EX-99.B.8.12
Form of
FUND PARTICIPATION AGREEMENT
between
THE XXXXXXX FUND and ALIAC
Aetna Life Insurance and Annuity Company (the "Company"), The Xxxxxxx
Fund on behalf of its Series DEM Equity Fund (the "Fund") and _________________
(the "Distributor") hereby agree to an arrangement whereby the Fund shall be
made available to serve as underlying investment media for Variable Annuity
Contracts ("Contracts") to be issued by the Company.
1. Establishment of Accounts; Availability of Fund.
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The Company represents that it has established Variable Annuity Accounts
B, C and D and may establish such other accounts as may be set forth in
Schedule A attached hereto and as may be amended from time to time with
the mutual consent of the parties hereto (the "Accounts"), each of which
is a separate account under Connecticut Insurance law, and has registered
or will register each of the Accounts (except for such Accounts for which
no such registration is required) as a unit investment trust under the
Investment Company Act of 1940 (the "1940 Act"), to serve as an
investment vehicle for the Contracts. Each Contract provides for the
allocation of net amounts received by the Company to an Account for
investment in the shares of one of more specified open-end management
investment companies available through that Account as underlying
investment media. Selection of a particular investment management company
and changes therein from time to time are made by the participant or
Contract owner, as applicable under a particular Contract.
2. Pricing Information; Orders; Settlement.
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(a) The Fund will make Fund shares available to be purchased by the
Company, and will accept redemption orders from the Company, on
behalf of each Account at the net asset value applicable to each
order on those days on which the Fund calculates its net asset
value (a "Business Day"). Fund shares shall be purchased and
redeemed in such quantity and at such time determined by the
Company to be necessary to meet the requirements of those Contracts
for which the Fund(s) serve as underlying investment media,
provided, however, that the Board of Trustees of the Fund
(hereinafter the "Trustees") may upon reasonable notice to the
Company, 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 the sole discretion of the Trustees, acting
in good faith and in the best interests of the shareholders of any
Portfolio and is acting in compliance with their fiduciary
obligations under federal and/or any applicable state laws.
(b) The Fund will provide to the Company closing net asset value,
dividend and capital gain information at the close of trading each
day that the New York Stock Exchange (the "Exchange") is open (each
such day a "Business Day"), and in no event later than 6:30 p.m.
Eastern Standard time on such Business Day. The Company will send
via facsimile or electronic transmission to the Fund or its
specified agent orders to purchase and/or redeem Fund shares by
10:00 a.m. Eastern Standard Time the following business day.
Payment for net purchases will be wired by the Company to an
account designated by the Fund to coincide with the order for
shares of the Fund.
(c) The Fund hereby appoints the Company as its agent for the limited
purpose of accepting purchase and redemption orders for Fund shares
relating to the Contracts from Contract owners or participants.
Orders from Contract owners or participants received from any
distributor of the Contracts (including affiliates of the Company)
by the Company, acting as agent for the Fund, prior to the close of
the Exchange on any given business day will be executed by the Fund
at the net asset value determined as of the close of the Exchange
on such Business Day, provided that the Fund receives written (or
facsimile) notice of such order by 10 a.m. Eastern Standard Time on
the next following Business Day. Any orders received by the Company
acting as agent on such day but after the close of the Exchange
will be executed by the Fund at the net asset value determined as
of the close of the Exchange on the next business day following the
day of receipt of such order, provided that the Fund receives
written (or facsimile) notice of such order by 10 a.m. Eastern
Standard Time within two days following the day of receipt of such
order.
(d) Payments for net redemptions of shares of the Fund will be wired by
the Fund to an account designated by the Company on the same
Business Day the Company places an order to redeem Fund Shares.
Payments for net purchases of the Fund will be wired by the Company
to an account designated by the Fund on the same Business Day the
Company places an order to purchase Fund shares. Payments shall be
in federal funds transmitted by wire.
(e) In lieu of applicable provisions set forth in paragraphs 2(a)
through 2(d) above, the parties may agree to provide pricing
information, execute orders and wire payments for purchases and
redemptions through National Securities Clearing Corporation's
Fund/SERV system in which case such activities will be governed by
the provisions set forth in an Exhibit to this Agreement.
