EMPIRE FIDELITY INVESTMENTS CORPORATION
EXECUTION COPY
PARTICIPATION AGREEMENT
BY AND AMONG
EMPIRE FIDELITY INVESTMENTS CORPORATION
AND
WARBURG, XXXXXX TRUST
AND
WARBURG, XXXXXX COUNSELLORS, INC.
AND
COUNSELLORS SECURITIES INC.
THIS AGREEMENT, made and entered into this day of _____________,
1997, by and among Empire Fidelity Investments Corporation, a New York
corporation (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 (each account referred to as the
"Account"), Warburg, Xxxxxx Trust, an open-end management investment
company and business trust organized under the laws of the Commonwealth of
Massachusetts (the "Fund"); Warburg, Xxxxxx Counsellors, Inc. a corporation
organized under the laws of the State of Delaware (the "Adviser"); and
Counsellors Securities Inc., a corporation organized under the laws of the
State of New York ("CSI").
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
contracts and variable annuity contracts to be offered by insurance
companies that have entered into participation agreements similar to this
Agreement (the "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
of securities and other assets (the "Portfolios"); and
WHEREAS, the Fund has received an order from the Securities and Exchange
Commission (the "SEC") granting Participating Insurance Companies and
variable annuity separate accounts and variable life insurance separate
accounts relief from the provisions of Sections 9(a), 13(a), 15(a), and
15(b) of the 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 Fund to be sold to and held by variable
annuity separate accounts and variable life insurance separate accounts of
both affiliated and unaffiliated Participating Insurance Companies and
qualified pension and retirement plans outside of the separate account
context (the "Mixed and Shared Funding Exemptive Order"). The parties to
this Agreement agree that the conditions or undertakings specified in the
Mixed and Shared Funding Exemptive Order and that may be imposed on the
Company, the Fund, the Adviser and/or CSI by virtue of the receipt of such
order by the SEC will be incorporated herein by reference, and such parties
agree to comply with such conditions and undertakings to the extent
applicable to each such party; 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 (the "1933 Act"); and
WHEREAS, the Company has registered or will register certain variable
annuity contracts (the "Contracts") under the 1933 Act; and
WHEREAS, the Account is a duly organized, validly existing segregated
asset account, established by resolution of the Board of Directors of the
Company and existing under the laws of the State of New York, to set aside
and invest assets attributable to the Contracts; and
WHEREAS, the Company has registered the Account as a unit investment trust
under the 1940 Act; and
WHEREAS, CSI, the Fund's distributor, is registered as a broker-dealer
with the SEC under the Securities Exchange Act of 1934 (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 of the Portfolios named
in Schedule 2, as such schedule may be amended from time to time (the
"Designated Portfolios"), on behalf of the Account to fund the Contracts,
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 Company,
the Fund, the Adviser and CSI agree as follows:
ARTICLE I. SALE OF FUND SHARES
1.1. The Fund agrees to sell to the Company those shares of the Designated
Portfolios that each Account orders, executing such orders on a daily basis
at the net asset value next computed after receipt and acceptance by the
Fund or its designee of the order for the shares of the Fund. For purposes
of this Section 1.1, the Company will be the designee of the Fund for
receipt of such orders from each Account and receipt by such designee will
constitute receipt by the Fund; provided that the Fund receives notice of
such order by 10:00 a.m. Eastern Time on the next following Business Day
("T+1"). In the event of a natural or man-made disaster, armed conflict,
act of terrorism, riot, labor disruption or any other circumstance beyond
its control (not caused by its own negligence or which could have been
adequately remedied if not for the Company's negligence), the Company may
transmit an estimate of such order by 10:00 a.m. Eastern time on T+1, with
the final order to be transmitted by 12:00 p.m. on such day. "Business
Day" will mean any day on which the New York Stock Exchange, Inc. (the
"NYSE") 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 will pay for Fund shares on T+1 in each case that an order
to purchase Fund shares is made in accordance with Section 1.1 above.
Payment will be in federal funds transmitted by wire. This wire transfer
will be initiated by 2:00 p.m. Eastern Time.
1.3. The Fund agrees to make shares of the Designated Portfolios 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 Fund calculates its Designated Portfolio net asset value
pursuant to rules of the SEC and the Fund shall use reasonable efforts to
calculate such net asset value on each day the NYSE is open for trading;
provided, however, that the Fund, the Adviser or CSI 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 its or their sole
discretion acting in good faith, necessary in the best interests of the
shareholders of such Portfolio.
1.4. On each Business Day on which the Fund calculates its net asset value,
the Company will aggregate and calculate the net purchase or redemption
orders for each Account maintained by the Fund in which contract owner
assets are invested. Net orders will only reflect orders that the Company
has received prior to the close of regular trading on the NYSE (currently
4:00 p.m., Eastern Time) on that Business Day. Orders that the Company has
received after the close of regular trading on the NYSE will be treated as
though received on the next Business Day. Each communication of orders by
the Company will constitute a representation that such orders were received
by it prior to the close of regular trading on the NYSE on the Business Day
on which the purchase or redemption order is priced in accordance with Rule
22c-1 under the 1940 Act. Other procedures relating to the handling of
orders will be in accordance with the prospectus and statement of
information of the relevant Designated Portfolio or with oral or written
instructions that CSI or the Fund will forward to the Company from time to
time.
1.5. 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, the sale
to which will not impair the tax treatment currently afforded the
Contracts. No shares of any Portfolio will be sold to the general public
except as set forth in this Section 1.5.
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 and acceptance by the Fund or its designee of the request for
redemption. For purposes of this Section 1.6, the Company will be the
designee of the Fund for receipt of requests for redemption from each
Account and receipt by such designee will constitute receipt by the Fund,
provided the Fund receives notice of request for redemption by 10:00 a.m.
