FIDELITY INVESTMENTS LIC
EXECUTION COPY
PARTICIPATION AGREEMENT
BY AND AMONG
FIDELITY INVESTMENTS LIFE INSURANCE COMPANY
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 Fidelity Investments Life Insurance Company, a Utah
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 Utah, 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
FIDELITY INVESTMENTS LIFE INSURANCE COMPANY
AND
WARBURG, XXXXXX TRUST
AND
WARBURG, XXXXXX COUNSELLORS, INC.
AND
COUNSELLORS SECURITIES INC.
The following separate accounts of Fidelity Investments Life Insurance
Company are permitted in accordance with the provisions of this
Agreement to invest in Designated Portfolios of the Fund shown in
Schedule 2:
Fidelity Investments Variable Annuity Account I
established July 22, 1987
SCHEDULE 2
PARTICIPATION AGREEMENT
BY AND AMONG
FIDELITY INVESTMENTS LIFE INSURANCE COMPANY
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
