Dreyfus so elect to make additional Participating Fund shares
available, the owners of the Existing Contracts or Insurance Company,
whichever shall have legal authority to do so, shall be permitted to
reallocate investments in that Participating Fund, redeem investments
in that Participating Fund and/or invest in that Participating Fund
upon the making of additional purchase payments under the Existing
Contracts. In the event of a termination of this Agreement pursuant to
Section 10.2 hereof, such Participating Fund and Dreyfus, as promptly
as is practicable under the circumstances, shall notify Insurance
Company whether Dreyfus and that Participating Fund will continue to
make that Participating Fund's shares available after such termination.
If such Participating Fund shares continue to be made available after
such termination, the provisions of this Agreement shall remain in
effect and thereafter either of that Participating Fund or Insurance
Company may terminate the Agreement as to that Participating Fund, as
so continued pursuant to this Section 10.3, upon prior written notice
to the other party, such notice to be for a period that is reasonable
under the circumstances but, if given by the Participating Fund, need
not be for more than six months.
10.4 Termination of this Agreement as to any one Participating Fund shall
not be deemed a termination as to any other Participating Fund unless
Insurance Company or such other Participating Fund, as the case may be,
terminates this Agreement as to such other Participating Fund in
accordance with this Article X.
ARTICLE XI
AMENDMENTS
11.1 Any other changes in the terms of this Agreement, except for the
addition or deletion of any Participating Fund as specified in Exhibit
A, shall be made by agreement in writing between Insurance Company and
each respective Participating Fund.
ARTICLE XII
NOTICE
12.1 Each notice required by this Agreement shall be given by certified
mail, return receipt requested, to the appropriate parties at the
following addresses:
Insurance Company: Allstate Life Insurance Company of New York
0000 Xxxxxxx Xxxx, Xxxxx X0X
Xxxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxx, ESQ.
Participating Funds: [Name of Fund]
c/o Premier Mutual Fund Services, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Vice President and Assistant Secretary
with copies to: [Name of Fund]
c/o The Dreyfus Corporation
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: General Counsel
Stroock & Stroock & Xxxxx
000 Xxxxxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attn: Xxxxx X. Xxxx, Esq.
Xxxxxx X. Xxxxxxx, Esq.
Notice shall be deemed to be given on the date of receipt by the
addresses as evidenced by the return receipt.
ARTICLE XIII
MISCELLANEOUS
13.1 This Agreement has been executed on behalf of each Fund by the
undersigned officer of the Fund in his capacity as an officer of the
Fund. The obligations of this Agreement shall only be binding upon the
assets and property of the Fund and shall not be binding upon any
director, trustee, officer or shareholder of the Fund individually. It
is agreed that the obligations of the Funds are several and not joint,
that no Fund shall be liable for any amount owing by another Fund and
that the Funds have executed one instrument for convenience only.
ARTICLE XIV
LAW
14.1 This Agreement shall be construed in accordance with the internal laws
of the State of New York, without giving effect to principles of
conflict of laws.
ARTICLE XV
FOREIGN TAX CREDITS
15.1 Each Participating Fund agrees to consult in advance with Insurance
Company concerning any decision to elect or not to pass through the
benefit of any foreign tax credits to the Participating Fund's
shareholders pursuant to Section 853 of the Code.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement to be duly
executed and attested as of the date first above written.
ALLSTATE LIFE INSURANCE COMPANY
OF NEW YORK
By:
Its:
Attest:_____________________
DREYFUS LIFE AND ANNUITY INDEX FUND, INC. (d/b/a DREYFUS STOCK INDEX
FUND)
By:
Its:
Attest:_____________________
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC.
By:
Its:
Attest:_____________________
DREYFUS VARIABLE INVESTMENT FUND
By:
Its:
Attest:_____________________
DREYFUS INVESTMENT PORTFOLIOS
By:
Its:
Attest:_____________________
EXHIBIT A
LIST OF PARTICIPATING FUNDS
Exhibit 8(d)
PARTICIPATION AGREEMENT
Among
VARIABLE INSURANCE PRODUCTS FUND,
FIDELITY DISTRIBUTORS CORPORATION
and
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
THIS AGREEMENT, made and entered into as of the ___day of
_______, 2000 by and among ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK,
(hereinafter the "Company"), a New York corporation, 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 such account hereinafter
referred to as the "Account"), and the VARIABLE INSURANCE PRODUCTS FUND, an
unincorporated business trust organized under the laws of the Commonwealth of
Massachusetts (hereinafter the "Fund") and FIDELITY DISTRIBUTORS CORPORATION
(hereinafter the "Underwriter"), a Massachusetts corporation.
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 (collectively, the "Variable Insurance Products") 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 beneficial interest in the Fund is divided into
several series of shares, each representing the interest in a particular managed
portfolio of securities and other assets, any one or more of which may be made
available under this Agreement, as may be amended from time to time by mutual
agreement of the parties hereto (each such series hereinafter referred to as a
"Portfolio"); and
WHEREAS, the Fund has obtained an order from the Securities and
Exchange Commission, dated October 15, 1985 (File No. 812-6102), 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, Fidelity Management & Research Company (the "Adviser")
is duly registered as an investment adviser under the federal Investment
Advisers Act of 1940 and any applicable state securities law; and
WHEREAS, the Company has registered or will register certain
variable life insurance and 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 the aforesaid variable annuity
contracts; and
WHEREAS, the Company has registered or will register each
Account as a unit investment trust under the 1940 Act; and
WHEREAS, the Underwriter is registered as a broker dealer with
the Securities and Exchange Commission ("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, to the extent permitted by applicable insurance laws
and regulations, the Company intends to purchase shares in the Portfolios on
behalf of each Account to fund certain of the aforesaid variable life and
variable annuity contracts and the Underwriter is authorized to sell such shares
to unit investment trusts such as each Account at net asset value;
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 Underwriter agrees to sell to the Company those shares
of the Fund 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 the Fund. 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 10:00 a.m. Boston time
on the next following Business Day. Beginning within three months of the
effective date of this Agreement, the Company agrees that orders for the
purchase or redemption of shares of the Funds on behalf of the Accounts will be
placed directly by the Company with the Funds or their transfer agent by
electronic transmission. "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 Securities and Exchange Commission.
1.2. The Fund agrees to make its shares available indefinitely
for purchase at the applicable net asset value per share by the Company and its
Accounts on those days on which the Fund calculates its net asset value pursuant
to rules of the Securities and Exchange Commission 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
shares of any Portfolio if such action is required by law or by regulatory
authorities having jurisdiction or is, in the sole discretion of the Board
acting in good faith and in light of their fiduciary duties under federal and
any applicable state laws, necessary in the best interests of the shareholders
of such Portfolio.
1.3. The Fund and the Underwriter agree that shares of the Fund
will be sold only to Participating Insurance Companies and their separate
accounts. No shares of any Portfolio will be sold to the general public.
1.4. The Fund and the Underwriter will not sell Fund shares 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 the Fund 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.
1.6. The Company agrees that purchases and redemptions of
Portfolio shares offered by the then current prospectus of the Fund shall be
made in accordance with the provisions of such prospectus. The Company agrees
that all net amounts available under the variable annuity contracts with the
form number(s) which are listed on Schedule A attached hereto and incorporated
herein by this reference, as such Schedule A 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, or in the
Company's general account, provided that such amounts may also be invested in an
investment company other than the Fund.
1.7. The Company shall pay for Fund shares on the next Business
Day after an order to purchase Fund shares is made in accordance with the
provisions of Section 1.1 hereof. Payment shall be in federal funds transmitted
by wire. For purpose of Section 2.10 and 2.11, 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 same day notice (by wire or
telephone, followed by written confirmation) to the Company of any income,
dividends or capital gain distributions payable on the Fund's shares. 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
practical after the net asset value per share is calculated (normally by 6:30
p.m. Boston time) and shall use its best efforts to make such net asset value
per share available by 7 p.m. Boston time.
ARTICLE II. Representations and Warranties
2.1. The Company represents and warrants that the Contracts are
or will be registered under the 1933 Act; 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 thereof as a segregated
asset account under the New York Insurance Code 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 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 New
York 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 represents that it is currently qualified as a
Regulated Investment Company under Subchapter M of the Internal Revenue Code of
1986, as amended, (the "Code") and that it will make every effort to maintain
such qualification (under Subchapter M or any successor or similar provision)
and that it will notify the Company immediately upon having a reasonable basis
for believing that it has ceased to so qualify or that it might not so qualify
in the future.
2.4. The Company represents that the Contracts are currently
treated as endowment or annuity 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.
2.5. (a) With respect to Initial Class shares, 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. The Fund has adopted a "no fee" or "defensive" Rule
12b-1 Plan under which it makes no payments for distribution expenses. 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.
(b) With respect to Service Class shares, the Fund has adopted a Rule
12b-1 Plan under which it makes payments to finance distribution expenses.
The Fund represents and warrants that it has a board of trustees, a
majority of whom are not interested persons of the Fund, which has
formulated and approved the Fund's Rule 12b-1 Plan to finance distribution
expenses of the Fund and that any changes to the Fund's Rule 12b-1 Plan
will be approved by a similarly constituted board of trustees.
2.6. The Fund makes no representation as to whether any aspect
of its operations (including, but not limited to, fees and expenses and
investment policies) complies with the insurance laws or regulations of the
various states except that the Fund represents that the Fund's investment
policies, fees and expenses are and shall at all times remain in compliance with
the laws of the State of New York and the Fund and the Underwriter represent
that their respective operations are and shall at all times remain in material
compliance with the laws of the State of New York to the extent required to
perform this Agreement.
2.7. 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 the laws of the State of New York and all applicable
state and federal securities laws, including without limitation the 1933 Act,
the 1934 Act, and the 0000 Xxx.
2.8. The Fund 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.
2.9. The Underwriter represents and warrants that the Adviser is
and shall remain duly registered in all material respects under all applicable
federal and state securities laws and that the Adviser shall perform its
obligations for the Fund in compliance in all material respects with the laws of
the State of New York and any applicable state and federal securities laws.
2.10. The Fund and Underwriter represent and warrant that all of
their directors, officers, employees, investment advisers, and other
individuals/entities dealing with the money and/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) 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.
2.11. The Company represents and warrants that all of its
directors, officers, employees, investment advisers, and other
individuals/entities dealing with the money and/or securities of the Fund are
covered by a blanket fidelity bond or similar coverage for the benefit of the
Fund, and that said bond is issued by a reputable bonding company, includes
coverage for larceny and embezzlement, and is in an amount not less than $5
million. 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 Fund and the Underwriter in the event that such coverage no longer
applies.
ARTICLE III. Prospectuses and Proxy Statements; Voting
3.1. The Underwriter shall provide the Company with as many
printed copies of the Fund's current prospectus and Statement of Additional
Information as the Company may reasonably request. If requested by the Company
in lieu thereof, the Fund shall provide camera-ready film 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. 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 annually 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.
3.2. The Fund's prospectus shall state that the Statement of
Additional Information for the Fund is available from the Underwriter or the
Company (or in the Fund's discretion, the Prospectus shall state that such
Statement is available from the Fund).
3.3. The Fund, at its expense, shall provide the Company with
copies of its proxy statements, reports to shareholders, and other
communications (except for prospectuses and Statements of Additional
Information, which are covered in Section 3.1) to shareholders in such quantity
as the Company shall reasonably require for distributing to Contract owners.
3.4. If and to the extent required by law the Company shall: (i) solicit
voting instructions from Contract owners; (ii) vote the Fund shares in
accordance with instructions received from Contract owners; and (iii) vote Fund
shares for which no instructions have been received in a particular separate
account in the same proportion as Fund shares of such portfolio for which
instructions have been received in that separate account, so long as and to the
extent that the Securities and Exchange Commission
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 standards set forth on Schedule B
attached hereto and incorporated herein by this reference, which standards will
also be provided to the other Participating Insurance Companies.
3.5. The Fund will comply with all provisions of the 1940 Act
requiring voting by shareholders, and in particular the Fund will either provide
for annual meetings or comply with Section 16(c) of the 1940 Act (although the
Fund is not one of the trusts described in Section 16(c) of that Act) as well as
with Sections 16(a) and, if and when applicable, 16(b). Further, the Fund will
act in accordance with the Securities and Exchange Commission's interpretation
of the requirements of Section 16(a) with respect to periodic elections of
trustees and with whatever rules the Commission may promulgate with respect
thereto.
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 or its investment 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 reasonably objects to such use within
fifteen Business Days after receipt of such material.
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, 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 and/or its
separate 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 reasonably objects
to such use within fifteen Business Days after receipt of such material.
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 all
amendments to any of the above, that relate to the Fund or its shares,
contemporaneously with the filing of such document with the Securities and
Exchange Commission 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 all amendments to any of the above, that relate to the
Contracts or each Account, contemporaneously with the filing of such document
with 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, any
of the following that refer to the Fund or any affiliate of the Fund:
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, research
reports, market letters, form letters, seminar texts, reprints or excerpts of
any other advertisement, sales literature, or published article), educational or
training materials or other communications distributed or made generally
available to some or all agents or employees, and registration statements,
prospectuses, Statements of Additional Information, shareholder reports, and
proxy materials.
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 or any
Portfolio 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.
5.2. All expenses incident to performance by the Fund under this
Agreement shall be paid by the Fund. The Fund 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 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,
and all taxes on the issuance or transfer of the Fund's shares.
5.3. The Company shall bear the expenses of distributing the
Fund's prospectus, proxy materials and reports to owners of Contracts issued by
the Company.
ARTICLE VI. Diversification
6.1. 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 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 and 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. In the event of a breach of this Article VI by the Fund, it will
take all reasonable steps (a) to notify Company of such breach and (b) to
adequately diversify the Fund so as to achieve compliance within the grace
period afforded by Regulation 1.817-5.
ARTICLE VII. Potential Conflicts
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 the Fund. An irreconcilable material 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 any 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 an irreconcilable material 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 trustees, 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 irreconcilable material conflict, up to and including: (1),
withdrawing the assets allocable to some or all of the separate accounts from
the Fund or any Portfolio and reinvesting such assets in a different investment
medium, including (but not limited to) another Portfolio of the Fund, 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 (2), establishing a new
registered management investment company or managed separate account.
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 Fund 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 Underwriter and Fund shall continue to accept and
implement orders by the Company for the purchase (and redemption) of shares of
the Fund.
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 Fund 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 an
irreconcilable material 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 Underwriter
and Fund shall continue to accept and implement orders by the Company for the
purchase (and redemption) of shares of the Fund.
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 irreconcilable material 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
irreconcilable material conflict. In the event that the Board determines that
any proposed action does not adequately remedy any irreconcilable material
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 any such
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 Act or 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 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 3.4, 3.5, 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.
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 and each person, if any, who
controls the Fund within the meaning of Section 15 of the 1933 Act
(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 the Fund'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 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 sales
literature (or any amendment or supplement) or otherwise for use
in connection with the sale of the Contracts or Fund 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 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 Fund Shares; or
(iii) arise out of any untrue statement or alleged untrue
statement of a material fact contained in a Registration
Statement, prospectus, 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 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.
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 Fund Shares 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 each of its directors and officers and each person, if any, who
controls the Company and its affiliated principal underwriter 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 shall not be unreasonably withheld) 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 Fund's shares 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 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 Fund 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 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 Fund shares; or
(iii)arise out of any untrue statement or alleged untrue
statement of a material fact contained in a
Registration Statement, prospectus, 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 VI of this Agreement); or
(v) arise out of or result from any material breach of
any representation and/or warranty made by the
Underwriter in this Agreement or arise out of or
result from any other material breach of this
Agreement by the Underwriter; as limited by and in
accordance with the provisions of Sections 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 will be entitled to
participate, at its own expense, in the defense thereof. 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 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, damages, liabilities (including amounts paid
in settlement with the written consent of the Fund) 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 VI of this Agreement);or
(ii) arise out of or result from any material breach of any
representation and/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, 1934 and 1940 acts, and the rules and regulations and rulings thereunder,
including such exemptions from those statutes, rules and regulations as the
Securities and Exchange Commission 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 until the first
to occur of:
(a) termination by any party for any reason by sixty (60) days
advance written notice delivered to the other parties; or
(b) termination by the Company by written notice to the Fund
and the Underwriter with respect to any Portfolio based
upon the Company's determination that shares of such
Portfolio are not reasonably available to meet the
requirements of the Contracts; or
(c) termination by the Company by written notice to the Fund
and the Underwriter with respect to any Portfolio in the
event any of the 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 Company by written notice to the Fund
and the Underwriter with respect to any Portfolio in the
event that such 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 the Fund may fail to so qualify;
or
(e) termination by the Company by written notice to the Fund
and the Underwriter with respect to any Portfolio in the
event that such Portfolio fails to meet the
diversification requirements specified in Article VI
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 and/or 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 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 the Fund or the Underwriter by written
notice to the Company, if the Company gives the Fund and
the Underwriter the written notice specified in Section
1.6(b) hereof and at the time such notice was given there
was no notice of termination outstanding under any other
provision of this Agreement; provided, however any
termination under this Section 10.1(h) shall be effective
forty five (45) days after the notice specified in Section
1.6(b) was given.
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 Fund 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 Fund, redeem
investments in the Fund and/or invest in the Fund 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.
10.3 The Company shall not redeem Fund shares attributable to
the Contracts (as opposed to Fund shares attributable to the Company's assets
held in the Account) except (i) as necessary to implement Contract Owner
initiated or approved transactions, or (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") or (iii) as
permitted by an order of the SEC pursuant to Section 26(b) of the 1940 Act. Upon
request, the Company will promptly furnish to the Fund and the Underwriter the
opinion of counsel for the Company (which counsel shall be reasonably
satisfactory to the Fund and the Underwriter) to the effect 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 Portfolio that
was otherwise available under the Contracts without first giving the Fund or the
Underwriter 90 days notice of its intention to do so.
ARTICLE XI. Notices
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 Fund:
00 Xxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Treasurer
If to the Company:
Allstate Life Insurance Company of New York
0000 Xxxxxxx Xxxx, Xxxxx X0X
Xxxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
If to the Underwriter:
00 Xxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Treasurer
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 or 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.
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 California 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 insurance operations
of the Company are being conducted in a manner consistent with the California
Insurance 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; 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 licensed and
registered to perform the obligations of the Underwriter under this Agreement.
The Company shall promptly notify the Fund and the Underwriter of any change in
control of the Company.
12.9. The Company shall furnish, or shall cause to be furnished, to the
Fund 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 ("GAAP"), if any), as soon as practical
and in any event within 90 days after the end of
each fiscal year;
(b) the Company's quarterly statements (statutory)
(and GAAP, if any), as soon as practical and in
any event within 45 days after the end of each
quarterly period:
(c) any financial statement, proxy statement, notice
or report of the Company sent to stockholders
and/or policyholders, as soon as practical after
the delivery thereof to stockholders;
(d) any registration statement (without exhibits) and
financial reports of the Company filed with the
Securities and Exchange Commission or any state
insurance regulator, as soon as practical after
the filing thereof;
(e) any other report submitted to the Company by
independent accountants in connection with any
annual, interim or special audit made by them of
the books of the Company, as soon as practical
after the receipt 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.
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
By: _________________________
Name: _________________________
Title: _________________________
VARIABLE INSURANCE PRODUCTS FUND
By: ________________________
Xxxxxx X. Xxxxx
Senior Vice President
FIDELITY DISTRIBUTORS CORPORATION
By: _______________________
Xxxxx X. Xxxxx
Vice President
Schedule A
Separate Accounts and Associated Contracts
Name of Separate Account and Policy Form Numbers of Contracts
Date Established by Board of Directors Funded By Separate Account
Allstate Life of New York NYLU 446
Separate Account A -
December 15, 1995
SCHEDULE B
PROXY VOTING PROCEDURE
The following is a list of procedures and corresponding responsibilities for the
handling of proxies relating to the Fund by the Underwriter, the Fund and the
Company. The defined terms herein shall have the meanings assigned in the
Participation Agreement except that the term "Company" shall also include the
department or third party assigned by the Insurance Company to perform the steps
delineated below.
