AMENDED AND RESTATED
PARTICIPATION AGREEMENT
AMONG
FIRST ALLMERICA FINANCIAL LIFE INSURANCE COMPANY,
ALLMERICA INVESTMENTS, INC.
ALLIANCE CAPITAL MANAGEMENT L.P.
AND
ALLIANCE FUND DISTRIBUTORS, INC.
DATED AS OF
AUGUST 1, 2000
PARTICIPATION AGREEMENT
THIS AGREEMENT, initially made and entered into as of the first day of
May, 2000 ("Agreement"), and Merged and Consolidated pursuant to a Merger and
Consolidation Agreement dated this first day of August, 2000, is amended and
restated this first day of August, 2000, by and among First Allmerica
Financial Life Insurance Company, a Massachusetts life insurance company
("Insurer") (on behalf of itself and its "Separate Account," defined below);
Allmerica Investments, Inc., a Massachusetts corporation ("Contracts
Distributor"), the principal underwriter with respect to the Contracts
referred to below; Alliance Capital Management L.P., a Delaware limited
partnership ("Adviser"), the investment adviser of the Fund referred to
below; and Alliance Fund Distributors, Inc., a Delaware corporation
("Distributor"), the Fund's principal underwriter (collectively, the
"Parties"),
WITNESSETH THAT:
WHEREAS Insurer, the Distributor, and Alliance Variable Products Series
Fund, Inc. (the "Fund") desire that Class B shares of the Fund's Portfolios
indicated on Schedule A (the "Portfolios"; reference herein to the "Fund"
includes reference to each Portfolio to the extent the context requires) be
made available by Distributor, to the Insurer on behalf of its Separate
Accounts supporting variable annuity contracts and variable life insurance
policies (the "Contracts"), also indicated on Schedule A, to serve as
underlying investment media for such Contracts,
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to be offered through Contracts Distributor and other registered
broker-dealer firms as agreed to by Insurer and Contracts Distributor; and
WHEREAS the Contracts provide for the allocation of net amounts received
by Insurer to separate series (the "Divisions"; reference herein to the
"Separate Account" includes reference to each Division to the extent the
context requires) of the Separate Account for investment in Class B shares of
corresponding Portfolios of the Fund that are made available through the
Separate Account to act as underlying investment media,
NOW, THEREFORE, in consideration of the mutual benefits and promises
contained herein, the Fund and Distributor will make Class B shares of the
Portfolios available to Insurer for this purpose at net asset value and with
no sales charges, all subject to the following provisions:
SECTION 1. ADDITIONAL CONTRACTS, SEPARATE ACCOUNTS AND PORTFOLIOS
The Parties to this Agreement may amend Schedule A of the Agreement from
time to time to reflect, as appropriate, additions or changes relating the
Contracts, additions or changes relating to the Separate Accounts, or to add
additional Portfolios. The provisions of this Agreement shall be equally
applicable to such Contracts, Separate Accounts or Portfolios, as applicable,
effective as of the date of the amendment of Schedule A, unless the context
otherwise requires. The Parties may amend this Agreement from time to time by
written agreement signed by all of the parties.
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SECTION 2. PROCESSING TRANSACTIONS
2.1 TIMELY PRICING AND ORDERS.
The Adviser or its designated agent will provide closing net asset
value, dividend and capital gain information for each Portfolio to Insurer at
the close of trading on each day (a "Business Day") on which (a) the New York
Stock Exchange is open for regular trading, (b) the Fund calculates the
Portfolio's net asset value and (c) Insurer is open for business. The Fund or
its designated agent will use its best efforts to provide this information by
6:00 p.m., Eastern time. Insurer will use these data to calculate unit
values, which in turn will be used to process transactions that receive that
same Business Day's Separate Account Division's unit values. Such Separate
Account processing will be done the same evening, and corresponding orders
with respect to Fund shares will be placed the morning of the following
Business Day. Insurer will use its best efforts to place such orders with the
Fund by 10:00 a.m., Eastern time.
2.2 TIMELY PAYMENTS.
Insurer will transmit orders for purchases and redemptions of Fund
shares to Distributor, and will wire payment for net purchases to a custodial
account designated by the Fund on the day the order for Fund shares is
placed, to the extent practicable. Payment for net redemptions will be wired
by the Fund to an account designated by Insurer on the same day as the order
is placed, to the extent practicable, and in any event be made within six
calendar days after the date the order is placed in order to enable Insurer
to pay redemption proceeds within the time specified in Section 22(e) of the
Investment Company Act of 1940, as amended (the "1940 Act").
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2.3 REDEMPTION IN KIND.
The Fund reserves the right to pay any portion of a redemption in kind
of portfolio securities, if the Fund's board of directors (the "Board of
Directors") determines that it would be detrimental to the best interests of
shareholders to make a redemption wholly in cash.
2.4 APPLICABLE PRICE.
The Parties agree that Portfolio share purchase and redemption orders
resulting from Contract owner purchase payments, surrenders, partial
withdrawals, routine withdrawals of charges, or other transactions under
Contracts will be executed at the net asset values as determined as of the
close of regular trading on the New York Stock Exchange on the Business Day
that Insurer receives such orders and processes such transactions, which,
Insurer agrees shall occur not earlier than the Business Day prior to
Distributor's receipt of the corresponding orders for purchases and
redemptions of Portfolio shares. For the purposes of this section, Insurer
shall be deemed to be the agent of the Fund for receipt of such orders from
holders or applicants of contracts, and receipt by Insurer shall constitute
receipt by the Fund. All other purchases and redemptions of Portfolio shares
by Insurer, will be effected at the net asset values next computed after
receipt by Distributor of the order therefor, and such orders will be
irrevocable. Insurer hereby elects to reinvest all dividends and capital
gains distributions in additional shares of the corresponding Portfolio at
the record-date net asset values until Insurer otherwise notifies the Fund in
writing, it being agreed by the Parties that the record date and the payment
date with respect to any dividend or distribution will be the same Business
Day.
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SECTION 3. COSTS AND EXPENSES
3.1 GENERAL.
Except as otherwise specifically provided herein, each Party will bear
all expenses incident to its performance under this Agreement.