Eastern Time on the next following Business Day. Payment will be in
federal funds transmitted by wire to the Company's account as designated by
the Company in writing from time to time, on the same Business Day the Fund
receives notice of the redemption order from the Company. The Fund
reserves the right to delay payment of redemption proceeds, but in no event
may such payment be delayed longer than the period permitted by the 0000
Xxx. The Fund will not bear any responsibility whatsoever for the proper
disbursement or crediting of redemption proceeds; the Company alone will be
responsible for such action. If notification of redemption is received
after 10:00 a.m. Eastern Time, payment for redeemed shares will be made on
the next following Business Day. As promptly as reasonably practicable
upon receipt of any purchase or redemption order placed by Company, CSI
will send an acknowledgement to Company of receipt of such order by fax,
e-mail or other medium agreed to by CSI and Company.
1.7. The Company agrees to purchase and redeem the shares of the Designated
Portfolios offered by the then current prospectus of the Fund in accordance
with the provisions of such prospectus.
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.
Purchase and redemption orders for Fund shares will be recorded in an
appropriate title for each Account or the appropriate subaccount of each
Account.
1.9. The Fund will furnish same day notice (by telecopier, followed by
written confirmation) to the Company of the declaration of any income,
dividends or capital gain distributions payable on each Designated
Portfolio's shares. The Company hereby elects to receive all such
dividends and distributions as are payable on the Designated Portfolio
shares in the form of additional shares of that Designated Portfolio. The
Fund will notify the Company of the number of shares so issued as payment
of such dividends and distributions. The Company reserves the right to
revoke this election upon reasonable prior notice to the Fund and to
receive all such dividends and distributions in cash.
1.10. The Fund will make the net asset value per share for each Designated
Portfolio available to the Company on a daily basis as soon as reasonably
practical after the net asset value per share is calculated and will use
its best efforts to make such net asset value per share available by 6:00
p.m., Eastern Time, but in no event later than 7:00 p.m., Eastern Time,
each Business Day.
1.11. In the event adjustments are required to correct any error in the
computation of the net asset value of the Fund's shares, the Fund or CSI
will notify the Company as soon as practicable after discovering the need
for those adjustments that result in an aggregate reimbursement of $150 or
more to any one Account maintained by a Designated Portfolio unless
notified otherwise by the Company (or, if lesser, results in an adjustment
of $10 or more to each contractowner's account). Any such notice will
state for each day for which an error occurred the incorrect price, the
correct price and, to the extent communicated to the Fund's shareholders,
the reason for the price change. The Company may send this notice or a
derivation thereof (so long as such derivation is approved in advance by
CSI or the Adviser) to contractowners whose accounts are affected by the
price change. The parties will negotiate in good faith to develop a
reasonable method for effecting such adjustments. CSI or the Adviser will
reimburse Company for any reasonable out-of-pocket expenses incurred by
Company as a result of the Fund or its designee providing Company with an
incorrect net asset value for a Designated Portfolio, provided, however,
that such reimbursement shall not exceed $10,000 for any such incorrectly
reported net asset value.
ARTICLE II. REPRESENTATIONS AND WARRANTIES
2.1. The Company represents and warrants that the Contracts are or will be
registered under the 1933 Act and that the Contracts will be issued and
sold in compliance with all applicable federal and state laws, including
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 as a separate account under applicable state law
and 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. The Company will 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 will register
and qualify the Contracts for sale in accordance with the securities laws
of the various states only if and to the extent deemed necessary by the
Company.
2.2. The Company represents that the Contracts are currently and at the
time of issuance will be treated as 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 Company represents and warrants that it will not purchase shares
of the Designated Portfolios with assets derived from tax-qualified
retirement plans except, indirectly, through Contracts purchased in
connection with such plans.
2.4. The Fund represents and warrants that Fund shares of the Designated
Portfolios sold pursuant to this Agreement will be registered under the
1933 Act and duly authorized for issuance in accordance with applicable law
and that the Fund is and will remain registered under the 1940 Act for as
long as such shares of the Designated Portfolios are outstanding. The Fund
will amend the registration statement for its shares under the 1933 Act and
the 1940 Act from time to time as required in order to effect the
continuous offering of its shares or as may otherwise be required by
applicable law. The Fund will register and qualify the shares of the
Designated Portfolios for sale in accordance with the laws of the various
states only if and to the extent deemed advisable by the Fund.
2.5. The Fund represents that each Designated Portfolio will elect to be
treated as a "regulated investment company" under Subchapter M of the
Internal Revenue Code and will qualify for such treatment for each taxable
year and will notify the Company immediately upon having a reasonable basis
for believing that a Designated Portfolio has ceased to so qualify or that
it might not so qualify in the future.
2.6. The Fund represents and warrants that in performing the services
described in this Agreement, the Fund will comply with all applicable laws,
rules and regulations. The Fund makes no representation as to whether any
aspect of its operations (including, but not limited to, fees and expenses
and investment policies, objectives and restrictions) complies with the
insurance laws and regulations of any state. The Fund and CSI agree that
upon request they will use their best efforts to furnish the information
required by state insurance laws so that the Company can obtain the
authority needed to issue the Contracts in the various states.
2.7. The Fund currently does not intend to make any payments to finance
distribution expenses pursuant to Rule 12b-1 under the 1940 Act, although
it reserves the right to make such payments in the future. To the extent
that it decides to finance distribution expenses pursuant to Rule 12b-1 the
Fund undertakes to have its Fund Board formulate and approve any plan under
Rule 12b-1 to finance distribution expenses in accordance with the 1940
Act.
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 applicable provisions of the 1940
Act.
2.9. CSI represents and warrants that it will distribute the Fund shares of
the Designated Portfolios in accordance with all applicable federal and
state securities laws including, without limitation, the 1933 Act, the 1934
Act and the 0000 Xxx.