(f) Each party has the right to rely on information or confirmations
provided by the other party (or by any affiliate of the other
party), and shall not be liable in the event that an error is a
result of any misinformation supplied by the other party
(g) The Fund and Distributor shall indemnify and hold the Company
harmless, from the effective date of this Agreement, against any
amount the Company is required to pay to Contract owners or
participants due to: (i) an incorrect calculation of a Fund's daily
net asset value, dividend rate, or capital gains distribution rate
or (ii) incorrect or late
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reporting of the daily net asset value, dividend rate, or capital
gain distribution rate of a Fund, upon written notification by the
Company, with supporting data, to Distributor. In addition, the
Fund or the Distributor shall be liable to the Company for systems
and out of pocket costs incurred by the Company in making a
Contract owners's or a participant's account whole, if such costs
or expenses are a result of the Fund's or the Distributor's failure
to provide timely or correct net asset values, dividend and capital
gains or financial information and if such information is not
corrected by 4:00 p.m. East Coast time of the next business day
after releasing such incorrect information provided the incorrect
NAV as well as the correct NAV for each day that the error occurred
is provided. If a mistake is caused in supplying such information
or confirmations, which results in a reconciliation with incorrect
information, the amount required to make a Contract owner's or a
participant's account whole shall be borne by the party providing
the incorrect information, regardless of when the error is
corrected.
(h) The Company agrees to purchase and redeem the shares of the Funds
named in Schedule B offered by the then current prospectus and
statement of additional information of the Fund in accordance with
the provisions of such prospectus and statement of additional
information.
3. Fees.
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In consideration of services provided by the Company under this
Agreement, the Fund or Distributor shall pay fees to the Company as set
forth in Schedule C.
4. Expenses.
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(a) Except as otherwise provided in this Agreement, all expenses
incident to the performance by the Fund under this Agreement shall
be paid by the Fund, including the cost of registration of Fund
shares with the Securities and Exchange Commission (the "SEC") and
in states where required. The Fund and Distributor shall pay no fee
or other compensation to the Company under this Agreement, and the
Company shall pay no fee or other compensation to the Fund or
Distributor, except as provided herein and in Schedule C attached
hereto and made a part of this Agreement as may be amended from
time to time with the mutual consent of the parties hereto. All
expenses incident to performance by each party of its respective
duties under this Agreement shall be paid by that party, unless
otherwise specified in this Agreement.
(b) The Fund or the Distributor shall provide to the Company, at the
location designated by the Company, periodic fund reports to
shareholders and other materials that are required by law to be
sent to Contract owners or participants. In addition, the Fund or
the Distributor shall provide the Company with a sufficient
quantity of its prospectuses, statements of additional information
and any supplements to any of these materials, to be used in
connection with the offerings and transactions contemplated by this
Agreement
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(c) The Fund or Distributor shall provide the company with a sufficient
quantity of its proxy material that is required to be sent to
Contract owners or participants. The cost associated with proxy
preparation, group authorization letters, programming for
tabulation and necessary materials (including postage) will be paid
by the Fund or Distributor.
5. Representations.
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(a) The Company agrees that it and its agents shall not, without the
written consent of the Fund or the Distributor, make
representations concerning the Fund, or its shares except those
contained in the then current prospectuses and in current printed
sales literature approved by or deemed approved by the Fund or the
Distributor.
(b) The Fund and Distributor represent and warrant that (i) they have
examined and tested their systems and made reasonable inquiry of
their business partners and other entities with whom they conduct
business with respect to Year 2000 problems and (ii) their ability
to perform their obligations under this Agreement will not be
interrupted or disrupted as a result of any business interruptions
or other business problems relating to specific dates or days
before, during and after the Year 2000.
6. Termination.
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This agreement shall terminate as to the sale and issuance of new
Contracts:
(a) at the option of either the Company, the Distributor or the Fund,
upon sixty days advance written notice to the other parties;
(b) at the option of the Company, upon one week advance written notice
to the Distributor and the Fund, if Fund shares are not available
for any reason to meet the requirement of Contracts as determined
by the Company. Reasonable advance notice of election to terminate
shall be furnished by Company;
(c) at the option of either the Company, the Distributor or the Fund,
immediately upon institution of formal proceedings against the
broker-dealer or broker-dealers marketing the Contracts, the
Account, the Company, the Fund or the Distributor by the National
Association of Securities Dealers, Inc. (the "NASD"), the SEC or
any other regulatory body;
(d) upon the determination of the Accounts to substitute for the Fund's
shares the shares of another investment company in accordance with
the terms of the applicable Contracts. The Company will give 60
days written notice to the Fund and the Distributor of any decision
to replace the Fund's' shares;
(e) upon assignment of this Agreement, unless made with the written
consent of all other parties hereto;
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(f) if Fund shares are not registered, issued or sold in conformance
with Federal law or such law precludes the use of Fund shares as an
underlying investment medium for Contracts issued or to be issued
by the Company. Prompt notice shall be given by the appropriate
party should such situation occur.
