EXHIBIT 1.8(e)(1)
PARTICIPATION AGREEMENT AMONG
LIBERTY LIFE ASSURANCE COMPANY OF BOSTON,
XXXXX XXX VARIABLE INVESTMENT TRUST,
XXXXX XXX & FARNHAM, INC.
AND
KEYPORT FINANCIAL SERVICES CORP.
This Agreement, made and entered into as of this ______ day of May, 1999
by and among Liberty Life Assurance Company of Boston (the "Company"), on its
own behalf and on behalf of its Separate Accounts, each of which is a
segregated asset account of the Company, Xxxxx Xxx Variable Investment Trust
(the "Trust"), Xxxxx Xxx & Farnham, Inc. ("SRF") and Keyport Financial
Services Corp. ("KFSC").
WHEREAS, the Trust engages in business as an open-end management
investment company and is available to act as the investment vehicle for
separate accounts established for variable life insurance policies and
variable annuity contracts (collectively, "Variable Insurance Products") to
be offered by insurance companies which have entered into participation
agreements substantially identical to this Agreement (each hereinafter a
"Participating Insurance Company"); and
WHEREAS, the beneficial interest in the Trust is divided into several
series of shares (such series being hereinafter referred to individually as a
"Series" or collectively as the "Series") available for purchase by the
Company for the Separate Accounts and listed in Schedule A, which is attached
hereto and incorporated herein; and
WHEREAS, the Trust relies on an order from the Securities and Exchange
Commission ("SEC"), dated July 1, 1988 (File No. 812-7044), granting life
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 to the extent necessary to
permit shares of the Trust to be sold to and held by variable annuity and
variable life insurance separate accounts of both affiliated and unaffiliated
life insurance companies (hereinafter the "Shared Funding Exemptive Order");
and
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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, Xxxxx Xxx & Xxxxxxx, Inc. ("SRF") serves as investment adviser
to the Trust and is duly registered as an investment adviser under the
Investment Advisers Act of 1940 and applicable state securities laws; and
provides certain administrative services to the Trust; and
WHEREAS, Liberty Funds Services, Inc. ("LFSI") serves as transfer agent
to the Trust; and
WHEREAS, the Company has registered or will register certain Variable
Insurance Products (set forth in Schedule A, which is attached hereto and
incorporated herein) under the 1933 Act, unless exempt therefrom; and
WHEREAS, the Company has established duly organized, validly existing
segregated asset accounts (set forth in Schedule A, which is attached hereto
and incorporated herein) (the "Separate Accounts") by resolution of the Board
of Directors of the Company; and
WHEREAS, the Company has registered or will register certain Separate
Accounts as unit investment trusts under the 1940 Act, unless exempt
therefrom; and
WHEREAS, the Company may rely on certain provisions of the 1933 and 1940
Acts that exempt certain Separate Accounts and Variable Insurance Products from
the registration requirements of the Acts in connection with the sale of
Variable Insurance Products under certain tax-advantaged retirement programs,
described in Article II, Section 2.12 and as provided for by Internal Revenue
Code of 1986, as amended (the "Code"); and
WHEREAS, KFSC serves as distributor of the Trust's shares and 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");
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares of the Trust on behalf of
each Separate Account to fund certain Variable Insurance Products listed in
Schedule A and KFSC is authorized to sell such shares to the Separate Accounts
at net asset value as provided in Article I hereof;
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NOW, THEREFORE, in consideration of their mutual promises, the Company, the
Trust, SRF and KFSC agree as follows:
ARTICLE I. SALE OF FUND SHARES
1.1. KFSC will sell to the Company those shares of the Trust which each
Separate Account orders, executing such orders on a daily basis at the closing
net asset value next computed after receipt by the Separate Accounts of purchase
payments or for the business day on which transactions under Variable Insurance
Products are effected by the Separate Accounts. The Company will notify the
Trust of purchase orders by 9:30 a.m. Eastern time on the next following
Business Day. For purposes of this Section 1.1, LFSI shall be the designee of
the Trust to receive such orders from the Company on behalf of each Separate
Account and receipt by LFSI shall constitute receipt by the Trust. "Business
Day" shall mean any day on which the New York Stock Exchange is open for trading
and on which the Trust calculates its net asset value pursuant to the rules of
the SEC.
1.2. The Trust will make its shares available indefinitely for purchase at
the applicable closing net asset value per share by the Company and its Separate
Accounts on those days on which the Trust calculates its net asset value
pursuant to rules of the SEC, and the Trust shall use reasonable efforts to
calculate such net asset value on each Business Day, in accordance with Section
1.11. Notwithstanding the foregoing, the Board of Trustees of the Trust (the
"Trustees") may refuse to sell shares of any Series to any person, or suspend or
terminate the offering of shares of any Series 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 such Series.
1.3. The Trust and KFSC agree that shares of the Trust will be sold only to
Participating Insurance Companies and their Separate Accounts. No shares of any
Series will be sold to the general public.
1.4. The Trust and KFSC will not sell Trust shares to any insurance company
or separate account unless an agreement containing provisions substantially the
same as Articles I, III, V, VII and Sections 2.5 and 2.12 of Article II of this
Agreement is in effect to govern such sales.