3.2 REGISTRATION.
The Fund will bear the cost of its registering as a management
investment company under the 1940 Act and registering its shares under the
Securities Act of 1933, as amended (the "1933 Act"), and keeping such
registrations current and effective; including, without limitation, the
preparation of and filing with the SEC of Forms N-SAR and Rule 24f-2 Notices
respecting the Fund and its shares and payment of all applicable registration
or filing fees with respect to any of the foregoing. Insurer will bear the
cost of registering the Separate Account as a unit investment trust under the
1940 Act and registering units of interest under the Contracts under the 1933
Act and keeping such registrations current and effective; including, without
limitation, the preparation and filing with the SEC of Forms N-SAR and Rule
24f-2 Notices respecting the Separate Account and its units of interest and
payment of all applicable registration or filing fees with respect to any of
the foregoing.
3.3 OTHER (NON-SALES-RELATED) EXPENSES.
The Fund will bear the costs of preparing, filing with the SEC and
setting for printing the Fund's prospectus, statement of additional
information and any amendments or supplements thereto (collectively, the
"Fund Prospectus"), periodic reports to shareholders, Fund proxy material and
other shareholder communications and any related requests for voting
instructions from Participants (as defined below). Insurer will bear the
costs of preparing, filing with the SEC and setting for printing, the
Separate Account's prospectus, statement of additional information and any
amendments or supplements thereto
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(collectively, the "Separate Account Prospectus"), any periodic reports to
owners, annuitants or participants under the Contracts (collectively,
"Participants"), and other Participant communications. The Fund and Insurer
each will bear the costs of printing in quantity and delivering to existing
Participants the documents as to which it bears the cost of preparation as
set forth above in this Section 3.3, it being understood that reasonable cost
allocations will be made in cases where any such Fund and Insurer documents
are printed or mailed on a combined or coordinated basis. If REQUESTED by
Insurer, the Fund will provide annual Prospectus text to Insurer on diskette
for printing and binding with the Separate Account Prospectus.
3.4 OTHER SALES-RELATED EXPENSES.
Expenses of distributing the Portfolio's shares and the Contracts will
be paid by Contracts Distributor and other parties, as they shall determine
by separate agreement.
3.5 PARTIES TO COOPERATE.
The Adviser, Insurer, Contracts Distributor, and Distributor each agrees
to cooperate with the others, as applicable, in arranging to print, mail
and/or deliver combined or coordinated prospectuses or other materials of the
Fund and Separate Account.
SECTION 4. LEGAL COMPLIANCE
4.1 TAX LAWS.
(a) The Adviser will use its best efforts to qualify and to maintain
qualification of each Portfolio as a regulated investment company ("RIC")
under Subchapter M of the Internal Revenue Code of 1986, as amended (the
"Code"), and the Adviser or Distributor will notify Insurer
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immediately upon having a reasonable basis for believing that a Portfolio has
ceased to so qualify or that it might not so qualify in the future.
(b) Insurer represents that it believes, in good faith, that the
Contracts will be treated as [annuity] contracts or life insurance policies,
as applicable, under applicable provisions of the Code and that it will make
every effort to maintain such treatment. Insurer will notify the Fund and
Distributor immediately upon having a reasonable basis for believing that any
of the Contracts have ceased to be so treated or that they might not be so
treated in the future.
(c) The Fund will use its best efforts to comply and to maintain each
Portfolio's compliance with the diversification requirements set forth in
Section 817(h) of the Code and Section 1.817-5(b) of the regulations under
the Code, and the Fund, Adviser or Distributor will notify Insurer
immediately upon having a reasonable basis for believing that a Portfolio has
ceased to so comply or that a Portfolio might not so comply in the future.
(d) Insurer represents that it believes, in good faith, that the
Separate Account is a "segregated asset account" and that interests in the
Separate Account are offered exclusively through the purchase of or transfer
into a "variable contract," within the meaning of such terms under Section
817(h) of the Code and the regulations thereunder. Insurer will make every
effort to continue to meet such definitional requirements, and it will notify
the Fund and Distributor immediately upon having a reasonable basis for
believing that such requirements have ceased to be met or that they might not
be met in the future.
(e) The Adviser will manage the Fund as a RIC in compliance with
Subchapter M of the Code and will use its best efforts to comply with Section
817(h) of the Code and regulations thereunder.
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The Fund has adopted and will maintain procedures for ensuring that the Fund
is managed in compliance with Subchapter M and Section 817(h) and regulations
thereunder.
(f) Should the Distributor or Adviser become aware of a failure of Fund,
or any of its Portfolios, to comply with Subchapter M of the Code or Section
817(h) of the Code and regulations thereunder, they represent and agree that
they will immediately notify Insurer of such in writing.
4.2 INSURANCE AND CERTAIN OTHER LAWS.
(a) The Adviser will use its best efforts to cause the Fund to comply
with any applicable state insurance laws or regulations, to the extent
specifically requested in writing by Insurer. If it cannot comply, it will so
notify Insurer in writing.
(b) Insurer represents and warrants that (i) it is an insurance company
duly organized, validly existing and in good standing under the laws of the
State of Delaware and has full corporate power, authority and legal right to
execute, deliver and perform its duties and comply with its obligations under
this Agreement, (ii) it has legally and validly established and maintains the
Separate Account as a segregated asset account under Delaware law, and (iii)
the Contracts comply in all material respects with all other applicable
federal and state laws and regulations.
(c) Insurer and Contracts Distributor represent and warrant that
Contracts Distributor is a business corporation duly organized, validly
existing, and in good standing under the laws of the State of Massachusetts
and has full corporate power, authority and legal right to execute, deliver,
and perform its duties and comply with its obligations under this Agreement.
(d) Distributor represents and warrants that it is a business
corporation duly organized, validly existing, and in good standing under the
laws of the State of Delaware and has full corporate power,
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authority and legal right to execute, deliver, and perform its duties and
comply with its obligations under this Agreement.
(e) Distributor represents and warrants that the Fund is a corporation
duly organized, validly existing, and in good standing under the laws of the
State of Maryland and has full power, authority, and legal right to execute,
deliver, and perform its duties and comply with its obligations under this
Agreement.
