EXHIBIT 8(g)
FORM OF
FUND PARTICIPATION AGREEMENT
THIS AGREEMENT is made as of the day of May 1999,
between XXXXXXXX XXXXXXXX SERIES TRUST ("Fund"), an open-end
management investment company organized as a Massachusetts
business trust, and KEYPORT LIFE INSURANCE COMPANY ("Company"), a
life insurance company organized under the laws of the state of
Rhode Island, on its own behalf and on behalf of each segregated
asset account of the Company set forth in Schedule A as attached
hereto, as such Schedule A may be amended from time to time
("Accounts").
WHEREAS, the Fund is registered under the Investment Company
Act of 1940, as amended ("1940 Act"), as an open-end management
investment company; and
WHEREAS, the Fund is organized as a series fund and has
established a number of distinct series of shares of beneficial
interest ("Series"), which correspond to distinct portfolios of
investments; and
WHEREAS, the Fund acts as an investment vehicle for separate
accounts established for variable life insurance policies and
variable annuity contracts to be offered by insurance companies
that have entered into participation agreements with the Fund
("Participating Insurance Companies"); and
WHEREAS, Xxxxxxxx Xxxxxxxx Asset Management Inc. ("Xxxxxxxx
Xxxxxxxx") is registered as an investment adviser under the
Advisors Act of 1940, as amended, a broker-dealer under the
Securities Exchange Act of 1934, as amended ("1934 Act"), and is
a member in good standing of the National Association of
Securities Dealers, Inc. ("NASD") and serves as investment
advisor and administrator to all Series of the Fund; and
WHEREAS, the Series of the Fund offered by the Fund to the
Company and the Accounts are set forth on Schedule B attached
hereto, as such Schedule B may be amended from time to time; and
WHEREAS, the Fund intends to apply for an order
("Exemptive Order") from the Securities and Exchange Commission
("SEC") granting Participating Insurance Companies and their
separate accounts exemptions from the provisions of sections
9(a), 13(a), 15(a) and 15(b) of 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 and variable life insurance separate accounts of both
affiliated and unaffiliated life insurance companies and certain
qualified pension and retirement plans ("Qualified Plans"); and
WHEREAS, to the extent permitted by applicable
insurance laws and regulations, the Company intends to purchase
Class I shares ("Shares") of one or more of the Series on behalf
of the Accounts to fund the Contracts, and the Fund intends to
sell such Shares to the relevant Accounts at such Shares' net
asset value;
NOW THEREFORE, in consideration of the premises and the
mutual covenants contained herein, it is agreed between the
parties as follows:
1. Sale of Shares. The Fund agrees to make Shares
available for purchase by the Accounts or the Company or its
affiliates on behalf of the Accounts at the Shares' net asset
value as computed in accordance with the Fund's registration
statement under the Securities Act of 1933, as amended ("1933
Act") and the 1940 Act, including the Fund's current prospectus
and statement of additional information, as amended or
supplemented from time to time ("Fund Registration Statement").
Purchases of Shares will be made in accordance with the
provisions of the Fund Registration Statement and the operational
procedures mutually agreed to by Xxxxxxxx Xxxxxxxx and the
Company from time to time. The Fund may refuse to sell Shares of
any Series to any person or may suspend or terminate the offering
of Shares of any Series if such action is required by law or by
regulatory authorities having jurisdiction or is, in the sole
discretion of the trustees of the Fund, necessary in the best
interests of the shareholders of any Series.
2. Redemption of Shares. The Fund will redeem Shares when
requested by an Account or the Company or its affiliates on
behalf of the Account at the Shares' net asset value (as computed
in accordance with the Fund Registration Statement) in accordance
with the provisions of the Fund Registration Statement and the
operational procedures mutually agreed to by Xxxxxxxx Xxxxxxxx
and the Company from time to time.
3. Acceptance of Orders. The Fund shall accept purchase
and redemption orders resulting from investments in and payments
under the Contracts on each Business Day, provided that such
orders are received by Xxxxxxxx Xxxxxxxx or the Fund prior to
9:00 a.m., Eastern time, on such Business Day and reflect
instructions received by the Company from Contract holders in
good order prior to the time the net asset value of the Series is
calculated in accordance with the Fund Registration Statement on
the prior Business Day. Notwithstanding the foregoing, the
Company shall use its best efforts to provide Xxxxxxxx Xxxxxxxx
or the Fund with such orders by 7:30 a.m. on the Business Day
following the Business Day on which instructions are so received
by the Company. Orders reflecting instructions received by the
Company in good order after the time the net asset value of the
Series is calculated will not be deemed received until the next
succeeding Business Day. The Company acts as the agent of the
Fund and Xxxxxxxx Xxxxxxxx for the limited purpose of accepting
purchase and redemption instructions from Contract holders.