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1.5. The Trust will redeem for cash, at 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 closing net asset value next computed after receipt by the
Separate Accounts of redemption requests or for the Business Day on which
transactions under Variable Insurance Products are effected by the Separate
Accounts. The Company will notify the Trust of redemption requests by 9:30 a.m.
Eastern time on the next following Business Day. For purposes of this Section
1.5, LFSI shall be the designee of the Trust to receive requests for redemption
from the Company on behalf of each Separate Account, and receipt by such
designee shall constitute receipt by the Trust.
1.6. The Trust may suspend the redemption of any full or fractional shares
of the Trust (1) for any period (a) during which the New York Stock Exchange is
closed (other than customary weekend and holiday closings) or (b) during which
trading on the New York Stock Exchange is restricted; (2) for any period during
which an emergency exists (as determined by the SEC) as a result of which (a)
disposal by the Trust of securities owned by it is not reasonably practicable or
(b) it is not reasonably practicable for the Trust fairly to determine the value
of its net assets; or (3) for such other periods as the SEC may by order permit
for the protection of shareholders of the Trust.
1.7. The Company will purchase and redeem the shares of each Series
offered by the then current prospectus of the Trust and in accordance with the
provisions of such prospectus and statement of additional information (the
"SAI") (collectively referred to as the "Prospectus," unless otherwise
provided).
1.8. The Company shall pay for Trust shares on the next Business Day after
an order to purchase Trust shares is placed in accordance with the provisions of
Section 1.1. hereof. Payment shall be in federal funds transmitted by wire, or
may otherwise be provided by separate agreement, with the reasonable expectation
of receipt by the Trust by 2:00 p.m. Eastern time on the next Business Day after
the Trust (or its designee) receives the purchase order.
The Trust shall pay for redeemed Trust shares on the next Business Day
after a request to redeem Trust shares is made in accordance with the provisions
of Section 1.5 hereof. Payment shall be in federal funds transmitted by wire, or
may otherwise be provided by separate agreement, with the
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reasonable expectation of receipt by the Company by 2:00 p.m. Eastern time on
the next Business Day after the Trust (or its designee) receives the
redemption request.
With respect to the payment of the purchase price by the Company and of
the redemption proceeds by the Trust, the Company and the Trust may net
purchase and redemption orders with respect to each Series and may transmit
one net payment per Series.
1.9. Issuance and transfer of the Trust's shares will be by book entry
only. The Trust will not issue share certificates to either the Company or
the Separate Accounts. Shares ordered from the Trust will be recorded in an
appropriate title for each Separate Account or the appropriate subaccount of
each Separate Account.
1.10. The Trust, through its designee LFSI, 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 shares of any
Series. The Company hereby elects to receive all such income, dividends and
capital gain distributions as are payable on the shares of each Series in
additional shares of that Series. The Company reserves the right to revoke this
election and to receive all such income, dividends and capital gain
distributions in cash. The Trust shall notify the Company through LFSI of the
number of shares so issued as payment of such income, dividends and
distributions.
1.11. The Trust shall make the closing net asset value per share for each
Series available to the Company on a daily basis as soon as reasonably practical
after closing the net asset value per share is calculated and shall use its best
efforts to make such closing net asset value per share available by 6:30 p.m.,
Boston time. If the Trust provides materially incorrect share net asset value
information (as determined under SEC guidelines), the Company and its designees
shall be entitled to an adjustment to the number of shares purchased or redeemed
to reflect the correct net asset value per share. Any material error in the
calculation or reporting of net asset value per share, dividend or capital gain
information shall be reported promptly upon discovery to the Company and its
designees. The Trust or SRF, whichever is responsible for a material pricing
error, shall reimburse the Company for its reasonable costs of correcting such
an error.
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ARTICLE II. REPRESENTATIONS AND WARRANTIES
2.1. The Company represents and warrants that the Contracts are or will
be registered under the 1933 Act to the extent required by 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 duly
organized and in good standing under applicable law and that prior to any
issuance or sale of any Contract it has legally and validly established each
Separate Account as a segregated asset account under all applicable state
insurance laws and has registered or, prior to any issuance or sale of the
Contracts, will register each Separate 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, to the extent required by the 0000 Xxx.
2.2. The Trust represents and warrants that Trust shares sold pursuant
to this Agreement shall be registered under the 1933 Act to the extent
required by the 1933 Act, duly authorized for issuance and sold in compliance
with the laws of the Commonwealth of Massachusetts and all applicable federal
and any state securities laws and that the Trust is and shall remain
registered under the 1940 Act to the extent required by the 1940 Act. The
Trust shall amend the registration statement for its shares under the 1933
Act and the 1940 Act from time to time as required in order to effect the
continuous offering of its shares. The Trust shall register and qualify the
shares for sale in accordance with the laws of the various states only if and
to the extent deemed advisable by the Trust or KFSC.
2.3. The Trust represents and warrants that it currently is qualified as
a Regulated Investment Company under Subchapter M of the Code and that it
will make every effort to remain qualified (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. Subject to Sections 2.3 and 6.1 thereof, the Company represents
that the Contracts are currently treated as endowment, annuity or life
insurance contracts under applicable provisions of the Code and that it will
make every effort to maintain such treatment and that it will notify the
Trust and KFSC 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.