2.10. CSI represents and warrants that it is and will remain duly
registered under all applicable federal and state securities laws and that
it will perform its obligations for the Fund in accordance in all material
respects with any applicable state and federal securities laws.
2.11. The Fund represents and warrants that all of its trustees, officers,
employees, and other individuals/entities having access to the funds and/or
securities of the Fund are and 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 includes coverage for larceny and
embezzlement and is issued by a reputable bonding company. CSI and the
Fund's investment advisers represent and warrant that they are and continue
to be at all times covered by policies similar to the aforesaid bond. The
Fund and Adviser further represent and warrant that the Fund and its
trustees are and at all times during the term of this Agreement will be
covered by an errors and omissions insurance policy in an amount of not
less than $3 million.
ARTICLE III. PROSPECTUSES AND PROXY STATEMENTS; VOTING
3.1. The Fund or CSI will provide a copy of the current Fund prospectus for
the Designated Portfolios (the "Portfolio Prospectus"), including a
computer diskette of the Company's specification or a final copy of a
current Portfolio Prospectus set in type at the Fund's or its affiliate's
expense, and such other assistance as is reasonably necessary in order for
the Company at least annually (or more frequently if the Portfolio
Prospectus is amended more frequently) to have the Portfolio Prospectus,
the prospectus for the Contracts and the prospectuses of other mutual funds
in which assets attributable to the Contracts may be invested printed
together in one document (the "Multifund Prospectus"). The Fund's share of
printing costs for such materials shall be determined by assigning the Fund
a pro-rata share of such expenses, the calculation of which shall be
determined by applying the following formula:
A/B x C
where "A" equals the number of pages of the Multifund Prospectus
attributable to the Portfolio Prospectus, "B" equals the total number of
pages of the Multifund Prospectus and "C" represents the total costs for
printing the Multifund Prospectus. The Company agrees to provide the Fund
or its designee with such information as may reasonably be requested by the
Fund or CSI to insure that the Fund's expenses do not include the cost of
printing any prospectuses other than those actually distributed to existing
owners of the Contracts.
3.2. The Fund or CSI will provide the Company, at the Fund's or its
affiliate's expense, with as many copies of the prospectus, statement of
additional information, annual report or semi-annual report as the Company
may reasonably request for distribution to prospective Contract owners and
applicants. The Fund or CSI will provide, at the Fund's or its affiliate's
expense, as many copies of said documents as necessary for distribution to
any existing Contract owner who requests such documents or whenever state
or federal law otherwise requires that such documents be provided. The
Fund or CSI will provide the copies of said documents to the Company or to
its mailing agent.
3.3 The Company shall bear the expenses of distributing the Multifund
Prospectus, statements of additional information, annual reports,
semi-annual reports and proxies to prospective Contract owners. The Fund
shall reimburse the Company for a portion of such postage and mailing
expenses with respect to such materials that are delivered to Contract
owners in an amount as determined by the following formula:
a/(a+b+c+d+e . . .+n) x C
where "a" equals the aggregate number of Contract owners who own shares of
the Fund; "b" is the aggregate number of Contract owners who own shares of
mutual funds advised by Fidelity Management and Research; "c" through "n"
each respectively equal the aggregate number of Contract owners who own
shares of funds advised by each of the other individual fund companies
whose funds serve as investment media for Contracts; and C is the total
cost of mailing such materials to all Contract owners.
3.4. To the extent that the Fund or CSI desires to change (whether by
revision or supplement) any of the information contained in any form of
Fund prospectus or statement of additional information provided to the
Company for inclusion in a Multifund Prospectus, the Company agrees to make
such changes within a reasonable period of time after receipt of a request
to make such change from the Fund or CSI, subject to the following
limitation. To the extent that the Fund is legally required to make a
change to a Fund prospectus or statement of additional information provided
to the Company for inclusion in a Multifund Prospectus, the Company agrees
to make any such change as soon as possible following receipt of the form
of revised prospectus and/or statement of additional information or
supplement, as applicable, but in no event later than five days following
receipt. To the extent that the Fund is required by law to cease selling
shares of a Designated Portfolio, the Company agrees to cease offering
shares of the Designated Portfolio until the Fund or CSI notifies the
Company otherwise.
3.5. If and to the extent required by law the Company will:
(a) solicit voting instructions from Contract owners;
(b) vote the shares of the Designated Portfolios held in the Account in
accordance with instructions received from Contract owners; and
(c) vote shares of the Designated Portfolios held in the Account for
which no timely instructions have been received, as well as shares it owns,
in the same proportion as shares of such Designated 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.
Except as set forth above, 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. The Company will be responsible for assuring that each
of its separate accounts participating in the Fund calculates voting
privileges in a manner consistent with all legal requirements, including
the Mixed and Shared Funding Exemptive Order. The Fund or its affiliate
will bear all reasonable expenses incurred by Company in connection with
the solicitation, tabulation and archiving, to the extent required by law,
rule or regulation, of the Fund's proxy material, provided Company uses a
solicitation and tabulation service designated by CSI or the Adviser.
3.6. The Fund will comply with all provisions of the 1940 Act requiring
voting by shareholders, and in particular, the Fund either will provide for
annual meetings (except insofar as the SEC may interpret Section 16 of the
1940 Act not to require such meetings) or, as the Fund currently intends,
will 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 SEC's interpretation of the requirements of
Section 16(a) with respect to periodic elections of trustees and with
whatever rules the SEC may promulgate with respect thereto.