7. Continuation of Agreement.
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Termination as the result of any cause listed in Section 6 shall not
affect the Fund's obligation to furnish its shares to Contracts then in
force for which its shares serve or may serve as the underlying medium
unless such further sale of Fund shares is prohibited by law or the SEC
or other regulatory body.
8. Advertising Materials; Filed Documents.
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(a) Advertising and sales literature with respect to the Fund prepared
by the Company or its agents for use in marketing its Contracts
will be submitted to the Fund or its designee for review before
such material is submitted to any regulatory body for review. No
such material shall be used if the Fund or its designee reasonably
object to such use in writing, transmitted by facsimile within two
business days after receipt of such material.
(b) The Fund will provide additional copies of its financials as soon
as available to the Company and at least one complete copy of all
registration statements, prospectuses, statements of additional
information, annual and semi-annual reports, proxy statements and
all amendments or supplements to any of the above that relate to
the Fund promptly after the filing of such document with the SEC or
other regulatory authorities. At the Distributor's request, the
Company will provide to the Distributor at least one complete copy
of all registration statements, prospectuses, statements of
additional information, annual and semi-annual reports, proxy
statements, and all amendments or supplements to any of the above
that relate to the Account promptly after the filing of such
document with the SEC or other regulatory authority.
(c) The Fund or the Distributor will provide via Excel spreadsheet
diskette format or in electronic transmission to the Company at
least quarterly portfolio information necessary to update Fund
profiles with seven business days following the end of each
quarter.
9. Proxy Voting.
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(a) The Company shall provide pass-through voting privileges on Fund
shares held by registered separate accounts to all Contract owners
and participants to the extent the SEC continues to interpret the
1940 Act as requiring such privileges. The Company shall provide
pass-through voting privileges on Fund shares held by unregistered
separate accounts to all Contract owners.
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(b) The Company will distribute to Contract owners and participants, as
appropriate, all proxy material furnished by the Fund and will vote
Fund shares in accordance with instructions received from such
Contract owners and participants. If and to the extent required by
law, the Company, with respect to each group Contract and in each
Account, shall vote Fund shares for which no instructions have been
received in the same proportion as shares for which such
instructions have been received. The Company and its agents shall
not oppose or interfere with the solicitation of proxies for Fund
shares held for such Contract owners and participants.
10. Indemnification.
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(a) The Company agrees to indemnify and hold harmless the Fund and the
Distributor, and its directors, officers, employees, agents and
each person, if any, who controls the Fund or its Distributor
within the meaning of the Securities Act of 1933 (the "1933 Act")
against any losses, claims, damages or liabilities to which the
Fund or any such director, officer, employee, agent, or controlling
person may become subject, under the 1933 Act or otherwise, insofar
as such losses, claims, damages, or liabilities (or actions in
respect thereof) 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 sales
literature of 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 therein or necessary to make the statements
therein not misleading, or arise out of or as a result of conduct,
statements or representations (other than statements or
representations contained in the prospectuses or sales literature
of the Fund) of the Company or its agents, with respect to the sale
and distribution of Contracts for which Fund shares are the
underlying investment. The Company will reimburse any legal or
other expenses reasonably incurred by the Fund or any such
director, officer, employee, agent, investment Distributor, or
controlling person in connection with investigating or defending
any such loss, claim, damage, liability or action; provided,
however, that the Company will not be liable in any such case to
the extent that any such loss, claim, damage or liability arises
out of or is based upon (i) an untrue statement or omission or
alleged omission made in such Registration Statement or prospectus
in conformity with written materials furnished to the Company by
the Fund specifically for use therein or (ii) the willful
misfeasance, bad faith, or gross negligence by the Fund or
Distributor in the performance of its duties or the Fund's or
Distributor's reckless disregard of obligations or duties under
this Agreement or to the Company, whichever is applicable. This
indemnity agreement will be in addition to any liability which
Company may otherwise have.
(b) The Fund and the Distributor agree to indemnify and hold harmless
the Company and its directors, officers, employees, agents and each
person, if any, who controls the Company within the meaning of the
1933 Act against any losses, claims, damages or liabilities to
which the Company or any such director, officer, employee, agent or
controlling person may become subject, under the 1933 Act or
otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact
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contained in the Registration Statement, prospectuses or sales
literature of the Fund 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 material fact required to be
stated therein or necessary to make the statements therein not
misleading. The Fund will reimburse any legal or other expenses
reasonably incurred by the Company or any such director, officer,
employee, agent, or controlling person in connection with
investigating or defending any such loss, claim, damage, liability
or action; provided, however, that the Fund will not be liable in
any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or
omission or alleged omission made in such Registration Statement or
prospectuses which are in conformity with written materials
furnished to the Fund by the Company specifically for use therein.