Xxxxxxxx Xxxxxxxx and the Fund may reject purchase and redemption
orders that are not in proper form as mutually agreed to by
Xxxxxxxx Xxxxxxxx and the Company from time to time.
4. Payment for Purchases and Redemptions. Purchase orders
shall be paid for in federal funds transmitted by wire no later
than the Business Day that the Fund receives notice of the order.
The Fund shall use its best efforts to send redemption proceeds
in federal funds transmitted by wire no later than the next
Business Day after the Fund received notice of the order, unless
doing so would cause the Fund to dispose of portfolio securities
or otherwise incur additional costs. In any event, the Fund will
wire proceeds of redemption orders to the Company within the
period required under the 1940 Act or the rules, orders or
regulations thereunder.
5. Limitation on Sales of Shares. The Fund agrees that
its Shares will be sold only to Participating Insurance Companies
and their separate accounts and/or to Qualified Plans, all in
accordance with Section 817(h) of the Internal Revenue Code and
applicable Treasury Regulations. No shares of any Series will be
sold directly to the general public. The Company agrees that
Shares will be used only for the purposes of funding the
Contracts and Accounts listed in Schedule A, as amended from time
to time.
6. Book Entry. Issuance and transfer of Shares will be by
book entry only. Share certificates will not be issued to the
Company or any Account. Shares ordered from the Fund will be
recorded in the appropriate title for each Account.
7. Notice of Dividends and Distributions. The Fund will
furnish prompt notice to the Company of any income, dividends or
capital gain distribution payable on Shares. The Company hereby
elects to receive all such income dividends and capital gain
distributions payable on Shares in additional Shares of the same
Series. The Fund shall notify the Company of the number of
Shares so issued as payment of such dividends and distributions.
8. Company Reports, The Company agrees to provide the
Fund or its designee on a daily basis with the amount of shares
of each Portfolio purchased and sold by each owner of the
Contracts (and information identifying each Contract owner's
PaineWebber Investment Executive) and such other information
concerning transactions in shares of the Fund by the Contract
owners as the Fund shall reasonably request.
9. Uniform Application of Pass-Through Voting and
Conflicts of Interest. The Fund agrees that all Participating
Insurance Companies shall have the same obligations and
responsibilities regarding pass-through voting and conflicts of
interest as the Company has under this Agreement.
10. Pass-Through Voting. With respect to Contracts and
Accounts that are subject to the 1940 Act, so long as and to the
extent that the SEC interprets the 1940 Act to require pass-
through voting privileges to Contract owners (including, for
purposes of this section, policy owners whose cash values are
invested in Shares through the Accounts), the Company will
provide pass-through voting privileges to Contract owners. The
Fund shall require all Participating Insurance Companies to
calculate voting privileges in the same manner and the Company
will be responsible for assuring that the Accounts calculate
voting privileges in the manner established by the Fund. With
respect to each Account, the Company will vote Shares held by the
Account and for which no timely voting instructions are received
from the Contract owners, as well as Shares held by the Account
that are owned by the Company for its general account, in the
same proportion as the Company votes Shares held by the Account
for which timely voting instructions are received from Contract
owners. The Company and its agents will in no way recommend or
oppose or interfere with the solicitation of proxies for Shares
held by Contract owners without the prior written consent of the
Fund, which may be withheld in the Fund's sole discretion.
11. Representations. (a) The Company represents and
warrants that it is an insurance company duly organized and in
good standing under the laws of its state of incorporation and
that it has legally and validly established each Contract and
Account.
(b) The Company represents and warrants that it has
registered or, prior to any issuance or sale of the Contracts,
will register each Account as a unit investment trust ("UIT") in
accordance with the provisions of the 1940 Act and cause each
Account to remain so registered to serve as a segregated asset
account for the Contracts unless an exemption from registration
is available.
(c) The Company represents and warrants that the Contracts
will be registered under the 1933 Act unless and exemption from
registration is available prior to any issuance or sale of the
Contracts and that the Contracts will be issued and sold in
compliance in all material respects with applicable federal and
state laws and further that the sale of the Contracts shall
comply in all material respects with state insurance law
suitability requirements.
(d) The Company represents and warrants that the Contracts
are currently and at the time of issuance will be treated as life
insurance, endowment or annuity contracts under applicable
provisions of the Internal Revenue Code, that it will maintain
such treatment and that it will notify the Fund 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.