(f) Adviser represents and warrants that it is a limited partnership,
duly organized, validly existing and in good standing under the laws of the
State of Delaware and has full power, authority, and legal right to execute,
deliver, and perform its duties and comply with its obligations under this
Agreement.
4.3 SECURITIES LAWS.
(a) Insurer represents and warrants that (i) interests in the Separate
Account pursuant to the Contracts will be registered under the 1933 Act to
the extent required by the 1933 Act and the Contracts will be duly authorized
for issuance and sold in compliance with Delaware law, (ii) the Separate
Account is and will remain registered under the 1940 Act to the extent
required by the 1940 Act, (iii) the Separate Account does and will comply in
all material respects with the requirements of the 1940 Act and the rules
thereunder, (iv) the Separate Account's 1933 Act registration statement
relating to the Contracts, together with any amendments thereto, will, at all
times comply in all material respects with the requirements of the 1933 Act
and the rules thereunder, and (v) the Separate Account Prospectus will at all
times comply in all material respects with the requirements of the 1933 Act
and the rules thereunder.
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(b) The Adviser and Distributor represent and warrant that (i) Fund
shares sold pursuant to this Agreement will be registered under the 1933 Act
to the extent required by the 1933 Act and duly authorized for issuance and
sold in compliance with Maryland law, (ii) the Fund is and will remain
registered under the 1940 Act to the extent required by the 1940 Act, (iii)
the Fund will amend the registration statement for its shares under the 1933
Act and itself under the 1940 Act from time to time as required in order to
effect the continuous offering of its shares, (iv) the Fund does and will
comply in all material respects with the requirements of the 1940 Act and the
rules thereunder, (v) the Fund's 1933 Act registration statement, together
with any amendments thereto, will at all times comply in all material
respects with the requirements of the 1933 Act and rules thereunder, and (vi)
the Fund Prospectus will at all times comply in all material respects with
the requirements of the 1933 Act and the rules thereunder.
(c) The Fund will register and qualify its shares for sale in accordance
with the laws of any state or other jurisdiction only if and to the extent
reasonably deemed advisable by the Fund, Insurer or any other life insurance
company utilizing the Fund.
(d) Distributor and Contracts Distributor each represents and warrants
that it is registered as a broker-dealer with the SEC under the Securities
Exchange Act of 1934, as amended, and is a member in good standing of the
National Association of Securities Dealers Inc. (the "NASD").
4.4 NOTICE OF CERTAIN PROCEEDINGS AND OTHER CIRCUMSTANCES.
(a) Distributor or the Fund shall immediately notify Insurer of (i) the
issuance by any court or regulatory body of any stop order, cease and desist
order, or other similar order with respect to the Fund's registration
statement under the 1933 Act or the Fund Prospectus, (ii) any request by the
SEC for any amendment to such registration statement or Fund Prospectus,
(iii) the initiation of any proceedings for that purpose or for any other
purpose relating to the registration or offering of the Fund's shares, or
(iv)
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any other action or circumstances that may prevent the lawful offer or sale
of Fund shares in any state or jurisdiction, including, without limitation,
any circumstances in which (x) the Fund's shares are not registered and, in
all material respects, issued and sold in accordance with applicable state
and federal law or (y) such law precludes the use of such shares as an
underlying investment medium of the Contracts issued or to be issued by
Insurer. Distributor and the Fund will make every reasonable effort to
prevent the issuance of any such stop order, cease and desist order or
similar order and, if any such order is issued, to obtain the lifting thereof
at the earliest possible time.
(b) Insurer and Contracts Distributor shall immediately notify the Fund
of (i) the issuance by any court or regulatory body of any stop order, cease
and desist order or similar order with respect to the Separate Account's
registration statement under the 1933 Act relating to the Contracts or the
Separate Account Prospectus, (ii) any request by the SEC for any amendment to
such registration statement or Separate Account Prospectus, (iii) the
initiation of any proceedings for that purpose or for any other purpose
relating to the registration or offering of the Separate Account interests
pursuant to the Contracts, or (iv) any other action or circumstances that may
prevent the lawful offer or sale of said interests in any state or
jurisdiction, including, without limitation, any circumstances in which said
interests are not registered and, in all material respects, issued and sold
in accordance with applicable state and federal law. Insurer and Contracts
Distributor will make every reasonable effort to prevent the issuance of any
such stop order, cease and desist order or similar order and, if any such
order is issued, to obtain the lifting thereof at the earliest possible time.
4.5 INSURER TO PROVIDE DOCUMENTS.
Upon request, Insurer will provide the Fund and the Distributor one
complete copy of SEC registration statements, Separate Account Prospectuses,
reports, any preliminary and final voting
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instruction solicitation material, applications for exemptions, requests for
no-action letters, and amendments to any of the above, that relate to the
Separate Account or the Contracts, contemporaneously with the filing of such
document with the SEC or other regulatory authorities.
4.6 FUND TO PROVIDE DOCUMENTS.
Upon request, the Fund will provide to Insurer one complete copy of SEC
registration statements, Fund Prospectuses, reports, any preliminary and
final proxy material, 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
or other regulatory authorities.
SECTION 5. MIXED AND SHARED FUNDING
5.1 GENERAL.
The Fund has obtained an order exempting it from certain provisions of
the 1940 Act and rules thereunder so that the Fund is available for
investment by certain other entities, including, without limitation, separate
accounts funding variable life insurance policies and separate accounts of
insurance companies unaffiliated with Insurer ("Mixed and Shared Funding
Order"). The Parties recognize that the SEC has imposed terms and conditions
for such orders that are substantially identical to many of the provisions of
this Section 5.
5.2 DISINTERESTED DIRECTORS.
The Fund agrees that its Board of Directors shall at all times consist
of directors a majority of whom (the "Disinterested Directors") are not
interested persons of Adviser or Distributor within the meaning of Section
2(a)(19) of the 1940 Act.
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5.3 MONITORING FOR MATERIAL IRRECONCILABLE CONFLICTS.