(c) Promptly after receipt by an indemnified party hereunder of notice
of the commencement of action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying
party hereunder, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to any
indemnified party otherwise than under this Section 10. In case any
such action is brought against any indemnified party, and it
notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to
the extent that it may wish to, assume the defense thereof, with
counsel satisfactory to such indemnified party, and after notice
from the indemnifying party to such indemnified party of its
election to assume the defense thereof, the indemnifying party will
not be liable to such indemnified party under this Section 10 for
any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than
reasonable costs of investigation.
11. Miscellaneous.
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(a) Amendment and Waiver. Neither this Agreement, nor any provision
hereof, may be amended, waived, discharged or terminated orally,
but only by an instrument in writing signed by all parties hereto.
(b) Notices. All notices and other communications hereunder shall be
given or made in writing and shall be delivered personally, or sent
by telex, telecopier or registered or certified mail, postage
prepaid, return receipt requested, or recognized overnight courier
service to the party or parties to whom they are directed at the
following addresses, or at such other addresses as may be
designated by notice from such party to all other parties.
To the Company:
Aetna Life Insurance and Annuity Company
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
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Attention: Xxxxx X. Xxxxxxxx, Counsel
To the Fund:
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Attn:
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To the Distributor:
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Attn:
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Any notice, demand or other communication given in a manner prescribed in
this subsection (b) shall be deemed to have been delivered on receipt.
(c) Successors and Assigns. This agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective
permitted successors and assigns.
(d) Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one
agreement, and any party hereto may execute this Agreement by
signing any such counterpart.
(e) Severability. In case any one or more of the provisions contained
in this Agreement should be invalid, illegal or unenforceable in
any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be
affected or impaired thereby.
(f) Entire Agreement. This Agreement constitutes the entire agreement
and understanding between the parties hereto and supersedes all
prior agreement and understandings relating to the subject matter
hereof.
(g) Governing Law. This Agreement shall be governed and interpreted in
accordance with the laws of the State of Connecticut.
(h) Non Exclusivity. It is understood by the parties that this
Agreement is not an exclusive arrangement in any respect.
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(i) Confidentiality. The terms of this Agreement and the Schedules
thereto will be held confidential by each party except to the
extent that either party or its counsel may deem it necessary to
disclose such terms.
12. Limitation on Liability of Trustees, etc.
This agreement has been executed on behalf of the Fund by the undersigned
officer of the Fund in his or her capacity as an officer of the Fund. The
obligations of this agreement shall be binding upon the assets and
property of the Fund only and shall not be binding on any Trustee,
officer or shareholder of the Fund individually.
IN WITNESS WHEREOF, the undersigned have executed this Agreement by their
duly authorized officers effective as of the ____ day of _________, _____.
AETNA LIFE INSURANCE AND ANNUITY COMPANY
By:
Name:________________________________
Title:_______________________________
THE XXXXXXX FUND
By: ________________________________
Name:________________________________
Title:_______________________________
DISTRIBUTOR
By:
Name:__________________________
Title:_________________________
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Schedule A
(For any future separate accounts - See Section 1(a)
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Schedule B
(List of funds available--See Section 1(b))
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Schedule C
Fees to the Company
1. Servicing Fees.
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Administrative services to Contract owners and participants shall be
the responsibility of the Company and shall not be the responsibility of the
Fund or the Distributor. The Distributor recognizes the Company as the sole
shareholder of Fund shares issued under the Fund Participation Agreement, and
that substantial savings will be derived in administrative expenses, such as
significant reductions in postage expense and shareholder communications, by
virtue of having a sole shareholder for each of the Accounts rather than
multiple shareholders. In consideration of the administrative savings resulting
from such arrangement, Distributor agrees to pay to the Company a servicing fee
based on the annual rate of ____% (_____% quarterly) of the average net assets
invested in the Funds through the Contracts in each calendar quarter.
Distributor will make such payments to the Company within thirty (30) days after
the end of each calendar quarter. Each payment will be accompanied by a
statement showing the calculation of the fee payable to the Company for the
quarter and such other supporting data as may be reasonably requested by the
Company.
2. 12b-1 Fees.
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In accordance with the Fund's plan pursuant to Rule 12b-1 under the
Investment Company Act of 1940, the Distributor will make payments to the
Company at an annual rate of ____% (______% quarterly) of the average net assets
invested in the Funds through the Contracts in each calendar quarter.
Distributor will make such payments to the Company within thirty (30) days after
the end of each calendar quarter. Each payment will be accompanied by a
statement showing the calculation of the fee payable to the Company for the
quarter and such other supporting data as may be reasonably requested by the
Company.
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