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2.5. The Trust 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 consistent with applicable
law. To the extent that it decides to finance distribution expenses pursuant
to Rule 12b-1, the Trust undertakes to have its Trustees, a majority of whom
are not interested persons of the Trust, formulate and approve any plan under
Rule 12b-1 to finance distribution expenses.
2.6. The Trust 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 Trust represents that it is currently in compliance and shall at
all times remain in compliance with the applicable insurance laws of Delaware to
the extent required to perform this Agreement and all other states to the extent
that the Participating Insurance Company advises the Trust, in writing, of such
laws or any changes in such laws, including the furnishing of information not
otherwise available to the Company which is required by state insurance law to
enable the Company to obtain the authority needed to issue the Contracts in any
applicable state.
2.7. KFSC represents and warrants that it is duly organized and validly
existing under the laws of the Commonwealth of Massachusetts and that it is, and
will remain, a member in good standing of the NASD and registered as a
broker-dealer with the SEC. KFSC further represents that it will sell and
distribute the Trust shares in accordance with the laws of the Commonwealth of
Massachusetts and all applicable state and federal securities laws, including
without limitation the 1933 Act, the 1934 Act, and the 0000 Xxx.
2.8. The Trust represents and warrants that it is and shall remain lawfully
organized and validly existing under the laws of the Commonwealth of
Massachusetts and that it does and will comply in all material aspects with the
1940 Act and the rules and regulations thereunder.
2.9. SRF represents and warrants that it is duly organized and validly
existing under the laws of the State of Illinois and that it is and will remain
duly registered as an investment adviser in all material aspects under all
applicable federal and state securities laws and that it shall perform its
obligations for
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the Trust in compliance in all material respects with all applicable laws of
the State of Illinois and any applicable state and federal securities laws.
2.10. The Trust represents and warrants that all of its trustees,
officers, employees, investment advisers, and other individuals/entities
having access to securities or funds of the Trust are and shall continue to
be at all times covered by a joint fidelity bond in an amount not less than
the minimum coverage required by Rule 17g-1 or other applicable regulations
under the 1940 Act with no deductible amount. The aforesaid bond shall
include coverage for larceny and embezzlement and shall be issued by a
reputable fidelity insurance company. Such fidelity bond may be a joint bond
with other investment companies having the same investment adviser,
sub-adviser, distributor or transfer agent.
2.11. The Company represents and warrants that it will not, without the
prior written consent of KFSC, purchase Trust shares with Separate Account
assets derived from the sale of Contracts to individuals or entities which
qualify under current or future state or federal law for any type of tax
advantage (whether by a reduction or deferral of, deduction or exemption
from, or credit against income or otherwise). Examples of such types of funds
under current law include: any tax-advantaged retirement program, whether
maintained by an individual, employer, employee association or otherwise
(including, without limitation, retirement programs which qualify under
Sections 401(a), 401(k), 403(a), 403(b), 408 and 457 of the Code), and any
retirement programs maintained for employees of the Government of the United
States or by the government of any state or political subdivision thereof, or
by any agency or instrumentality of any of the foregoing.
2.12. The Company represents and warrants that it will not transfer or
otherwise convey shares of the Trust, without the prior written consent of
KFSC.
ARTICLE III. PROSPECTUS AND PROXY STATEMENTS; VOTING
3.1. KFSC shall provide the Company with as many copies of the current
prospectus for each Series set forth on Schedule A, excluding the SAI, as the
Company may reasonably request in connection with delivery of the prospectus,
excluding the SAI, to shareholders and purchasers of the Contracts. If
requested by the Company in lieu thereof, the Trust shall provide such
documentation (including a final copy of the new prospectus, excluding the
SAI, as set in type at the Trust's expense) and other assistance as is
reasonably necessary in order for the Company once each year (or more
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frequently if a prospectus for a Series is amended) to have the prospectus
for the Contracts and the Series' prospectuses, excluding the SAI, printed
together in one document. With respect to any Series prospectus that is
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 Trust based
on (a) the ratio of the number of pages of the Series prospectus included in
the Prospectus Booklet 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 Series to the total number of Contract owners, PROVIDED THAT
the Trust shall not be required to pay the Company more than $22,500 during
calendar year 1999 as its portion of the cost of printing Prospectus
Booklets, as allocated pursuant to this Section.
3.2. Each Series prospectus shall state that the SAI for the Series is
available from KFSC and the Trust, at its expense, shall provide a final copy
of such SAI to KFSC for duplication and provision to any prospective owner
who requests the SAI and to any owner of a Contract ("Owners").
3.3. The Trust, at its expense, shall provide the Company with copies of
its proxy material, reports to shareholders and other communications to
shareholders in such quantity as the Company shall reasonably require for
distribution to Owners.
3.4. If and to the extent required by law, the Company and, so long as
and to the extent that the SEC continues to interpret the 1940 Act to require
pass-through voting privileges for Owners, the Trust shall:
(i) solicit voting instructions from Owners;
(ii) vote the Trust shares in accordance with instructions received from
Owners; and
(iii) vote Trust shares for which no instructions have been received in
the same proportion as Trust shares of such Series for which instructions
have been received;
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.