The Fund agrees that its Board of Directors will monitor for the
existence of any material irreconcilable conflict between the interests of
the participants in all separate accounts of life insurance companies
utilizing the Fund, including the Separate Account. Insurer agrees to inform
the Board of Directors of the Fund of the existence of or any potential for
any such material irreconcilable conflict of which it is aware. The concept
of a "material irreconcilable conflict" is not defined by the 1940 Act or the
rules thereunder, but the Parties recognize that such a conflict may arise
for a variety of reasons, including, without limitation:
(a) an action by any state insurance or other regulatory authority;
(b) a change in applicable federal or state insurance, tax or securities
laws or regulations, or a public ruling, private letter ruling, no-action or
interpretative letter, or any similar action by insurance, tax or securities
regulatory authorities;
(c) an administrative or judicial decision in any relevant proceeding;
(d) the manner in which the investments of any Portfolio are being
managed;
(e) a difference in voting instructions given by variable annuity
contract and variable life insurance contract participants or by participants
of different life insurance companies utilizing the Fund; or
(f) a decision by a life insurance company utilizing the Fund to
disregard the voting instructions of participants.
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Insurer will assist the Board of Directors in carrying out its
responsibilities by providing the Board of Directors with all information
reasonably necessary for the Board of Directors to consider any issue raised,
including information as to a decision by Insurer to disregard voting
instructions of Participants.
5.4 CONFLICT REMEDIES.
(a) It is agreed that if it is determined by a majority of the members
of the Board of Directors or a majority of the Disinterested Directors that a
material irreconcilable conflict exists, Insurer and the other life insurance
companies utilizing the Fund will, at their own expense and to the extent
reasonably practicable (as determined by a majority of the Disinterested
Directors), take whatever steps are necessary to remedy or eliminate the
material irreconcilable conflict, which steps may include, but are not
limited to:
(i) withdrawing the assets allocable to some or all of the separate
accounts from the Fund or any Portfolio and reinvesting such assets
in a different investment medium, including another Portfolio of the
Fund, or submitting the question whether such segregation should be
implemented to a vote of all affected participants and, as
appropriate, segregating the assets of any particular group (e.g.,
annuity contract owners or participants, life insurance contract
owners or all contract owners and participants of one or more life
insurance companies utilizing the Fund) that votes in favor of such
segregation, or offering to the affected contract owners or
participants the option of making such a change; and
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(ii) establishing a new registered investment company of the type defined
as a "Management Company" in Section 4(3) of the 1940 Act or a new
separate account that is operated as a Management Company.
(b) If the material irreconcilable conflict arises because of
Insurer's decision to disregard Participant voting instructions and that
decision represents a minority position or would preclude a majority vote,
Insurer may be required, at the Fund's election, to withdraw the Separate
Account's investment in the Fund. No charge or penalty will be imposed as a
result of such withdrawal. Any such withdrawal must take place within six
months after the Fund gives notice to Insurer that this provision is being
implemented, and until such withdrawal Distributor and the Fund shall
continue to accept and implement orders by Insurer for the purchase and
redemption of shares of the Fund.
(c) If a material irreconcilable conflict arises because a particular
state insurance regulator's decision applicable to Insurer conflicts with the
majority of other state regulators, then Insurer will withdraw the Separate
Account's investment in the Fund within six months after the Fund's Board of
Directors informs Insurer that it has determined that such decision has
created a material irreconcilable conflict, and until such withdrawal
Distributor and Fund shall continue to accept and implement orders by Insurer
for the purchase and redemption of shares of the Fund.
(d) Insurer agrees that any remedial action taken by it in resolving
any material irreconcilable conflict will be carried out at its expense and
with a view only to the interests of Participants.
(e) For purposes hereof, a majority of the Disinterested Directors
will determine whether or not any proposed action adequately remedies any
material irreconcilable conflict. In no event, however, will the Fund or
Distributor be required to establish a new funding medium for any Contracts.
Insurer
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will not be required by the terms hereof to establish a new funding medium
for any Contracts if an offer to do so has been declined by vote of a
majority of Participants materially adversely affected by the material
irreconcilable conflict.
5.5 NOTICE TO INSURER.
The Fund will promptly make known in writing to Insurer the Board of
Directors' determination of the existence of a material irreconcilable
conflict, a description of the facts that give rise to such conflict and the
implications of such conflict.
5.6 INFORMATION REQUESTED BY BOARD OF DIRECTORS.
Insurer and the Fund will at least annually submit to the Board of
Directors of the Fund such reports, materials or data as the Board of
Directors may reasonably request so that the Board of Directors may fully
carry out the obligations imposed upon it by the provisions hereof, and said
reports, materials and data will be submitted at any reasonable time deemed
appropriate by the Board of Directors. All reports received by the Board of
Directors of potential or existing conflicts, and all Board of Directors
actions with regard to determining the existence of a conflict, notifying
life insurance companies utilizing the Fund of a conflict, and determining
whether any proposed action adequately remedies a conflict, will be properly
recorded in the minutes of the Board of Directors or other appropriate
records, and such minutes or other records will be made available to the SEC
upon request.
5.7 COMPLIANCE WITH SEC RULES.
If, at any time during which the Fund is serving an investment medium
for variable life insurance policies, 1940 Act Rules 6e-3(T) or, if
applicable, 6e-2 are amended or Rule 6e-3 is adopted to provide exemptive
relief with respect to mixed and shared funding, the Parties agree that they
will comply with the terms and conditions thereof and that the terms of this
Section 5 shall be deemed modified if and only
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to the extent required in order also to comply with the terms and conditions
of such exemptive relief that is afforded by any of said rules that are
applicable.
SECTION 6. TERMINATION
6.1 EVENTS OF TERMINATION.
Subject to Section 6.4 below, this Agreement will terminate as to a
Portfolio:
(a) at the option of Insurer or Distributor upon at least six months
advance written notice to the other Parties, or
(b) at the option of the Fund upon (i) at least sixty days advance
written notice to the other parties, and (ii) approval by (x) a majority of
the disinterested Directors upon a finding that a continuation of this
Contract is contrary to the best interests of the Fund, or (y) a majority
vote of the shares of the affected Portfolio in the corresponding Division of
the Separate Account (pursuant to the procedures set forth in Section 11 of
this Agreement for voting Trust shares in accordance with Participant
instructions).
