PARTICIPATION AGREEMENT
Among
VANGUARD VARIABLE INSURANCE FUND
and
THE VANGUARD GROUP, INC.
and
VANGUARD MARKETING CORPORATION
and
FIRST SYMETRA NATIONAL LIFE INSURANCE COMPANY OF NEW YORK
THIS AGREEMENT, made and entered into as of the 2nd day of November,
2012, by and among VANGUARD VARIABLE INSURANCE FUND (hereinafter the "Fund"),
a Delaware business trust, THE VANGUARD GROUP, INC. (hereinafter the
"Sponsor"), a Pennsylvania corporation, VANGUARD MARKETING CORPORATION
(hereinafter the "Distributor"), a Pennsylvania corporation, and FIRST
SYMETRA NATIONAL LIFE INSURANCE COMPANY OF NEW YORK (hereinafter the "Company")
, a New York corporation, on its own behalf and on behalf of each segregated
asset account of the Company named in Schedule A hereto as may be amended
from time to time (each such account hereinafter referred to as the "Account").
WHEREAS, the Fund was organized to act as the investment vehicle for
variable life insurance policies and variable annuity contracts to be offered
by separate accounts of insurance companies which have entered into
participation agreements with the Fund and the Sponsor (hereinafter
"Participating Insurance Companies"); and
WHEREAS, the beneficial interest in the Fund is divided into several
series of shares, each designated a "Portfolio," and representing the interest
in a particular managed portfolio of securities and other assets; and
WHEREAS, the Fund is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act")
and its shares are registered under the Securities Act of 1933, as amended
(the "1933 Act"); and
WHEREAS, the assets of each Portfolio of the Fund are managed by
several entities (the "Advisers"), each of which is duly registered as an
investment adviser under the federal Investment Advisers Act of 1940 and any
applicable state securities laws; and
WHEREAS, the Company has established or will establish one or more
Accounts to fund certain variable life insurance policies and/or variable
annuity contracts (the "Variable Insurance Products"), which Accounts and
Variable Insurance Products are registered under the 1940 Act and the 1933
Act, respectively; and
WHEREAS, each Account is a duly organized, validly existing
segregated asset account, established by resolution of the Board of Directors
of the Company, on the date shown for each Account on Schedule A hereto, to
set aside and invest assets attributable to the Variable Insurance Products;
and
WHEREAS, the Distributor is a wholly-owned subsidiary of the Sponsor,
is registered as a broker dealer with the Securities and Exchange Commission
("SEC") under the Securities Exchange Act of 1934, as amended (the "1934 Act")
and is a member in good standing of the Financial Industry Regulatory
Authority, Inc. ("FINRA"); and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares of the Portfolios on
behalf of each Account to fund the Variable Insurance Products and the
Sponsor is authorized to sell such shares to the Accounts at net asset value;
WHEREAS, the Company and the Sponsor have entered into a Defined
Contribution Clearance & Settlement Agreement of even date herewith (the
"DCC&S Agreement") which sets forth the operational provisions governing the
purchase and redemption of shares of the Fund by the Accounts and related
matters;
NOW, THEREFORE, in consideration of their mutual promises, the
Company, the Fund, the Sponsor and the Distributor agree as follows:
ARTICLE I. Sale of Fund Shares
1.1 The Sponsor and the Distributor agree to sell to the Company
those shares of the Portfolios of the Fund listed on Schedule B which each
Account orders, in accordance with this Agreement and the applicable
provisions of the DCC&S Agreement.
1.2 The Fund, subject to the provisions of Article IX of this
Agreement, agrees to make its shares available indefinitely for purchase at
the applicable net asset value per share by the Company and its Accounts on
those days on which the Fund calculates its net asset value pursuant to the
rules of the SEC and the Fund shall use its best efforts to calculate such
net asset value on each day which the NYSE is open for trading.
Notwithstanding the foregoing, the Board of Trustees of the Fund (hereinafter
the "Board") may refuse to sell shares of any Portfolio to any person
including, but not limited to, the Company, or suspend or terminate the
offering of shares of any Portfolio if such action is required by law or by
regulatory authorities having jurisdiction or is, in the sole discretion of
the Board, acting in good faith and in light of their fiduciary duties under
federal and any applicable state laws, necessary in the best interests of the
shareholders of such Portfolio. Further, it is acknowledged and agreed that
the availability of shares of the Fund shall be subject to the Fund's then
current prospectus and statement of additional information, federal and state
securities laws and applicable rules and regulations of the SEC and FINRA.
1.3 The Fund and the Sponsor agree that shares of the Fund will
be sold only to Participating Insurance Companies and their separate accounts.
No shares of any Portfolio will be sold to the general public.
1.4 The Fund and the Sponsor will not sell Fund shares to any
Participating Insurance Company or its separate account unless an agreement
containing a provision substantially the same as Section 2.4 of Article II of
this Agreement is in effect to govern such sales.
1.5 The Fund agrees to redeem for cash, on the Company's request,
any full or fractional shares of the Fund held by an Account, in accordance
with the applicable provisions of the DCC&S Agreement. The Fund reserves the
right to suspend redemption privileges or pay redemptions in kind, as
disclosed in the Fund's prospectus or statement of additional information.
The Fund agrees to treat the Company like any other shareholder in similar
circumstances in making these determinations.
1.6 The Company agrees to purchase and redeem the shares of each
Portfolio offered by the then current prospectus of the Fund and in accordance
with the provisions of such prospectus and the accompanying statement of
additional information.
1.7 Issuance and transfer of a Fund's shares will be by book
entry only. Stock certificates will not be issued to the Company or any
Account. Shares ordered from the Fund will be recorded in an appropriate
title for each Account or the appropriate subaccount of each Account. The
Fund shall furnish to the Company the CUSIP number assigned to each Portfolio
of the Fund identified in Schedule B hereto.