1. The number of proxy proposals is given to the Company by the Underwriter
as early as possible before the date set by the Fund for the shareholder
meeting to facilitate the establishment of tabulation procedures. At
this time the Underwriter will inform the Company of the Record, Mailing
and Meeting dates. This will be done verbally approximately two months
before meeting.
2. Promptly after the Record Date, the Company will perform a "tape run",
or other activity, which will generate the names, addresses and number
of units which are attributed to each contractowner/policyholder (the
"Customer") as of the Record Date. Allowance should be made for account
adjustments made after this date that could affect the status of the
Customers' accounts as of the Record Date.
Note: The number of proxy statements is determined by the activities
described in Step #2. The Company will use its best efforts to call in
the number of Customers to Fidelity, as soon as possible, but no later
than two weeks after the Record Date.
3. The Fund's Annual Report no longer needs to be sent to each Customer by
the Company either before or together with the Customers' receipt of a
proxy statement. Underwriter will provide the last Annual Report to the
Company pursuant to the terms of Section 3.3 of the Agreement to which
this Schedule relates.
4. The text and format for the Voting Instruction Cards ("Cards" or "Card")
is provided to the Company by the Fund. The Company, at its expense,
shall produce and personalize the Voting Instruction Cards. The Legal
Department of the Underwriter or its affiliate ("Fidelity Legal") must
approve the Card before it is printed. Allow approximately 2-4 business
days for printing information on the Cards. Information commonly found
on the Cards includes:
a. name (legal name as found on account registration)
b. address
c. Fund or account number
d. coding to state number of units
e. individual Card number for use in tracking and verification of votes (already on Cards as
printed by the Fund)
(This and related steps may occur later in the chronological process due to
possible uncertainties relating to the proposals.)
5. During this time, Fidelity Legal will develop, produce, and the Fund
will pay for the Notice of Proxy and the Proxy Statement (one document).
Printed and folded notices and statements will be sent to Company for
insertion into envelopes (envelopes and return envelopes are provided
and paid for by the Insurance Company). Contents of envelope sent to
Customers by Company will include:
a. Voting Instruction Card(s)
b. One proxy notice and statement (one document)
c. return envelope (postage pre-paid by Company) addressed to the Company or its
tabulation agent
d. "urge buckslip" - optional, but recommended. (This is a small, single sheet of paper
that requests Customers to vote as quickly as possible and that their vote is
important. One copy will be supplied by the Fund.)
e. cover letter - optional, supplied by Company and reviewed and approved in advance by
Fidelity Legal.
6. The above contents should be received by the Company approximately 3-5
business days before mail date. Individual in charge at Company reviews
and approves the contents of the mailing package to ensure correctness
and completeness. Copy of this approval sent to Fidelity Legal.
7. Package mailed by the Company.
* The Fund must allow at least a 15-day solicitation time to the
Company as the shareowner. (A 5-week period is recommended.)
Solicitation time is calculated as calendar days from (but not
including) the meeting, counting backwards.
8. Collection and tabulation of Cards begins. Tabulation usually takes
place in another department or another vendor depending on process used.
An often used procedure is to sort Cards on arrival by proposal into
vote categories of all yes, no, or mixed replies, and to begin data
entry.
Note: Postmarks are not generally needed. A need for postmark
information would be due to an insurance company's internal procedure
and has not been required by Fidelity in the past.
9. Signatures on Card checked against legal name on account registration
which was printed on the Card.
Note: For Example, If the account registration is under "Xxxxxxx X.
Xxxxx, Trustee," then that is the exact legal name to be printed on the
Card and is the signature needed on the Card.
10. If Cards are mutilated, or for any reason are illegible or are not
signed properly, they are sent back to Customer with an explanatory
letter, a new Card and return envelope. The mutilated or illegible Card
is disregarded and considered to be not received for purposes of vote
tabulation. Any Cards that have "kicked out" (e.g. mutilated, illegible)
of the procedure are "hand verified," i.e., examined as to why they did
not complete the system. Any questions on those Cards are usually
remedied individually.
11. There are various control procedures used to ensure proper tabulation of
votes and accuracy of that tabulation. The most prevalent is to sort the
Cards as they first arrive into categories depending upon their vote; an
estimate of how the vote is progressing may then be calculated. If the
initial estimates and the actual vote do not coincide, then an internal
audit of that vote should occur. This may entail a recount.
12. The actual tabulation of votes is done in units which is then converted
to shares. (It is very important that the Fund receives the tabulations
stated in terms of a percentage and the number of shares.) Fidelity
Legal must review and approve tabulation format.
13. Final tabulation in shares is verbally given by the Company to Fidelity
Legal on the morning of the meeting not later than 10:00 a.m. Boston
time. Fidelity Legal may request an earlier deadline if required to
calculate the vote in time for the meeting.
14. A Certification of Mailing and Authorization to Vote Shares will be
required from the Company as well as an original copy of the final vote.
Fidelity Legal will provide a standard form for each Certification.
15. The Company will be required to box and archive the Cards received from
the Customers. In the event that any vote is challenged or if otherwise
necessary for legal, regulatory, or accounting purposes, Fidelity Legal
will be permitted reasonable access to such Cards.
16. All approvals and "signing-off" may be done orally, but must always be
followed up in writing.
Exhibit 8(f)
AMENDMENT TO FUND PARTICIPATION AGREEMENT
Glenbrook Life and Annuity Company, Templeton Variable Products Series Fund
and Franklin Xxxxxxxxx Distributors, Inc. hereby amend their Fund Participation
Agreement dated as of January 10, 1999, ("Agreement"), by:
1. Adding Allstate Life Insurance Company of New York, a life insurance
company organized under the laws of New York, as a party to the Agreement
between and among Templeton Variable Products Series Fund (the "Trust"), an
open-end management investment company organized as a business trust under
Massachusetts law, Franklin Xxxxxxxxx Distributors, Inc., a California
corporation, the Trust's principal underwriter (the "Underwriter") and
Glenbrook Life and Annuity Company, a life insurance company organized as a
corporation under Illinois law (the "Company"). Both Allstate Life
Insurance Company of New York and Glenbrook Life and Annuity Company shall
hereinafter be referred to as the "Company."
2. Adding Section, "Agreement"
Agreement
1.0 Form of Agreement. This Agreement shall create a separate agreement for
each Company as though each Company had separately executed an identical
Fund Participation Agreement with the Trust and the Underwriter. No rights,
responsibilities or liabilities arising under the Agreement as it pertains
to one Company shall be enforceable by or against any party to the
Agreement as it pertains to another Company.
3. Adding Allstate Life Insurance Company of New York to Article VII, "Notices"
If to the Company:
Allstate Life Insurance Company of New York
Suite J5B
0000 Xxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxxx Xxxx, Esq.
4. Replacing Schedule A of the Agreement with Amended Schedule A-C, attached;
and
5. Replacing Schedule E of the Agreement with Amended Schedule E, attached;
IN WITNESS WHEREOF, the parties have caused their duly authorized officers
to execute this Amendment to Fund Participation Agreement, to be effective as of
[ ], 1999.
Glenbrook Life and Annuity Company Templeton Variable Products Series Fund
By its authorized officer By its authorized officer
By: By:
----------------------------------------------------
Name: Xxxx Xxxxxx Name: Xxxxx X. Xxxxxxxx
Title: Senior Vice President and Director Title: Assistant Vice President and
Assistant Secretary
Allstate Life Insurance Company of New York Franklin Xxxxxxxxx Distributors, Inc.
------------------------------------------- -------------------------------------
By its authorized officer By its authorized officer
By:___________________________________ By:
Name: Xxxx Xxxxxx Name: Xxxxxxx Xxxxxx
Title: Senior Vice President and Director Title: Senior Vice President
SCHEDULE A - C
Contracts Issued by Glenbrook Life and Annuity Company
and Allstate Life of New York
--------------------------- ------------------------------- ------------------------------- -------------------------------
Contract 1 Contract 2 Contract 3
--------------------------- ------------------------------- ------------------------------- -------------------------------
--------------------------- ------------------------------- ------------------------------- -------------------------------
Contract/Product Name STI Classic Variable Annuity Glenbrook Provider Variable Allstate Provider Variable
----------------------
and Type Annuity Annuity
--------
--------------------------- ------------------------------- ------------------------------- -------------------------------
--------------------------- ------------------------------- ------------------------------- -------------------------------
Registered (Y/N) Yes Yes No
--------------------------- ------------------------------- ------------------------------- -------------------------------
--------------------------- ------------------------------- ------------------------------- -------------------------------
SEC Registration Number
-1933 Act 033-00999 333-00999 Product in development
--------------------------- ------------------------------- ------------------------------- -------------------------------
--------------------------- ------------------------------- ------------------------------- -------------------------------
Representative Form
Numbers GLAU246 GLAU228, GLAU229
GLA14
--------------------------- ------------------------------- ------------------------------- -------------------------------
--------------------------- ------------------------------- ------------------------------- -------------------------------
Separate Account Glenbrook Life and Annuity Glenbrook Life Multi-Manager Allstate Life of New York
Name/Date Established Company Variable Annuity Variable Account Separate Account A
Account -
--------------------------- ------------------------------- ------------------------------- -------------------------------
--------------------------- ------------------------------- ------------------------------- -------------------------------
SEC Registration Number -
1940 Act 811-7541 811-7541
--------------------------- ------------------------------- ------------------------------- -------------------------------
--------------------------- ------------------------------- ------------------------------- -------------------------------
Templeton Variable TVP - Templeton Bond Fund - TVP - Templeton Stock Fund - TVP - Templeton Stock Fund -
Products Series Fund Class 2 - Templeton Class 2 - Templeton Class 2 - Templeton
("TVP") -Portfolios and Investment Counsel, Inc. Investment Counsel, Inc. Investment Counsel, Inc.
Classes - Adviser
TVP - Templeton Stock Fund - TVP - Xxxxxxxxx International TVP - Xxxxxxxxx International
Class 2 - Xxxxxxxxx Fund - Class 2 - Xxxxxxxxx Fund - Class 2 - Xxxxxxxxx
Investment Counsel, Inc. Investment Counsel, Inc. Investment Counsel, Inc.
TVP - Templeton Developing TVP - Templeton Developing
Markets Fund - Class 2 - Markets Fund - Class 2 -
Xxxxxxxxx Asset Management, Xxxxxxxxx Asset Management,
Ltd. Ltd.
TVP - Mutual Shares
TVP - Mutual Shares
Investments Fund -
Class 2 -
Investments Fund -
Class 2 - Franklin
Mutual Advisers,
LLC. Franklin Mutual
Advisers, LLC.
TVP - Franklin Small Cap TVP - Franklin Small Cap
Investments Fund - Class 2 Investments Fund - Class 2
-Franklin Advisers, Inc. -Franklin Advisers, Inc.
--------------------------- ------------------------------- ------------------------------- -------------------------------
SCHEDULE A - C
Contracts Issued by Glenbrook Life and Annuity Company
and Allstate Life of New York
--------------------------- ------------------------------- ------------------------------- -------------------------------
Contract 4 Contract 5 Contract 6
--------------------------- ------------------------------- ------------------------------- -------------------------------
--------------------------- ------------------------------- ------------------------------- -------------------------------
Contract/Product Name and Allstate Custom Portfolio
Type Variable Annuity
--------------------------- ------------------------------- ------------------------------- -------------------------------
--------------------------- ------------------------------- ------------------------------- -------------------------------
Registered (Y/N) Yes
--------------------------- ------------------------------- ------------------------------- -------------------------------
--------------------------- ------------------------------- ------------------------------- -------------------------------
SEC Registration Number
-1933 Act Product in development
--------------------------- ------------------------------- ------------------------------- -------------------------------
--------------------------- ------------------------------- ------------------------------- -------------------------------
Representative Form
Numbers NYLU446
--------------------------- ------------------------------- ------------------------------- -------------------------------
--------------------------- ------------------------------- ------------------------------- -------------------------------
Separate Account Allstate Life of New York
Name/Date Established Separate Account A
--------------------------- ------------------------------- ------------------------------- -------------------------------
--------------------------- ------------------------------- ------------------------------- -------------------------------
SEC Registration Number -
1940 Act
--------------------------- ------------------------------- ------------------------------- -------------------------------
--------------------------- ------------------------------- ------------------------------- -------------------------------
Templeton Variable TVP - Templeton Asset
Products Series Fund Allocation Fund - Class 2 -
("TVP") -Portfolios and Xxxxxxxxx Investment Counsel,
Classes - Adviser Inc.
TVP - Xxxxxxxxx International
Fund - Class 2 - Xxxxxxxxx
Investment Counsel, Inc.
--------------------------- ------------------------------- ------------------------------- -------------------------------
SCHEDULE D
Other Portfolios Available under the Contracts
--------------------------------------------------------------------- -----------------------------------------------------
AIM V.I. Balanced MFS Emerging Growth Series
--------------------------------------------------------------------- -----------------------------------------------------
--------------------------------------------------------------------- -----------------------------------------------------
AIM V.I. Diversified Income MFS Research Series
--------------------------------------------------------------------- -----------------------------------------------------
--------------------------------------------------------------------- -----------------------------------------------------
AIM V.I. International Equity MFS Growth with Income Series
--------------------------------------------------------------------- -----------------------------------------------------
--------------------------------------------------------------------- -----------------------------------------------------
AIM V.I. Growth MFS New Discovery Series
--------------------------------------------------------------------- ------------------------------------------------------
--------------------------------------------------------------------- ------------------------------------------------------
AIM V.I. Value
--------------------------------------------------------------------- ------------------------------------------------------
--------------------------------------------------------------------- ------------------------------------------------------
AIM V.I. Growth & Income Xxxxxxxxxxx Aggressive Growth
--------------------------------------------------------------------- ------------------------------------------------------
--------------------------------------------------------------------- ------------------------------------------------------
AIM V.I. Government Securities Xxxxxxxxxxx Capital Appreciation
--------------------------------------------------------------------- ------------------------------------------------------
--------------------------------------------------------------------- ------------------------------------------------------
AIM V.I. High Yield Xxxxxxxxxxx Global Securities
--------------------------------------------------------------------- ------------------------------------------------------
--------------------------------------------------------------------- ------------------------------------------------------
AIM V.I. Capital Appreciation Xxxxxxxxxxx Main Street Growth & Income
--------------------------------------------------------------------- ------------------------------------------------------
--------------------------------------------------------------------- ------------------------------------------------------
Xxxxxxxxxxx Multiple Strategies
--------------------------------------------------------------------- ------------------------------------------------------
--------------------------------------------------------------------- ------------------------------------------------------
Dreyfus Socially Responsible Growth Xxxxxxxxxxx Strategic Bond
--------------------------------------------------------------------- ------------------------------------------------------
--------------------------------------------------------------------- ------------------------------------------------------
Dreyfus Stock Index
--------------------------------------------------------------------- ------------------------------------------------------
--------------------------------------------------------------------- ------------------------------------------------------
Dreyfus VIF Growth & Income Xxxxxxx Sachs VIT Capital Growth
--------------------------------------------------------------------- -----------------------------------------------------
--------------------------------------------------------------------- -----------------------------------------------------
Dreyfus VIF Money Market Xxxxxxx Xxxxx VIT CORE Small Cap Equity
--------------------------------------------------------------------- ------------------------------------------------------
--------------------------------------------------------------------- ------------------------------------------------------
Dreyfus Capital Appreciation Xxxxxxx Sachs VIT CORE U.S. Equity
--------------------------------------------------------------------- ------------------------------------------------------
--------------------------------------------------------------------- ------------------------------------------------------
Xxxxxxx Xxxxx VIT Global Income
--------------------------------------------------------------------- -----------------------------------------------------
--------------------------------------------------------------------- -----------------------------------------------------
Federated Prime Money Fund II Xxxxxxx Sachs VIT International Equity
--------------------------------------------------------------------- -----------------------------------------------------
--------------------------------------------------------------------- -----------------------------------------------------
--------------------------------------------------------------------- -----------------------------------------------------
--------------------------------------------------------------------- -----------------------------------------------------
Fidelity VIP Equity-Income Xxxxxx Xxxxxxx Xxxx Xxxxxx Equity Growth
--------------------------------------------------------------------- -----------------------------------------------------
--------------------------------------------------------------------- -----------------------------------------------------
Fidelity VIP Growth Xxxxxx Xxxxxxx Xxxx Xxxxxx Mid Cap Value
--------------------------------------------------------------------- -----------------------------------------------------
--------------------------------------------------------------------- -----------------------------------------------------
Fidelity VIP High Income Xxxxxx Xxxxxxx Xxxx Xxxxxx Fixed Income
--------------------------------------------------------------------- -----------------------------------------------------
--------------------------------------------------------------------- -----------------------------------------------------
Fidelity VIP Overseas Xxxxxx Xxxxxxx Xxxx Xxxxxx Value
--------------------------------------------------------------------- -----------------------------------------------------
--------------------------------------------------------------------- ----------------------------------------------------
Fidelity VIP II Contrafund Xxxxxx Xxxxxxx Xxxx Xxxxxx Global Equity
--------------------------------------------------------------------- ----------------------------------------------------
--------------------------------------------------------------------- ----------------------------------------------------
Fidelity VIP II Index 500
--------------------------------------------------------------------- -----------------------------------------------------
--------------------------------------------------------------------- -----------------------------------------------------
Fidelity VIP Growth Opportunities STI Capital Appreciation
--------------------------------------------------------------------- -----------------------------------------------------
--------------------------------------------------------------------- -----------------------------------------------------
STI International Equity
--------------------------------------------------------------------- -----------------------------------------------------
--------------------------------------------------------------------- -----------------------------------------------------
STI Investment Grade Bond
--------------------------------------------------------------------- ----------------------------------------------------
--------------------------------------------------------------------- ----------------------------------------------------
STI Mid-Cap Equity
--------------------------------------------------------------------- -------------------------------------------------
--------------------------------------------------------------------- ----------------------------------------------------
STI Small Cap Equity
--------------------------------------------------------------------- -----------------------------------------------------
--------------------------------------------------------------------- -----------------------------------------------------
STI Value Income Stock
--------------------------------------------------------------------- -----------------------------------------------------
--------------------------------------------------------------------- -----------------------------------------------------
STI Growth and Income
--------------------------------------------------------------------- ----------------------------------------------------
--------------------------------------------------------------------- ----------------------------------------------------
STI Quality Stock Growth
--------------------------------------------------------------------- ----------------------------------------------------
SCHEDULE E
RULE 12B-1 PLANS
Compensation Schedule
Each Portfolio named below shall pay the following amounts pursuant to the terms
and conditions referenced below under its Class 2 Rule 12b-1 Distribution Plan,
stated as a percentage per year of Class 2's average daily net assets
represented by shares of Class 2.