(c) at the option of the Fund upon institution of formal proceedings
against Insurer or Contracts Distributor by the NASD, the SEC, any state
insurance regulator or any other regulatory body regarding Insurer's
obligations under this Agreement or related to the sale of the Contracts, the
operation of the Separate Account, or the purchase of the Fund shares, if, in
each case, the Fund reasonably determines that such proceedings, or the facts
on which such proceedings would be based, have a material likelihood of
imposing material adverse consequences on the Portfolio to be terminated; or
(d) at the option of Insurer upon institution of formal proceedings
against the Fund, Adviser, or Distributor by the NASD, the SEC, or any state
insurance regulator or any other regulatory body
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regarding the Fund's, Adviser's or Distributor's obligations under this
Agreement or related to the operation or management of the Fund or the
purchase of Fund shares, if, in each case, Insurer reasonably determines that
such proceedings, or the facts on which such proceedings would be based, have
a material likelihood of imposing material adverse consequences on Insurer,
Contracts Distributor or the Division corresponding to the Portfolio to be
terminated; or
(e) at the option of any Party in the event that (i) the Portfolio's
shares are not registered and, in all material respects, issued and sold in
accordance with any applicable state and federal law or (ii) such law
precludes the use of such shares as an underlying investment medium of the
Contracts issued or to be issued by Insurer; or
(f) upon termination of the corresponding Division's investment in the
Portfolio pursuant to Section 5 hereof; or
(g) at the option of Insurer if the Portfolio ceases to qualify as a
RIC under Subchapter M of the Code or under successor or similar provisions;
or
(h) at the option of Insurer if the Portfolio fails to comply with
Section 817(h) of the Code or with successor or similar provisions; or
(i) at the option of Insurer if Insurer reasonably believes that any
change in a Fund's investment adviser or investment practices will materially
increase the risks incurred by Insurer.
6.2 FUNDS TO REMAIN AVAILABLE.
Except (i) as necessary to implement Participant-initiated transactions,
(ii) as required by state insurance laws or regulations, (iii) as required
pursuant to Section 5 of this Agreement, or (iv) with
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respect to any Portfolio as to which this Agreement has terminated, Insurer
shall not (x) redeem Fund shares attributable to the Contracts, or (y)
prevent Participants from allocating payments to or transferring amounts from
a Portfolio that was otherwise available under the Contracts, until, in
either case, 60 calendar days after Insurer shall have notified the Fund or
Distributor of its intention to do so.
6.3 SURVIVAL OF WARRANTIES AND INDEMNIFICATIONS.
All warranties and indemnifications will survive the termination of this
Agreement.
6.4 CONTINUANCE OF AGREEMENT FOR CERTAIN PURPOSES.
Notwithstanding any termination of this Agreement, the Distributor shall
continue, at the option of the Insurer, to make available shares of the
Portfolios pursuant to the terms and conditions of this Agreement, for all
Contracts in effect on the effective date of termination of this Agreement
(the "Existing Contracts"), except as otherwise provided under Section 5 of
this Agreement. Specifically, and without limitation, the Distributor shall,
at the option of the Insurer, facilitate the sale and purchase of shares of
the Portfolios as necessary in order to process premium payments, surrenders
and other withdrawals, and transfers or reallocations of values under
Existing Contracts.
SECTION 7. PARTIES TO COOPERATE RESPECTING TERMINATION
The other Parties hereto agree to cooperate with and give reasonable
assistance to Insurer in taking all necessary and appropriate steps for the
purpose of ensuring that the Separate Account owns no shares of a Portfolio
after the Final Termination Date with respect thereto.
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SECTION 8. ASSIGNMENT
This Agreement may not be assigned by any Party, except with the written
consent of each other Party.
SECTION 9. CLASS B DISTRIBUTION PAYMENTS
From time to time during the term of this Agreement the Distributor may
make payments to the Contracts Distributor pursuant to a distribution plan
adopted by the Fund with respect to the Class B shares of the Portfolios
pursuant to Rule 12b-1 under the 1940 Act (the "Rule 12b-1 Plan) in
consideration of the Contracts Distributor's furnishing distribution services
relating to the Class B shares of the Portfolios and providing
administrative, accounting and other services, including personal service
and/or the maintenance of Participant accounts, with respect to such shares.
The Distributor has no obligation to make any such payments, and the
Contracts Distributor waives any such payment, until the Distributor receives
monies therefor from the Fund. Any such payments made pursuant to this
Section 9 shall be subject to the following terms and conditions:
(a) Any such payments shall be in such amounts as the Distributor may
from time to time advise the Contracts Distributor in writing but in any
event not in excess of the amounts permitted by the Rule 12b-1 Plan. Such
payments may include a service fee in the amount of .25 of 1% per annum of
the average daily net assets of the Fund attributable to the Class B shares
of a Portfolio held by clients of the Contracts Distributor. Any such service
fee shall be paid solely for personal service and/or the maintenance of
Participant accounts.
(b) The provisions of this Section 9 relate to a plan adopted by the
Fund pursuant to Rule 12b-1. In accordance with Rule 12b-1, any person
authorized to direct the disposition of monies paid
20
or payable by the Fund pursuant to this Section 9 shall provide the Fund's
Board of Directors, and the Directors shall review, at least quarterly, a
written report of the amounts so expended and the purposes for which such
expenditures were made.
(c) The provisions of this Section 9 shall remain in effect for not more
than a year and thereafter for successive annual periods only so long as such
continuance is specifically approved at least annually in conformity with
Rule 12b-1 and the 1940 Act. The provisions of this Section 9 shall
automatically terminate in the event of the assignment (as defined by the
0000 Xxx) of this Agreement, in the event the Rule 12b-1 Plan terminates or
is not continued or in the event this Agreement terminates or ceases to
remain in effect. In addition, the provisions of this Section 9 may be
terminated at any time, without penalty, by either the Distributor or the
Contracts Distributor with respect to any Portfolio on not more than 60 days'
nor less than 30 days' written notice delivered or mailed by registered mail,
postage prepaid, to the other party.