1.8 The Company hereby elects to receive all income, dividends
and capital gain distributions as are payable on the Portfolio shares in
additional shares of that Portfolio. The Company reserves the right to revoke
this election and to receive all such income dividends and capital gain
distributions in cash. The Fund shall notify the Company of the number of
shares so issued as payment of dividends and distributions.
ARTICLE II. Representations and Warranties
2.1 The Company represents and warrants that it is an insurance
company duly organized and in good standing under applicable law; that it has
legally and validly established each Account prior to any issuance or sale
thereof as a segregated asset account under Section 4240(a)(ii) of the New
York Insurance Code; that it has and will maintain the capacity to issue all
Variable Insurance Products that may be sold; and that it is properly
licensed, qualified and in good standing to sell the Variable Insurance
Products in New York and any other states where the Variable Insurance
Products will be sold, if any.
2.2 The Company represents and warrants that the Variable
Insurance Products are registered under the 0000 Xxx.
2.3 The Company represents and warrants it has registered each
Account as a unit investment trust in accordance with the provisions of the
1940 Act to serve as segregated investment accounts for the Variable
Insurance Products.
2.4 The Fund represents and warrants that Fund shares sold
pursuant to this Agreement shall be registered under the 1933 Act, duly
authorized for issuance and sold in compliance with the laws of the State of
New York and all applicable federal and state securities laws and that the
Fund is and shall remain registered under the 0000 Xxx. The Fund shall amend
the registration statement for its shares under the 1933 Act and the 1940 Act
from time to time as required in order to effect the continuous offering of
its shares. The Fund shall register and qualify the shares for sale in
accordance with the laws of the various states only if and to the extent
deemed advisable by the Fund, the Distributor, or the Sponsor.
2.5 The Fund represents that it is qualified as a Regulated
Investment Company under Subchapter M of the Internal Revenue Code of 1986,
as amended (the "Code"), and that it will make every effort to maintain
qualification (under Subchapter M or any successor or similar provision) and
(ii) it will notify the Company immediately upon having a reasonable basis
for believing that it ceased to so qualify or that it might not so qualify in
the future. The Fund acknowledges that any failure to qualify as a Regulated
Investment Company will eliminate the ability of the subaccounts to avail
themselves of the "look through" provisions of Section 817(h) of the Code,
and that as a result the Variable Insurance Products will almost certainly
fail to qualify as endowment or life insurance contracts under Section 817(h)
of the Code.
2.6 The Company represents that the Variable Insurance Products
will be treated as endowment or life insurance contracts under applicable
provisions of the Code and that it will make every effort to maintain such
treatment and that it will notify the Fund and the Sponsor immediately upon
having a reasonable basis for believing that the Variable Insurance Products
have ceased to be so treated or that they might not be so treated in the
future.
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 or
otherwise.
2.8 The Fund makes no representation as to whether any aspect of
its operations (including, but not limited to, fees and expenses and
investment policies) complies with the insurance laws or regulations of the
various states except that the Fund represents that the Fund's investment
policies, fees and expenses are and shall at all times remain in compliance
with the laws of the State of New York and the Fund and the Sponsor represent
that their respective operations are and shall at all times remain in
material compliance with the laws of the State of New York to the extent
required to perform this Agreement.
2.9 The Distributor represents and warrants that it is a member
in good standing of FINRA and is registered as a broker-dealer with the SEC.
The Distributor further represents that it will sell and distribute the Fund
shares in accordance with the laws of the State of New York and all
applicable state and federal securities laws, including without limitation
the 1933 Act, the 1934 Act, and the 0000 Xxx.
2.10 The Fund represents that it is lawfully organized and validly
existing under the laws of the State of Delaware and that it does and will
comply in all material respects with the 1940 Act and any applicable
regulations thereunder.
2.11 The Sponsor represents and warrants that the Advisers to the
Fund are, and the Sponsor shall use its best effort to cause the Advisers to
remain, duly registered in all material respects under all applicable federal
and state securities laws and to perform their obligations for the Fund in
compliance in all material respects with the laws of the State of New York
and any applicable state and federal securities laws.
2.12 The Fund and the Sponsor represent and warrant that all of
their trustees, directors, officers, employees, investment advisers, and
other individuals/entities dealing with the money and/or securities of the
Fund are and shall continue to be at all times covered by a blanket fidelity
bond or similar coverage for the benefit of the Fund in an amount not less
than the minimum coverage required currently by Rule 17g-1 under the 1940 Act
or other applicable laws or regulations as may be promulgated from time to
time. The aforesaid bond shall include coverage for larceny and embezzlement
and shall be issued by a reputable bonding company.
2.13 With respect to the Variable Insurance Products, which are
registered under the 1933 Act, the Company represents and warrants that:
(a) Symetra Securities Inc. is the principal underwriter
for each such Account and any subaccounts thereof and is a registered broker-
dealer with the SEC under the 1934 Act;
(b) the shares of the Portfolios of the Fund are and will
continue to be the only investment securities held by the corresponding
subaccounts;
(c) the number of Portfolios of the Fund available for
investment by the Accounts will not constitute a majority of the total number
of mutual funds or portfolio selections available for investment by the
Accounts in any Variable Insurance Product that is a variable annuity; and
(d) with regard to each Portfolio, the Company, if
permitted by law, on behalf of the corresponding subaccount, will:
(i) vote such shares held by it in the same
proportion as the vote of all other holders of such shares; and
(ii) refrain from substituting shares of another
security for such shares unless the SEC has approved such substitution in the
manner provided in Section 26 of the 0000 Xxx.