Portfolio Name Maximum Annual Payment Rate
--------------------------------------------------------------------------------
Templeton Bond Fund 0.15%
Templeton Stock Fund 0.25%
Templeton Developing Markets Fund 0.25%
Xxxxxxxxx International Fund 0.25%
Templeton Asset Allocation Fund 0.25%
Mutual Shares Investments Fund 0.25%
Frankllin Small Cap Investments Fund 0.25%
Agreement Provisions
If the Company, on behalf of any Account, purchases Trust Portfolio shares
("Eligible Shares") which are subject to a Rule 12b-1 Plan adopted under the
1940 Act (the "Plan"), the Company may participate in the Plan.
To the extent the Company or its affiliates, agents or designees (collectively
"you") you provide administrative and other services which assist in the
promotion and distribution of Eligible Shares or Variable Contracts offering
Eligible Shares, the Underwriter, the Trust or their affiliates (collectively,
"we") may pay you a Rule 12b-1 fee. "Administrative and other services" may
include, but are not limited to, furnishing personal services to owners of
Contracts which may invest in Eligible Shares ("Contract Owners"), answering
routine inquiries regarding a Portfolio, coordinating responses to Contract
Owner inquiries regarding the Portfolios, maintaining such accounts or providing
such other enhanced services as a Trust Portfolio or Contract may require,
maintaining customer accounts and records, or providing other services eligible
for service fees as defined under NASD rules. Your acceptance of such
compensation is your acknowledgment that eligible services have been rendered.
All Rule 12b-1 fees, shall be based on the value of Eligible Shares owned by the
Company on behalf of its Accounts, and shall be calculated on the basis and at
the rates set forth in the Compensation Schedule stated above. The aggregate
annual fees paid pursuant to each Plan shall not exceed the amounts stated as
the "annual maximums" in the Portfolio's prospectus, unless an increase is
approved by shareholders as provided in the Plan. These maximums shall be a
specified percent of the value of a Portfolio's net assets attributable to
Eligible Shares owned by the Company on behalf of its Accounts (determined in
the same manner as the Portfolio uses to compute its net assets as set forth in
its effective Prospectus).
You shall furnish us with such information as shall reasonably be requested by
the Trust's Boards of Trustees ("Trustees") with respect to the Rule 12b-1 fees
paid to you pursuant to the Plans. We shall furnish to the Trustees, for their
review on a quarterly basis, a written report of the amounts expended under the
Plans and the purposes for which such expenditures were made.
The Plans and provisions of any agreement relating to such Plans must be
approved annually by a vote of the Trustees, including the Trustees who are not
interested persons of the Trust and who have no financial interest in the Plans
or any related agreement ("Disinterested Trustees"). Each Plan may be terminated
at any time by the vote of a majority of the Disinterested Trustees, or by a
vote of a majority of the outstanding shares as provided in the Plan, on sixty
(60) days' written notice, without payment of any penalty. The Plans may also be
terminated by any act that terminates the Underwriting Agreement between the
Underwriter and the Trust, and/or the management or administration agreement
between Franklin Advisers, Inc. or Xxxxxxxxx Investment Counsel, Inc. or their
affiliates and the Trust. Continuation of the Plans is also conditioned on
Disinterested Trustees being ultimately responsible for selecting and nominating
any new Disinterested Trustees. Under Rule 12b-1, the Trustees have a duty to
request and evaluate, and persons who are party to any agreement related to a
Plan have a duty to furnish, such information as may reasonably be necessary to
an informed determination of whether the Plan or any agreement should be
implemented or continued. Under Rule 12b-1, the Trust is permitted to implement
or continue Plans or the provisions of any agreement relating to such Plans from
year-to-year only if, based on certain legal considerations, the Trustees are
able to conclude that the Plans will benefit each affected Trust Portfolio and
class. Absent such yearly determination, the Plans must be terminated as set
forth above. In the event of the termination of the Plans for any reason, the
provisions of this Schedule E relating to the Plans will also terminate.
Any obligation assumed by the Trust pursuant to this Agreement shall be limited
in all cases to the assets of the Trust and no person shall seek satisfaction
thereof from shareholders of the Trust. You agree to waive payment of any
amounts payable to you by Underwriter under a Plan until such time as the
Underwriter has received such fee from the Fund.
The provisions of the Plans shall control over the provisions of the
Participation Agreement, including this Schedule E, in the event of any
inconsistency.
You agree to provide complete disclosure as required by all applicable statutes,
rules and regulations of all rule 12b-1 fees received from us in the prospectus
of the contracts.
Exhibit 8(g)
A - 1
PARTICIPATION AGREEMENT
Among
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK,
VARIABLE INSURANCE FUNDS,
HSBC ASSET MANAGEMENT AMERICAS INC.
and
BISYS FUND SERVICES
THIS AGREEMENT, dated as of the ___ day of , 2000 by and among Allstate
Life Insurance Company of New York (the "Company"), a New York 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
"Fund"), a Massachusetts business trust, HSBC Asset Management Americas Inc.
(the "Adviser"), a New York corporation and BISYS Fund Services (the
"Underwriter"), a [INSERT STATE]corporation.
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 and variable annuity contracts (the
"Variable Insurance Products") to be offered by insurance companies which have
entered into participation agreements with the Fund and the Adviser
("Participating Insurance Companies");
WHEREAS, the shares of beneficial interest of the Fund 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 Fund has obtained an order from the Securities and Exchange
Commission (the "SEC") dated December 10, 1998 (Variable Insurance Funds, et
al., File No. 812-10694, Investment Company Act Rel. No. 23594) 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 (the
"1940 Act"), and Rules 6e-2(b)(15) and 6e-3(T)(b)(15) thereunder, if and 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, qualified pension and retirement plans
outside of the separate account context, the manager of a Fund or certain
related corporations, and the general account of a life insurance company, or
certain related corporations, whose separate account holds, or will hold, shares
of the Fund (the "Mixed and Shared Funding Exemptive Order"), and the Fund
hereby provides notice to the Company that appropriate prospectus disclosure
regarding potential risks of mixed and shared funding may be appropriate;
WHEREAS, the Fund is registered as an open-end management investment
company under the 1940 Act and shares of the Portfolios are registered under the
Securities Act of 1933, as amended (the "1933 Act");
WHEREAS, the Adviser, which serves as investment adviser to certain
Portfolios of the Fund, is duly registered as an investment adviser under the
federal Investment Advisers Act of 1940, as amended;
WHEREAS, the Company has issued or will issue certain variable life
insurance and/or variable annuity contracts supported wholly or partially by an
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, each Account is duly established and maintained as a segregated
asset account, duly established by the Company, to set aside and invest assets
attributable to the aforesaid Contracts;
WHEREAS, the Underwriter, which serves as distributor to the Fund, is
registered as a broker-dealer with the SEC under the Securities Exchange Act of
1934, as amended (the "1934 Act"), and is a member in good standing of the
National Association of Securities Dealers, Inc. (the "NASD"); and
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, and the Underwriter is authorized to sell such shares to
the Account at net asset value;
NOW, THEREFORE, in consideration of their mutual promises, the Company, the
Fund and the Adviser agree as follows:
ARTICLE I. Sale of Fund Shares
1.1. The Fund has granted to the Underwriter exclusive authority to distribute
the Fund's shares, and has agreed to instruct, and has so instructed, the
Underwriter to make available to the Company, for purchase on behalf of the
Account, Fund shares of those Designated Portfolios selected by the
Adviser. Pursuant to such authority and instructions, and subject to
Article X hereof, the Underwriter shall make available to the Company for
purchase on behalf of the Account, shares of those Designated Portfolios
listed on Schedule A to this Agreement, such purchases to be effected at
net asset value in accordance with Section 1.3 of this Agreement.
Notwithstanding the foregoing, (i) Fund series (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 Fund and the Adviser may so
provide, and (ii) the Board of Trustees of the Fund (the "Board") may
suspend or terminate the offering of Fund 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 Fund 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 Fund shares attributable to Contract owners except
in the circumstances permitted in Section 10.3 of this Agreement, and (ii)
the Fund may delay redemption of Fund 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 Fund hereby appoints the Company as an agent of the Fund for the
limited purpose of receiving purchase and redemption requests on
behalf of the Account (but not with respect to any Fund 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 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
pursuant to the rules of the SEC (a "Business Day") by the Company as
such limited agent of the Fund prior to the time that the Designated
Portfolio ordinarily calculates its net asset value as described from
time to time in the Fund's prospectus, shall constitute receipt by the
Fund on that same Business Day, provided that the Fund receives notice
of such 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 Fund of a purchase request for such
shares. Payment for Designated Portfolio shares shall be made in
federal funds transmitted to the Fund by wire to be received by the
Fund by noon, Eastern Time, on the day the Fund is notified of the
purchase request for Designated Portfolio shares (unless the Fund
determines and so advises the Company that sufficient proceeds are
available from redemption of shares of other Designated Portfolios
effected pursuant to redemption requests tendered by the Company on
behalf of the Account). If federal funds are not received on time,
such funds will be invested, and Designated Portfolio shares purchased
thereby will be issued, as soon as practicable and the Company shall
promptly, upon the Fund's request, reimburse the Fund for any charges,
costs, fees, interest or other expenses incurred by the Fund in
connection with any advances to, or borrowing or overdrafts by, the
Fund, or any similar expenses incurred by the Fund, as a result of
portfolio transactions effected by the Fund 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 Fund.
(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 on the next Business Day after
the Fund is properly notified of the redemption order of such shares
(unless redemption proceeds are to be applied to the purchase of
shares of other Designated Portfolios in accordance with Section
1.3(b) of this Agreement), except that the Fund 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 Fund as described
in the then current prospectus. The Fund 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 Fund's
receipt of such request, provided that, in the case of a purchase
request, payment for Fund shares so requested is received by the Fund
in federal funds prior to close of business for determination of such
value, as defined from time to time in the Fund Prospectus.
1.4. The Fund shall make the net asset value per share for each Designated
Portfolio (s) available to the Company on a daily basis as soon as
reasonably practicable after the net asset value per share is calculated
but shall use its best efforts to make such net asset value available by
6:30 p.m, Eastern time. In the event that the Fund is unable to meet the
6:30 pm. Time stated herein, it shall provide additional time for the
Company to place orders for the purchase and redemption of shares. Such
additional time shall be equal to the additional time which fund takes to
make the net asset value available to the Company. If the Fund provides the
Company with materially incorrect share net asset value information through
no fault of the Company, the Company on behalf of the separate accounts,
shall be entitled to an adjustment to the number of shares purchased or
redeemed to reflect the correct share net asset value. Any material error
in the calculation of net asset value per share, divided or capital gain
information shall be reported promptly upon discovery to the Company. At
the end of each Business Day, the Company shall use the information
described in herein to calculate separate account unit values for the day.
Using these unit values, the Company shall process each such Business Day's
separate account transactions based on requests and premiums received by it
by the close of trading on the floor of the New York Stock Exchange
(currently 4:00 p.m., Eastern time) to determine the net dollar amount of
Fund shares which shall be purchased or redeemed at that day's closing net
asset value per share. The net purchase or redemption orders so determined
shall be transmitted to Fund by the Company by 9:00 a.m., Eastern time on
the Business Day next following the Company's receipt of such requests and
premiums in accordance with the terms of this agreement. If the company's
order requests the purchase of Fund shares, the Company shall pay for such
purchase by wiring federal funds to Fund or its designated custodial
account on the day the order is transmitted by the Company. If the
Company's order requests a net redemption resulting in a payment of
redemption proceeds to the Company, Fund shall use it best efforts to wire
the redemption proceeds to the Company by the next Business Day, unless
doing so would require Fund to dispose of Designated Portfolio securities
or otherwise incur additional costs. In any event, proceeds shall be wired
to the Company within three Business Days or such longer period permitted
by the '40 Act or the rules, orders or regulations thereunder and Fund
shall notify the person designated in writing by the Company as the
recipient for such notice of such delay by 3:00 p.m., Eastern time the same
Business Day that the Company transmits the redemption order to Fund. If
the Company's order requests the application of redemption proceeds from
the redemption of shares to the purchase of shares of another Designated
Portfolio as shown on Schedule A, Fund shall so apply such proceeds on the
same Business Day that the Company transmits such order to the Fund.
1.5. The Fund shall furnish notice (by wire or telephone followed by written
confirmation) to the Company, as soon as reasonably practicable, of any
income dividends or capital gain distributions payable on any Designated
Portfolio shares. 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 Fund 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 Fund shares shall be by book entry only. Share
certificates will not be issued to the Company or the Account. Purchase and
redemption orders for Fund 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 Fund'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. 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
Fund and the Underwriter 45 days written notice of its intention to make
such other investment vehicle available as a funding vehicle for the
Contracts; and (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 Fund and the Underwriter prior to the
Fund's signing of this Agreement, the Fund or Adviser consents in writing
to the use of such other vehicle, such consent not to be unreasonably
withheld.
1.8. The Fund shall sell Fund shares only to Participating Insurance Companies
and their separate accounts and to persons or plans ("Qualified Persons")
that communicate to the Fund (or its designees) that they qualify to
purchase shares of the Fund 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 Fund as constituting investments of the Account for the
purpose of satisfying the diversification requirements of Section 817(h).
The Fund shall not sell Fund shares to any insurance company or separate
account unless an agreement substantially complying with Article VI of this
Agreement is in effect to govern such sales, to the extent required. The
Company hereby represents and warrants that it and the Account are
Qualified Persons. The Fund reserves the right to cease offering shares of
any Designated Portfolio in the discretion of the Fund.
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 New York
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 each
Account to remain so registered and 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 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 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 applicable state and federal
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.
2.3. The Fund may make payments to finance distribution expenses pursuant to
Rule 12b-1 under the 1940 Act. Prior to financing distribution expenses
pursuant to Rule 12b-1, the Fund will have the Board, a majority of whom
are not interested persons of the Fund, formulate and approve a plan
pursuant to Rule 12b-1 under the 1940 Act to finance distribution expenses.
2.4. The Fund 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 and other applicable laws of the
various states.
2.5. The Fund represents that it is lawfully organized and validly existing
under the laws of the State of Massachusetts and that it does and will
comply in all material respects with the 1940 Act.
2.6. Adviser represents and warrants that it is and will remain duly registered
and licensed in all material respects under all applicable federal and
state laws and shall perform its obligations hereunder in compliance in all
material respects with any applicable state and federal laws.
2.7. The Fund and the Adviser represent and warrant that all of their
trustees/directors, officers, employees, investment advisers, and other
individuals or entities dealing with the money and/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 minimum 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 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 not less than $5 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 Fund and to pay
to the Fund any amounts lost from larceny, embezzlement or other events
covered by the aforesaid bond to the extent such amounts properly belong to
the Fund 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
Fund and the Adviser in the event that such coverage no longer applies.
2.9 Underwriter represents and warrants that it is and will be a member in good
standing of the NASD and is and will be registered as a broker-dealer with
the SEC. Underwriter further represents that it will sell and distribute
the Variable Contracts in accordance with all applicable state and federal
laws and regulations, including without limitation the '33 Act, the '34 Act
and the '40 Act.
Underwriter represents that its operations are and shall at all times remain in
material compliance with the laws of the State of New York to the entent
required to perform this Agreement.
2.10 Underwriter represents and warrants that it is and will remain dully
registered and licensed in all material respects under all applicable
federal and state securities laws and shall perform its obligations
hereunder in compliance in all material respects with any applicable state
and federal laws.
ARTICLE III. Prospectuses and Proxy Statements; Voting
3.1. The Fund or its designee shall provide the Company with as many copies of
the Fund's current prospectus (describing only the Designated Portfolios
listed on Schedule A) or, to the extent permitted, the Fund's profiles as
the Company may reasonably request. The Company shall bear the expense of
printing copies of the current prospectus and profiles for the Contracts
that will be distributed to existing Contract owners, and the Fund shall
bear the expense of printing copies of the Fund's prospectus and profiles
that are used in connection with offering the Contracts issued by the
Company. If requested by the Company in lieu thereof, the Fund shall
provide such documentation (including a final copy of the new prospectus on
diskette at the Fund's expense) and other assistance as is reasonably
necessary in order for the Company once each year (or more frequently if
the prospectus for the Fund is amended) to have the prospectus for the
Contracts and the Fund's prospectus or profile printed together in one
document (such printing to be at the Fund's expense).
3.2. The Fund's prospectus shall state that the current statement of additional
information ("SAI") for the Fund is available, and the Underwriter (or the
Fund), at its expense, shall provide a reasonable number of copies of such
SAI free of charge to the Company for itself and for any owner of a
Contract who requests such SAI.
3.3. The Fund shall provide the Company with information regarding the Fund's
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 agrees that it will use such
information in the form provided. 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 that it may not modify such information in any way
without the prior consent of the Fund.
3.4. 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
distributing to Contract owners.
3.5. The Company shall:
(i) solicit voting instructions from Contract owners;
(ii) vote the Fund shares in accordance with instructions received from
Contract owners;
(iii)vote Fund shares for which no instructions have been received in the
same proportion as Fund shares of such portfolio for which
instructions have been received; and
(iv) vote Fund shares it owns in the same proportion as those shares for
which it has received voting instructions, 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 Fund shares
held in any segregated asset account in the same proportion as Fund
shares of such 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 and consistent with any reasonable standards that the Fund
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 Fund or
its designee, each piece of sales literature or other promotional material
that the Company develops and in which the Fund (or a Designated Portfolio
thereof) or the Adviser or the Underwriter is named. No such material shall
be used until approved by the Fund or its designee, and the Fund will use
its best efforts for it or its designee to review such sales literature or
promotional material within five Business Days after receipt of such
material. The Fund or its designee reserves the right to reasonably object
to the continued use of any such sales literature or other promotional
material in which the Fund (or a Designated Portfolio thereof) or the
Adviser or the Underwriter is named, and no such material shall be used if
the Fund or its designee so object.
4.2. The Company shall not give any information or make any representations or
statements on behalf of the Fund or concerning the Fund or the Adviser or
the Underwriter 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 Fund shares, as such registration statement and
prospectus or SAI 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, except with the
permission of the Fund or its designee.
4.3. The Fund or its 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 five 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 Fund, the Adviser and the Underwriter 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 Fund 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 Fund or its shares, promptly after the filing
of such document(s) with 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 (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 or supplements 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 Fund or its designee any complaints received from the
Contract owners pertaining to the Fund or the Designated Portfolio.
4.7. The Fund 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 Fund's registration statement, 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
prospectus or registration statement, 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.
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 Fund or any affiliate of the Fund:
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 communications
distributed or made generally available with regard to the Fund.
ARTICLE V. Fees and Expenses
5.1. The Fund and the Adviser shall pay no fee or other compensation to the
Company under this Agreement. If the Fund or any Portfolio adopts and
implements a plan pursuant to Rule 12b-1 to finance distribution expenses,
or a plan to finance Contract owner services, then the Fund or 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.
5.2. All expenses incident to performance by the Fund under this Agreement shall
be paid by the Fund. The Fund 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 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, typesetting and
printing the prospectus, 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 Fund's shares.
5.3. The Company shall bear the expenses of distributing the Fund's prospectus
to owners of Contracts issued by the Company and of distributing the Fund's
proxy materials and reports to such Contract owners.
ARTICLE VI. Diversification and Qualification
6.1. The Fund will invest its assets 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,
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 Regulations. In the event of a breach of this Article VI by the
Fund, it will take all reasonable steps (a) to notify the Company of such
breach and (b) to adequately diversify the Fund so as to achieve compliance
within the grace period afforded by Regulation 1.817-5.
6.2. The Fund represents that it is or will be qualified as a Regulated
Investment Company under Subchapter M of the Code, and 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 it has ceased
to so qualify or that it might not so qualify in the future.
6.3. The Company represents that the Contracts are currently, and at the time of
issuance shall be, treated as life insurance, endowment, or annuity
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, the Adviser, and the Underwriter 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. The Company agrees that
any prospectus offering a contract that is a "modified endowment contract"
as that term is defined in Section 7702A of the Code (or any successor or
similar provision), shall identify such contract as a modified endowment
contract.
ARTICLE VII.
Potential Conflicts
The following provisions shall apply only upon the sale of shares of the Fund to
variable annuity and variable life insurance separate accounts, and then only to
the extent required under the 0000 Xxx.