ARTICLE IV. SALES MATERIAL AND INFORMATION
4.1. CSI will provide the Company on a timely basis with investment
performance information for each Designated Portfolio in which the Company
maintains an Account, including total return for the preceding calendar
month and calendar quarter, the calendar year to date, and the prior
one-year, five-year, and ten year (or life of the Designated Portfolio)
periods. The Company may, based on the SEC mandated information supplied
by CSI, prepare communications for contractowners ("Contractowner
Materials"). The Company will provide copies of all Contractowner
Materials concurrently with their first use for CSI's internal
recordkeeping purposes. It is understood that neither CSI nor any
Designated Portfolio will be responsible for errors or omissions in, or the
content of, Contractowner Materials except to the extent that the error or
omission resulted from information provided by or on behalf of CSI or the
Designated Portfolio. Any printed information that is furnished to the
Company pursuant to this Agreement other than each Designated Portfolio's
prospectus or statement of additional information (or information
supplemental thereto), periodic reports and proxy solicitation materials is
CSI's sole responsibility and not the responsibility of any Designated
Portfolio or the Fund. The Company agrees that the Portfolios, the
shareholders of the Portfolios and the officers and governing Board of the
Fund will have no liability or responsibility to the Company in these
respects.
4.2. The Company will 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, prospectus or
statement of additional information for Fund shares, as such registration
statement, prospectus and statement of additional information may be
amended or supplemented from time to time, or in reports or proxy
statements for the Fund, or in published reports for the Fund which are in
the public domain or approved by the Fund or CSI for distribution, or in
sales literature or other material provided by the Fund, the Adviser or by
CSI, except with permission of CSI. The Company will furnish, or will
cause to be furnished, to the Fund, the Adviser or CSI, each piece of sales
literature or other promotional material in which the Company or its
Account is named, at least ten (10) business days prior to its use. No
such sales literature or other promotional material which requires the
permission of CSI prior to use will be used if CSI reasonably objects to
such use within five (5) business days after receipt.
Nothing in this Section 4.2 will be construed as preventing the Company or
its employees or agents from giving advice on investment in the Fund.
4.3. The Fund, the Adviser and CSI will not give any information or make
any representations or statements 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, prospectus or
statement of additional information for the Contracts, as such registration
statement, prospectus and statement of additional information may be
amended or supplemented from time to time, or in published reports for each
Account or the Contracts which are in the public domain or approved by the
Company for distribution to contractowners, or in sales literature or other
material provided by the Company, except with permission of the Company.
The Company agrees to respond to any request for approval on a prompt and
timely basis. The Fund, the Adviser or CSI will furnish, or will cause to
be furnished, to the Company or its designee, each piece of sales
literature or other promotional material in which the Company or its
Account is named at least ten (10) business days prior to its use. No such
material will be used if the Company reasonably objects to such use within
five (5) business days after receipt of such material.
4.4. The Fund will provide to the Company at least one complete copy of all
registration statements, prospectuses, statements of additions 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 SEC, the NASD
or other regulatory authority.
4.5. 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, the NASD or other regulatory
authority.
4.6. 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 (e.g.,
on-line networks such as the Internet or other electronic messages)), sales
literature (i.e., any written communication distributed or made generally
available to customers or the public, including brochures, circulars,
research reports, market letters, form letters, seminar texts, reprints or
excerpts of any other advertisements 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, proxy materials and any other material
constituting sales literature or advertising under the NASD rules, the 1933
Act or the 0000 Xxx.
4.7. The Fund and CSI hereby consent to the Company's use of the names
Warburg, Xxxxxx Trust Post-Venture Capital Portfolio, or other Designated
Portfolio, and Warburg, Xxxxxx Counsellors, Inc. in connection with the
marketing of the Contracts, subject to the terms of Sections 4.1 and 4.2 of
this Agreement. Such consent will continue only as long as any Contracts
are invested in the relevant Designated Portfolio.
ARTICLE V. FEES AND EXPENSES
5.1. The Fund, the Adviser and CSI will pay no fee or other compensation to
the Company (other than as set forth in Article III hereof and in the
administrative services letter agreement between CSI and the Company)
except if the Fund or any Designated Portfolio adopts and implements a plan
pursuant to Rule 12b-1 under the 1940 Act to finance distribution expenses,
then, subject to obtaining any required exemptive orders or other
regulatory approvals, the Fund may make payments to the Company or to the
underwriter for the Contracts if and in such amounts agreed to by the Fund
in writing.
5.2. All expenses incident to performance by the Fund of this Agreement
will be paid by the Fund to the extent permitted by law. The Fund will
bear the expenses for the cost of registration and qualification of the
Fund's shares; preparation and filing of the Fund's prospectus, statement
of additional information and registration statement, proxy materials and
reports; setting in type and printing the Fund's prospectus; setting in
type and printing proxy materials and reports by it to contractowners
(including the costs of printing a Fund prospectus that contains an annual
report); the preparation of all statements and notices required by any
federal or state law; all taxes on the issuance or transfer of the Fund's
shares; any expenses permitted to be paid or assumed by the Fund pursuant
to a plan, if any, under Rule 12b-1 under the 1940 Act; and all other
expenses set forth in Article III of this Agreement.
ARTICLE VI. DIVERSIFICATION
6.1. The Adviser will ensure that each Portfolio will comply at all times
during the term of this Agreement with (a) the diversification requirements
set forth in Section 817(h) of the Internal Revenue Code and the rules and
regulations thereunder, as amended from time to time, including without
limitation Regulation 1.817-5 and (b) the requirements for qualification as
a regulated investment company under Section 851 of the Internal Revenue
Code. In the event of a breach of this Article VI the Adviser will take
all reasonable steps: (a) to notify the Company immediately of such breach;
and (b) with respect to Section 817(h), to adequately diversify the Fund so
as to achieve compliance therewith within the grace period afforded by
Treasury Regulation 1.817-5.