2.14 The Fund represents that it will comply with all provisions
of the 1940 Act requiring voting by shareholders, and in particular the Fund
will either provide for annual meetings or comply with Section 16(c) of the
1940 Act (although the Fund is not one of the trusts described in Section
16(c) of that Act) as well as with Sections 16(a) and, if and when
applicable, 16(b). Further, the Fund will act in accordance with the 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 III. Offering Documents and Reports
3.1 The Fund, the Sponsor or their designee shall provide the
Company (at the Sponsor's expense) with as many copies of the Fund's current
prospectus as the Company may reasonably request. The Company shall provide a
copy of the Fund's prospectus to each Variable Insurance Product owner. If
requested by the Company in lieu thereof, the Fund or the Sponsor shall
provide such documentation (including a final copy of the new prospectus as
set in type at the Fund's or the Sponsor's expense) and other assistance as
is reasonably necessary in order for the Company once each year (or more
frequently if the prospectus for the Fund is amended) to have the prospectus
for the Variable Insurance Products and the Fund's prospectus printed together
in one document (such printing to be at the Company's expense).
3.2 The Fund's prospectus shall state that the statement of
additional information for the Fund is available from the Sponsor (or in
the Fund's discretion, the prospectus shall state that the statement of
additional information is available from the Fund) and the Sponsor (or the
Fund), at its expense, shall print and provide such statement free of charge
to the Company and to any owner of a Variable Insurance Product or
prospective owner who requests such statement.
3.3 The Fund, at its own expense, shall provide the Company with
copies of its reports to shareholders, other communications to shareholders,
and, if required by applicable law, proxy material, in such quantity as the
Company shall reasonably require for distributing to Variable Insurance
Product owners. The Fund shall provide to the Company the prospectuses and
annual reports referenced in this Agreement within fifteen (15) days prior to
the Company's obligation to mail, and the Company agrees to provide the Fund
with advance notice of such date. If the documents are not delivered to the
Company within ten (10) days of the Company's obligation to mail, the Fund
shall reimburse the Company for any extraordinary out-of-pocket costs
(including, but not limited to, overtime for printing and mailing).
ARTICLE IV. Sales Material and Information
4.1 The Company shall furnish, or shall cause to be furnished, to
the Fund or its designee, each piece of sales literature or other promotional
material in which the Fund, its Advisers or the Sponsor is named, at least
ten Business Days prior to its use. The Company may use such material in fewer
than ten Business Days if it receives the written consent of the Fund or its
designee. No such material shall be used if the Fund or its designee
reasonably objects to such use within ten Business Days after receipt of such
material. In connection with the identification of the Portfolios in any such
material, the use of the Sponsor's name or identification of the Portfolios
shall be given no greater prominence than any other mutual fund or portfolio
selection offered in a Variable Insurance Product that is a variable annuity.
4.2 The Company shall not give any information or make any
representations or statements on behalf of the Fund or concerning the Fund in
connection with the sale of the Variable Insurance Products other than the
information or representations contained in the registration statement or
prospectus for the Fund shares, as such registration statement and prospectus
may be amended or supplemented from time to time, or in reports or proxy
statements for the Fund, or in sales literature or other promotional material
approved by the Fund or its designee or by the Sponsor, except with the
permission of the Fund or the Sponsor or the designee of either.
4.3 The Fund, Sponsor, Distributor or their designee shall
furnish, or shall cause to be furnished, to the Company or its designee,
each piece of sales literature or other promotional material in which the
Company or an Account is named at least ten Business Days prior to its use.
No such material shall be used if the Company or its designee reasonably
objects to such use within ten Business Days after receipt of such material.
4.4 The Fund, the Distributor and the Sponsor shall not give any
information or make any representations on behalf of the Company or
concerning the Company, each Account, or the Variable Insurance Products
other than the information or representations contained in a prospectus for
the Variable Insurance Products, as such prospectus may be amended or
supplemented from time to time, or in published reports for each Account
which are in the public domain or approved by the Company for distribution to
Variable Insurance Product owners, or in sales literature or other promotional
material approved by the Company or its designee, except with the permission
of the Company.
4.5 The Fund will provide to the Company at least one complete
copy of all registration statements, prospectuses, statements of additional
information, reports, proxy statements, sales literature and other promotional
materials, applications for exemptions, requests for no-action letters, and
all amendments to any of the above, that relate to the Fund or its shares,
prior to or contemporaneously with the filing of each document with the SEC
or other regulatory authorities.
4.6 The Company will provide to the Fund at least one complete
copy of all prospectuses, reports, solicitations for voting instructions,
sales literature and other promotional materials, applications for exemption,
requests for no-action letters, and all amendments to any of the above, that
relate to the Variable Insurance Products or each Account, prior to or
contemporaneously with the filing of such document with the SEC or other
regulatory authorities.
4.7 The Company and the Fund shall also each promptly inform the
other of the results of any examination by the SEC (or other regulatory
authorities) that relates to the Variable Insurance Products, the Fund or its
shares, and the party that was the subject of the examination shall provide
the other party with a copy of relevant portions of any "deficiency letter"
or other correspondence or written report regarding any such examination.
4.8 The Fund and the Sponsor will provide the Company with as
much notice as is reasonably practicable of any proxy solicitation for any
Portfolio, and of any material change in the Fund's registration statement,
particularly any change resulting in a change to the prospectus for any
Account. The Fund and the Sponsor will cooperate with the Company so as to
enable the Company to solicit voting instructions from owners of Variable
Insurance Products, to the extent a solicitation is required by applicable
law, or to make changes to its prospectus in an orderly manner.