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 the Fund and all other persons investing in
the Fund. 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 any Portfolio are being managed; (e) a difference in voting
instructions given by variable annuity contract and variable life insurance
contract owners; (f) a decision by an insurer to disregard the voting
instructions of contract owners; or (g) if applicable, a decision by a
qualified pension or retirement plan to disregard the voting instructions
of its participants. The Board shall promptly inform the Company if it
determines that a material irreconcilable conflict exists and the
implications thereof.
7.2. The Company, with a view only to the interests of Contract owners, will
report any potential or existing conflicts of which it is aware to the
Board. The Company, with a view only to the interests of Contract owners,
will assist the Board in carrying out its responsibilities under the Mixed
and 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. No less than annually, the Company shall submit to the Board
such reports, materials, or data as the Board reasonably requests so that
the Board may carry out its obligations under the Mixed and Shared Funding
Exemptive Order. Such reports, materials and data shall be submitted more
frequently if deemed appropriate by the Board.
7.3. If it is determined by a majority of the Board, or a majority of its
disinterested members, 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 Board members), take whatever steps are necessary to
remedy or eliminate the irreconcilable material conflict, up to and
including: (1) withdrawing the assets allocable to some or all of the
separate accounts from the Fund or any Portfolio and reinvesting such
assets in a different investment medium, including (but not limited to)
another Portfolio of the Fund, or submitting the question as to 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 (2) establishing a new
registered management investment company or managed separate account.
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 Account's
investment in the Fund and terminate this Agreement with respect to each
Account (at the Company's expense); 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 Fund. No charge
or penalty will be imposed as a result of such withdrawal. The
responsibility to take such remedial action shall be carried out with a
view only to the interest of the contract owners.
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 Fund and terminate this Agreement with
respect to such Account (at the Company's expense) 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
Fund. The responsibilty to take such action shall be carried out with a
view only to the interest of the contract owners.
7.6. For purposes of Section 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 Contract if an offer to do so has been declined
by vote of a majority of Contract owners materially and 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 any such material irreconcilable
conflict as determined by a majority of the disinterested members of the
Board.
7.7. If and to the extent the Mixed and Shared Funding Exemptive Order or any
amendment thereto contains terms and conditions different from Sections
3.5, 3.6, 7.1, 7.2, 7.3, 7.4, and 7.5 of this Agreement, then the Fund
and/or the Participating Insurance Companies, as appropriate, shall take
such steps as may be necessary to comply with the Mixed and Shared Funding
Exemptive Order, and Sections 3.5, 3.6, 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 the
Mixed and Shared Funding Exemptive Order or any amendment thereto. If and
to the extent that Rule 6e-2 and Rule 6e-3(T) are amended, or Rule 6e-3
under the 1940 Act is adopted, to provide exemptive relief from any
provision of the 1940 Act or the rules promulgated thereunder with respect
to mixed or shared funding (as defined in the Mixed and Shared Funding
Exemptive Order) on terms and conditions materially different from those
contained in the Mixed and Shared Funding Exemptive Order, then (a) the
Fund 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, 3.6, 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.
ARTICLE VIII. Indemnification
8.1. Indemnification by the Company
8.1(a). The Company agrees to indemnify and hold harmless the Fund, the
Adviser and the trustees/directors and officers of each, and each
person, if any, who controls the Fund or the Adviser within the
meaning of Section 15 of the 1933 Act or who is under common control
with the Fund or the 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, expenses (or actions in
respect thereof), or settlements are related to the sale or
acquisition of the fund's shares or the contracts and:
(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 Fund 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 Fund
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 Fund not
supplied by the Company or the Underwriter or persons under their
respective control) or wrongful conduct of the Company or the
Underwriter or their agents or persons under their respective
authorization or control, with respect to the sale or distribution of
the Contracts or Fund 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 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 material failure by the Company or the
Underwriter 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
qualification requirements specified in Article VI of this Agreement);
or
(v) arise out of or result from any material breach of any representation
and/or warranty made by the Company or the Underwriter in this
Agreement or arise out of or result from any other material breach of
this Agreement by the Company or the Underwriter; 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 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.
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 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.
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 Fund shares or the Contracts or the
operation of the Fund.
8.2. Indemnification by the Fund
8.2(a). The Fund shall 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 Fund) 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 or liabilities (or actions in respect thereof) or
settlements are related to the operations of the Fund 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 SAI 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 Fund or its
designee by or on behalf of the Company for use in the registration
statement, prospectus or SAI 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 Fund 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 Fund or its designees) or wrongful conduct of the Fund
or its designees, with respect to the sale or distribution of the
Contracts or Fund 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 Fund; or
(iv) arise as a result of any failure by the Fund or its designees to
provide the services and furnish the materials under the terms of this
Agreement (including a failure of the Fund, whether unintentional or
in good faith or otherwise, to comply with the diversification and
other qualification requirements specified in Article VI of this
Agreement); or
(v) arise out of or result from any material breach of any representation
and/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 8.2(b)
and 8.2(c) hereof.
8.2(b). The Fund 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.
8.2(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 an Indemnified Party, 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.
8.2(d). The Indemnified Parties will promptly notify the Fund or its designees
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 the Account.
8.3. Indemnification By the Adviser
8.3(a). The Adviser agrees to indemnify and hold harmless the Company and the
Underwriter and each of their respective directors and officers and each
person, if any, who controls the Company or the Underwriter 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 Adviser) 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 or liabilities (or
actions in respect thereof) or settlements are related to the sale or
acquisition of Fund shares or the Contracts and:
(i) Arise out of or based upon any untrue statement or alleged untrue
statement of any material fact contained in the Registration Statement
or sales literature of 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
comformity with information furnished to Adviser or Fund by or on
behalf of the Company for use in the Registration Statement for Fund
or in sales literature (or any amendment or supplement) or otherwise
for use in connection with the sale of the Contracts or Fund shares;
or
(ii) arise out of or as a result of statements or representations (other
that statements or representations contained in the registration
statement, prospectus or sales literature for the Contraccts not
supplied by Adviser or Fund or persons under their control) or
wrongful conduct of Fund or Adviser or persons under their control,
with respect to the sale or distribution of the Contracts or Fund
shares; or
(iii)arise out of any untrue statement or alleged untrue statement of a
material fact contained in a registration statement, prospectus, 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 statements therein not misleading, 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 for
inclusion therein by or on behalf of Fund or Adviser;
(iv) 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 8.3(b) and 8.3(c) hereof.
8.3(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 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 Adviser or the Account,
whichever is applicable.
8.3(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 Parties, 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.
8.3(d). The Company and the Fund shall promptly notify the Adviser of the
commencement of any litigation or proceeding against it or any of its
respective officers or directors 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 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 Federal Securities
Laws and the rules and regulations and rulings thereunder, including such
exemptions from those statutes, rules and regulations as the SEC may grant
(including, but not limited to, the Mixed and Shared Funding Exemptive
Order) and the terms hereof shall be interpreted and construed in
accordance therewith. If, in the future, the Mixed and Shared Funding
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 be effective as of the date hereof and 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 Fund, Adviser and
the Underwriter based upon the Company's determination that shares of
the Fund are not reasonably available to meet the requirements of the
Contracts; said termination to be effective ten days after receipt of
notice unless Fund makes available a sufficient number of shares to
reasonably meet the requirements of the Contracts within said ten-day
period; or
(c) termination by the Company by written notice to the Fund, Adviser and
the Underwriter 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; said termination to be effective ten days after receipt
of notice unless Fund makes available a sufficient number of share to
reasonably meet the requirements of the Contracts within the said
ten-day period; or
(d) termination by the Fund or Adviser in the event that formal
administrative proceedings are instituted against the Company or
Underwriter 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 Fund's
shares; provided, however, that the Fund 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. Prompt
notice of election to terminate shall be furnished by the Fund with
said termination to be effective upon receipt of notice; or
(e) termination by the Company in the event that formal administrative
proceedings are instituted against the Fund by the NASD, 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 Fund or Adviser to perform its obligations under this Agreement.
Prompt notice of election to terminate shall be furnished by the
Company with said termination to be effective upon receipt of notice;
or
(f) termination by the Company by written notice to the Fund, the Adviser
and the Underwriter 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 Article VI hereof, or if the
Company reasonably believes that such Portfolio may fail to so qualify
or comply; or
(g) termination by the Fund or Adviser by written notice to the Company in
the event that the Contracts fail to meet the qualifications specified
in Article VI hereof; or
(h) termination by the Fund by written notice to the Company, if the
Company gives the Fund and the Underwriter the written notice
specified in Section 1.7(a)(ii) hereof and at the time such notice was
given there was no notice of termination outstanding under any other
provision of this Agreement; provided, however, any termination under
this Section 10.1(j) shall be effective 45 days after the notice
specified in Section 1.7(a)(ii) was given; or
(i) 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 Fund in accordance with the terms of the
Contracts, provided that the Company has given at least 45 days prior
written notice to the Fund, Adviser and Underwriter of the date of
substitution; or
(j) 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 Fund and the
Underwriter shall, at the option of the Company, continue to make available
additional shares of the Fund 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 Fund or its designee requests that the Company seek an order pursuant
to Section 26(b) of the 1940 Act to permit the substitution of other
securities for the shares of the Designated Portfolios. The Fund and/or the
Adviser shall split the cost of seeking such an order, and the Company
agrees that it shall reasonably cooperate with the Fund and seek such an
order upon request. Specifically, the owners of the Existing Contracts may
be permitted to reallocate investments in the Fund, redeem investments in
the Fund and/or invest in the Fund upon the making of additional purchase
payments under the Existing Contracts (subject to any such election by the
Fund). 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. 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.The Company shall not redeem Fund shares attributable to the Contracts (as
opposed to Fund 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 Fund, Adviser and Underwriter, 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 Fund, Adviser and Underwriter
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 Portfolio that was otherwise available
under the Contracts without first giving the Fund, Adviser or the
Underwriter 90 days notice of its intention to do so.
10.4.Notwithstanding any termination of this Agreement, each party's obligation
under Article VIII to indemnify the other parties shall survive.
ARTICLE XI. Notices
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 Fund: Variable Insurance Funds
0000 Xxxxxxx Xxxx
Xxxxxxxx, Xxxx 00000-0000
If to the Company: Allstate Life Insurance Company of New York
0000 Xxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
If to the Adviser: HSBC Asset Management Americas Inc.
000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
If to the Underwriter: BISYS Fund Services
0000 Xxxxxxx Xxxx
Xxxxxxxx, Xxxx 00000-0000
ARTICLE XII. Miscellaneous
12.1.All persons dealing with the Fund 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 Fund. The parties
agree that neither the Board, officers, agents or shareholders of the Fund
assume any personal liability or responsibility for obligations entered
into by or 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 without the express
written consent of the affected party until such time as such information
has come into the public domain, except as required by Federal or State
regulators.
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 New York Superintendant with any
information or reports in connection with services provided under this
Agreement which such Superintendant may request in order to ascertain
whether the variable contract operations of the Company are being conducted
in a manner consistent with the New York 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.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed in its name and on its behalf by its duly authorized representative
and its seal to be hereunder affixed hereto as of the date specified below.
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
By its authorized officer
By: ____
Title:
Date:
VARIABLE INSURANCE FUNDS
By its authorized officer
By:
Title:
Date:
HSBC ASSET MANAGEMENT AMERICAS INC.
By its authorized officer
By:
Title:
Date:
BISYS FUND SERVICES
By its authorized officer
By:
Title:
Date:
Schedule A
Contract Account Designated Portfolio(s)
1. NYLU446 Allstate Life of HSBC Variable Growth and Income Fund
New York Separate
Account A
2. NYLU446 Allstate Life of HSBC Variable Fixed Income Fund
New York Separate
Account A
3. NYLU446 Allstate Life of HSBC Variable Cash Management Fund
New York Separate
Account A
Date: __________________
Exhibit 8(h)
PARTICIPATION AGREEMENT
By and Among
XXXXXXXXXXX VARIABLE ACCOUNT FUNDS,
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
and
OPPENHEIMERFUNDS, INC.
THIS AGREEMENT, made and entered into as of the ___ day of ________, 2000 by and
among Allstate Life Insurance Company of New York, a New York corporation
(hereinafter the "Company") on its own behalf and on behalf of each separate
account of the Company named in Schedule 1 to this Agreement, as may be amended
from time to time by mutual consent (each account referred to as the "Account"),
Xxxxxxxxxxx Variable Account Funds, an open-end diversified management
investment company organized under the laws of the State of Massachusetts
(hereinafter the "Fund") and OppenheimerFunds, Inc., a Colorado Corporation
(hereinafter the "Adviser").
WHEREAS, the Fund engages in business as an open-end management investment
company and was established for the purpose of serving as the investment vehicle
for separate accounts established for variable life insurance policies and
variable annuity contracts to be offered by insurance companies (hereinafter
"Participating Insurance Companies"); and
WHEREAS, beneficial interests in the Fund are divided into several series of
shares, each representing the interest in a particular managed portfolio
(collectively the "Portfolios") of securities and other assets (the Portfolios
covered by this Agreement are specified in Schedule 2 attached hereto as may be
amended from time to time by mutual consent); and
WHEREAS, the Fund has obtained an order from the Securities and Exchange
Commission (alternatively referred to as the "SEC" or the "Commission"), dated
July 16, 1986 (File No. 812-6234), 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 "Mixed and 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 Adviser is
registered as an investment adviser under the Investment Advisers
Act of 1940 and serves as the investment adviser to the Fund;
WHEREAS, the Company has registered or will register certain variable annuity
and/or life insurance contracts (hereinafter "Contracts") under the 1933 Act
(unless an exemption from registration is available); and WHEREAS, the Account
is a duly organized, validly existing segregated asset account, established by
resolution of the Board of Directors of the Company under the insurance laws of
the State of New York, to set aside and invest assets attributable to the
Contracts. (The Contract(s) and the Account(s) covered by the Agreement are
specified in Schedule 1 attached hereto, as may be amended from time to time by
mutual consent); and
WHEREAS, the Company has registered the Account as a unit investment trust under
the 1940 Act (unless an exemption from registration is available); and
WHEREAS, to the extent permitted by applicable insurance laws and regulations,
the Company intends to purchase shares in the Portfolios named in Schedule 2 on
behalf of the Account to fund the Contracts named in Schedule 1 and the Fund is
authorized to sell such shares to unit investment trusts such as the Account at
net asset value;
NOW, THEREFORE, in consideration of their mutual promises, the Fund, the Adviser
and the Company agree as follows: ARTICLE I. Sale of Fund Shares
1.1. The Fund agrees to sell to the Company those shares of the Fund
which the Company orders on behalf of the Account, 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 the Fund. 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 written (or
facsimile) notice of such order on the next following Business Day by no
later than 10:00 A.M. New York time; however, the Company undertakes to use
its best efforts to provide such notice to the Fund by no later than 9:30
A.M. New York time. "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 Company shall pay for Fund shares on the next Business Day
after an order to purchase Fund shares is made in accordance with Section
1.1 hereof. Payment shall be in federal funds transmitted by wire pursuant
to instructions of the Fund's Treasurer or by a credit for any shares
redeemed.
1.3. The Fund agrees to make an indefinite number of Fund shares
available for purchase at the applicable net asset value per share by the
Company for their separate Accounts listed in Schedule 2, on those days on
which the Fund calculates its net asset value pursuant to rules of the SEC;
provided, however, that the Board of Trustees of the Fund (hereinafter the
"Trustees") may refuse to sell shares of any Portfolio to any person, or
suspend or terminate the offering of shares of any Portfolio if such action
is required by law or by regulatory authorities having jurisdiction or is,
in the sole discretion of the Trustees, acting in good faith and in light
of their fiduciary duties under federal and any applicable state laws, in
the best interests of the shareholders of any Portfolio.
1.4. The Fund agrees that shares of the Fund will be sold only to
Participating Insurance Companies and their separate accounts, qualified
pension and retirement plans or such other persons as are permitted under
applicable provisions of the Internal Revenue Code of 1986, as amended (the
"Internal Revenue Code"), and regulations promulgated thereunder
(collectively, "Qualified Investors"), and/or to one or more registered
investment companies that restrict the sale of shares of such registered
investment companies to Qualified Investors, the sale of which will not
impair the tax treatment currently afforded the contracts.
1.5. The Fund shall not sell Fund shares to any insurance company or
separate account unless a contractual obligation is in effect with respect
to such sales to abide by the conditions of the Mixed and Shared Funding
Exemptive Order that are addressed in Section 3.4 and Article VII of this
Agreement.
1.6. The Fund agrees to redeem for cash, upon the Company's request,
any full or fractional shares of the Fund 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 1.6, the Company shall be the designee of the Fund
for receipt of requests for redemption and receipt by such designee shall
constitute receipt by the Fund; provided that the Fund receives written (or
facsimile) notice of such request for redemption on the next following
Business Day by no later than 10:00 A.M. New York time; however the Company
undertakes to use its best efforts to provide such notice to the Fund by no
later than 9:30 A.M. New York time.
1.7. The Fund shall pay for the Fund shares that are redeemed within
the time period specified in the Fund's prospectus or statement of
additional information, provided, however, that if the Fund does not pay
for the Fund shares that are redeemed on the next Business Day after a
request to redeem shares is made, then the Fund shall apply any such delay
in redemptions uniformly to all holders of shares of that Portfolio.
Payment shall be in federal funds transmitted by wire pursuant to the
instructions of the Company or by a credit toward any shares purchased on
the Business Day on which the redemption payment is made.
1.8. The Company agrees to purchase and redeem the shares of the
Portfolios named in Schedule 2 offered by the then current prospectus and
statement of additional information of the Fund in accordance with the
provisions of such prospectus and statement of additional information.
1.9. Issuance and transfer of the Funds' shares will be by book entry
only. Stock certificates will not be issued to the Company or the Account.
Purchase and redemption orders for Fund shares will be recorded in an
appropriate title for each Account or the appropriate subaccount of each
Account.
1.10. The Fund shall furnish notice as soon as reasonably practicable
to the Company of any income, dividends or capital gain distributions
payable on the Portfolio's shares. The Company hereby elects to receive all
such dividends and distributions as are payable on the Portfolio shares in
additional shares of that Portfolio. The Company reserves the right to
revoke this election and thereafter to receive all such dividends and
distributions in cash. The Fund shall notify the Company of the number of
shares so issued as payment of such dividends and distributions.
1.11. 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
practical after the net asset value per share is calculated and shall use
its best efforts to make such net asset value per share available by 6:30
p.m. New York time. In the event the Fund is unable to meet the 6:30 p.m.
time stated herein, it shall provide additional time for the Company to
place orders for the purchase and redemption of shares. Such additional
time shall be equal to the additional time which the Fund takes to make the
closing net asset value available to the Company. If the Fund provides
materially incorrect share net asset value information, the Fund shall make
an adjustment to the number of shares purchased or redeemed for the
Accounts to reflect the correct net asset value per share. Any material
error in the calculation or reporting of net asset value per share,
dividend or capital gains information shall be reported promptly upon
discovery to the Company.
ARTICLE II. Representations and Warranties
2.1. The Company represents and warrants that the Contracts are or
will be registered under the 1933 Act (unless an exemption from
registration is available) and, 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 state law and that it has registered the
Account as a unit investment trust in accordance with the provisions of the
1940 Act to serve as a segregated investment account for the Contracts, and
that it will maintain such registration for so long as any Contracts are
outstanding or until registration is no longer required under federal and
state securities laws. The Company shall amend the registration statement
under the 1933 Act for the Contracts and the registration statement under
the 1940 Act for the Account from time to time as required in order to
effect the continuous offering of the Contracts or as may otherwise be
required by applicable law. The Company shall register and qualify the
Contracts for sale in accordance with the securities laws of the various
states only if and to the extent deemed necessary by the Company.