ARTICLE VII. POTENTIAL CONFLICTS
7.1. The Board of Trustees of the Fund (the "Fund Board") will monitor the
Fund for the existence of any irreconcilable material conflict among the
interests of the contractowners 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 and variable life insurance contractowners; or (f) a decision by an
insurer to disregard the voting instructions of contractowners. The Fund
Board will 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 Fund Board. The Company agrees to assist the Fund Board
in carrying out its responsibilities, as delineated in the Mixed and Shared
Funding Exemptive Order, by providing the Fund Board with all information
reasonably necessary for the Fund Board to consider any issues raised.
This includes, but is not limited to, an obligation by the Company to
inform the Fund Board whenever contractowner voting instructions are to be
disregarded. The Company's responsibilities hereunder will be carried out
with a view only to the interest of contractowners.
7.3. If it is determined by a majority of the Fund Board, or a majority of
its disinterested trustees, that an irreconcilable material conflict
exists, the Company will, 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 irreconcilable
material conflict, up to and including: (a) withdrawing the assets
allocable to some or all of the Accounts from the Fund or any Designated
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 contractowners and, as appropriate, segregating the assets of
any appropriate group (i.e., variable annuity contractowners or variable
life insurance contractowners of one or more Participating Insurance
Companies) that votes in favor of such segregation, or offering to the
affected contractowners the option of making such a change; and (b)
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 contractowner voting instructions, and the
Company's judgment represents a minority position or would preclude a
majority vote, the Company may be required, at the Fund's election, to
withdraw the affected subaccount of the Account's investment in the Fund
and terminate this Agreement with respect to such subaccount; provided,
however, that such withdrawal and termination will be limited to the extent
required by the foregoing irreconcilable material conflict as determined by
a majority of the disinterested trustees of the Fund Board. No charge or
penalty will be imposed as a result of such withdrawal.
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 insurance regulators, then the Company
will withdraw the affected subaccount of the Account's investment in the
Fund and terminate this Agreement with respect to such subaccount;
provided, however, that such withdrawal and termination will be limited to
the extent required by the foregoing irreconcilable material conflict as
determined by a majority of the disinterested directors of the Fund Board.
No charge or penalty will be imposed as a result of such withdrawal.
7.6. For purposes of Sections 7.3 through 7.6 of this Agreement, a majority
of the disinterested members of the Fund Board will determine whether any
proposed action adequately remedies any irreconcilable material conflict,
but in no event will the Fund or the Adviser (or any other investment
adviser to the Fund) be required to establish a new funding medium for the
Contracts. The Company will 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 contractowners materially affected by the
irreconcilable material conflict.
7.7. The Company will at least annually submit to the Fund Board such
reports, materials or data as the Fund Board may reasonably request so that
the Fund 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 will be submitted more frequently if deemed appropriate
by the Fund 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
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, will take such steps as
may be necessary to comply with Rules 6e-2 and 6e-3(T), as amended, and
Rule 6e-3, as adopted, to the extent such rules are applicable; and (b)
Sections 3.5, 3.6, 7.1, 7.2, 7.3, 7.4, and 7.5 of this Agreement will
continue in effect only to the extent that terms and conditions
substantially identical to such Sections are contained in such Rule(s) as
so amended or adopted.
ARTICLE VIII. INDEMNIFICATION
8.1. Indemnification By The Company
(a) The Company agrees to indemnify and hold harmless the Fund, the
Adviser, CSI, and each person, if any, who controls or is associated with
the Fund, the Adviser or CSI within the meaning of such terms under the
federal securities laws and any director, trustee, officer, partner,
employee or agent of the foregoing (collectively, the "Indemnified Parties"
for purposes of this Section 8.1) against any and all losses, claims,
expenses, 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:
(1) arise out of or are based upon any untrue statements or alleged
untrue statements of any material fact contained in the registration
statement, prospectus or statement 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), including any prospectuses or statements of
additional information of the Fund to which the Company has made any
changes to the information provided to the Company or arise out of or are
based upon the omission or the alleged omission to state therein a material
fact required to be stated or necessary to make such statements not
misleading in light of the circumstances in which they were made; provided
that this agreement to indemnify will not apply as to any Indemnified Party
if such statement or omission or such alleged statement or omission was
made in reliance upon and in conformity with written information furnished
to the Company by the Fund, the Adviser or CSI for use in the registration
statement, prospectus or statement of additional 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 Fund shares; or
(2) arise out of or as a result of statements or representations by or
on behalf of the Company or wrongful conduct of the Company or persons
under its control, with respect to the sale or distribution of the
Contracts or Fund shares (other than statements or representations
contained in the Fund registration statement, Fund prospectus, Fund
statement of additional information, sales literature or other promotional
material of the Fund not supplied by the Company or persons under its
control); or
(3) arise out of any untrue statement or alleged untrue statement of a
material fact contained in the Fund registration statement, prospectus,
statement of additional information or sales literature or other
promotional material of the Fund (or amendment or supplement) or the
omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make such statements not misleading in
light of the circumstances in which they were made, if such a statement or
omission was made in reliance upon and in conformity with information
furnished to the Fund 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 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, including,
but not limited to, a failure to comply with the provisions of Section 3.3;
except to the extent provided in Sections 8.1(b) and 8.3 hereof. This
indemnification will be in addition to any liability that the Company
otherwise may have.
(b) No party will be entitled to indemnification under Section 8.1(a) to
the extent such loss, claim, damage, liability or litigation is due to the
willful misfeasance, bad faith, or gross negligence in the performance of
such party's duties under this Agreement, or by reason of such party's
reckless disregard of its obligations or duties under this Agreement by the
party seeking indemnification.
(c) The Indemnified Parties promptly will notify the Company of the
commencement of any litigation, proceedings, complaints or actions by
regulatory authorities against them in connection with the issuance or sale
of the Fund shares or the Contracts or the operation of the Fund.