4.9 For purposes of this Article IV, the phrase "sales literature
and other promotional material" includes, but is not limited to, sales
literature (i.e., any written communication distributed or made generally
available to customers, including brochures, circulars, research reports,
market letters, form letters, seminar texts, reprints or excerpts of any
other advertisement, sales literature, or published articles), educational or
training materials or other communications distributed or made generally
available to some or all agents or employees, and prospectuses, shareholder
reports, and proxy materials.
4.10 Certain Transactions and Restrictions.
(a) The Company agrees that it will provide, not later
than five Business Days after receipt of a written request by the Sponsor on
behalf of the Fund, the Taxpayer Identification Number of any or all Variable
Insurance Product owner(s) and the amount, date, name of investment
professional associated with the Variable Insurance Product owner (if any),
and transaction type (purchase, redemption, transfer, or exchange) of every
purchase, redemption, transfer, or exchange transaction by such Variable
Insurance Product owner(s) in an Account investing in the Fund through an
account maintained by the Company during the specific period covered by the
request. Unless required by applicable law, rule or regulation, the Sponsor
and the Fund agree not to use the information received under this Section for
marketing or any other purpose not related to (i) limiting or reducing abusive
trading in shares issued by the Fund or (ii) collecting purchase or redemption
fees (if any).
(b) The Company agrees that it will execute written
instructions from the Sponsor on behalf of the Fund, including instructions
to restrict or prohibit purchases or exchanges of Fund shares in specific
accounts or by or on behalf of specific Variable Insurance Product owners
identified by the Fund as having engaged in transactions in Fund shares that
violate policies established by the Fund for the purpose of eliminating or
reducing any dilution of the value of the outstanding securities issued by
the Fund. Any such instructions by the Sponsor shall include the Taxpayer
Identification Number or equivalent identifying number of the Variable
Insurance Product owner(s) to which the instructions relate and the specific
restriction(s) to be executed. The Company agrees that it will execute any
such instructions as soon as reasonably practicable, but not later than five
Business Days after receipt of the instructions by the Company. The parties
acknowledge that the Company's ability to execute the Sponsor's instructions
may be limited by certain contractual obligations contained in the Variable
Insurance Products, certain rights contained in the Variable Insurance
Product prospectuses, and/or applicable state insurance laws and regulations.
If pursuant to any such limitation, the Company reasonably believes that it
is prevented from complying with a request from the Sponsor to restrict or
prohibit trading, the Company will notify the Sponsor within three days of
receiving such request and will work cooperatively with the Sponsor to
determine whether other actions may be taken by the Company in order to
protect Fund shareholders from dilution of the value of outstanding
securities issued by the Fund.
ARTICLE V. Fees and Expenses
5.1 The Fund and Sponsor shall pay no fee or other compensation
to the Company under this Agreement. Nothing herein shall prevent the parties
hereto from otherwise agreeing to perform, and arranging for appropriate
compensation for, other services relating to the Fund and or to the Accounts.
5.2 All expenses incident to performance by the Fund under this
Agreement shall be paid by the Fund. The Fund shall see to it that all its
shares are registered and authorized for issuance in accordance with
applicable federal law and, if and to the extent deemed advisable by the
Fund, in accordance with applicable state laws prior to their sale. The Fund
shall bear the fees and expenses for the cost of registration and
qualification of the Fund's shares, preparation and filing of the Fund's
prospectus and registration statement, proxy materials and reports, setting
the prospectus in type, setting in type and printing the proxy materials and
reports to shareholders (including the costs of printing a prospectus that
constitutes an annual report), the preparation of all statements and notices
required by any federal or state law, all taxes on the issuance or transfer
of the Fund's shares.
5.3 The Fund shall bear the expenses of printing, and the Company
shall bear the expenses of distributing, the Fund's prospectus to owners of
Variable Insurance Products issued by the Company. The Company shall bear the
expenses of distributing the Fund's proxy materials (to the extent such proxy
solicitation is required by law) and reports to owners of Variable Insurance
Products.
ARTICLE VI. Diversification
6.1 The Fund will at all times invest money from the Variable
Insurance Products in such a manner as to ensure that the Variable Insurance
Products will be treated as variable contracts under the Code and the
regulations issued thereunder. Without limiting the scope of the foregoing,
the Fund and the Sponsor represent and warrant that each Portfolio of the
Fund will meet the diversification requirements of Section 817(h) of the Code
and Treasury Regulation 1.817-5, relating to the diversification requirements
for endowment or life insurance contracts and any amendments or other
modifications to such Section or Regulations, as if those requirements
applied directly to each such Portfolio. In the event of a breach of this
Article VI by the Fund, it will take all reasonable steps (a) to notify
Company of such breach and (b) to adequately diversify, each Portfolio of the
Fund so as to achieve compliance within the grace period afforded by
Regulation 817-5.
6.2 The Fund and the Sponsor represent that each Portfolio will
elect to be qualified as a Regulated Investment Company under Subchapter M of
the Code and they will maintain such qualification (under Subchapter M or
any successor or similar provision).