SECTION 10. NOTICES
Notices and communications required or permitted by Section 2 hereof
will be given by means mutually acceptable to the Parties concerned. Each
other notice or communication required or permitted by this Agreement will be
given to the following persons at the following addresses and facsimile
numbers, or such other persons, addresses or facsimile numbers as the Party
receiving such notices or communications may subsequently direct in writing:
If to Insurer
21
First Allmerica Financial Life Insurance
Company
000 Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxx, President
If to Contracts Distributor
Allmerica Investments, Inc.
000 Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxx, President
If to Distributor
Alliance Fund Distributors, Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx XX 00000
Attn.: Xxxxxx X. Xxxxxx
FAX: (000) 000-0000
If to Advisor or the Fund
Alliance Capital Management L.P.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx XX 00000
Attn: Xxxxxx X. Xxxxxx
FAX: (000) 000-0000
SECTION 11. VOTING PROCEDURES
Subject to the cost allocation procedures set forth in Section 3 hereof,
Insurer will distribute all proxy material furnished by the Fund to
Participants and will vote Fund shares in accordance with instructions
received from Participants. Insurer will vote Fund shares that are (a) not
attributable to Participants or (b) attributable to Participants, but for
which no instructions have been received, in the same proportion as Fund
shares for which said instructions have been received from Participants.
Insurer agrees that it will disregard Participant voting instructions only to
the extent it would be permitted to do so pursuant to Rule 6e-3
(T)(b)(15)(iii) under the 1940 Act if the Contracts were variable
22
life insurance policies subject to that rule. Other participating life
insurance companies utilizing the Fund will be responsible for calculating
voting privileges in a manner consistent with that of Insurer, as prescribed
by this Section 11.
SECTION 12. FOREIGN TAX CREDITS
The Adviser agrees to consult in advance with Insurer concerning any
decision to elect or not to elect pursuant to Section 853 of the Code to pass
through the benefit of any foreign tax credits to the Fund's shareholders.
SECTION 13. INDEMNIFICATION
13.1 INDEMNIFICATION OF FUND, DISTRIBUTOR AND ADVISER BY INSURER.
(a) Except to the extent provided in Sections 13.1(b) and 13.1(c),
below, Insurer agrees to indemnify and hold harmless the Fund, Distributor
and Adviser, each of their directors and officers, and each person, if any,
who controls the Fund, Distributor or Adviser within the meaning of Section
15 of the 1933 Act (collectively, the "Indemnified Parties" for purposes of
this Section 13. 1) against any and all losses, claims, damages, liabilities
(including amounts paid in settlement with the written consent of Insurer) or
actions in respect thereof (including, to the extent 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 actions are related to the sale, acquisition,
or holding of the Fund's shares and:
(i) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Separate Account's
1933 Act registration statement, the
23
Separate Account Prospectus, the Contracts or, to the extent
prepared by Insurer or Contracts Distributor, sales literature or
advertising for the Contracts (or any amendment or supplement to
any of the foregoing), or arise out of or are based upon the
omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading; provided that this agreement to indemnify
shall not apply as to any Indemnified Party if such statement
or omission or such alleged statement or omission was made
in reliance upon and in conformity with information furnished to
Insurer or Contracts Distributor by or on behalf of the Fund,
Distributor or Adviser for use in the Separate Account's 1933
Act registration statement, the Separate Account Prospectus, the
Contracts, or sales literature or advertising (or any amendment or
supplement to any of the foregoing); or
(ii) arise out of or as a result of any other statements or
representations (other than statements or representations contained
in the Fund's 1933 Act registration statement, Fund Prospectus,
sales literature or advertising of the Fund, or any amendment or
supplement to any of the foregoing, not supplied for use therein by
or on behalf of Insurer or Contracts Distributor) or the negligent,
illegal or fraudulent conduct of Insurer or Contracts Distributor or
persons under their control (including, without limitation, their
employees and "Associated Persons," as that term is defined in
paragraph (m) of Article I of the NASD's By-Laws), in connection
with the sale or distribution of the Contracts or Fund shares; or
(iii) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the Fund's 1933
Act registration statement, Fund Prospectus,
24
sales literature or advertising of the Fund, or any amendment or
supplement to any of the foregoing, or the omission or alleged
omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading
if such a statement or omission was made in reliance upon and in
conformity with information furnished to the Fund, Adviser or
Distributor by or on behalf of Insurer or Contracts Distributor
for use in the Fund's 1933 Act registration statement, Fund
Prospectus, sales literature or advertising of the Fund, or any
amendment or supplement to any of the foregoing; or
(iv) arise as a result of any failure by Insurer or Contracts Distributor
to perform the obligations, provide the services and furnish the
materials required of them under the terms of this Agreement.
(b) Insurer shall not be liable under this Section 13.1 with respect to
any losses, claims, damages, liabilities or actions to which an Indemnified
Party would otherwise be subject by reason of willful misfeasance, bad faith,
or gross negligence in the performance by that Indemnified Party of its
duties or by reason of that Indemnified Party's reckless disregard of
obligations or duties under this Agreement or to Distributor or to the Fund.
(c) Insurer shall not be liable under this Section 13.1 with respect to
any action against an Indemnified Party unless the Fund, Distributor or
Adviser shall have notified Insurer in writing within a reasonable time after
the summons or other first legal process giving information of the nature of
the action 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 Insurer of any such action shall not
relieve Insurer from any liability which it may have to the Indemnified Party
against whom such
25
action is brought otherwise than on account of this Section 13. 1. In case
any such action is brought against an Indemnified Party, Insurer shall be
entitled to participate, at its own expense, in the defense of such action.
Insurer also shall be entitled to assume the defense thereof, with counsel
approved by the Indemnified Party named in the action, which approval shall
not be unreasonably withheld. After notice from Insurer to such Indemnified
Party of Insurer's election to assume the defense thereof, the Indemnified
Party will cooperate fully with Insurer and shall bear the fees and expenses
of any additional counsel retained by it, and Insurer will not be liable to
such Indemnified Party under this Agreement for any legal or other expenses
subsequently incurred by such Indemnified Party independently in connection
with the defense thereof, other than reasonable costs of investigation.