8.2. Indemnification By The Adviser, the Fund and CSI
(a) The Adviser, the Fund and CSI, in each case solely to the extent
relating to such party's responsibilities hereunder, agree to indemnify and
hold harmless the Company and each person, if any, who controls or is
associated with the Company within the meaning of such terms under the
federal securities laws and any director, trustee, officer, partner,
employee or agent of the foregoing (collectively, the "Indemnified Parties"
for purposes of this Section 8.2) against any and all losses, claims,
expenses, 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:
(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 Fund
or sales literature or other promotional material 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 or necessary to make such statements not
misleading in light of the circumstances in which they were made (in each
case substantially as transmitted to you by the Fund or CSI), provided that
this agreement to indemnify will 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, CSI or the Fund by or on behalf of the Company for use in the
registration statement, prospectus or statement of additional information
for the Fund or in sales literature of the Fund (or any amendment or
supplement thereto) or otherwise for use in connection with the sale of the
Contracts or Fund shares; or
(2) arise out of or as a result of statements or representations or
wrongful conduct of the Adviser, the Fund or CSI or persons under the
control of the Adviser, the Fund or CSI respectively, with respect to the
sale of the Fund shares (other than statements or representations contained
in a registration statement, prospectus, statement of additional
information, sales literature or other promotional material covering the
Contracts not supplied by CSI or persons under its control); 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 or supplement thereto), or the
omission or alleged omission to state therein a material fact required to
be stated or necessary to make such statement or statements not misleading
in light of the circumstances in which they were made, if such statement or
omission was made in reliance upon and in conformity with written
information furnished to the Company by the Adviser, the Fund or CSI or
persons under the control of the Adviser, the Fund or CSI; or
(4) arise as a result of any failure by the Fund, the Adviser or CSI 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 VI of this Agreement); or
(5) arise out of or result from any material breach of any
representation and/or warranty made by the Adviser, the Fund or CSI in this
Agreement, or arise out of or result from any other material breach of this
Agreement by the Adviser the Fund or CSI;
except to the extent provided in Sections 8.2(b) and 8.3 hereof. These
indemnifications will be in addition to any liability that the Fund,
Adviser or CSI otherwise may have.
(b) No party will be entitled to indemnification under Section 8.2(a) to
the extent such loss, claim, damage, liability or litigation is due to the
willful misfeasance, bad faith, or gross negligence in the performance of
such party's duties under this Agreement, or by reason of such party's
reckless disregard of its obligations or duties under this Agreement by the
party seeking indemnification.
(c) The Indemnified Parties will promptly notify the Adviser, the Fund and
CSI of the commencement of any litigation, proceedings, complaints or
actions by regulatory authorities against them in connection with the
issuance or sale of the Contracts or the operation of the account.
8.3. Indemnification Procedure
Any person obligated to provide indemnification under this Article VIII
("Indemnifying Party" for the purpose of this Section 8.3) will not be
liable under the indemnification provisions of this Article VIII with
respect to any claim made against a party entitled to indemnification under
this Article VIII ("Indemnified Party" for the purpose of this Section 8.3)
unless such Indemnified Party will have notified the Indemnifying Party in
writing within a reasonable time after the summons or other first legal
process giving information of the nature of the claim will have been served
upon such Indemnified Party (or after such party will have received notice
of such service on any designated agent), but failure to notify the
Indemnifying Party of any such claim will not relieve the Indemnifying
Party from any liability which it may have to the Indemnified Party against
whom such action is brought otherwise than on account of the
indemnification provision of this Article VIII, except to the extent that
the failure to notify results in the failure of actual notice to the
Indemnifying Party and such Indemnifying Party is damaged solely as a
result of failure to give such notice. In case any such action is brought
against the Indemnified Party, the Indemnifying Party will be entitled to
participate, at its own expense, in the defense thereof. The Indemnifying
Party also will be entitled to assume the defense thereof, with counsel
satisfactory to the party named in the action. After notice from the
Indemnifying Party to the Indemnified Party of the Indemnifying Party's
election to assume the defense thereof, the Indemnified Party will bear the
fees and expenses of any additional counsel retained by it, and the
Indemnifying Party will not be liable to such party under this Agreement
for any legal or other expenses subsequently incurred by such party
independently in connection with the defense thereof other than reasonable
costs of investigation, unless: (a) the Indemnifying Party and the
Indemnified Party will have mutually agreed to the retention of such
counsel; or (b) the named parties to any such proceeding (including any
impleaded parties) include both the Indemnifying Party and the Indemnified
Party and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them.
The Indemnifying Party will not be liable for any settlement of any
proceeding effected without its written consent but if settled with such
consent or if there is a final judgment for the plaintiff, the Indemnifying
Party agrees to indemnify the Indemnified Party from and against any loss
or liability by reason of such settlement or judgment. A successor by law
of the parties to this Agreement will be entitled to the benefits of the
indemnification contained in this Article VIII. The indemnification
provisions contained in this Article VIII will survive any termination of
this Agreement.
ARTICLE IX. APPLICABLE LAW
9.1. This Agreement will be construed and the provisions hereof interpreted
under and in accordance with the laws of the State of New York.
9.2. This Agreement will be subject to the provisions of the 1933 Act, the
1934 Act and the 1940 Act, and the rules and regulations and rulings
thereunder, including such exemptions from those statutes, rules and
regulations as the SEC may grant (including, but not limited to, the Mixed
and Shared Funding Exemptive Order) and the terms hereof will be
interpreted and construed in accordance therewith.