ARTICLE VII. Indemnification
7.1 Indemnification by the Company
(a) The Company agrees to indemnify and hold harmless the
Fund and each trustee of the Board and officers and each person, if any, who
controls the Fund within the meaning of Section 15 of the 1933 Act, the
Sponsor and the Distributor (collectively, the "Indemnified Parties" for
purposes of this Section 7.1) against any and all losses, claims, damages,
liabilities (including amounts paid in settlement with the written consent
of the Company) or litigation (including legal and other expenses) to which
the Indemnified Parties may become subject under any statute, regulation, at
common law or otherwise, insofar as such losses, claims, damages, liabilities
or expenses (or actions in respect thereof) or settlements are related to the
sale or acquisition of the Fund's shares or the Variable Insurance Products
and:
(i) arise out of or are based upon any untrue
statements or alleged untrue statements of any material fact contained in
the registration statement or prospectus for the Variable Insurance Products
or contained in the contract or policy or sales literature for the Variable
Insurance Products (or any amendment or supplement to any of the foregoing),
or arise out of or are based upon the omission or the alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, provided that this agreement to
indemnify shall not apply as to any Indemnified Party if such statement or
omission or such alleged statement or omission was made in reliance upon and
in conformity with information furnished to the Company by or on behalf of
the Fund for use in the registration statement or prospectus for the Variable
Insurance Products or in the contract or policy sales literature (or any
amendment or supplement) or otherwise for use in connection with the sale of
the Variable Insurance Products or the Fund shares; or
(ii) arise out of or as a result of statements or
representations (other than statements or representations contained in the
registration statement, prospectus or sales literature of the Fund not
supplied by the Company, or persons under its control) or unlawful conduct of
the Company or persons under its control, with respect to the sale or
distribution of the Variable Insurance Products or Fund shares; or
(iii) arise out of any untrue statement or alleged
untrue statement of a material fact contained in a registration statement,
prospectus, or sales literature of the Fund (or any amendment or supplement
thereto), or the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein not misleading, if such statement or omission was made in reliance
upon information furnished to the Fund by or on behalf of the Company; or
(iv) result from any failure by the Company to
provide the services and furnish the materials under the terms of this
Agreement; or
(v) arise out of or result from any material
breach of any representation and/or warranty made by the Company in this
Agreement or arise out of or result from any material breach of this
Agreement by the Company;
as limited by and in accordance with the provisions of Section 7.1(b) and
7.1(c) hereof.
(b) The Company shall not be liable under this
indemnification provision with respect to any losses, claims, damages,
liabilities or litigation to which an Indemnified Party would otherwise be
subject by reason of such Indemnified Party's willful misfeasance, bad faith,
or gross negligence in the performance of such Indemnified Party's duties or
by reason of such Indemnified Party's reckless disregard of obligations and
duties under this Agreement or to the Fund, whichever is applicable.
(c) The Company shall not be liable under this
indemnification provision with respect to any claim made against an
Indemnified Party unless such Indemnified Party shall have notified the
Company in writing within a reasonable time after the summons or other first
legal process giving information of the nature of the claim shall have been
served upon such Indemnified Party (or after such Indemnified Party shall
have received notice of such service on a designated agent), but failure to
notify the Company of any such claim shall not relieve the Company from any
liability which it may have to the Indemnified Party against whom such action
is brought otherwise than on account of this indemnification provision. In
case any such action is brought against the Indemnified Parties, the Company
shall be entitled to participate, at its own expense, in the defense of such
action. The Company also shall be entitled to assume the defense thereof,
with counsel satisfactory to the party named in the action. After notice from
the Company to such a party of the Company's election to assume the defense
thereof, the Indemnified Party shall bear the fees and expenses of any
additional counsel retained by it, and the Company will not be liable to such
party under this agreement for any legal or other expenses subsequently
incurred by such party independently in connection with the defense thereof
other than reasonable costs of investigation.
(d) The Indemnified Parties will promptly notify the
Company of the commencement of any litigation or proceedings against them in
connection with the issuance or sale of the Fund shares or the Variable
Insurance Products or the operation of the Fund.
7.2 Indemnification by the Sponsor
(a) The Sponsor agrees to indemnify and hold harmless the
Company and each of its directors and officers and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933Act
(collectively, the "Indemnified Parties" for purposes of this Section 7.2)
against any and all losses, claims, damages, liabilities (including amounts
paid in settlement with the written consent of the Sponsor) or litigation
(including legal and other expenses) to which the Indemnified Parties may
become subject under any statute, at common law or otherwise, insofar as such
losses, claims, damages, liabilities or expenses (or actions in respect
thereof) or settlements are related to the sale or acquisition of the Fund's
shares or the Variable Insurance Products and:
(i) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in the
registration statement or prospectus or sales literature of the Fund (or any
amendment or supplement to any of the foregoing), or arise out of or are
based upon the omission or the alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, provided that this agreement to indemnify shall not apply as
to any Indemnified Party if such statement or omission or such alleged
statement or omission was made in reliance upon and in conformity with
information furnished to the Sponsor or Fund by or on behalf of the Company
for use in the registration statement or prospectus for the Fund or in sales
literature (or any amendment or supplement thereto) or otherwise for use in
connection with the sale of the Variable Insurance Products or Fund shares; or
(ii) arise out of or as a result of statements or
representations (other than statements or representations contained in the
registration statement, prospectus or sales literature for the Variable
Insurance Products not supplied by the Sponsor or persons under its control)
or unlawful conduct of the Fund, the Advisers or persons under their control,
with respect to the sale or distribution of the Variable Insurance Products
or Fund shares; or
(iii) arise out of any untrue statement or alleged
untrue statement of a material fact contained in a registration statement,
prospectus or sales literature covering the Variable Insurance Products (or
any amendment or supplement thereto), or the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statement or statements therein not misleading, if such statement or
omission was made in reliance upon information furnished to the Company by or
on behalf of the Fund; or
(iv) result from any failure by the Sponsor or the
Fund to provide the services and furnish the materials under the terms of this
Agreement (including a failure to comply with the diversification requirements
specified in Article VI of this Agreement); or
(v) arise out of or result from any material
breach of any representation and/or warranty made by the Sponsor or the Fund
in this Agreement or arise out of or result from any other material breach of
this Agreement by the Sponsor or the Fund;
as limited by and in accordance with the provisions of Sections 7.2(b) and
7.2(c) hereof.