Each Participating Insurance Company shall be responsible for assuring that
each of its Separate Accounts participating in the Trust calculates voting
privileges in a manner consistent with the standards to be provided in
writing to the Participating Insurance Company.
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3.5. The Trust will comply with all provisions of the 1940 Act requiring
voting by shareholders. The Trust reserves the right to take all actions,
including but not limited to, the dissolution, merger, and sale of all assets
of the Trust upon the sole authorization of its Trustees, to the extent
permitted by the laws of the Commonwealth of Massachusetts and the 1940 Act.
ARTICLE IV. SALES MATERIAL AND INFORMATION
4.1. The Company shall furnish, or shall cause to be furnished, to the
Trust or its designee, each piece of sales literature or other promotional
material in which the Trust or SRF or any sub-adviser or KFSC is named, at
least 10 days prior to its use. No such material shall be used if the Trust
or its designee objects to such use within 10 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 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 a Prospectus for
Series 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 its designee or by KFSC, except with the permission of the Trust or
KFSC or the designee of either. The Trust and KFSC 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 "broker only"
materials including information about the Trust or KFSC are not distributed
to existing or prospective owners, and neither the Trust nor KFSC shall be
liable for any losses, damages, or expenses relating to the improper use of
such broker only materials.
4.3. The Trust 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, a Separate Account(s) and/or
the Contracts are named at least 10 days prior to its use. No such material
shall be used if the Company or its designee objects to such use within 10
days after receipt of such material.
4.4. The Trust and KFSC shall not give any information or make any
representations or statements on behalf of the Company or concerning the
Company, any Separate Account, or the
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Variable Insurance Products other than the information or representations
contained in a registration statement or prospectus for such Variable
Insurance Products, as such registration statement and prospectus may be
amended or supplemented from time to time, or in published reports for such
Separate Account which are in the public domain or approved by the Company
for distribution to Owners, or in 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 Trust and KFSC shall adopt and implement
procedures reasonably designed to ensure that "broker only" materials
including information about the Company or the Contracts are not distributed
to existing or prospective owners, and the Company shall not be liable for
any losses, damages, or expenses relating to the improper use of such broker
only materials.
4.5. The Trust will provide to the Company at least one complete copy of
all registration statements, prospectuses, SAIs, reports, proxy statements,
sales literature and other promotional materials, applications for exemption,
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.
The Trust shall provide the Company with as much notice as is reasonable
practicable of any proxy solicitation for a Series and of any material change
in the prospectuses or registration statements relating to the Trust or its
shares, particularly any changes resulting in a change to a prospectus or
registration statement relating to the Contracts.
4.6. The Company will provide to the Trust at least one complete copy of
all registration statements, prospectuses, SAIs, reports, solicitations for
voting instructions, sales literature and other promotional materials,
applications for exemption, requests for no-action letters, and all
amendments to any of the above, that relate to the Variable Insurance
Products or any Separate Account, contemporaneously with the filing of such
document with the SEC.
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, or other public
media), sales literature (i.e., any written
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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, SAIs,
shareholder reports, proxy materials, and any other material constituting
sales literature or advertising under the NASD rules, the 1933 Act, or the
0000 Xxx.
4.8 The Company, the Trust, and KFSC agree that the provisions of this
Article IV is not intended to designate or otherwise imply that the Company
is an underwriter or distributor of shares of the Trust.
ARTICLE V. FEES AND EXPENSES
5.1. The Trust and KFSC shall pay no fee or other compensation to the
Company under this Agreement, except that if the Trust or any Series adopts
and implements a plan pursuant to Rule 12b-1 to finance distribution
expenses, then KFSC may make payments to the Company or to the underwriter
for the Variable Insurance Products if and in amounts agreed to by KFSC in
writing and such payments will be made out of existing fees payable to KFSC
by the Trust for this purpose. No such payments shall be made directly by the
Trust. Currently, no such plan pursuant to Rule 12b-1 or payments are
contemplated.
5.2. All expenses incident to performance by the Trust under this
Agreement shall be paid by the Trust. At its expense, the Trust shall see to
it that all its shares are registered and authorized for issuance in
accordance with applicable federal law and, if and to the extent deemed
advisable by the Trust, in accordance with applicable state laws prior to
their sale. The Trust shall bear the expenses of registration and
qualification of the Trust's shares, preparation and filing of the Trust's
registration statement, registration statement amendments, Series
prospectuses, 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
Trust's shares.
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5.3. The Company shall bear the expenses of distributing the Trust's
proxy materials and reports to Owners.
ARTICLE VI. DIVERSIFICATION
6.1. The Trust will at all times invest money from the Variable
Insurance Products in such a manner as to ensure that, insofar as such
investment is required to assure such treatment, the Variable Insurance
Products will be treated as variable contracts under the Code and the
regulations issued thereunder. Without limiting the scope of the foregoing,
the Trust currently complies with and at all times will continue to comply
with Section 817(h) of the Code and the Treasury Regulations thereunder
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 will notify the Company immediately upon having a
reasonable basis to believe any Series has ceased to comply or may not so
comply in the future and will immediately take all necessary steps to
adequately diversify the Series to achieve compliance within the grace period
afforded by Regulation 1.817-5 of the Code.