ARTICLE X. TERMINATION
10.1. This Agreement will terminate:
(a) at the option of any party, with or without cause, with respect to
some or all of the Designated Portfolios, upon one hundred twenty (120)
days' advance written notice to the other parties; or
(b) at the option of the Company, upon receipt of the Company's written
notice by the other parties, with respect to any Designated Portfolio if
shares of the Designated Portfolio are not reasonably available to meet the
requirements of the Contracts as determined in good faith by the Company;
or
(c) at the option of the Company, upon receipt of the Company's written
notice by the other parties, with respect to any Designated Portfolio 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 Company; or
(d) at the option of the Fund, upon receipt of the Fund's written notice
by the other parties, 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, provided that the Fund determines in its sole judgment, exercised
in good faith, that any such proceeding would have a material adverse
effect on the Company's ability to perform its obligations under this
Agreement; or
(e) at the option of the Company, upon receipt of the Company's written
notice by the other parties, upon institution of formal proceedings against
the Fund, Adviser or CSI by the NASD, the SEC, or any state securities or
insurance department or any other regulatory body, provided that the
Company determines in its sole judgment, exercised in good faith, that any
such proceeding would have a material adverse effect on the Fund's,
Adviser's or CSI's ability to perform its obligations under this Agreement;
or
(f) at the option of the Company, upon receipt of the Company's written
notice by the other parties, with respect to any Designated Portfolio if
the Designated Portfolio 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 and in good
faith believes that the Designated Portfolio may fail to so qualify; or
(g) at the option of the Company, upon receipt of the Company's written
notice by the other parties, with respect to any Designated Portfolio if
the Designated Portfolio fails to meet the diversification requirements
specified in Article VI hereof or if the Company reasonably and in good
faith believes the Designated Portfolio may fail to meet such requirements;
or
(h) at the option of any party to this Agreement, upon written notice to
the other parties, upon another party's material breach of any provision of
this Agreement which material breach is not cured within thirty (30) days
of said notice; or
(i) at the option of the Company, if the Company determines in its sole
judgment exercised in good faith, that either the Fund, the Adviser or CSI
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, such termination to
be effective sixty (60) days' after receipt by the other parties of written
notice of the election to terminate; or
(j) at the option of the Fund or CSI, if the Fund or CSI respectively,
determines 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, such
termination to be effective sixty (60) days' after receipt by the other
parties of written notice of the election to terminate; or
(k) at the option of the Company or the Fund upon receipt of any necessary
regulatory approvals and/or the vote of the contractowners having an
interest in the Account (or any subaccount) to substitute the shares of
another investment company for the corresponding Designated Portfolio
shares of the Fund in accordance with the terms of the Contracts for which
those Designated Portfolio shares had been selected to serve as the
underlying investment media. The Company will give sixty (60) 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
(l) at the option of the Company or the Fund upon a determination by a
majority of the Fund Board, or a majority of the disinterested Fund Board
members, that an irreconcilable material conflict exists among the
interests of: (1) all contractowners of variable insurance products of all
separate accounts; or (2) the interests of the Participating Insurance
Companies investing in the Fund as set forth in Article VII of this
Agreement; or
(m) at the option of the Fund in the event any of the Contracts are not
issued or sold in accordance with applicable federal and/or state law.
Termination will be effective immediately upon such occurrence without
notice.
10.2. Notice Requirement
Except as specified in Section 10.1(m), no termination of this Agreement
will be effective unless and until the party terminating this Agreement
gives prior written notice to all other parties of its intent to terminate,
which notice will set forth the basis for the termination.
10.3. Effect of Termination
In the event of any termination of this Agreement other than pursuant to
subsection (d), (j), (l) or (m) of Section 10.1, the Fund and CSI will, 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 will be permitted to
reallocate investments in the Designated Portfolios (as in effect on such
date), redeem investments in the Designated Portfolios and/or invest in the
Designated Portfolios upon the making of additional purchase payments under
the Existing Contracts. In the event of such termination, the Company
agrees (i) to terminate the availability of shares of the Fund to Contracts
other than Existing Contracts and (ii) to use its best efforts to receive
approval from the SEC as soon as reasonably practicable to replace shares
of the Fund with other investments for Contracts and, if and when granted
such approval, thereafter to so replace the shares of the Fund, in each
such case as soon as reasonably practicable.
10.4. Surviving Provisions
Notwithstanding any termination of this Agreement, each party's
obligations under Article VIII to indemnify other parties will survive and
not be affected by any termination of this Agreement. In addition, each
party's obligations under Section 12.6 will survive and not be affected by
any termination of this Agreement. Finally, with respect to Existing
Contracts, all provisions of this Agreement also will survive and not be
affected by any termination of this Agreement.