(b) The Sponsor shall not be liable under this
indemnification provision with respect to any losses, claims, damages,
liabilities or litigation to which an Indemnified Party would otherwise be
subject by reason of such Indemnified Party's willful misfeasance, bad faith,
or gross negligence in the performance of such Indemnified Party's duties or
by reason of such Indemnified Party's reckless disregard of obligations and
duties under this Agreement or to the Company or the Accounts, whichever is
applicable.
(c) The Sponsor shall not be liable under this
indemnification provision with respect to any claim made against an
Indemnified Party unless such Indemnified Party shall have notified the
Sponsor in writing within a reasonable time after the summons or other first
legal process giving information of the nature of the claim shall have been
served upon such Indemnified Party (or after such Indemnified Party shall
have received notice of any such service on any designated agent), but failure
to notify the Sponsor of any such claim shall not relieve the Sponsor from
any liability which it may have to the Indemnified Party against whom such
action is brought otherwise than on account of this indemnification provision.
In any case any such action is brought against the Indemnified Parties, the
Sponsor will be entitled to participate, at its own expense, in the defense
thereof. The Sponsor also shall be entitled to assume the defense thereof,
with counsel satisfactory to the party named in the action. After notice
from the Sponsor to such party of the Sponsor's election to assume the
defense thereof, the Indemnified Party shall bear the fees and expenses of
any additional counsel retained by it, and the Sponsor will not be liable to
such party under this Agreement for any legal or other expenses subsequently
incurred by each party independently in connection with the defense thereof
other than reasonable costs of investigation.
(d) The Company agrees promptly to notify the Sponsor of
the commencement of any litigation or proceedings against it or any of its
officers or directors in connection with the issuance or sale of the Variable
Insurance Products or the operation of each Account.
7.3 Indemnification by the Fund
(a) The Fund agrees to indemnify and hold harmless the
Company, and each of its directors and officers and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act
(collectively, the "Indemnified Parties" for purposes of this Section 7.3)
against any and all losses, claims, damages, liabilities (including amounts
paid in settlement with the written consent of the Fund) or litigation
(including legal and other expenses) to which the Indemnified Parties may
become subject under any statute, at common law or otherwise, insofar as such
losses, claims damages, liabilities or expenses (or action in respect thereof)
or settlements resulting from the gross negligence, bad faith or willful
misconduct of the Board or any member thereof, are related to the operations
of the Fund and:
(i) arise as a result of any failure by the Fund
to provide the services and furnish the materials under the terms of this
Agreement (including a failure to comply with the diversification requirements
specified in Article VI of this Agreement); or
(ii) arise out of or result from any material
breach of any representation and/or warranty made by the Fund in this
Agreement or arise out of or result from any other material breach of this
Agreement by the Fund;
as limited by and in accordance with the provisions of Sections 7.3(b) and
7.3(c) hereof.
(b) The Fund shall not be liable under this
indemnification provision with respect to any losses, claims, damages,
liabilities or litigation to which an Indemnified Party would otherwise be
subject by reason of such Indemnified Party's willful misfeasance, bad faith,
or gross negligence in the performance of such Indemnified Party's duties or
by reason of such Indemnified Party's reckless disregard of obligations and
duties under this Agreement or to the Company, the Fund, the Sponsor or each
Account, whichever is applicable.
(c) The Fund shall not be liable under this
indemnification provision with respect to any claim made against an
Indemnified Party unless such Indemnified Party shall have notified the Fund
in writing within a reasonable time after the summons or other first legal
process giving information of the nature of the claim shall have been served
upon such Indemnified Party (or after such Indemnified Party shall have
received notice of such service on any designated agent), but failure to
notify the Fund of any such claim shall not relieve the Fund from any
liability which it may have to the Indemnified Party against whom such action
is brought otherwise than on account of this indemnification provision. In
case any such action is brought against the Indemnified Parties, the Fund
will be entitled to participate, at its own expense, in the defense thereof.
The Fund also shall be entitled to assume the defense thereof, with counsel
satisfactory to the party named in the action. After notice from the Fund to
such party or the Fund's election to assume the defense thereof, the
Indemnified Party shall bear the fees and expenses of any additional counsel
retained by it, and the Fund will not be liable to such party independently
in connection with the defense thereof other than reasonable costs of
litigation.
(d) The Company and the Sponsor agree promptly to notify
the Fund of the commencement of any litigation or proceedings against it or
any of its respective officers or directors in connection with this Agreement,
the issuance or sale of the Variable Insurance Products, with respect to the
operation of an Account, or the sale or acquisition of shares of the Fund.