ARTICLE VII. POTENTIAL CONFLICTS
7.1. The Trustees will monitor the Trust for the existence of any
material irreconcilable conflict between the interests of the Owners of
separate accounts of the Participating Insurance Companies investing in the
Trust. A material irreconcilable conflict may arise for a variety of reasons,
including: (a) an action by any state insurance regulatory authority; (b) a
change in applicable federal or state insurance, tax, or securities laws or
regulations, or a public ruling, private letter ruling, no-action or
interpretive letter, or any similar action by insurance, tax, or securities
regulatory authorities; (c) an administrative or judicial decision in any
relevant proceeding; (d) the manner in which the investments of any Series
are being managed; (e) a difference in voting instructions given by variable
annuity contract and variable life insurance policy owners; or (f) a decision
by an insurer to disregard the voting instructions of Owners. The Trustees
shall promptly inform the Participating Insurance Companies if they determine
that a material irreconcilable conflict exists and the implications thereof.
7.2. The Company will report to the Trustees any potential or existing
conflicts (including the occurrence of any event specified in paragraph 7.1
which may give rise to such a conflict) of which it is
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aware. The Company will assist the Trustees in carrying out their
responsibilities under the Shared Funding Exemptive Order, by providing the
Trustees with all information reasonably necessary for the Trustees to
consider any issues raised. This includes, but is not limited to, an
obligation by the Company to inform the Trustees whenever Owner voting
instructions are disregarded.
7.3. If it is determined by a majority of the Trust's Trustees, or a
majority of its disinterested Trustees, that a material irreconcilable
conflict exists, the Company and other Participating Insurance Companies for
which a material irreconcilable conflict is relevant shall, at their expense
and to the extent reasonably practicable (as determined by a majority of the
disinterested Trustees), take whatever steps are necessary to remedy or
eliminate the material irreconcilable conflict, up to and including: (1),
withdrawing the assets allocable to some or all of the separate accounts of
Participating Insurance Companies from the Trust or any Series and
reinvesting such assets in a different investment medium, including (but not
limited to) another Series of the Trust, or submitting the question whether
such segregation should be implemented to a vote of all affected 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 of the Participating Insurance Companies) that votes in
favor of such segregation, or offering to the affected Owners the option of
making such a change; (2), establishing a new registered management
investment company or managed separate account; and (3) obtaining SEC
approval.
7.4. If a material irreconcilable conflict arises because of a decision
by the Company to disregard Owner voting instructions and that decision
represents a minority position or would preclude a majority vote, the Company
may be required, at the Trust's election, to withdraw the affected Separate
Account's investment in the Trust and terminate this Agreement; provided,
however that such withdrawal and termination shall be limited to the extent
required by the foregoing material irreconcilable conflict as determined by a
majority of the disinterested Trustees. Any such withdrawal and termination
must take place within six months after the Trust gives written notice that
this provision is being implemented, and until the end of that six-month
period KFSC and Trust shall continue to accept and implement orders by the
Company for the purchase (and redemption) of shares of the Trust.
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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 Separate Account's investment in the Trust and terminate this
Agreement within six months after the Trustees inform the Company in writing
that they have 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
Trustees. Until the end of the foregoing six-month period, KFSC and Trust
shall continue to accept and implement orders by the Company for the purchase
(and redemption) of shares of the Trust.
7.6. For purposes of Sections 7.3. through 7.6. of this Agreement, a
majority of the disinterested Trustees shall determine whether any proposed
action adequately remedies any material irreconcilable conflict, but in no
event will the Trust be required to establish a new funding medium for the
Variable Insurance Products. The Company shall not be required to establish a
new funding medium for the Variable Insurance Products if an offer to do so
has been declined by vote of a majority of Owners materially adversely
affected by the material irreconcilable conflict. If the Trustees determine
that any proposed action does not adequately remedy any material
irreconcilable conflict, then the Company will withdraw the affected Separate
Account's investment in the Trust and terminate this Agreement within six (6)
months after the Trustees inform 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 Trustees.