2.2. Subject to Article VI hereof, the Company represents that it
believes that the Contracts are currently and at the time of issuance will
be treated as life insurance or annuity contracts under applicable
provisions of the Internal Revenue Code and that it will make every effort
to maintain such treatment and that it will notify the Fund and the Adviser
immediately upon having a reasonable basis for believing that the Contracts
have ceased to be so treated or that they might not be so treated in the
future.
2.3. The Fund represents and warrants that Fund shares sold pursuant
to this Agreement shall be registered under the 1933 Act and duly
authorized for issuance and sold in accordance with applicable state and
federal law and that the Fund is and shall remain registered under the 1940
Act for as long as the Fund shares are sold. 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.
2.4. The Fund represents that it is currently qualified as a Regulated
Investment Company under Subchapter M of the Internal Revenue Code and that
it will maintain such qualification (under Subchapter M or any successor or
similar provision) and that it will notify the Company immediately upon
having a reasonable basis for believing that it has ceased to so qualify or
that it might not so qualify in the future.
2.5. If the Fund considers the adoption of one or more plans under
Rule 12b-1 under the 1940 Act to finance distribution expenses (a "12b-1
Plan"), the Company agrees to provide the Trustees any information as may
be reasonably necessary for the Trustees to determine whether to adopt a
12b-1 Plan or Plans. The Fund shall notify the Company upon commencing to
finance distribution expenses pursuant to Rule 12b-1.
2.6. The Fund represents that it is lawfully organized and validly
existing under the laws of the Commonwealth of Massachusetts and that it
does and will comply with applicable provisions of the 0000 Xxx.
2.7. The Adviser represents and warrants that it is and will remain
duly registered under all applicable federal and state securities laws and
that it shall perform its obligations for the Fund in compliance with any
applicable state and federal securities laws.
2.8. The Fund and Adviser each represent and warrant that all of its
respective Directors, Trustees, officers, employees, investment advisers,
and transfer agent of the Fund are and shall continue to be at all times
covered by a blanket fidelity bond (which may, at the Fund's election, be
in the form of a joint insured bond) or similar coverage for the benefit of
the Fund in an amount not less than the minimal coverage as required
currently by Section 17(g) and 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 insurance company. The Adviser 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 Company in the event that
such coverage no longer applies.
2.9. The Company represents and warrants that all of its directors,
officers, employees, agents, investment advisers, and other individuals and
entities dealing with the money and/or securities of the Fund are covered
by a blanket fidelity bond or similar coverage in an amount not less than
the equivalent of U.S. $3 million. The aforesaid bond shall include
coverage for larceny and embezzlement and shall be issued by a reputable
insurance company. The Company agrees that any amount received under such
bond in connection with claims that derive from arrangements described in
this Agreement will be paid by the Company for the benefit of the Fund. 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 Fund and the Adviser in the event that such coverage no longer
applies.
2.10. The Fund and Adviser represent that the Fund's investment
policies, fees and expenses are and shall at all times remain in compliance
with applicable state securities laws, if any, and the Fund and Adviser
represent that their respective operations are and shall at all times
remain in material compliance with applicable state securities laws to the
extent required to perform this Agreement. The Fund and the Adviser also
represent that they will comply with any applicable state insurance law
restrictions, as provided in advance and in writing by the Company to the
Fund and the Adviser, including the furnishing of information about the
Fund not otherwise available to the Company which is required by state
insurance law to enable the Company to obtain the authority needed to issue
the Contracts in any applicable state.
ARTICLE III. Prospectus and Proxy Statements; Voting
3.1. At least annually, the Fund or the Adviser shall provide the
Company, free of charge, with as many copies of the current prospectuses
for the Portfolios as the Company may reasonably request for distribution
to existing Contract owners whose Contracts are funded by such Portfolios.
The Fund or the Adviser shall provide the Company, at the Company's
expense, with as many copies of the current prospectuses for the Portfolios
as the Company may reasonably request for distribution to prospective
purchasers of Contracts. If requested by the Company in lieu thereof, the
Fund shall provide such documentation (including a "camera ready" copy of
the new prospectuses dated on or after May 1, 1999 as set in type or, at
the request of the Company, as a diskette in the form sent to the financial
printer) and other assistance as is reasonably necessary in order for the
parties hereto once each year (or more frequently if the prospectuses for
the Portfolios are supplemented or amended) to have the prospectus for the
Contracts and the prospectuses for the Portfolios printed together in one
document. With respect to any prospectuses for the Portfolios that are
printed in combination with any one or more Contract prospectus (the
"Prospectus Booklet"), the costs of printing Prospectus Booklets for
distribution to existing Contract owners shall be prorated to the Fund
based on (a) the ratio of the number of pages of the prospectuses included
for the Portfolios in the Prospectus Booklets to the number of pages in the
Prospectus Booklet as a whole; and (b) the ratio of the number of Contract
owners with Contract value allocated to the Fund to the total number of
Contract owners; provided, however, that the Company shall bear all
printing expenses of such combined documents where used for distribution to
prospective purchasers or to owners of existing Contracts not funded by the
Portfolios.
3.2. The Fund's prospectus shall state that the statement of
additional information for the Fund is available from the Fund (or its
transfer agent). The Fund or its designee shall print and provide such
Statement to the Company and to any owner of a Contract or prospective
owner who requests such Statement at the Fund's expense.
3.3. The Fund or the Adviser, at its expense, shall provide the
Company with copies of the Fund's communications to shareholders and with
copies of the Fund's proxy material and semi-annual and annual reports to
shareholders (or may, at the Fund or the Adviser's option, reimburse the
Company for the pro rata cost of printing such materials) in such
quantities as the Company shall reasonably require, for distributing to
Contract owners at the Company's expense. Upon request, the Adviser shall
be permitted to review and approve the typeset form of such proxy material,
communications and shareholder reports prior to such printing.
3.4. If and to the extent required by law (or the Mixed and
Shared Funding Exemptive Order) the Company shall: (i) solicit voting
instructions from Contract owners; (ii) vote the Fund shares in
accordance with instructions received from Contract owners or
participants; and (iii) vote Fund shares for which no instructions
have been received in the same proportion as Fund shares of such
Portfolio for which instructions have been received from the Company's
Contract owners; so long as and to the extent that the SEC continues
to interpret the 1940 Act to require pass-through voting privileges
for variable Contract owners. The Company reserves the right to vote
Fund shares held in any Account in its own right, to the extent
permitted by law.
3.5. The Fund will comply with all applicable provisions of the
1940 Act requiring voting by shareholders. 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 or the Adviser is named, at
least ten business days prior to its use. No such material shall be
used if the Fund or its designee reasonably objects in writing to such
use within ten business days after receipt of such material.
4.2. The Company shall not give any information or make any
representations or statements on behalf of the Fund or the Adviser
concerning either of them 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, except with the permission of the Fund. The Fund
agrees to respond to any request for approval in a prompt and timely
basis. The Company shall adopt and implement procedures reasonably
designed to ensure that information promulgated or distributed by the
Company or a subsidiary thereof, or their respective employees or
agents, concerning the Fund or the Adviser which is intended only for
use only by brokers or agents selling the Contracts (i.e., information
that is not intended for distribution to Contract owners or
prospective Contract owners) is so used, by their employees and
neither the Fund nor the Adviser shall be liable for any losses,
damages, or expenses relating to the improper use of such broker only
materials. The parties hereto agree that this section is not intended
to designate or otherwise imply that the Company is an underwriter or
distributor of the Fund's shares.
4.3. The Adviser or Fund shall furnish or cause to be furnished,
to the Company or its designee, each piece of sales literature or
other promotional material which the Adviser or Fund prepared or
caused to be prepared, in which the Company or its separate account is
named, at least ten business days prior to its use. No such material
shall be used if the Company or its designee reasonably objects in
writing to such use within ten business days after receipt of such
material.
4.4. The Adviser and the Fund 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 information or
representations contained in (i) the registration statement or
prospectus for the Contracts, as such registration statement and
prospectus may be amended or supplemented from time to time, (ii)
reports for the Account which are in the public domain or approved by
the Company for distribution to Contract owners or participants, or
(iii) sales literature or other promotional material approved by the
Company or its designee, except with the permission of the Company.
The Company agrees to respond to any request for approval on a prompt
and timely basis. The Adviser shall adopt and implement procedures
reasonably designed to ensure that information promulgated or
distributed by the Fund and/or the Adviser or any subsidiary thereof,
or their respective employees or agents, concerning the Company, any
of its affiliates, or the Contracts which is intended only for use
only by brokers or agents selling the shares (i.e., information that
it not intended for distribution to shareowners or prospective
shareowners) is so used by their employees and agents, and neither the
Company nor any of its affiliates shall be liable for any losses,
damages, or expenses relating to the improper use of such broker only
materials. The parties agree that this section is not intended to
designate or otherwise imply that the Adviser is an underwriter or
distributor of the Contracts.
4.5. The Adviser 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 prepared by or at the request of the
Fund, the Adviser, or any subsidiary of the Adviser, in which the
Company or its separate account is named, applications for exemptions,
requests for no-action letters, and all amendments to any of the
above, that relate to any Portfolio or its shares, contemporaneously
with the filing of such document with 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 in
which the Fund (or any Portfolio) or the Adviser is named,
applications for exemptions, requests for no action letters, and all
amendments to any of the above, that relate to the Contracts or each
Account, contemporaneously with the filing of such document with 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, electronic media, or other public media), sales
literature (i.e., any written communication distributed or made
generally available to customers or the public, including brochures,
circulars, research reports, market letters, form letters, seminar
texts, reprints or excerpts of any other advertisement, sales
literature, or published article), educational or training materials
or other communications distributed or made generally available to
some or all agents or employees, and proxy materials and any other
material constituting sales literature or advertising under NASD
rules, the 1940 Act or the 0000 Xxx.
4.8. The Company agrees and acknowledges that the Adviser is the
sole owner of the OppenheimerFunds, Inc. clasped hands xxxx and that
all use of any designation comprised in whole or part of such xxxx
under this Agreement shall inure to the benefit of the Adviser or the
Fund. The Company shall not use such xxxx on its own behalf or on
behalf of each Account in connection with marketing the Contracts
without prior written consent of the Adviser, which consent shall not
be unreasonably withheld, delayed or conditioned. Upon termination of
this Agreement for any reason, the Company shall cease all use of any
such xxxx.
4.9. Except as otherwise expressly provided in this Agreement or
as required by applicable law or regulation, neither the Fund nor the
Adviser, nor any subsidiary of the Adviser shall use any trademark,
trade name, service xxxx or logo of the Company or any of its
affiliates, or any variation of any such trademark, trade name,
service xxxx or logo, without the Company's prior written consent, the
granting of which shall be at the Company's sole option.
ARTICLE V. Fees and Expenses
5.1. The Fund and Adviser shall pay no fee or other compensation
to the Company under this Agreement, and the Company shall pay no fee
or other compensation to the Fund or Adviser, except as provided
herein or in any other written agreement.
5.2. All expenses incident to performance by each party of its
respective duties under this Agreement shall be paid by that party.
The Fund 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 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, the preparation
of all statements and notices required by any federal or state law,
and all applicable taxes on the issuance and transfer of the Fund's
shares to the Company.
5.3. The Company shall bear the expenses of distributing the
Fund's prospectus, proxy materials, communications and reports to
Contract owners and of printing and distributing the Fund's prospectus
to prospective Contract owners. ARTICLE VI. Diversification
6.1. 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 and the regulations
issued thereunder. Without limiting the scope of the foregoing, the
Fund represents and warrants that each Portfolio of the Fund will
comply with Section 817(h) of the Internal Revenue Code and 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 (and
any revenue rulings, revenue procedures, notices, and other published
announcements of the Internal Revenue Service interpreting these
sections). In the event of a breach of this Article VI by the Fund, it
will take all reasonable steps (a) to notify the Company of such
breach and (b) to adequately diversify each Portfolio of the Fund so
as to achieve compliance within the grace period afforded by Treasury
Regulation 1.817-5. The Fund and Adviser represent that each Portfolio
is qualified as a Regulated Investment Company under Subchapter M of
the Code and that they will maintain such qualification (under
Subchapter M or any successor provision). ARTICLE VII. Potential
Conflicts
7.1. The Board of Trustees of the Fund (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 the Fund. An irreconcilable material 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 any
Portfolio are being managed; (e) a difference in voting instructions
given by Participating Insurance Companies or 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 an irreconcilable material conflict exists and the
implications thereof.
7.2. The Company has received a copy of the Mixed and Shared
Funding Exemptive Order, and in particular, has reviewed the
conditions to the requested relief set forth therein. The Company
agrees to be bound by the responsibilities of a participating
insurance company as set forth in the Mixed and Shared Funding
Exemptive Order, including without limitation the requirement that the
Company report any potential or existing conflicts of which it is
aware to the Board. The Company agrees to assist the Board in carrying
out its responsibilities in monitoring such conflicts under the Mixed
and Shared Funding Exemptive Order, by providing the Board in a timely
manner 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 and by confirming in writing, at
the Fund's request, that the Company is unaware of any such potential
or existing material irreconcilable conflicts.
7.3. If it is determined by a majority of the Board, or a
majority of its disinterested Trustees, that a material irreconcilable
conflict exists, the Company and the relevant 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 irreconcilable material conflict, up to and including: (1)
withdrawing the assets allocable to some or all of the separate
accounts from the Fund or any Portfolio and reinvesting such assets in
a different investment medium, including (but not limited to) another
Portfolio of the Fund, 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., variable annuity Contract owners or life insurance
Contract owners, of one or more Participating Insurance Companies)
that votes in favor of such segregation, or offering to the affected
Contract owners the option of making such a change; and (2)
establishing a new registered management investment company or managed
separate account.
7.4. If the Company's disregard of voting instructions could
conflict with the majority of Contract owners voting instructions, and
if the Company and/or the Fund and the Adviser reasonably determine
that a material irreconcilable conflict (as set forth in the Mixed and
Shared Funding Exemptive Order) may arise as a result, then the
Company may be required, at the Fund's election, to withdraw the
Account's investment in the Fund and terminate this Agreement. Any
such withdrawal and termination must take place within six (6) months
after the Fund gives written notice that this provision is being
implemented. Until such withdrawal and termination is implemented, the
Fund shall continue to accept and implement orders by the Company for
the purchase and redemption of shares of the Fund. 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.
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 Account's investment in the Fund and
terminate this Agreement within six (6) months after the Fund informs
the Company in writing that it has determined that such decision has
created an irreconcilable material conflict. Until such withdrawal and
termination is implemented, the Fund shall continue to accept and
implement orders by the Company for the purchase and redemption of
shares of the Fund, subject to applicable regulatory limitation. 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.
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 irreconcilable
material 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
irreconcilable material conflict. In the event that the Board
determines that any proposed action does not adequately remedy any
irreconcilable material 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 any such
material irreconcilable conflict as determined by a majority of the
disinterested members of the Board.
7.7. Upon request, the Company shall at least annually submit to
the Board such reports, materials or data as the Board may reasonably
request so that the Board may fully carry out the duties imposed upon
it as delineated in the Mixed and Shared Funding Exemptive Order, and
said reports, materials and data shall be submitted more frequently if
deemed appropriate by the Board.
7.8. 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 Act or the rules promulgated thereunder with respect
to mixed or shared funding (as defined in the Mixed and Shared Funding
Exemptive Order) on terms and conditions materially different from
those contained in the Mixed and Shared Funding Exemptive Order, the
(a) the Fund and/or the Participating Insurance Companies (including
the Company), as appropriate, shall take such reasonable 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.
ARTICLE VIII. Indemnification
8.1. Indemnification By The Company
(a). The Company agrees to indemnify and hold harmless the Fund
and the Adviser, each member of their Board of Trustees or Board of
Directors, each of their officers and each person, if any, who
controls the Fund within the meaning of Section 15 of the 1933 Act
(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 reasonable legal and other
expenses), to which the Indemnified Parties may become subject under
any statute, regulation, at common law or otherwise, insofar as such
losses, claims, damages, liabilities or expenses (or actions in
respect thereof) or settlements are related to the sale or acquisition
of the Fund's shares 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, prospectus or statement of additional
information for the Contracts or contained in sales literature or
other promotional material for the Contracts (or any amendment or
supplement to any of the foregoing), or arise out of or are based upon
the omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances which they were
made; 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 or
the Adviser for use in the registration statement, prospectus or
statement of additional information for the Contracts or sales
literature (or any amendment or supplement) or otherwise for use in
connection with the sale of the Contracts or Fund shares; or
(ii) arise out of or as a result of statements or representations
by or on behalf of the Company (other than statements or
representations contained in the Fund registration statement, Fund
prospectus or sales literature or other promotional material 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 Fund shares,
provided any such statement or representation or such wrongful conduct
was not made in reliance upon and in conformity with information
furnished to the Company by or on behalf of the Advisor or the Fund;
or
(iii) arise out of any untrue statement or alleged untrue
statement of a material fact contained in the Fund registration
statement, Fund prospectus, statement of additional information or
sales literature or other promotional material 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 in
light of the circumstances in which they were made, if such statement
or omission was made in reliance upon information furnished to the
Fund or the Adviser by or on behalf of the Company or persons under
its control; or
(iv) 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.
except to the extent provided in Sections 8.1(b) and 8.3 hereof. This
indemnification shall be in addition to any liability which the Company may
otherwise have.
(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 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.
8.2. Indemnification by Adviser and Fund
8.2(a)(1). 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 reasonable legal and other expenses)
to which the Indemnified Parties may become subject under any statute,
regulation, at common law or otherwise, insofar as such losses,
claims, damages, liabilities or expenses (or actions in respect
thereof) or settlements are related to the sale or acquisition of the
Fund's shares 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, prospectus, statement of additional
information 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 in light of the circumstances in which they
were made; 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 the Fund by or
on behalf of the Company for use in the Fund registration statement,
prospectus or statement of additional information, or sales literature
or other promotional material for the Contracts or of the Fund; or
(ii) arise out of or as a result of statements or representations
(other than statements or representations contained in the Contracts
or in the Contract registration statement, the Contract prospectus,
statement of additional information, or sales literature or other
promotional material for the Contracts not supplied by the Adviser or
the Fund or persons under the control of the Adviser or the Fund
respectively) or wrongful conduct of the Adviser or persons under its
control, with respect to the sale or distribution of the Contracts,
provided any such statement or representation or such wrongful conduct
was not made in reliance upon and in conformity with information
furnished to the Adviser or the Fund by or on behalf of the Company;
or
(iii) arise out of any untrue statement or allegedly untrue
statement of a material fact contained in a registration statement,
prospectus, statement of additional information 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 in light of the
circumstances in which they were made, if such statement or omission
was made in reliance upon information furnished to the Company by or
on behalf of the Fund or persons under the control of the Adviser; or
(iv) arise out of or result from any material breach of any
representation and/or warranty made by the Adviser or the Fund in this
Agreement or arise out of or result from any other material breach of
this Agreement by the Adviser or the Fund;
(v) arise out of or result from the materially incorrect or
untimely calculation or reporting of the daily net asset value per
share or dividend or capital gain distribution rate;
except to the extent provided in Sections 8.2(b) and 8.3 hereof. This
indemnification shall be in addition to any liability which the Adviser may
otherwise have.