7.4 Indemnification by the Distributor
(a) The Distributor agrees to indemnify and hold harmless
the Company and each of its directors and officers and each person, if any,
who controls the Company within the meaning of Section 15 of the 1933 Act
(collectively, the "Indemnified Parties" for purposes of this Section 7.4)
against any and all losses, claims, damages, liabilities (including amounts
paid in settlement with the written consent of the Sponsor) or litigation
(including legal and other expenses) to which the Indemnified Parties may
become subject under any statute, at common law or otherwise, insofar as
such losses, claims, damages, liabilities or expenses (or actions in respect
thereof) or settlements are related to the sale or acquisition of the Fund's
shares or the Variable Insurance Products and:
(i) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in the
registration statement or prospectus or sales literature of the Fund (or any
amendment or supplement to any of the foregoing), or arise out of or are based
upon the omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, provided that this agreement to indemnify shall not apply as to
any Indemnified Party if such statement or omission or such alleged statement
or omission was made in reliance upon and in conformity with information
furnished to the Distributor or the Fund by or on behalf of the Company for
use in the registration statement or prospectus for the Fund or in sales
literature (or any amendment or supplement thereto) or otherwise for use in
connection with the sale of the Variable Insurance Products or Fund shares;
or
(ii) arise out of or as a result of statements or
representations (other than statements or representations contained in the
registration statement, prospectus or sales literature for the Variable
Insurance Products not supplied by the Distributor or persons under its
control) or unlawful conduct of the Fund, the Advisers or persons under their
control, with respect to the sale or distribution of the Variable Insurance
Products or Fund shares; or
(iii) arise out of any untrue statement or alleged
untrue statement of a material fact contained in a registration statement,
prospectus or sales literature covering the Variable Insurance Products (or
any amendment or supplement thereto), or the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statement or statements therein not misleading, if such statement or
omission was made in reliance upon information furnished to the Company by or
on behalf of the Fund; or
(iv) result from any failure by the Distributor or
the Fund to provide the services and furnish the materials under the terms of
this Agreement; or
(v) arise out of or result from any material
breach of any representation and/or warranty made by the Distributor or the
Fund in this Agreement or arise out of or result from any other material
breach of this Agreement by the Distributor of the Fund;
as limited by and in accordance with the provisions of Sections 7.4(b) and
7.4(c) hereof.
(b) The Distributor shall not be liable under this
indemnification provision with respect to any losses, claims, damages,
liabilities or litigation to which an Indemnified Party would otherwise be
subject by reason of such Indemnified Party's willful misfeasance, bad faith,
or gross negligence in the performance of such Indemnified Party's duties or
by reason of such Indemnified Party's reckless disregard of obligations and
duties under this Agreement or to the Company or the Accounts, whichever is
applicable.
(c) The Distributor shall not be liable under this
indemnification provision with respect to any claim made against an
Indemnified Party unless such Indemnified Party shall have notified the
Distributor in writing within a reasonable time after the summons or other
first legal process giving information of the nature of the claim shall have
been served upon such Indemnified Party (or after such Indemnified Party
shall have received notice of any such service on any designated agent), but
failure to notify the Distributor of any such claim shall not relieve the
Distributor from any liability which it may have to the Indemnified Party
against whom such action is brought otherwise than on account of this
indemnification provision. In any case any such action is brought against
the Indemnified Parties, the Distributor will be entitled to participate, at
its own expense, in the defense thereof. The Sponsor also shall be entitled
to assume the defense thereof, with counsel satisfactory to the party named
in the action. After notice from the Distributor to such party of the
Distributor's election to assume the defense thereof, the Indemnified Party
shall bear the fees and expenses of any additional counsel retained by it,
and the Distributor will not be liable to such party under this Agreement for
any legal or other expenses subsequently incurred by each party independently
in connection with the defense thereof other than reasonable costs of
investigation.
(d) The Company agrees promptly to notify the Distributor
of the commencement of any litigation or proceedings against it or any of its
officers or directors in connection with the issuance or sale of the Variable
Insurance Products or the operation of each account.
ARTICLE VIII. Applicable Law
8.1 This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the State of New York.
8.2 This Agreement shall be subject to the provisions of the 1933,
1934 and 1940 Acts, and the rules and regulations and rulings thereunder,
including such exemptions from those statutes, rules and regulations as the
SEC may grant, and the terms hereof shall be interpreted and construed in
accordance therewith.
ARTICLE IX. Termination
9.1 This Agreement shall continue in full force and effect until
the first to occur of:
(a) termination by any party for any reason by sixty (60)
days' advance written notice delivered to the other parties; or
(b) termination by the Company by written notice to the
Fund and the Sponsor with respect to any Portfolio based upon the Company's
determination that shares of such Portfolio are not reasonably available to
meet the requirements of the Variable Insurance Products; or
(c) termination by the Company by written notice to the
Fund and the Sponsor with respect to any Portfolio in the event any of the
Portfolio's shares are not registered, issued or sold in accordance with
applicable state and/or federal law or such law precludes the use of such
shares as the underlying investment media of the Variable Insurance Products
issued or to be issued by the Company; or
(d) termination by the Company by written notice to the
Fund and the Sponsor with respect to any Portfolio in the event that such
Portfolio ceases to qualify as a Regulated Investment Company under Subchapter
M of the Code or under any successor or similar provision, or if the Company
reasonably believes that the Fund may fail to so qualify (in the event of
such termination, the Company shall withdraw all assets allocable to the
separate accounts from the Portfolio and shall reinvest such assets in a
different investment medium, including, but not limited to, another Portfolio
of the Fund); or
(e) termination by the Company by written notice to the
Fund and the Sponsor with respect to any Portfolio in the event that such
Portfolio fails to meet the diversification requirements as specified in
Article VI hereof (in the event of such termination, the Company shall
withdraw all assets allocable to the separate accounts from the Portfolio and
shall reinvest such assets in a different investment medium, including, but
not limited to, another Portfolio of the Fund); or
(f) termination by the Fund, the Sponsor, or the
Distributor by written notice to the Company, if any of the Fund, the
Sponsor, or the Distributor shall determine, in its sole judgment exercised
in good faith, that the Company and/or its affiliated companies 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; or
(g) termination by the Company by written notice to the
Fund and the Sponsor, if the Company shall determine, in its sole judgment
exercised in good faith, that either the Fund, the Sponsor, or the
Distributor 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.
9.2 Notwithstanding any termination of this Agreement, the
Fund and the Sponsor shall, at the option of the Company, continue to make
available shares of the Fund pursuant to the terms and conditions of this
Agreement, for all Variable Insurance Products in effect on the effective
date of termination of this Agreement (hereinafter referred to as "Existing
Contracts"). Specifically, without limitation, the owners of the Existing
Contracts shall be permitted to reallocate investments in the Fund, redeem
investments in the Fund and/or invest in the Fund upon the making of
additional purchase payments under the Existing Contracts.