7.7. If and to the extent that Rule 6e-2 and Rule 6e-3(T) are amended,
or Rule 6e-3 is adopted, to provide exemptive relief from any provision of
the 1940 Act or the rules promulgated thereunder with respect to mixed or
shared funding (as defined in the Shared Funding Exemptive Order) on terms
and conditions materially different from those contained in the Shared
Funding Exemptive Order, then (a) 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; and (b) Sections 3.4., 3.5., 7.1., 7.2., 7.3., 7.4.,
and 7.5. of this Agreement shall continue
15
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 SRF, the KFSC,
the Trust and each of its Trustees, officers, employees and agents and each
person, if any, who controls the Trust within the meaning of Section 15 of
the 1933 Act (collectively, the "Indemnified Parties" and individually the
"Indemnified Party" for purposes of this Article VIII) against any and all
losses, claims, damages, liabilities (including amounts paid in settlement
with the written consent of the Company, which consent shall not be
unreasonably withheld) or expenses (including the reasonable costs of
investigating or defending any alleged loss, claim, damage, liability or
expense and reasonable legal counsel fees incurred in connection therewith)
(collectively, "Losses"), to which the Indemnified Parties may become subject
under any statute or regulation, or at common law or otherwise, insofar as
such Losses are related to the sale or acquisition of Trust 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 a disclosure
document for the Contracts or in the Contracts themselves or in sales
literature generated or approved by the Company on behalf of the Contracts or
Accounts (or any amendment or supplement to any of the foregoing)
(collectively, "Company Documents" for the purposes of this Article VIII), 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 indemnity 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 was accurately
derived from written information furnished to the Company by or on behalf of
the Trust for use in Company Documents or otherwise for use in connection
with the sale of the Contracts or Trust shares; or
(ii) arise out of or result from statements or representations
(other than statements or representations contained in and accurately derived
from Trust Documents as defined in Section
16
8.2(a)(i) below) or wrongful conduct of the Company or persons under its
control, with respect to the sale or acquisition of the Contracts or Trust
shares; or
(iii) arise out of or result from any untrue statement or
alleged untrue statement of a material fact contained in Trust Documents as
defined in Section 8.2(a)(i) 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 was made
in reliance upon and accurately derived from written information furnished to
the Trust by or on behalf of the Company; or
(iv) arise out of or result from any failure by the Company to
provide the services or furnish the materials required 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, subject to Sections 8(1)(b) and (c) below.
(b) The Company shall not be liable under this indemnification
provision with respect to any Losses 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 Trust or
SRF, whichever is applicable. The Company shall also 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
17
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.
(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.
The provisions of this Section 8.1 shall survive the termination of
this Agreement.
8.2 INDEMNIFICATION BY THE ADVISER
(a) SRF agrees to indemnify and hold harmless the Company, the
underwriter of the Contracts 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" and individually an
"Indemnified Party" 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 SRF, which consent shall not be unreasonably
withheld) or expenses (including the reasonable costs of investigating or
defending any alleged loss, claim, damage, liability or expense and
reasonable legal counsel fees incurred in connection therewith)
(collectively, "Losses") to which the Indemnified Parties may become subject
under any statute, at common law or otherwise, insofar as such Losses are
related to the sale or acquisition of the Trust'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, prospectus or sales literature of the Trust (or any amendment or
supplement to any of the foregoing) (collectively, the "Trust Documents") 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 of such alleged statement or omission was made in reliance upon and
in conformity with written information furnished to SRF or Trust by or on
behalf of the Company for use in the Registration
18
Statement or prospectus for the Trust or in sales literature (or any
amendment or supplement) or otherwise for use in connection with the sale of
the Contracts or Trust shares; or
(ii) arise out of or as a result of statements or
representations (other than statements or representations contained in the
disclosure documents or sales literature for the Contracts not supplied by
SRF or persons under its control) or wrongful conduct of the Trust, SRF or
KFSC or persons under their control, with respect to the sale or distribution
of the Contracts or Trust shares; or
(iii) arise out of any untrue statement or alleged untrue
statement of a material fact contained in a disclosure document 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 and in conformity with written information furnished to the
Company by or on behalf of the Trust; or
(iv) 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 qualification representation specified in Section 2.3 of this
Agreement and the diversification requirements specified in Section 6.1 of
this Agreement); or
(v) arise out of or result from any material breach of any
representation and/or warranty made by SRF or KFSC in this Agreement or arise
out of or result from any other material breach of this Agreement by SRF or
KFSC, as limited by and in accordance with the provisions of Sections 8.2(b)
and 8.2(c) hereof.
(b) SRF shall not be liable under this indemnification provision
with respect to any Losses 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.
(c) SRF 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 SRF in writing within a reasonable time
after the summons or other first legal process giving information of the
nature of the
19
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 SRF of any such claim shall not
relieve SRF 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, SRF will be entitled to participate, at its own expense,
in the defense thereof. SRF also shall be entitled to assume the defense
thereof, with counsel satisfactory to the party named in the action. After
notice from SRF to such party of SRF's election to assume the defense
thereof, the Indemnified Party shall bear the expenses of any additional
counsel retained by it, and SRF will not be liable to such party under this
Agreement for any legal or other expenses subsequently incurred by such party
independently in connection with the defense thereof other than reasonable
costs of investigation.
(d) The Company agrees promptly to notify SRF 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.
(e) If, in any participation agreement to which SRF is a party
executed after the date of this Agreement (a "Later Agreement"), SRF shall
agree to indemnify a participating insurance company other than the Company
for the Trust's failure to comply with the Subchapter M and Section 817(h)
diversification requirements and regulations under the Internal Revenue Code,
then SRF agrees that it shall indemnify the Company pursuant to this
Agreement to the same extent it is required to indemnify the other
participating company under a Later Agreement. The provisions of this Section
8.2 shall survive the termination of this Agreement.
8.3 INDEMNIFICATION BY THE TRUST
(a) The Trust agrees to indemnify and hold harmless the Company, and
each of its directors and officers and each person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act (collectively, the
"Indemnified Parties" for purposes of this Section 8.3) against any and all
losses, claims, damages, liabilities (including amounts paid in settlement
with the written consent of the Trust, which consent shall not be
unreasonably withheld) or litigation (including legal and other
20
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 Trust, and arise out
of or result from any material breach of any representation and/or warranty
made by the Trust in this Agreement or arise out of or result from any other
material breach of this Agreement by the Trust; as limited by and in
accordance with the provisions of Section 8.3(b) and 8.3(c) hereof. It is
understood and expressly stipulated that neither the holders of shares of the
Trust nor any Trustee, officer, agent or employee of the Trust shall be
personally liable hereunder, nor shall any resort be had to other private
property for the satisfaction of any claim or obligation hereunder, but the
Trust only shall be liable.