8.2(a)(2) The Fund agrees to indemnify and hold harmless the
Indemnified Parties [as defined in Section 8.2(a)(1)] against any and
all losses, claims, damages, liabilities (including amounts paid in
settlement with the written consent of the Fund) or litigation
(including reasonable legal and other expenses) to which the
Indemnified Parties may become subject under any statute, regulation,
at common law or otherwise, insofar as such losses, claims, damages,
liabilities or expenses (or actions in respect thereof) or settlements
are related to the operations of the Fund or the sale or acquisition
of the Fund's shares and:
(i) arise out of or are based upon (a) any untrue statement or
alleged untrue statement of any material fact or (b) the omission or
the alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements made therein, in
light of the circumstances in which they were made, not misleading, if
such fact, statement or omission is contained in the registration
statement for the Fund or the Contracts, or in the prospectus or
statement of additional information for the Contracts or the Fund, or
in any amendment to any of the foregoing, or in sales literature or
other promotional material for the Contracts or of the Fund, provided,
however, that this agreement to indemnify shall not apply as to any
Indemnified Party if such statement, fact or omission or such alleged
statement, fact or omission was made in reliance upon and in
conformity with information furnished to the Adviser or the Fund by or
on behalf of the Indemnified Party; or
(ii) arise out of or as a result of statements or representations
(other than statements or representations contained in the Contracts
or in the Contract registration statement, the Contract prospectus,
statement of additional information, or sales literature or other
promotional material for the Contracts not supplied by the Adviser or
the Fund or persons under the control of the Adviser or the Fund
respectively) or wrongful conduct of the Fund or persons under its
control with respect to the sale or distribution of Contracts,
provided any such statement or representation or such wrongful conduct
was not made in reliance upon and in conformity with information
furnished to the Adviser or the Fund by or on behalf of the Company;
or
(iii) arise out of or result from any material breach of any
representation and/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 (including a failure, whether unintentional or
in good faith or otherwise, to comply with the diversification
requirements specified in Article VI of this Agreement);
(iv) arise out of or result from the materially incorrect or
untimely calculation or reporting of the daily net asset value per
share or dividend or capital gain distribution rate;
except to the extent provided in Section 8.2(b) and 8.3 hereof. This
indemnification shall be in addition to any liability which the Fund may
otherwise have.
(b). The Fund and 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 of such
Indemnified Party's duties or by reason of such Indemnified Party's
reckless disregard of obligations and duties under this Agreement.
8.3 Indemnification Procedure
Any person obligated to provide indemnification under this Article VIII
("indemnifying party" for the purpose of this Section 8.3) shall not be liable
under the indemnification provisions of this Article VIII with respect to any
claim made against a party entitled to indemnification under this Article VIII
("indemnified party" for the purpose of this Section 8.3) unless such
indemnified party shall have notified the indemnifying party in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
indemnified party (or after such party shall have received notice of such
service on any designated agent), but failure to notify the indemnifying party
of any such claim shall not relieve the indemnifying party from any liability
which it may have to the indemnified party against whom such action is brought
under the indemnification provisions of this Article VIII, except to the extent
that the failure to notify results in the failure of actual notice to the
indemnifying party and such indemnifying party is damaged solely as a result of
failure to give such notice. In case any such action is brought against the
indemnified party, the indemnifying party will be entitled to participate, at
its own expense, in the defense thereof. The indemnifying party also shall be
entitled to assume the defense thereof, with counsel satisfactory to the party
named in the action. After notice from the indemnifying party to the indemnified
party of the indemnifying party's election to assume the defense thereof, the
indemnified party shall bear the fees and expenses of any additional counsel
retained by it, and the indemnifying party will not be liable to such party
under this Agreement for any legal or other expenses subsequently incurred by
such party independently in connection with the defense thereof other than
reasonable costs of investigation, unless (i) the indemnifying party and the
indemnified party shall have mutually agreed to the retention of such counsel or
(ii) the named parties to any such proceeding (including any impleaded parties)
include both the indemnifying party and the indemnified party and representation
of both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. The indemnifying party shall not be
liable for any settlement of any proceeding effected without its written
consent, which shall not be unreasonably withheld, but if settled with such
consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party from and against any loss or
liability by reason of such settlement or judgment.
A successor by law of the parties to this Agreement shall be entitled to the
benefits of the indemnification contained in this Article VIII. The
indemnification provisions contained in this Article VIII shall survive any
termination of this Agreement. ARTICLE IX. Applicable Law
9.1. This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the State of New
York. 9.2. This Agreement shall be subject to the provisions of the
1933, 1934 and 1940 Acts, and the rules and regulations and rulings
thereunder, including such exemptions from those statutes, rules and
regulations as the SEC may grant (including, but not limited to, the
Mixed and Shared Funding Exemptive Order) and the terms hereof shall
be interpreted and construed in accordance therewith.
ARTICLE X. Termination
10.1 This Agreement shall terminate:
(a) at the option of any party upon six month's advance written
notice to the other parties unless otherwise agreed in a separate
written agreement among the parties; or
(b) at the option of the Company to the extent that shares of
Portfolios are not reasonably available to meet the requirements of
the Contracts as determined by the Company reasonably and in good
faith; or
(c) at the option of the Fund or the Adviser upon institution of
formal proceedings against the Company by the NASD, the SEC, the
insurance commission 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 administration of the Contracts, the
operation of the Account, or the purchase of the Fund shares, which
would have a material adverse effect on the Company's ability to
perform its obligations under this Agreement; or
(d) at the option of the Company upon institution of formal
proceedings against the Fund or the Adviser by the NASD, the SEC, or
any state securities or insurance department or any other regulatory
body, which would have a material adverse effect on the Adviser's or
the Fund's ability to perform its obligations under this Agreement; or
(e) at the option of the Company or the Fund upon receipt of any
necessary regulatory approvals or the vote of the Contract owners
having an interest in the Account (or any subaccount) to substitute
the shares of another investment company for the corresponding
Portfolio shares of the Fund in accordance with the terms of the
Contracts for which those Portfolio shares had been selected to serve
as the underlying investment media. The Company will give 45 days
prior written notice to the Fund of the date of any proposed vote or
other action taken to replace the Fund's shares; or
(f) at the option of the Company or the Fund upon a determination
by a majority of the Board, or a majority of the disinterested Board
members, that an irreconcilable material conflict exists among the
interests of (i) all Contract owners of variable insurance products of
all separate accounts or (ii) the interests of the Participating
Insurance Companies investing in the Fund as delineated in Article VII
of this Agreement; or
(g) at the option of the Company if the Fund ceases to qualify as
a Regulated Investment Company under Subchapter M of the Internal
Revenue Code, or under any successor or similar provision, or if the
Company reasonably believes that the Fund may fail to so qualify; or
(h) at the option of the Company if the Fund fails to meet the
diversification requirements specified in Article VI hereof or if the
Company reasonably believes that the Fund will fail to meet such
requirements; or
(i) at the option of any party to this Agreement, upon another
party's failure to cure a material breach of any provision of this
Agreement within thirty days after written notice thereof; or (j) at
the option of the Company, if the Company determines in its sole
judgment exercised in good faith, that either the Fund or the Adviser
has suffered a material adverse change in its business, operations or
financial condition since the date of this Agreement or is the subject
of material adverse publicity which is likely to have a material
adverse impact upon the business and operations of the Company; or
(k) at the option of the Fund or the Adviser, if the Fund or
Adviser respectively, shall determine in its sole judgment exercised
in good faith, that the Company has suffered a material adverse change
in its business, operations or financial condition since the date of
this Agreement or is the subject of material adverse publicity which
is likely to have a material adverse impact upon the business and
operations of the Fund or the Adviser; or
(l) subject to the Fund's compliance with Article VI hereof, at
the option of the Fund in the event any of the Contracts are not
issued or sold in accordance with applicable requirements of federal
and/or state law.
10.2 Notice Requirement.
(a) In the event that any termination of this Agreement is based
upon the provisions of Article VII, such prior written notice shall be
given in advance of the effective date of termination as required by
such provisions.
(b) In the event that any termination of this Agreement is based
upon the provisions of Sections 10.1(b) - (d) or 10.1(g) - (i), prompt
written notice of the election to terminate this Agreement for cause
shall be furnished by the party terminating the Agreement to the
non-terminating parties, with said termination to be effective upon
receipt of such notice by the non-terminating parties.
(c) In the event that any termination of this Agreement is based
upon the provisions of Sections 10.1(j) or 10.1(k), prior written
notice of the election to terminate this Agreement for cause shall be
furnished by the party terminating this Agreement to the
non-terminating parties. Such prior written notice shall be given by
the party terminating this Agreement to the non-terminating parties at
least 30 days before the effective date of termination.
10.3 It is understood and agreed that the right to terminate this
Agreement pursuant to Section 10.1(a) may be exercised for any reason
or for no reason.
10.4. Effect of Termination.
(a) Notwithstanding any termination of this Agreement pursuant to
Section 10.1 of this Agreement and subject to Section 1.3 of this
Agreement, the Company may require the Fund to continue to make
available additional shares of the Fund pursuant to the terms and
conditions of this Agreement as provided in paragraph (b) below, 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 Fund, redeem
investments in the Fund and/or invest in the Fund upon the making of
additional purchase payments under the Existing Contracts. The parties
agree that this Section 10.4 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.
(b) If shares of the Fund continue to be made available after
termination of this Agreement pursuant to this Section 10.4, the
provisions of this Agreement shall remain in effect except for Section
10.1(a) and thereafter the Fund, the Adviser, or the Company may
terminate the Agreement, as so continued pursuant to this Section
10.4, upon written notice to the other party, such notice to be for a
period that is reasonable under the circumstances but need not be for
more than 90 days.
10.5 Except as necessary to implement Contract owner initiated or
approved transactions, or as required by state insurance laws or
regulations, the Company shall not redeem Fund shares attributable to
the Contracts (as opposed to Fund shares attributable to the Company's
assets held in the Account), and the Company shall not prevent
Contract owners from allocating payments to a Portfolio that was
otherwise available under the Contracts, until 45 days after the
Company shall have notified the Fund or the Adviser of its intention
to do so.
ARTICLE XI. Notices
Any notice shall be deemed duly given only if sent by hand, evidenced by written
receipt or by certified mail, return receipt requested, to the other party at
the address of such party set forth below or at such other address as such party
may from time to time specify in writing to the other party. All notices shall
be deemed given on the date received or rejected by the addressee.
If to the Fund:
Xxxxxxxxxxx Variable Account Funds
0000 Xxxxxx Xxx
Xxxxxxxxx, XX 00000
Attn: Treasurer
If to the Adviser:
OppenheimerFunds, Inc.
0 Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attn: Xxxxxx X. Xxxxxxx, Esq.
Executive Vice President and General Counsel
If to the Company:
Allstate Life Insurance Company of New York
0000 Xxxxxxx Xxxx
Xxxxx X0X
Xxxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
ARTICLE XII. Miscellaneous
12.1. The Company and the Adviser each understand and agree that
the obligations of the Fund under this Agreement are not binding upon
any shareholder or Trustee of the Fund personally, but bind only the
Fund and the Fund's property; the Company and the Adviser each
represent that it has notice of the provisions of the Declaration of
Trust of the Fund disclaiming shareholder and Trustee liability for
acts or obligations of the Fund
12.2. Subject to the requirements of legal process and
regulatory authority, each party hereto shall treat as confidential
and all information reasonably identified as confidential in writing
by any other party hereto (including without limitation the names and
addresses of the owners of the Contracts) and, except as contemplated
by this Agreement, shall not disclose, disseminate or utilize such
confidential information until such time as it may come into the
public domain without the express written consent of the affected
party .
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. This Agreement shall not be assigned by any party hereto
without the prior written consent of all the parties.
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.
12.8. Each party represents that the execution and delivery of
this Agreement and the consummation of the transactions contemplated
herein have been duly authorized by all necessary corporate or trust
action, as applicable, by such party and when so executed and
delivered this Agreement will be the valid and binding obligation of
such party enforceable in accordance with its terms.
12.9. Except as may otherwise be required under Article VII, 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.
12.10. It is understood by the parties that this Agreement is not
an exclusive arrangement in any respect. 12.11. The foregoing
constitutes the entire Agreement between the parties hereto, and shall
not be modified, amended or assigned except by an Agreement in writing
signed by an authorized representative of each such party.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed in its name and on its behalf by its duly authorized
representative and its seal to be hereunder affixed as of the date specified
below.
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
By its authorized officer,
By: ___________________________________
Title: __________________________________
Date:___________________________________
XXXXXXXXXXX VARIABLE ACCOUNT FUNDS
By its authorized officer,
By: ___________________________________
Title: _________________________________
Date: ___________________________________
OPPENHEIMERFUNDS, INC.
By its authorized officer,
By: ___________________________________
Title: _________________________________
Date: ___________________________________
SCHEDULE 1
SEPARATE ACCOUNTS AND ASSOCIATED CONTRACTS
Name of Separate Account and Policy Form Numbers of Contracts
Date Established by Board of Directors: Funded by Separate Account:
Allstate Life of New York Separate Account A -- NYLU446
December 15, 1995
SCHEDULE 2
Portfolios of Xxxxxxxxxxx Variable Account Funds:
Xxxxxxxxxxx Aggressive Growth Fund /VA Xxxxxxxxxxx Bond Fund/VA
Xxxxxxxxxxx Capital Appreciation Fund/VA Xxxxxxxxxxx Global
Securities Fund/VA Xxxxxxxxxxx High Income Fund/VA Xxxxxxxxxxx Main
Street Growth & Income Fund/VA Xxxxxxxxxxx Small Cap Growth Fund/VA
Xxxxxxxxxxx Strategic Income Fund/VA
Exhibit 8(i)
PARTICIPATION AGREEMENT
By and Among
XXXXX FARGO VARIABLE TRUST
And
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
And
XXXXXXXX INC.
THIS AGREEMENT, made and entered into this __th day of _______, 2000,
by and among Allstate Life Insurance Company of New York, a New York corporation
(the "Company"), on its own behalf and on behalf of each separate account of the
Company named in Exhibit A to this Agreement, as may be amended from time to
time (each separate account, a "Separate Account"), and Xxxxx Fargo Variable
Trust, an open-end diversified management investment company organized under the
laws of the State of Delaware (the "Trust"), and Xxxxxxxx Inc., an Arkansas
corporation (the "Underwriter").
WHEREAS, the Trust engages in business as an open-end diversified,
management investment company and was established for the purpose of serving as
the investment vehicle for separate accounts established for variable life
insurance contracts and variable annuity contracts to be offered by insurance
companies which have entered into participation agreements substantially similar
to this Agreement ("Participating Insurance Companies"); and
WHEREAS, beneficial interests in the Trust are divided into several
series of shares, each representing the interest in a particular managed
portfolio of securities and other assets (each, a "Fund"); and
WHEREAS, an order from the U.S. Securities and Exchange Commission (the
"SEC" or "Commission"), dated September 28, 1998 (File No. 812-11158), grants
Participating Insurance Companies and variable annuity separate accounts and
variable life insurance separate accounts relief from the provisions of Sections
9(a), 13(a), 15(a) and 15(b) of the Investment Company Act of 1940, as amended
(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 separate accounts and variable life insurance separate accounts
of both affiliated and unaffiliated Participating Insurance Companies and
qualified pension and retirement plans ("Mixed and Shared Funding Order"), and
WHEREAS, the Trust 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 (the "1933 Act"); and
WHEREAS, the Company has registered or will register certain variable
annuity and variable life insurance contracts under the 1933 Act and named in
Exhibit A to this Agreement, as it may be amended from time to time (the
"Contracts"); and
WHEREAS, the Separate Accounts are duly organized, validly existing
segregated asset accounts, established by resolution of the Board of Directors
of the Company under the insurance laws of the State of New York, to set aside
and invest assets attributable to the Contracts; and
WHEREAS, the Company has registered the Separate Accounts as unit
investment trusts under the 1940 Act; 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");
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares in the Funds named in
Exhibit B on behalf of the Separate Accounts to fund the Contracts, and the
Underwriter is authorized to sell such shares to unit investment trusts such as
the Separate Accounts at net asset value;
NOW, THEREFORE, in consideration of their mutual promises, the Company,
the Trust, and the Underwriter agree as follows: ARTICLE 1 Sale of Trust Shares
1.1. The Underwriter agrees to sell to the Company those shares of the Trust
which the Company orders on behalf of the Separate Accounts, executing such
orders on a daily basis at the net asset value next computed after receipt and
acceptance by the Trust or its designee of the order for the shares of the
Trust. For purposes of this Section 1.1, the Company shall be the designee of
the Trust for receipt of such orders from each Separate Account and receipt by
such designee shall constitute receipt by the Trust; provided that the Trust
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 relevant Fund calculates its net
asset value.
1.2. The Trust agrees to make its shares available indefinitely for purchase at
the applicable net asset value per share by Participating Insurance Companies
and their separate accounts on those days on which the Trust calculates its net
asset value pursuant to rules of the SEC; provided, however, that the Board of
Trustees of the Trust (hereinafter the "Trustees") may refuse to sell shares of
any Fund to any person, or suspend or terminate the offering of shares of any
Fund, if such action is required by law or by regulatory authorities having
jurisdiction, or is, in the sole discretion of the Trustees, acting in good
faith and in light of their fiduciary duties under federal and any applicable
state laws, necessary in the best interests of the shareholders of any Fund.
1.3. The Trust and the Underwriter agree that shares of the Trust will be sold
only to Participating Insurance Companies and their separate accounts, and to
qualified pension and retirement plans. No shares of the Trust will be sold to
the general public.
1.4. The Trust and the Underwriter will not sell Trust shares to any insurance
company or separate account unless an agreement containing provisions
substantially the same as Articles 1, 3, 5, 7 and Section 2.8 of Article 2 of
this Agreement are in effect to govern such sales.
1.5. The Trust will not accept a purchase order from a qualified pension or
retirement plan if such purchase would make the plan shareholder an owner of 10
percent or more of the assets of a Fund unless such plan executes an agreement
with the Trust governing participation in such Fund that includes the conditions
set forth herein to the extent applicable. A qualified pension or retirement
plan will execute an application containing an acknowledgment of this condition
at the time of its initial purchase of shares of any Fund.
1.6. The Trust agrees to redeem for cash, upon the Company's request, any full
or fractional shares of the Trust held by the Company, executing such requests
on a daily basis at the net asset value next computed after receipt and
acceptance by the Trust or its designee of the request for redemption. For
purposes of this Section 1.6, the Company shall be the designee of the Trust for
receipt of requests for redemption from each Separate Account and receipt by
such designee shall constitute receipt by the Trust; provided the Trust receives
notice of request for redemption by 9:30 a.m. Eastern Time on the next following
Business Day. Payment shall be in federal funds transmitted by wire to the
Company's account as designated by the Company in writing from time to time.
1.7. Each purchase, redemption, and exchange order placed by the Company shall
be placed separately for each Fund and shall not be netted with respect to any
Fund. However, with respect to payment of the purchase price by the Company and
of redemption proceeds by the Trust, the Company and the Trust shall net
purchase and redemption orders with respect to each Fund and shall transmit one
net payment for all Funds in accordance with Section 1.8.
1.8. The Company agrees that purchases and redemptions of Fund shares offered by
the then current prospectus of the Fund shall be made in accordance with the
provisions of such prospectus. The Company agrees that all net amounts available
under the variable life insurance contracts and variable annuity contracts with
the form number(s) which are listed on Exhibit A attached hereto and
incorporated herein by this reference, as such Exhibit A may be amended from
time to time hereafter by mutual written agreement of all the parties hereto
(the "Contracts"), shall be invested in the Funds, in such other Funds managed
by Xxxxx Fargo Bank as may be mutually agreed to in writing by the parties
hereto, or in the Company's general account, provided that such amounts may also
be invested in an investment company other than the Trust if (a) such other
investment company, or series thereof, has investment objectives or policies
that are substantially different from the investment objectives and policies of
all the Funds of the Trust which are actually used by the Company to fund the
Contracts; or (b) the Company gives the Fund and the Underwriter 45 days written
notice of its intention to make such other investment company available as a
funding vehicle for the Contacts; or (c) such other investment company was
available as a funding vehicle for the Contracts prior to the date of this
Agreement and the Company so informs the Fund and Underwriter prior to their
signing this Agreement (a list of such funds appearing on Exhibit B to this
Agreement); or (d) the Fund or Underwriter consents to the use of such other
investment company.