9.3 The Company shall not redeem Fund shares attributable to the
Variable Insurance Products (as opposed to Fund shares attributable to the
Company's assets held in the Accounts) except (a) as necessary to implement
Variable Insurance Products owner initiated or approved transactions, or (b)
as required by state and/or federal laws or regulations or judicial or other
legal precedent of general application (hereinafter referred to as a "Legally
Required Redemption"). Upon request, the Company will promptly furnish to
the Fund and the Sponsor the opinion of counsel for the Company (which
counsel shall be reasonably satisfactory to the Fund and the Sponsor) to
the effect that any redemption pursuant to clause (b) above is a Legally
Required Redemption. Furthermore, except in cases where permitted under the
terms of the Variable Insurance Products, the Company shall not prevent
owners of Variable Insurance Products from allocating payments to a Portfolio
that was otherwise available under the Variable Insurance Products without
first giving the Fund or the Sponsor 90 days' notice of its intention to do
so.
ARTICLE X. Notices
Any notice shall be sufficiently given when sent by registered or
certified mail, overnight courier or facsimile to the other party at the
address of such party set forth below or at such other address as such party
may from time to time specify in writing to the other party.
If to the Fund: Vanguard Variable Insurance Fund
X.X. Xxx 0000
Xxxxxx Xxxxx, XX 00000
Attn: Xxxxx Xxxx
If to the Sponsor: The Vanguard Group, Inc.
X.X. Xxx 0000
Xxxxxx Xxxxx, XX 00000
Attn: Xxxxx Xxxx
If to the Distributor: Vanguard Marketing Corporation
X.X. Xxx 0000
Xxxxxx Xxxxx, XX 00000
Attn: Xxxxx Xxxx
If to the Company: First Symetra National Life Insurance Company
of New York
000 000xx Xxxxxx XX, Xxxxx 0000
Xxxxxxxx, XX 00000
Attn: Law Department SC-11
ARTICLE XI. Miscellaneous
11.1 It is understood and stipulated that neither the shareholders
of any Portfolio nor the officers or trustees of the Fund shall be personally
liable hereunder.
11.2 Subject to the requirements of the legal process and
regulatory authority, each party hereto shall treat as confidential the names
and addresses of the owners of the Variable Insurance Products, all material
provided under Section 4 of this agreement, and all information reasonably
identified as confidential in writing by any other party hereto and, except
as permitted by this Agreement, shall not (unless it has obtained the express
written consent of the affected party) disclose, disseminate or utilize such
names and addresses and other confidential information until such time as it
may come into the public domain.
11.3 The captions in this Agreement are included for convenience
of reference only and in no way define or delineate any of the provisions
hereof or otherwise affect their construction or effect.
11.4 This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
11.5 If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby.
11.6 Each party hereto shall cooperate with each party and all
appropriate governmental authorities (including without limitation the SEC,
FINRA and state insurance regulators) and shall permit such authorities
reasonable access to its books and records in connection with any
investigation or inquiry relating to this Agreement or the transactions
contemplated hereby.
11.7 The rights, remedies and obligations contained in this
Agreement are cumulative and are in addition to any and all rights, remedies
and obligations, at law or in equity, which the parties hereto are entitled
to under state and federal laws.
11.8 This Agreement or any of the rights and obligations hereunder
may not be assigned by any party without the prior written consent of all
parties hereto.
11.9 The Company shall furnish, or cause to be furnished, to the
Fund or its designee upon request copies of the following reports:
(a) the Company's Annual Financial Statement on Statutory
Basis; and
(b) any registration statement, prospectus or other
materials distributed in connection with the sale of the Variable Insurance
Products to the extent such registration statement, prospectus or other
materials reference the Fund.
11.10 This Agreement, including any Schedule hereto, may be amended
or modified only by written instrument, executed by duly authorized officers
of the parties.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed in its name and on its behalf by its duly authorized
representative as of the date specified above.
VANGUARD VARIABLE INSURANCE FUND
By: /s/ Xxxxx Xxxx
Name: Xxxxx Xxxx
Title: Secretary
THE VANGUARD GROUP, INC.
By: /s/Xxxxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx
Title: Principal
VANGUARD MARKETING CORPORATION
By: /s/ Xxxxx Xxxx
Name: Xxxxx Xxxx
Title: Secretary
FIRST SYMETRA NATIONAL LIFE INSURANCE COMPANY OF NEW YORK
By: /s/ Xxxxx X. Xxxxx
Name: Xxxxx X. Xxxxx
Title: Senior Vice President
SCHEDULE A
SEPARATE ACCOUNTS AND ASSOCIATED CONTRACTS
Name of Separate Account Contracts Funded by Separate Account
First Symetra Separate Account S FIRST SYMETRA TRUE VA
SCHEDULE B
PORTFOLIOS
The following Portfolios of the Vanguard Variable Insurance Funds
shall be made available as investments underlying the Variable Insurance
Products, subject to the limitations set forth in Section 2.13(c) hereof:
Money Market Portfolio
Total Bond Market Index Portfolio
High-Yield Bond Portfolio
Short-Term Investment Grade Portfolio
Balanced Portfolio
Diversified Value Portfolio
Equity Income Portfolio
Equity Index Portfolio
Growth Portfolio
Mid-Cap Index Portfolio
REIT Index Portfolio
Small Company Growth Portfolio
International Portfolio
Total Stock Market Index Portfolio
Capital Growth Portfolio
Conservative Allocation Portfolio
Moderate Allocation Portfolio