(b) The Trust shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or
litigation incurred or assessed against any 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 Trust, SRF or each Account,
whichever is applicable.
(c) The Trust shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Trust in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claims shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice
of such service on any designated agent), but failure to notify the Trust of
any such claim shall not relieve the Trust from any liability which it may
have to the Indemnified Party against whom such action is brought otherwise
than on account of this indemnification provision. In case any such action is
brought against the Indemnified Parties, the Trust will be entitled to
participate, at its own expense, in the defense thereof. The Trust also shall
be entitled to assume the defense thereof, with counsel satisfactory to the
party named in the action. After notice from the Trust to such party of the
Trust's election to assume the defense thereof, the Indemnified Party shall
bear the fees and expenses of any additional counsel retained by it, and the
Trust will not be liable to such party
21
under this Agreement for any legal or other expenses subsequently incurred by
such party independently in connection with the defense thereof other than
reasonable costs of investigation.
(d) The Company and SRF agree promptly to notify the Trust 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
the Account, or the sale or acquisition of share of the Trust.
The provisions of this Section 8.3 shall survive the termination of
this Agreement.
ARTICLE IX. APPLICABLE LAW
9.1. This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the Commonwealth of
Massachusetts, without giving effect to conflict of laws principles provided,
however, that if such laws or any of the provisions of this Agreement
conflict with applicable provisions of the 1940 Act, the latter shall control.
9.2. This Agreement shall be made 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 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 months advance written
notice to the other parties; or
(b) at the option of the Company to the extent that shares of a
Series are not reasonably available to meet the requirements of the Variable
Insurance Products as determined by the Company, provided however, that such
termination shall apply only to the Series not reasonably available. Prompt
notice of the election to terminate for such cause shall be furnished by the
Company; or
22
(c) at the option of the Trust, SRF or KFSC, if formal
administrative proceedings are instituted against the Company by the NASD,
the SEC, the Insurance Commissioner or any other regulatory body regarding
the duties of the Company under this Agreement or related to the sale of the
Variable Insurance Products, with respect to the operation of a Separate
Account, or the purchase of the Trust shares, provided, however, that the
Trust or KFSC, as the case may be, shall determine in its sole judgment
exercised in good faith, that any such administrative proceedings will have a
material adverse effect upon the ability of the Company to perform its
obligations under this Agreement; or
(d) at the option of the Company, if formal administrative
proceedings are instituted against the Trust, SRF or KFSC 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 Trust, SRF or KFSC to perform
its respective obligations under this Agreement; or
(e) with respect to a Separate Account, upon requisite authority to
substitute the shares of another investment company for shares of the
corresponding Series of the Trust in accordance with the terms of the
Variable Insurance Products for which those Series shares had been selected
to serve as the underlying investment media. The Company will give the Trust
30 days' prior written notice the date of any proposed action to replace the
Trust shares; or
(f) at the option of the Company, in the event any of the Trust's
shares are not registered, issued or sold in accordance with applicable
federal and any state law or such law precludes the use of such shares as the
underlying investment media of the Variable Insurance Products issued or to
be issued by the Company; or
(g) at the option of the Company, if the Trust 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 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 VI. hereof; or if the
Company reasonably believes that the Trust may fail to meet the
diversification requirements set forth in Article VI of this Agreement; or
23
(i) at the option of the Trust, SRF or KFSC, if:
(1) the Trust, SRF or KFSC, respectively, shall determine, in
their sole judgment reasonably exercised in good faith, that the Company has
suffered a material adverse change in its business or financial condition or
is the subject of material adverse publicity and that such material adverse
publicity will have a material adverse impact upon the business and
operations of the Trust, SRF or KFSC,
(2) the Trust, SRF or KFSC shall notify the Company in writing
of such determination and its intent to terminate this Agreement, and
(3) after considering the actions taken by the Company and any
other changes in circumstances since the giving of such notice, such
determination of the Trust, SRF or KFSC shall continue to apply on the 60th
day following the giving of such notice, which 60th day shall be the
effective date of termination; or
(j) at the option of the Company, if
(1) the Company shall determine, in its sole judgment
reasonably exercised in good faith, that the Trust, SRF or KFSC has suffered
a material adverse change in its business or financial condition or is the
subject of material adverse publicity and such material adverse publicity
will have a material adverse impact upon the business and operations of the
Company or the sale of the Contracts, and
(2) after making such determination, the Company has notified
the Trust, SRF and KFSC in writing of such determination and of its intent to
terminate the Agreement, and
(3) after considering the actions taken by the Trust, SRF
and/or KFSC and any other changes in circumstances since the giving of such
notice, such determination shall continue to apply on the 60th day following
the giving of such notice, which 60th day shall be the effective date of
termination; or
(k) at the option of either the Trust or KFSC, if the Company gives
the Trust and KFSC the written notice specified in Section 10.3.(a). 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.(k). shall be effective 45 days after
the notice specified in 10.3.(a). was given; or
24
(l) upon another Party's failure to cure a material breach of any
provision of this Agreement within thirty (30) days after written notice
thereof.