1.9. In the event of net purchase, the Company shall pay for
shares by 2:00 p.m. Eastern Time on the next Business Day after an order to
purchase the Shares is deemed to be received in accordance with the provisions
of Section 1.1 hereof. In the event of net redemptions, the Trust shall pay the
redemption proceeds in accordance with the terms of the then-current prospectus
for the Trust. All such payments shall be in federal funds transmitted by wire.
For purposes of Section 2.4 and Section 2.11, upon receipt by the Trust 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.
1.10. Issuance and transfer of the Trust's shares will be by book entry only.
Stock certificates will not be issued to the Company or any Separate Account.
Purchase and redemption orders for Trust shares will be recorded in an
appropriate title for each Separate Account or the appropriate subaccount of
each Separate Account.
1.11. The Trust shall furnish notice as soon as reasonably practicable to the
Company of any income, dividends, or capital gain distributions payable on the
Trust's shares. The Company hereby elects to receive all such dividends and
distributions as are payable on the Fund shares in the form of additional shares
of that Fund. The Company reserves the right to revoke this election and to
receive all such dividends and distributions in cash. The Trust shall notify the
Company of the number of shares so issued as payment of such dividends and
distributions.
1.12. The Trust shall make the net asset value per share for each Fund available
to the Company on a daily basis as soon as reasonably practical after the net
asset value per share is calculated and shall use its best efforts to make such
net asset value per share available by 5:30 p.m. Pacific Time, each business
day.
ARTICLE 2 Representations and Warranties
ARTICLE 1
2.1. The Company represents and warrants that the Contracts are or will be
registered under the 1933 Act, unless exempt therefrom, and that the Contracts
will be issued and sold in compliance with all applicable federal and state laws
and that the sale of the Contracts shall comply in all material respects with
applicable state insurance suitability requirements. The Company further
represents and warrants that: (i) it is an insurance company duly organized and
in good standing under applicable law; (ii) it has legally and validly
established each Separate Account as a segregated asset account under applicable
state law and has registered each Separate Account as a unit investment trust in
accordance with the provisions of the 1940 Act, unless exempt therefrom, to
serve as segregated investment accounts for the Contracts; and (iii) it will
maintain such registration, if required, for so long as any Contracts are
outstanding. The Company shall amend any registration statement under the 1933
Act for the Contracts and any registration statement under the 1940 Act for the
Separate Accounts from time to time as required in order to effect the
continuous offering of the Contracts or as may otherwise be required by
applicable law. The Company shall register and qualify the Contracts for sale in
accordance with the securities laws of the various states only if, and to the
extent, deemed necessary by the Company. 2.2. Subject to Article VI hereof, the
Company represents that the Contracts are currently and at the time of issuance
will be treated as life insurance, endowment, or annuity contracts under
applicable provisions of the Internal Revenue Code and that it will maintain
such treatment and that it will notify the Trust 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.
2.3. The Company represents that any prospectus offering a Contract that is a
life insurance contract where it is reasonably probable that such Contract would
be a "modified endowment contract," as that term is defined in Section 7702A of
the Internal Revenue Code will identify such Contract as a modified endowment
contract (or policy).
2.4. The Company represents and warrants that all of its directors, officers,
employees, investment advisers, and other individuals/entities dealing with the
money and/or securities of the Trust are covered by a blanket fidelity bond or
similar coverage in an amount not less than $5 million. The aforesaid includes
coverage for larceny and embezzlement and is issued by a reputable bonding
company. The Company agrees that any amounts received under such bond in
connection with claims that derive from arrangements described in this Agreement
will be held by the Company for the benefit of the Trust. The Company agrees to
see that this bond or another bond containing these provisions is always in
effect, and agrees to notify the Trust and the Underwriter in the event that
such coverage no longer applies. 1.1.
2.5. The Company represents and warrants that it has taken all necessary steps
to ensure that it has addressed all Year 2000 transition issues, and that
neither the Trust nor the Underwriter and their affiliates, nor the owners of
the Contracts will experience any material negative effect as a result of the
Company's Year 2000 transition.
2.6. The Trust represents and warrants that Trust shares sold pursuant to this
Agreement shall be registered under the 1933 Act and duly authorized for
issuance in accordance with applicable law, and that the Trust is and shall
remain registered under the 1940 Act for as long as the Trust shares are sold.
The Trust shall amend the registration statement for its shares under the 1933
and the 1940 Acts from time to time as required in order to effect the
continuous offering of its shares. The Trust shall register and qualify the
shares for sale in accordance with the laws of the various states only if, and
to the extent, deemed advisable by the Trust or the Underwriter.
2.7. The Trust represents that it is currently qualified as a Regulated
Investment Company under Subchapter M of the Internal Revenue Code, and that it
will make every effort to maintain such qualification (under Subchapter M or any
successor or similar provision).
2.8. 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 and other applicable laws of the various
states, except that the Trust represents that it is and shall at all times
remain in compliance with the laws of the state of Delaware to the extent
required to perform this Agreement.
2.9. The Trust represents and warrants that to the extent that it decides to
finance distribution expenses pursuant to Rule 12b-1 under the 1940 Act, the
Trust undertakes to have its Board of Trustees, a majority of whom are not
interested persons of the Trust, formulate and approve any plan under Rule 12b-1
("Rule 12b-1 Plan") to finance distribution expenses. The Trust shall notify the
Company immediately upon determining to finance distribution expenses pursuant
to Rule 12b-1.
2.10. The Trust represents that it is lawfully organized and validly existing
under the laws of Delaware and that it does and will comply with applicable
provisions of the 0000 Xxx.
2.11. The Trust represents and warrants that it and all of its trustees,
officers, employees and other individuals/entities having access to the funds
and/or securities of the Trust are and 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 minimal coverage as required currently by Rule 17g-1 of
the 1940 Act or related provisions as may be promulgated from time to time. The
aforesaid bond includes coverage for larceny and embezzlement and is issued by a
reputable bonding company.
2.12. The Trust represents and warrants that it has taken all necessary steps to
ensure that it has addressed all Year 2000 transition issues.
2.13. 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 Trust's
shares in accordance with all applicable federal and state securities laws,
including without limitation the 1933 Act, the 1934 Act, and the 0000 Xxx.
2.14. The Underwriter represents and warrants that the Trust's investment
manager, Xxxxx Fargo Bank, is exempt from registration as an investment adviser
under all applicable federal and state securities laws and that the investment
manager will perform its obligations to the Trust in accordance with any
applicable state and federal securities laws.
2.15. The Underwriter represents and warrants that it has taken all necessary
steps to ensure that it has addressed all Year 2000 transition issues.
ARTICLE 3 Prospectuses and Proxy Statements; Voting
3.1. The Underwriter shall provide the Company, at the Company's Trust's
expense, with as many copies of the Trust's current prospectus as the Company
may reasonably request. If requested by the Company in lieu thereof, the Trust
shall provide such documentation including a final copy of a current prospectus
set in type at the Trust's expense and other assistance as is reasonably
necessary in order for the Company at least annually (or more frequently if the
Trust's prospectus is amended more frequently) to have the new prospectus for
the Contracts and the Trust's new prospectus printed together in one document;
in such case at the Company's Trust's expense.
3.2. The Trust's prospectus shall state that the statement of additional
information for the Trust is available from the Underwriter (or, in the Trust's
discretion, the Prospectus shall state that such statement is available from the
Trust).
3.3. The Trust, at its expense, shall provide the Company with copies of its
proxy material, if any, reports to shareholders and other communications to
shareholders in such quantity as the Company shall reasonably require and the
Company shall bear the costs of distributing them to existing Contract owners or
participants.
3.4. The Trust hereby notifies the Company that it is appropriate to include in
the prospectuses pursuant to which the Contracts are offered disclosure
regarding the potential risks of mixed and shared funding.
3.5. To the extent required by applicable law the Company shall:
(1) solicit voting instructions from Contract owners or
participants;
(2) vote the Trust shares held in each Separate Account in
accordance with instructions received from Contract owners or
participants; and
(3) vote Trust shares held in each Separate Account for which no
timely instructions have been received, in the same proportion as
Trust shares of such Fund for which instructions have been received
from the Company's Contract owners or participants;
for so long as and to the extent that the 1940 Act requires
pass-through voting privileges for variable contract owners. The
Company reserves the right to vote Trust 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 Trust
calculates voting privileges in a manner consistent with other
Participating Insurance Companies and as required by the Mixed and
Shared Funding Order. The Trust will notify the Company of any changes
of interpretation or amendment to the Mixed and Shared Funding Order.
3.6. The Trust will comply with all provisions of the 1940 Act requiring voting
by shareholders, and in particular, the Trust will either provide for annual
meetings (except to the extent that the Commission may interpret Section 16 of
the 1940 Act not to require such meetings) or comply with Section 16(c) of the
1940 Act (although the Trust is not one of the trusts described in Section 16(c)
of that Act) as well as with Sections 16(a) and, if and when applicable, 16(b)
of the 1940 Act. Further, the Trust will act in accordance with the Commission's
interpretation of the requirements of Section 16(a) with respect to periodic
elections of Trustees and with whatever rules the Commission may promulgate with
respect thereto.
ARTICLE 4 Sales Material and Information
4.1. The Company shall furnish, or shall cause to be furnished, to the Trust or
the Underwriter, each piece of sales literature or other promotional material in
which the Trust or the Trust's investment manager, sub-advisers or Underwriter
is named, at least five business days prior to its use. No such material shall
be used if the Trust or the Underwriter reasonably objects in writing to such
use within five business days after receipt of such material.
4.2. The Company represents and agrees that sales literature for the Contracts
prepared by the Company or its affiliates will be consistent with every law,
rule, and regulation of any regulatory agency or self-regulatory agency that
applies to the Contracts or to the sale of the Contracts, including, but not
limited to, NASD Conduct Rule 2210 and IM-2210-2 thereunder.
4.3. The Company shall not give any information or make any representations or
statements on behalf of the Trust or concerning the Trust in connection with the
sale of the Contracts other than the information or representations contained in
the registration statement or prospectus for the Trust shares as such
registration statement and prospectus may be amended or supplemented from time
to time, or in reports or proxy statements for the Trust, or in sales literature
or other promotional material approved by the Trust or by the Underwriter,
except with the permission of the Trust or the Underwriter. The Trust and the
Underwriter agree to respond to any request for approval on a prompt and timely
basis. The Company shall adopt and implement procedures reasonably designed to
ensure that information concerning the Trust, the Underwriter, or any of their
affiliates which is intended for use by brokers or agents selling the Contracts
(i.e., information that is not intended for distribution to Contract owners or
prospective Contract owners) is so used, and neither the Trust, the Underwriter,
nor any of their affiliates shall be liable for any losses, damages, or expenses
relating to the improper use of such broker only materials by agents of the
Company or its affiliates who are unaffiliated with the Trust or the
Underwriter. The parties hereto agree that this Section 4.3 is not intended to
designate nor otherwise imply that the Company is an underwriter or distributor
of the Trust's shares.
4.4. The Trust or the Underwriter 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, its Separate
Account, or the Contracts are named, at least five business days prior to its
use. No such material shall be used if the Company reasonably objects in writing
to such use within five business days after receipt of such material.
4.5. The Trust represents and agrees that sales literature for the Trust
prepared by the Trust or its affiliates in connection with the sale of the
Contracts will be consistent with every law, rule, and Regulation of any
regulatory agency or self regulatory agency that applies to the Trust or to the
sale of Trust shares, including, but not limited to, NASD Conduct Rule 2210 and
IM-2210-2 thereunder.
4.6. The Trust and the Underwriter shall not give any information or make any
representations on behalf of the Company or concerning the Company, each
Separate 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 Separate Account which are in the
public domain or approved by the Company for distribution to Contract owners or
participants, or in sales literature or other promotional material approved by
the Company, except with the permission of the Company. The Company agrees to
respond to any request for approval on a prompt and timely basis. The Trust and
the Underwriter shall xxxx information produced by or on behalf of the Trust
"FOR BROKER USE ONLY" which is intended for use by brokers or agents selling the
Contracts (i.e., information that is not intended for distribution to Contract
owners or prospective Contract owners) is so used, and neither the Company nor
any of its affiliates shall be liable for any losses, damages, or expenses
arising on account of the use by brokers of such information with third parties
in the event that is not so marked.
4.7. The Trust 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 all amendments
to any of the above, that relate to the Trust or its shares, contemporaneously
with the filing of such document with the SEC or other regulatory authorities.
4.8. The Company will provide to the Trust 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 all amendments to any of the above, that relate to the Contracts or
each Separate Account, contemporaneously with the filing of such document with
the SEC or other regulatory authorities. The Company shall promptly inform the
Trust of the results of any examination by the SEC (or other regulatory
authorities) that relates to the Contracts, and the Company shall provide the
Trust with a copy of relevant portions of any "deficiency letter" or other
correspondence or written report regarding any such examination.
4.9. For purposes of this Article 4, the phrase "sales literature or other
promotional material" includes, but is not limited to, advertisements (such as
material published, or designed for use in, a newspaper, magazine, or other
periodical, radio, television, telephone or tape recording, videotape display,
signs or billboards, motion pictures, or other public media), sales literature
(i.e., any written communication distributed or made generally available to
customers or the public, including brochures, circulars, research reports,
market letters, form letters, seminar texts, reprints or excerpts of any other
advertisement, sales literature, or published article), educational or training
materials or other communications distributed or made generally available to
some or all agents or employees, registration statements, prospectuses,
statements of additional information, shareholder reports, and proxy materials
and any other material constituting sales literature or advertising under NASD
Conduct Rules, the 1940 Act or the 1933 Act. ARTICLE 5 Fees and Expenses
5.1. The Trust and Underwriter shall pay no fee or other compensation to the
Company under this Agreement, except subject a Rule 12b-1 Plan to finance
distribution expenses, in which case, subject to obtaining any required
exemptive orders or other regulatory approvals, 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. Each party, however, shall, in
accordance with the allocation of expenses specified in this Agreement,
reimburse other parties for expenses initially paid by one party but allocated
to another party. In addition, nothing herein shall prevent the parties hereto
from otherwise agreeing to perform, and arranging for appropriate compensation
for, other services relating to the Trust and/or to the Separate Accounts.
5.2. All expenses incident to performance by the Trust of this Agreement shall
be paid by the Trust to the extent permitted by applicable law. All Trust shares
will be duly authorized for issuance and registered in accordance with
applicable federal law and to the extent deemed advisable by the Trust, in
accordance with applicable state law, prior to 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 and registration statement,
Trust proxy materials and reports, printing proxy materials and annual reports
for existing Contract owners, setting in type and printing the Trust's
prospectuses, the preparation of all statements and notices required by any
federal or state law, all taxes on the issuance or transfer of the Trust's
shares, and any expenses permitted to be paid or assumed by the Trust pursuant
to any Rule 12b-1 Plan under the 1940 Act duly adopted by the Trust.
5.3. The Company shall bear the expenses of printing and distributing the Trust
prospectuses and proxy statements and shareholder reports. The Company shall
bear all expenses associated with the registration, qualification, and filing of
the Contracts under applicable federal securities and state insurance laws; the
cost of preparing, printing, and distributing the Contracts' prospectuses and
statements of additional information; and the cost of printing and distributing
annual individual account statements for Contract owners as required by state
insurance laws.
ARTICLE 6 Diversification
6.1. The Trust 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 and the regulations issued thereunder. Without
limiting the scope of the foregoing, the Trust will comply with Section 817(h)
of the Internal Revenue Code and 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 or successors thereto. The Trust will provide the Company with a
certification of quarterly compliance with Section 817(h), and the regulations
thereunder, in such form as Trust and Company shall agree.
ARTICLE 7 Potential Conflicts
7.1. The Board of Trustees of the Trust (the "Trust Board") will monitor the
Trust for the existence of any material irreconcilable conflict among the
interests of the Contract owners of all separate accounts investing in the
Trust. A material irreconcilable conflict may arise for a variety of reasons,
including: (a) an action by any state insurance regulatory authority; (b) a
change in applicable federal or state insurance, tax, or securities laws or
regulations, or a public ruling, private letter ruling, no-action or
interpretative letter, or any similar action by insurance, tax, or securities
regulatory authorities; (c) an administrative or judicial decision in any
relevant proceeding; (d) the manner in which the investments of any Fund are
being managed; (e) a difference in voting instructions given by variable annuity
contract owners, variable life insurance contract owners, and trustees of
qualified pension or retirement plans; (f) a decision by a Participating
Insurance Company to disregard the voting instructions of Contract owners; or
(g) if applicable, a decision by a qualified pension or retirement plan to
disregard the voting instructions of plan participants. The Trust Board shall
promptly inform the Company if it determines that a material irreconcilable
conflict exists and the implications thereof. A majority of the Trust Board
shall consist of Trustees who are not "interested persons" of the Trust.
7.2. The Company has reviewed a copy of the Mixed and Shared Funding Order, and
in particular, has reviewed the conditions to the requested relief set forth
therein. The Company agrees to assist the Trust Board in carrying out its
responsibilities under the Mixed and Shared Funding Order, by providing the
Trust Board with all information reasonably necessary for the Trust Board to
consider any issues raised. This includes, but is not limited to, an obligation
by the Company to inform the Trust Board whenever Contract owner voting
instructions are disregarded. The Trust Board shall record in its minutes or
other appropriate records, all reports received by it and all action with regard
to a conflict.
7.3. If it is determined by a majority of the Trust Board, or a majority of its
disinterested Trustees, that a material irreconcilable conflict exists, the
Company shall, at its 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 relevant Fund and reinvesting such assets in a different
investment medium, including another Fund, or in the case of insurance company
participants submitting the question as to whether such segregation should be
implemented by a vote of all affected Contract owners and, as appropriate,
segregating the assets of any appropriate group (i.e., annuity Contract owners
or life insurance Contract owners of one or more Participating Insurance
Companies) that votes in favor of such segregation, or offering to the affected
Contract owners the option of making such a change; and (b) establishing a new
registered management investment company or managed separate account.
7.4. If the Company's disregard of voting instructions could conflict with the
majority of Contract owner voting instructions, and the Company's judgment
represents a minority position or would preclude a majority vote, the Company
may be required, at the Trust's election, to withdraw the Separate Account's
investment in the Trust and terminate this Agreement with respect to such
Separate Account, and no charge or penalty will be imposed as a result of such
withdrawal. Any such withdrawal and termination shall take place within 30 days
after written notice is given that this provision is being implemented, subject
to applicable law but in any event consistent with the terms of the Mixed and
Shared Funding Order. Until such withdrawal and termination is implemented, the
Underwriter and the Trust shall continue to accept and implement orders by the
Company for the purchase and redemption of shares of the Trust. Such withdrawal
and termination shall be limited to the extent required by the foregoing
material irreconcilable conflict as determined by a majority of disinterested
Trustees.
7.5. If a particular state insurance regulator's decision applicable to the
Company conflicts with the majority of other state insurance regulators, then
the Company will withdraw the Separate Account's investment in the Trust and
terminate this Agreement with respect to such Separate Account within 30 days
after the Trust informs the Company of a material irreconcilable conflict,
subject to applicable law but in any event consistent with the terms of the
Mixed and Shared Funding Order. Until such withdrawal and termination is
implemented, the Underwriter and the Trust shall continue to accept and
implement orders by the Company for the purchase and redemption of shares of the
Trust. Such withdrawal and termination shall be limited to the extent required
by the foregoing material irreconcilable conflict as determined by a majority of
disinterested Trustees.