ARTICLE XI. NOTICES
11.1. Any notice will be deemed duly 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 parties.
If to the Company: If to the Fund, the Adviser and/or CSI:
Fidelity Investments 000 Xxxxxxxxx Xxxxxx
Life Insurance Company 00xx Xxxxx
00 Xxxxxxxxxx Xxxxxx Xxx Xxxx, XX 00000 Mail Zone R25B Attn:
Xxxxxx X. Xxxxx
Xxxxxx, XX 00000 Senior Vice President
Attn: Xxxxxxx X. Xxxxxx
ARTICLE XII. MISCELLANEOUS
12.1. The Fund, the Adviser and CSI acknowledge that the identities of the
customers of the Company or any of its affiliates (collectively the
"Company Protected Parties" for purposes of this Section 12.1), information
maintained regarding those customers, and all computer programs and
procedures or other information developed or used by the Company Protected
Parties or any of their employees or agents in connection with the
Company's performance of its duties under this Agreement are the valuable
property of the Company Protected Parties. The Fund, the Adviser and CSI
agree that if they come into possession of any list or compilation of the
identities of or other information about the Company Protected Parties'
customers, or any other information or property of the Company Protected
Parties, other than such information as is publicly available or as may be
independently developed or compiled by the Fund, the Adviser or CSI from
information supplied to them by the Company Protected Parties' customers
who also maintain accounts directly with the Fund, the Adviser or CSI, the
Fund, the Adviser and CSI will hold such information or property in
confidence and refrain from using, disclosing or distributing any of such
information or other property except: (a) with the Company's prior written
consent; or (b) as required by law or judicial process. The Company
acknowledges that the identities of the customers of the Fund, the Adviser,
CSI or any of their affiliates (collectively the "Adviser Protected
Parties" for purposes of this Section 12.1), information maintained
regarding those customers, and all computer programs and procedures or
other information developed or used by the Adviser Protected Parties or any
of their employees or agents in connection with the Fund's, the Adviser's
or CSI's performance of their respective duties under this Agreement are
the valuable property of the Adviser Protected Parties. The Company agrees
that if it comes into possession of any list or compilation of the
identities of or other information about the Adviser Protected Parties'
customers, or any other information or property of the Adviser Protected
Parties, other than such information as is publicly available or as may be
independently developed or compiled by the Company from information
supplied to them by the Adviser Protected Parties' customers who also
maintain accounts directly with the Company, the Company will hold such
information or property in confidence and refrain from using, disclosing or
distributing any of such information or other property except: (a) with the
Fund's, the Adviser's or CSI's prior written consent; or (b) as required by
law or judicial process. Each party acknowledges that any breach of the
agreements in this Section 12.1 would result in immediate and irreparable
harm to the other parties for which there would be no adequate remedy at
law and agree that in the event of such a breach, the other parties will be
entitled to equitable relief by way of temporary and permanent injunctions,
as well as such other relief as any court of competent jurisdiction deems
appropriate.
12.2. 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.
12.3. This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together will constitute one and the same
instrument.
12.4. If any provision of this Agreement will be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the Agreement
will not be affected thereby.
12.5. This Agreement will not be assigned by any party hereto without the
prior written consent of all the parties, except that the Company may
delegate its responsibilities under this Agreement to an insurance company
controlled by or under common control with the Company (the "Company
Affiliate"), provided that the Company shall remain fully liable for the
performance of all services hereunder and the Company Affiliate shall at
such time and thereafter throughout the term of this Agreement be deemed to
make all representations, warranties and covenants made by Company in this
Agreement and in the administrative services letter between CSI and the
Company. The Company shall give written notice to CSI of such delegation.
12.6. Each party to this Agreement will maintain all records required by
law, including records detailing the services it provides. Such records
will be preserved, maintained and made available to the extent required by
law and in accordance with the 1940 Act and the rules thereunder. Each
party to this Agreement will cooperate with each other party and all
appropriate governmental authorities (including without limitation the SEC,
the NASD and state insurance regulators) and will permit each other and
such authorities reasonable access to its books and records in connection
with any investigation or inquiry relating to this Agreement or the
transactions contemplated hereby. Upon request by the Fund or CSI, the
Company agrees to promptly make copies or, if required, originals of all
records pertaining to the performance of services under this Agreement
available to the Fund or CSI, as the case may be. The Fund agrees that the
Company will have the right to inspect, audit and copy all records
pertaining to the performance of services under this Agreement pursuant to
the requirements of any state insurance department. Each party also agrees
to promptly notify the other parties if it experiences any difficulty in
maintaining the records in an accurate and complete manner. This provision
will survive termination of this Agreement.
12.7. 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 board 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.
12.8. The parties to this Agreement acknowledge and agree that all
liabilities of the Fund arising, directly or indirectly, under this
agreement, will be satisfied solely out of the assets of the Fund and that
no trustee, officer, agent or holder of shares of beneficial interest of
the Fund will be personally liable for any such liabilities. No Portfolio
or series of the Fund will be liable for the obligations or liabilities of
any other Portfolio or series.
12.9. 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 Accounts or the Designated Portfolios of the Fund or other
applicable terms of this Agreement.
12.10. The rights, remedies and obligations contained in this Agreement are
cumulative and are in addition to any and all rights.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be executed in its name and behalf by its duly authorized representative
as of the date specified below.
FIDELITY INVESTMENTS LIFE INSURANCE COMPANY
By:_____________________________________
Name:___________________________________
Title:____________________________________
WARBURG, XXXXXX TRUST
By:_____________________________________
Name:___________________________________
Title:____________________________________
WARBURG, XXXXXX COUNSELLORS, INC.
By:_____________________________________
Name:___________________________________
Title:____________________________________
COUNSELLORS SECURITIES INC.
By:_____________________________________
Name:___________________________________
Title:____________________________________
SCHEDULE 1
PARTICIPATION AGREEMENT
BY AND AMONG
EMPIRE FIDELITY INVESTMENTS CORPORATION
AND
WARBURG, XXXXXX TRUST
AND
WARBURG, XXXXXX COUNSELLORS, INC.
AND
COUNSELLORS SECURITIES INC.
The following separate accounts of Empire Fidelity Investments Corporation
are permitted in accordance with the provisions of this Agreement to invest
in Designated Portfolios of the Fund shown in Schedule 2:
Empire Fidelity Investments Variable Annuity Account A
established July 15, 1991
SCHEDULE 2
PARTICIPATION AGREEMENT
BY AND AMONG
EMPIRE FIDELITY INVESTMENTS CORPORATION
AND
WARBURG, XXXXXX TRUST
AND
WARBURG, XXXXXX COUNSELLORS, INC.
AND
COUNSELLORS SECURITIES INC.
The Separate Account(s) shown on Schedule 1 may invest in the following
Designated Portfolios of the Warburg, Xxxxxx Trust:
International Equity Portfolio
Small Company Growth Portfolio
Post-Venture Capital Portfolio