10.2. It is understood and agreed that the right of any party hereto
to terminate this Agreement pursuant to Section 10.1.(a). may be exercised
for any reason or for no reason.
10.3. NOTICE REQUIREMENT. No termination of this Agreement shall be
effective unless and until the party terminating this Agreement gives prior
written notice to all other parties to this Agreement of its intent to
terminate, which notice shall set forth the basis for such termination.
Furthermore,
(a) in the event that any termination is based upon the provisions
of Article VII., or the provision of Section 10.1.(a), 10.1.(i), 10.1.(j) or
10.1.(k) of this Agreement, such prior written notice shall be given in
advance of the effective date of termination as required by such provisions;
and
(b) in the event that any termination is based upon the provisions
of Section 10.1.(c) or 10.1.(d) of this Agreement, such prior written notice
shall be given at least 90 days before the effective date of termination.
10.4. EFFECT OF TERMINATION. Notwithstanding any termination of this
Agreement, the Trust, SRF and KFSC shall, at the option of the Company,
continue to make available additional shares of the Trust pursuant to the
terms and conditions of this Agreement, for all Variable Insurance Products
in effect on the effective date of termination of this Agreement (hereinafter
referred to as "Existing Products"). Specifically, without limitation, the
Owners of the Existing Products 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 Products. 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.
25
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 Company:
Liberty Life Assurance Company of Boston
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Executive Vice President and Chief Operating Officer
With a copy to: Counsel
If to the Trust:
c/o Xxxxx Xxx & Xxxxxxx, Inc.
Xxx Xxxxx Xxxxxx Xxxxx
Xxxxxxx, XX 00000
Attn.: Secretary
If to SRF:
Xxxxx Xxx & Xxxxxxx, Inc.
Xxx Xxxxx Xxxxxx Xxxxx
Xxxxxxx, XX 00000
Attn.: Secretary
If to KFSC:
000 Xxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: President
With a copy to: General Counsel
ARTICLE XII. MISCELLANEOUS
12.1. All persons dealing with the Trust must look solely to the
property of the Trust for the enforcement of any claims against the Trust
hereunder and otherwise understand that the Trustees, officers, agents or
shareholders of the Trust shall have no personal liability for any
obligations entered into by or on behalf of the Trust.
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 and all information reasonably
26
identified as confidential in writing be 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 effected thereby.
12.6. Each party hereto shall cooperate with each other party and all
appropriate governmental authorities (including without limitation the SEC,
the NASD, the Internal Revenue Service 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.
12.7. The Trust and KFSC agree that to the extent any advisory or other
fees received by the Trust, KFSC, or SRF are determined to be unlawful in
appropriate legal or administrative proceedings, the Trust shall indemnify
and reimburse the Company for any out-of-pocket expenses and actual damages
the Company has incurred as a result of any such proceeding, provided however
that the provisions of Section 8.2(b) and 8.2(c) of this Agreement. shall
apply to such indemnification and reimbursement obligation. Such
indemnification and reimbursement obligation shall be in addition to any
other indemnification and reimbursement obligations of the Trust under this
Agreement.
12.8. The rights, remedies and obligations contained in this Agreement
are cumulative and are in addition to any and all rights, remedies and
obligation, at law or in equity, which the parties hereto are entitled to
under state and federal laws.
12.9. Except as otherwise expressly provided in this Agreement, neither
the Trust, its investment adviser, its principal underwriter, or any
affiliates thereof, or KFSC, shall use any
27
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.
12.10. Except as otherwise expressly provided in this Agreement, neither
the Company nor any of its affiliates shall use any trademark, trade name,
service xxxx or logo of the Trust, its investment adviser, its principal
underwriter, or any affiliates thereof, or KFSC, or any variation of any such
trademark, trade name, service xxxx or logo, without the Trust's prior
written consent, the granting of which shall be at the Trust's sole option.
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 officer
and its seal to be hereunder affixed hereto as of the date first set forth
above.
LIBERTY LIFE ASSURANCE COMPANY OF BOSTON
By:
Title:
XXXXX XXX VARIABLE INVESTMENT TRUST
By:
Title:
XXXXX XXX & FARNHAM, INC.
By:
Title:
KEYPORT FINANCIAL SERVICES CORP.
By:
Title:
28
SCHEDULE A
TRUST SERIES AVAILABLE UNDER THE VARIABLE INSURANCE PRODUCTS
------------------------------------------------------------
Growth Stock Fund
Balanced Fund
Money Market Fund
SEPARATE ACCOUNTS UTILIZING THE SERIES
--------------------------------------
LLAC Variable Account.
VARIABLE INSURANCE PRODUCTS FUNDED BY THE SEPARATE ACCOUNT
----------------------------------------------------------
Liberty's Spectrum Select Modified Single Payment Variable
Life Insurance Contract
Liberty's Spectrum Select Last Survivor Modified Single Payment
Variable Life Insurance Contract
29