7.6. For purposes of Sections 7.3 through 7.6 of this Agreement, a majority of
the disinterested members of the Trust Board shall determine whether any
proposed action adequately remedies any material irreconcilable conflict, but in
no event will the Trust or the Underwriter 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.
7.7. The Trust Board's determination of the existence of a material
irreconcilable conflict and its implication will be made known in writing to the
Company.
7.8. The Company shall at least annually submit to the Trust Board such
reports, materials, or data as the Trust Board may reasonably request so that
the Trustees may fully carry out the duties imposed upon the Trust Board by the
Mixed and Shared Funding Order, and said reports, materials and data shall be
submitted more frequently if deemed appropriate by the Trust Board.
7.9. If and to the extent that Rule 6e-2 and Rule 6e-3(T) are amended, or Rule
6e-3(T) is adopted, to provide exemptive relief from any provision of the 1940
Act or the rules promulgated thereunder with respect to mixed or shared funding
(as defined in the Mixed and Shared Funding Order) on terms and conditions
materially different from those contained in the Mixed and Shared Funding Order,
the Trust and/or the Company, 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.
ARTICLE 8 Indemnification
8.1. Indemnification By The Company
(a) The Company agrees to indemnify and hold harmless
the Trust, the Underwriter, and each of the Trust's or the
Underwriter's directors, officers, employees, or agents and each
person, if any, who controls the Trust or the Underwriter within the
meaning of such terms under the federal securities laws (collectively,
the "indemnified parties" for purposes of this Section 8.1) against any
and all losses, claims, damages, liabilities (including amounts paid in
settlement with the written consent of the Company), or litigation
(including reasonable legal and other expenses), to which the
indemnified parties may become subject under any statute, regulation,
at common law or otherwise, insofar as such losses, claims, damages,
liabilities or expenses (or actions in respect thereof) or settlements
are related to the sale or acquisition of the Trust's shares or the
Contracts and:
(1) arise out of or are based upon any untrue statements or
alleged untrue statements of any material fact contained in the
registration statements, prospectuses or statements of additional
information for the Contracts or contained in the Contracts, or sales
literature or other promotional material for the Contracts (or any
amendment or supplement to any of the foregoing), or arise out of or
are based upon the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances in
which they were made; 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
statement of information 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
(2) arise out of or as a result of statements or representations
by or on behalf of the Company (other than statements or
representations contained in the Trust registration statement, Trust
prospectus or sales literature or other promotional material of the
Trust 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 Trust shares;
or
(3) arise out of any untrue statement or alleged untrue statement
of a material fact contained in the Trust's registration statement,
prospectus, statement of additional information, or sales literature
or other promotional material 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 in light of the
circumstances in which they were made, if such a statement or omission
was made in reliance upon and in conformity with information furnished
to the Trust by or on behalf of the Company or persons under its
control; or
(4) arise as a result of any failure by the Company to provide
the services and furnish the materials or to make any payments under
the terms of this Agreement; or
(5) arise out of 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 by the Company of this
Agreement;
except to the extent provided in Sections 8.1(b) and 8.4 hereof. This
indemnification shall be in addition to any liability which the Company
may otherwise have.
(b) No party shall be entitled to indemnification by
the Company if such loss, claim, damage, liability or litigation is due
to the willful misfeasance, bad faith, gross negligence, or reckless
disregard of duty by the party seeking indemnification.
(c) 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 Trust shares or the
Contracts or the operation of the Trust.
8.2. Indemnification By the Underwriter
(a) The Underwriter agrees to indemnify and hold
harmless the Company and each of its directors, officers, employees, or
agents and each person, if any, who controls the Company within the
meaning of such terms under the federal securities laws (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), or litigation
(including reasonable legal and other expenses) to which the
indemnified parties may become subject under any statute, regulation,
at common law or otherwise, insofar as such losses, claims, damages,
liabilities or expenses (or actions in respect thereof) or settlements
are related to the sale or acquisition of the Trust's shares or the
Contracts and:
(1) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the
registration statement, prospectus, or statement of additional
information for the Trust, or sales literature or other promotional
material of the Trust (or any amendment or supplement to any of the
foregoing), or arise out of or are based upon the omission or the
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading in light of the circumstances in which they were made;
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 the Trust by or on behalf
of the Company for use in the registration statement, prospectus, or
statement of additional information for the Trust or in sales
literature of the Trust (or any amendment or supplement thereto) or
otherwise for use in connection with the sale of the Contracts or
Trust shares; or
(2) arise out of or as a result of statements or representations
(other than statements or representations contained in the Contracts
or in the Contract or Trust registration statement, the Contract or
Trust prospectus, statement of additional information, or sales
literature or other promotional material for the Contracts or of the
Trust not supplied by the Underwriter or persons under the control of
the Underwriter) or wrongful conduct of the Underwriter or persons
under the control of the Underwriter, with respect to the sale or
distribution of the Contracts or Trust shares; or
(3) arise out of any untrue statement or alleged untrue statement
of a material fact contained in a registration statement, prospectus,
statement of additional information, or sales literature or other
promotional material 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 in light of
the circumstances in which they were made, if such statement or
omission was made in reliance upon and in conformity with information
furnished to the Company by or on behalf of the Underwriter or persons
under the control of the Underwriter; or
(4) arise as a result of any failure by the Underwriter 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 and
procedures related thereto specified in Article 6 of this Agreement);
or
(5) arise out of or result from any material breach of any
representation and/or warranty made by the Underwriter in this
Agreement or arise out of or result from any other material breach of
this Agreement by the Underwriter;
except to the extent provided in Sections 8.2(b) and 8.4 hereof. This
indemnification shall be in addition to any liability which the
Underwriter may otherwise have.
(b) No party shall be entitled to indemnification by
the Underwriter if such loss, claim, damage, liability or litigation is
due to the willful misfeasance, bad faith, gross negligence, or
reckless disregard of duty by the party seeking indemnification.
(c) The indemnified parties will promptly notify the
Underwriter of the commencement of any litigation or proceedings
against them in connection with the issuance or sale of the Contracts
or the operation of each Separate Account.
8.3. Indemnification By the Trust
(a) The Trust agrees to indemnify and hold harmless
the Company and each of its directors, officers, employees, or agents
and each person, if any, who controls the Company within the meaning of
such terms under the federal securities laws (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 Trust), or litigation
(including reasonable legal and other expenses) to which the
indemnified parties may become subject under any statute, regulation,
at common law or otherwise, insofar as such losses, claims, damages,
liabilities or expenses (or actions in respect thereof) or settlements
are related to the operations of the Trust and:
(1) arise as a result of any failure by the Trust 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 and
procedures related thereto specified in Article 6 of this Agreement);
or
(2) 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;
except to the extent provided in Sections 8.3(b) and 8.4 hereof. This
indemnification shall be in addition to any liability which the Trust
may otherwise have.
(b) No party shall be entitled to indemnification by
the Trust if such loss, claim, damage, liability or litigation is due
to the willful misfeasance, bad faith, gross negligence, or reckless
disregard of duty by the party seeking indemnification.
(c) The indemnified parties will promptly notify the
Trust of the commencement of any litigation or proceedings against it
in connection with the issuance or sale of the Contracts or the
operation of each Separate Account.
8.4. Indemnification Procedure
Any person obligated to provide indemnification under this Article 8
("indemnifying party" for the purpose of this Section 8.4) shall not be
liable under the indemnification provisions of this Article 8 with
respect to any claim made against a party entitled to indemnification
under this Article 8 ("indemnified party" for the purpose of this
Section 8.4) unless such indemnified party shall have notified the
indemnifying party in writing within a reasonable time after the
summons or other first legal process giving information of the nature
of the claim shall have been served upon such indemnified party (or
after such party shall have received notice of such service on any
designated agent), but failure to notify the indemnifying party of any
such claim shall not relieve the indemnifying party from any liability
which it may have to the indemnified party against whom such action is
brought under the indemnification provision of this Article 8, except
to the extent that the failure to notify results in the failure of
actual notice to the indemnifying party and such indemnifying party is
damaged solely as a result of failure to give such notice. In case any
such action is brought against the indemnified party, the indemnifying
party will be entitled to participate, at its own expense, in the
defense thereof. The indemnifying party also shall be entitled to
assume the defense thereof, with counsel satisfactory to the party
named in the action. After notice from the indemnifying party to the
indemnified party of the indemnifying party's election to assume the
defense thereof, the indemnified party shall bear the fees and expenses
of any additional counsel retained by it, and the indemnifying party
will not be liable to such party under this Agreement for any legal or
other expenses subsequently incurred by such party independently in
connection with the defense thereof other than reasonable costs of
investigation, unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or
(ii) the named parties to any such proceeding (including any impleaded
parties) include both the indemnifying party and the indemnified party
and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between
them. The indemnifying party shall not be liable for any settlement of
any proceeding effected without its written consent but if settled with
such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and
against any loss or liability by reason of such settlement or judgment.
A successor by law of the parties to this Agreement shall be
entitled to the benefits of the indemnification contained in this
Article 8. The indemnification provisions contained in this Article 8
shall survive any termination of this Agreement.
ARTICLE 9 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 Delaware without
giving effect to conflicts of laws provisions thereof.
9.2. This Agreement shall be subject to the provisions of the 1933, 1934,
and 1940 Acts, and the rules, regulations, and rulings thereunder,
including such exemptions from those statutes, rules and regulations as
the SEC may grant (including, but not limited to, the Mixed and Shared
Funding Order) and the terms hereof shall be interpreted and construed
in accordance therewith.
ARTICLE 10 Termination
10.1. This Agreement shall terminate automatically in the event of its
assignment, unless made with written consent of each party; or:
(a) at the option of any party upon six months advance written
notice to the other parties; or
(b) at the option of the Company if shares of the Funds
delineated in Exhibit B are not reasonably available to meet the
requirements of the Contracts as determined by the Company; or
(c) at the option of the Trust upon institution of formal
proceedings against the Company by the NASD, the SEC, the insurance
commission of any state or any other regulatory body, which would have
a material adverse effect on the Company's ability to perform its
obligations under this Agreement; or
(d) at the option of the Company upon institution of formal
proceedings against the Trust or the Underwriter by the NASD, the SEC,
or any state securities or insurance department or any other
regulatory body, which would have a material adverse effect on the
Underwriter's or the Trust's ability to perform its obligations under
this Agreement; or
(e) at the option of the Trust or the Underwriter by written
notice to the Company, if the Company gives the Trust and the
Underwriter the written notice specified in Section 1.8(b) hereof and
at the time such notice was given there was no notice of termination
outstanding under any other provision of this Agreement; provided,
however, any termination under this Section 10.1(e) shall be effective
sixty (60) days after the notice specified in Section 1.8(b) was
given; or
(f) at the option of the Company or the Trust upon a
determination by a majority of the Trust Board, or a majority of the
disinterested Trustees, that a material irreconcilable conflict exists
among the interests of (i) all contract owners of variable insurance
products of all separate accounts, or (ii) the interests of the
Participating Insurance Companies investing in the Trust as delineated
in Article 7 of this Agreement; or
(g) at the option of the Company if the Trust ceases to qualify
as a Regulated Investment Company under Subchapter M of the Internal
Revenue Code, or under any successor or similar provision, or if the
Company reasonably believes that the Trust may fail to so qualify; or
(h) at the option of the Company if the Trust fails to meet the
diversification requirements specified in Article 6 hereof or if the
Company reasonably believes that the Trust will fail to meet such
requirements; or
(i) at the option of any party to this Agreement, upon
another party's material breach of any provision of this
Agreement; or
(j) at the option of the Company, if the Company determines
in its sole judgment exercised in good faith, that either the
Trust or the Underwriter has suffered a material adverse change
in its business, operations, or financial condition since the
date of this Agreement or is the subject of material adverse
publicity which is likely to have a material adverse impact upon
the business and operations of the Company or the Contracts
(including the sale thereof); or
(k) at the option of the Trust or Underwriter, if the Trust
or Underwriter respectively, shall determine in its sole judgment
exercised in good faith, that the Company has suffered a material
adverse change in its business, operations, or financial
condition since the date of this Agreement or is the subject of
material adverse publicity which is likely to have a material
adverse impact upon the business and operations of the Trust or
Underwriter; or
(l) subject to the Trust's compliance with Article 6 hereof,
at the option of the Trust in the event any of the Contracts are
not issued or sold in accordance with applicable requirements of
federal and/or state law. Termination shall be effective
immediately upon such occurrence without notice.
10.2. Notice Requirement
(a) In the event that any termination of this
Agreement is based upon the provisions of Article 7, such prior written
notice shall be given in advance of the effective date of termination
as required by such provisions.
(b) In the event that any termination of this
Agreement is based upon the provisions of Sections 10.l(b) - (d) or
10.1(g) - (i), prompt written notice of the election to terminate this
Agreement for cause shall be furnished by the party terminating the
Agreement to the non-terminating parties, with said termination to be
effective upon receipt of such notice by the non-terminating parties.
(c) In the event that any termination of this
Agreement is based upon the provisions of Sections 10.1(j) or 10. l(k),
prior written notice of the election to terminate this Agreement for
cause shall be furnished by the party terminating this Agreement to the
nonterminating parties. Such prior written notice shall be given by the
party terminating this Agreement to the non-terminating parties at
least 30 days before the effective date of termination.
10.3. It is understood and agreed that the right to terminate this Agreement
pursuant to Section 10.1(a) may be exercised for any reason or for no
reason.
10.4. Effect of Termination
(a) Notwithstanding any termination of this Agreement
pursuant to Section 10.1 of this Agreement and subject to Section 1.3
of this Agreement, the Company may require the Trust and the
Underwriter to continue to make available additional shares of the
Trust for so long after the termination of this Agreement as the
Company desires pursuant to the terms and conditions of this Agreement
as provided in paragraph (b) below, 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 Trust, redeem investments in the Trust and/or invest
in the Trust upon the making of additional purchase payments under the
Existing Contracts. The parties agree that this Section 10.4 shall not
apply to any terminations under Article 7 and the effect of such
Article 7 terminations shall be governed by Article 7 of this
Agreement.
(b) If shares of the Trust continue to be made
available after termination of this Agreement pursuant to this Section
10.4, the provisions of this Agreement shall remain in effect except
for Section 10.l(a) and thereafter the Trust, the Underwriter, or the
Company may terminate the Agreement, as so continued pursuant to this
Section 10.4, upon written notice to the other party, such notice to be
for a period that is reasonable under the circumstances but need not be
for more than 90 days.
10.5 The Company shall not redeem Fund shares attributable to the Contracts
(as opposed to Fund shares attributable to the Company's assets held in
the Account) except (i) as necessary to implement Contract Owner
initiated or approved transactions, or (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"). Upon request, the Company will promptly furnish to the
Trust and the Underwriter the opinion of counsel for the Company (which
counsel shall be reasonably satisfactory to the Trust and the
Underwriter) to the effect 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 Fund that was
otherwise available under the Contracts without first giving the Trust
or the Underwriter 90 days notice of its intention to do so.
ARTICLE 11 Notices
Any notice shall be deemed duly given only if sent by hand, evidenced
by written receipt or by certified mail, return receipt requested, to
the other party at the address of such party set forth below or at such
other address as such party may from time to time specify in writing to
the other party. All notices shall be deemed given three business days
after the date received or rejected by the addressee.
If to the Trust: Xxxxx Fargo Variable Trust
000 Xxxxxx Xxxxxx
Xxxxxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx, Assistant Secretary
Copy: C. Xxxxx Xxxxxxx, Esq.
Vice President & Senior Counsel
Xxxxx Fargo Bank
Legal Department
000 Xxxxxx Xxxxxx - 0xx Xxxxx
Xxx Xxxxxxxxx, XX 00000-0000
If to the Company: Allstate Life Insurance Company of New York
0000 Xxxxxxx Xxxx, Xxx. X0X
Xxxxxxxxxx, XX 00000
Attention: Xxxxx Xxxxxxxxx, Senior Vice President and Director
If to the Underwriter: Xxxxxxxx Inc.
000 Xxxxxx Xxxxxx
Xxxxxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx, Senior Vice President
ARTICLE 12 Miscellaneous
11.1. All persons dealing with the Trust must look solely to the property of the
Trust for the enforcement of any claims against the Trust as neither the
Trustees, officers, agents or shareholders assume any personal liability for
obligations entered into on behalf of the Trust.
11.2. Subject to law and regulatory authority, each party hereto shall treat as
confidential all information reasonably identified as such in writing by any
other party hereto (including without limitation the names and addresses of the
owners of the Contracts) and, except as contemplated by this Agreement, shall
not disclose, disseminate, or utilize such confidential information until such
time as it may come into the public domain without the express prior written
consent of the affected party.
11.3. 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.
11.4. This Agreement may be executed simultaneously in two or more counterparts,
each of which taken together shall constitute one and the same instrument.
11.5. 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.
11.6. This Agreement shall not be assigned by any party hereto without the prior
written consent of all the parties.
11.7. 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 each other and such
authorities reasonable access to its books and records in connection with any
investigation or inquiry relating to this Agreement or the transactions
contemplated hereby.
11.8. Each party represents that the execution and delivery of this Agreement
and the consummation of the transactions contemplated herein have been duly
authorized by all necessary corporate or trust action, as applicable, by such
party and when so executed and delivered this Agreement will be the valid and
binding obligation of such party enforceable in accordance with its terms.
11.9. The parties to this Agreement may amend the schedules to this Agreement
from time to time to reflect changes in or relating to the Contracts, the
Separate Accounts or the Funds of the Trust.
11.10. The Trust has filed a Certificate of Trust with the Secretary of State of
the State of Delaware. The Company acknowledges that the obligations of or
arising out of the Trust's Declaration of Trust are not binding upon any of the
Trust's Trustees, officers, employees, agents or shareholders individually, but
are binding solely upon the assets and property of the Trust in accordance with
its proportionate interest hereunder. The Company further acknowledges that the
assets and liabilities of each Fund are separate and distinct and that the
obligations of or arising out of this instrument are binding solely upon the
assets or property of the Fund on whose behalf the Trust has executed this
instrument. The Company also agrees that the obligations of each Fund hereunder
shall be several and not joint, in accordance with its proportionate interest
hereunder, and the Company agrees not to proceed against any Fund for the
obligations of another Fund.
11.11. Except as otherwise expressly provided in this Agreement, neither the
Trust nor the underwriter nor any affiliate thereof shall use any trademark,
trade name, service xxxx or logo of the Company or any of its affiliates, or any
variation of any such trademark, trade name service xxxx or logo, without the
Company's prior consent, the granting of which shall be at the Company's sole
option. Except as otherwise expressly provided in this Agreement, neither the
Company nor any affiliate thereof shall use any trademark, trade name, service
xxxx or logo of the Trust or of the Underwriter, or any variation of any such
trademark, trade name, service xxxx or logo, without the prior consent of either
the Trust or of the Underwriter, as appropriate, the granting of which shall be
at the sole option of the Trust or of the Underwriter, as applicable. 1.1.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
Xxxxx Fargo Variable Trust
By:
Name: Xxxxxxx X. Xxxxx
Title: Assistant Secretary
Allstate Life Insurance Company of New York
By:
Name:
Title:
Xxxxxxxx Inc.
By:
Name: Xxxxxxx X. Xxxxx
Title: Senior Vice President
EXHIBIT A
Separate Accounts and Contracts
Subject to the Participation Agreement
Certificate
NYLU446
Separate Account
Allstate Life of New York Separate Account A
EXHIBIT B
Funds Subject to the Participation Agreement
Xxxxx Fargo Variable Trust Asset Allocation Fund
Xxxxx Fargo Variable Trust Equity Income Fund
Xxxxx Fargo Variable Trust Growth Fund