13.2 INDEMNIFICATION OF INSURER AND CONTRACTS DISTRIBUTOR BY ADVISER.
(a) Except to the extent provided in Sections 13.2(d) and 13.2(e),
below, Adviser agrees to indemnify and hold harmless Insurer and Contracts
Distributor, each of their directors and officers, and each person, if any,
who controls Insurer or Contracts Distributor within the meaning of Section
15 of the 1933 Act (collectively, the "Indemnified Parties" for purposes of
this Section 13.2) against any and all losses, claims, damages, liabilities
(including amounts paid in settlement with the written consent of Adviser) or
actions in respect thereof (including, to the extent reasonable, legal and
other expenses) to which the Indemnified Parties may become subject under any
statute, at common law or otherwise, insofar as such losses, claims, damages,
liabilities or actions are related to the sale, acquisition, or holding of
the Fund's shares and:
(i) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Fund's 1933 Act
registration statement, Fund Prospectus, sales literature or
advertising of the Fund or, to the extent not prepared by Insurer or
26
Contracts Distributor, sales literature or advertising for the
Contracts (or any amendment or supplement to any of the foregoing),
or arise out of or are based upon the omission or the alleged
omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading;
provided that this agreement to indemnify shall not apply as to any
Indemnified Party if such statement or omission or such alleged
statement or omission was made in reliance upon and in conformity
with information furnished to Distributor, Adviser or the Fund by or
on behalf of Insurer or Contracts Distributor for use in the Fund's
1933 Act registration statement, Fund Prospectus, or in sales
literature or advertising (or any amendment or supplement to any of
the foregoing); or
(ii) arise out of or as a result of any other statements or
representations (other than statements or representations contained
in the Separate Account's 1933 Act registration statement, Separate
Account Prospectus, sales literature or advertising for the
Contracts, or any amendment or supplement to any of the foregoing,
not supplied for use therein by or on behalf of Distributor,
Adviser, or the Fund) or the negligent, illegal or fraudulent
conduct of the Fund, Distributor, Adviser or persons under their
control (including, without limitation, their employees and
Associated Persons), in connection with the sale or distribution
of the Contracts or Fund shares; or
(iii) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Separate Account's
1933 Act registration statement, Separate Account Prospectus, sales
literature or advertising covering the Contracts, or any amendment or
supplement to any of the foregoing, or the omission or alleged
omission to
27
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 in conformity
with information furnished to Insurer or Contracts Distributor by
or on behalf of the Fund, Distributor or Adviser for use in the
Separate Account's 1933 Act registration statement, Separate Account
Prospectus, sales literature or advertising covering the Contracts,
or any amendment or supplement to any of the foregoing; or
(iv) arise as a result of any failure by the Fund, Adviser or Distributor
to perform the obligations, provide the services and furnish the
materials required of them under the terms of this Agreement;
(b) Except to the extent provided in Sections 13.2(d) and 13.2(e)
hereof, Adviser agrees to indemnify and hold harmless the Indemnified Parties
from and against any and all losses, claims, damages, liabilities (including
amounts paid in settlement thereof with, except as set forth in Section
13.2(c) below, the written consent of Adviser) or actions in respect thereof
(including, to the extent reasonable, legal and other expenses) to which the
Indemnified Parties may become subject directly or indirectly under any
statute, at common law or otherwise, insofar as such losses, claims, damages,
liabilities or actions directly or indirectly result from or arise out of the
failure of any Portfolio to operate as a regulated investment company in
compliance with (i) Subchapter M of the Code and regulations thereunder and
(ii) Section 817(h) of the Code and regulations thereunder (except to the
extent that such failure is caused by Insurer), including, without
limitation, any income taxes and related penalties, rescission charges,
liability under state law to Contract owners or Participants asserting
liability against Insurer or Contracts Distributor pursuant to the Contracts,
the costs of any ruling and closing agreement or other settlement with the
Internal Revenue Service, and the cost of any substitution by Insurer of
shares
28
of another investment company or portfolio for those of any adversely
affected Portfolio as a funding medium for the Separate Account that Insurer
deems necessary or appropriate as a result of the noncompliance.
(c) The written consent of Adviser referred to in Section 13.2(b) above
shall not be required with respect to amounts paid in connection with any
ruling and closing agreement or other settlement with the Internal Revenue
Service.
(d) Adviser shall not be liable under this Section 13.2 with respect to
any losses, claims; damages, liabilities or actions to which an Indemnified
Party would otherwise be subject by reason of willful misfeasance, bad faith,
or gross negligence in the performance by that Indemnified Party of its
duties or by reason of such Indemnified Party's reckless disregard of its
obligations and duties under this Agreement or to Insurer, Contracts
Distributor or the Separate Account.
(e) Adviser shall not be liable under this Section 13.2 with respect to
any action against an Indemnified Party unless Insurer or Contracts
Distributor shall have notified Adviser in writing within a reasonable time
after the summons or other first legal process giving information of the
nature of the action 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 Adviser of any such action shall
not relieve Adviser from any liability which it may have to the Indemnified
Party against whom such action is brought otherwise than on account of this
Section 13.2. In case any such action is brought against an Indemnified
Party, Adviser will be entitled to participate, at its own expense, in the
defense of such action. Adviser also shall be entitled to assume the defense
thereof (which shall include, without limitation, the conduct of any ruling
request and closing agreement or other settlement proceeding with the
Internal Revenue Service), with counsel approved by the Indemnified Party
named in the action,
29
which approval shall not be unreasonably withheld. After notice from Adviser
to such Indemnified Party of Adviser's election to assume the defense
thereof, the Indemnified Party will cooperate fully with Adviser and shall
bear the fees and expenses of any additional counsel retained by it, and
Adviser will not be liable to such Indemnified Party under this Agreement for
any legal or other expenses subsequently incurred by such Indemnified Party
independently in connection with the defense thereof, other than reasonable
costs of investigation.
13.3 EFFECT OF NOTICE.
Any notice given by the indemnifying Party to an Indemnified Party
referred to in Section 13.1(c) or 13.2(e) above of participation in or
control of any action by the indemnifying Party will in no event be deemed to
be an admission by the indemnifying Party of liability, culpability or
responsibility, and the indemnifying Party will remain free to contest
liability with respect to the claim among the Parties or otherwise.
SECTION 13. APPLICABLE LAW
This Agreement will be construed and the provisions hereof interpreted
under and in accordance with New York law, without regard for that state's
principles of conflict of laws.
SECTION 14. EXECUTION IN COUNTERPARTS
This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together will constitute one and the same
instrument.
30
SECTION 15. SEVERABILITY
If any provision of this Agreement is held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement will
not be affected thereby.
SECTION 16. RIGHTS CUMULATIVE
The rights, remedies and obligations contained in this Agreement are
cumulative and are in addition to any and all rights, remedies and
obligations, at law or in equity, that the Parties are entitled to under
federal and state laws.
SECTION 17. RESTRICTIONS ON SALES OF FUND SHARES
Insurer agrees that the Fund will be permitted (subject to the other
terms of this Agreement) to make its shares available to separate accounts of
other life insurance companies.
SECTION 18. HEADINGS
The Table of Contents and headings used in this Agreement are for
purposes of reference only and shall not limit or define the meaning of the
provisions of this Agreement.
31
IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed in their names and on their behalf by and through their duly
authorized officers signing below.
FIRST ALLMERICA FINANCIAL LIFE INSURANCE COMPANY
By:
Name:
Title:
ALLMERICA INVESTMENTS, INC.
By:
Name:
Title:
ALLIANCE CAPITAL MANAGEMENT LP
By: Alliance Capital Management Corporation,
its General Partner
By:
Name: Xxxxxx X. Xxxxxx, Xx.
Title: VP and Assistant General Counsel
ALLIANCE FUND DISTRIBUTORS, INC.
By:
Name: Xxxxxxx X. Xxxxx
Title: Senior Vice President
32
SCHEDULE A
---------------------------- -------------------------- -------------------------- --------------------------
PRODUCT NAME 1933 ACT NUMBER 1940 ACT NUMBER PORTFOLIOS
---------------------------- -------------------------- -------------------------- --------------------------
Allmerica Value Generation 333-87105 811-8114 Alliance Growth Portfolio
---------------------------- -------------------------- -------------------------- --------------------------
DirectedAdvisory-Solutions 333-90545 811-8114 Alliance Growth Portfolio
---------------------------- -------------------------- -------------------------- --------------------------
Allmerica Accumulator 333-87105 811-8114 Alliance Growth Portfolio
Alliance Premier Growth
Portfolio
Alliance Technology
Portfolio
Alliance Growth and
Income Portfolio
---------------------------- -------------------------- -------------------------- --------------------------
Exec Annuity Plus 33-71052 811-8114 Alliance Growth and
Income Portfolio
Alliance Premier Growth
Portfolio
---------------------------- -------------------------- -------------------------- --------------------------
Allmerica Advantage 33-71052 811-8114 Alliance Growth and
Income Portfolio
Alliance Premier Growth
Portfolio
---------------------------- -------------------------- -------------------------- --------------------------
Allmerica Ultimate 333-38276 811-8114 Alliance Growth and
Advantage Income Portfolio
Alliance Premier Growth
Portfolio
---------------------------- -------------------------- -------------------------- --------------------------
Select Reward Pending 811-8116 Alliance Growth and
Income Portfolio
---------------------------- -------------------------- -------------------------- --------------------------
Select Acclaim Pending 811-8116 Alliance Growth and
Income Portfolio
Alliance Premier Growth
Portfolio
---------------------------- -------------------------- -------------------------- --------------------------
Delaware Medallion 33-71054 811-8114 Alliance Growth Portfolio
(I, II, III)
Alliance Premier Growth
Portfolio
Alliance Growth and
Income Portfolio
Alliance Technology
Portfolio
---------------------------- -------------------------- -------------------------- --------------------------
33
---------------------------- -------------------------- -------------------------- --------------------------
Delaware Golden Medallion Pending 811-8114 Alliance Growth Portfolio
Alliance Premier Growth
Portfolio
Alliance Growth and
Income Portfolio
Alliance Technology
Portfolio
---------------------------- -------------------------- -------------------------- --------------------------
Pioneer Vision (I, II) 33-86664 811-8872 Alliance Premier Growth
Portfolio
Alliance Technology
Portfolio
---------------------------- -------------------------- -------------------------- --------------------------
Pioneer C-Vision 333-64833 811-8872 Alliance Premier Growth
Portfolio
Alliance Technology
Portfolio
---------------------------- -------------------------- -------------------------- --------------------------
Pioneer Xtra Vision Pending 811-8872 Alliance Growth Portfolio
Alliance Premier Growth
Portfolio
Alliance Growth and
Income Portfolio
Alliance Technology
Portfolio
---------------------------- -------------------------- -------------------------- --------------------------
Pioneer No-Load 333-90535 811-8872 Alliance Premier Growth
Portfolio
Alliance Technology
Portfolio
---------------------------- -------------------------- -------------------------- --------------------------
Select Life 333-62369 811-8987 Alliance Premier Growth
Portfolio
Alliance Growth and
Income Portfolio
---------------------------- -------------------------- -------------------------- --------------------------
Select Inheiritage 33-74184 811-8304 Alliance Premier Growth
Portfolio
Alliance Growth and
Income Portfolio
---------------------------- -------------------------- -------------------------- --------------------------
34
---------------------------- -------------------------- -------------------------- --------------------------
Select Single Premium Life 333-45914 811-10133 Alliance Premier Growth
Portfolio
Alliance Growth and
Income Portfolio
---------------------------- -------------------------- -------------------------- --------------------------
Select VUL 2001 Pending Pending Alliance Premier Growth
Portfolio
Alliance Growth and
Income Portfolio
---------------------------- -------------------------- -------------------------- --------------------------
Executive Solutions 333-06383 811-10133 Alliance Growth and
Income Portfolio
Alliance Technology
Portfolio
---------------------------- -------------------------- -------------------------- --------------------------
35