(e) The Fund represents and warrants that the Shares
offered and sold pursuant to this Agreement will be registered
under the 1933 Act to the extent required by that Act and sold in
accordance with all applicable federal and state laws, and that
the Fund shall be registered under the 1940 Act to the extent
required by that Act, prior to and at the time of any issuance or
sale of such Shares. The Fund shall qualify its Shares for sale
in accordance with the laws of the various states only if and to
the extent deemed advisable by the Fund.
(f) The Fund represents and warrants that each Series will
comply with the diversification requirements set forth in Section
817(h) of the Internal Revenue Service and applicable regulations
thereunder and will notify the Company immediately upon having a
reasonable basis for believing any Series has ceased to comply or
might not so comply and will immediately take all reasonable
steps to adequately diversify the Series to achieve compliance.
(g) The Fund represents and warrants that each Series in
which the Accounts invest is currently qualified as a "regulated
investment company" under Subchapter M of the Internal Revenue
Code and will maintain such qualification. The Fund will notify
the Company immediately upon having a reasonable basis for
believing any Series has ceased to comply or might not so comply
in the future.
12. Indemnification. (a) The Fund agrees to
indemnify, defend and hold the Company, its officers, directors,
employees and agents and any person who controls the Company
within the meaning of Section 15 of the 1933 Act (referred to in
this Section 11(a) collectively as "Indemnified Parties"), free
and harmless from and against any and all claims, demands,
liabilities and expenses (including the cost of investigating or
defending such claims, demands or liabilities, amounts paid in
settlement with the consent of the Fund and any counsel fees
incurred in connection therewith) which the Indemnified Parties
may incur under the 1933 Act, or under common law or otherwise,
(i) arising out of or based upon any alleged untrue statement of
a material fact contained in the Fund Registration Statement or
arising out of or based upon any alleged omission to state a
material fact required to be stated in the Fund Registration
Statement or necessary to make the statements therein not
misleading, except insofar as such claims, demands, liabilities
or expenses arise out of or are based upon any such untrue
statement or omission or alleged untrue statement or omission
made in reliance upon and in conformity with information
furnished in writing by or on behalf of the Company to the Fund
for use in the Fund Registration Statement or otherwise for use
in connection with the sale of Contracts or Shares; (ii) arising
out of or based upon statements or representations (other than
statements or representations made in reliance upon and in
conformity with information furnished in writing by or on behalf
of the Company) or wrongful conduct of the Fund or persons under
its control concerning the sale or distribution of the Contracts
or Shares; (iii) arising out of or based upon any alleged
omission to state a material fact required to be stated in the
registration statement for the Contracts (including any amendment
or supplement to the prospectus or statement of additional
information) ("Contract Registration Statement") or necessary to
make the statements therein not misleading, if such claims,
demands, liabilities or expenses arise out of or are based upon
any such untrue statement or omission or alleged untrue statement
or omission made in reliance upon and in conformity with
information furnished in writing by or on behalf of the Fund to
the Company for use in the Contract Registration Statement; or
(iv) arise out of or result from any material breach of the
representations and/or warranties made by the Fund in this
Agreement or any other material breach of this Agreement by the
Fund. In no event shall anything contained herein be so
construed as to protect the Company against any liability to the
Fund or to the shareholders of any Series to which the Company
would otherwise be subject by reason of willful misfeasance, bad
faith or gross negligence in the performance of its duties or by
reason of its reckless disregard of its obligations under this
Agreement.
(b) The Fund shall not be liable to the Company under this
indemnity agreement with respect to any claim made against the
Company or any other Indemnified Party unless the Company or
other such person shall have notified the Fund in writing of the
claim within a reasonable time after the summons or other first
written notification giving information of the nature of the
claim shall have been served upon the Indemnified Party (or after
the Indemnified Party shall have received notice of service on
any designated agent). However, failure to notify the Fund of
any claim shall not relieve the Fund from any liability which it
may have to an Indemnified Party otherwise than on account of
this indemnity agreement. The Fund shall be entitled to
participate at its own expense in the defense or, if it so
elects, to assume the defense of any suit brought to enforce any
claims subject to this indemnity agreement. If the Fund elects
to assume the defense of any such claim, the defense shall be
conducted by counsel chosen by the Fund and satisfactory to the
Indemnified Parties in the suit whose approval shall not be
unreasonably withheld. In the event that the Fund elects to
assume the defense of any suit and retain counsel, the
Indemnified Parties shall bear the fees and expenses of any
additional counsel retained by them. If the Fund does not elect
to assume the defense of a suit, it will reimburse the
Indemnified Parties for the reasonable fees and expenses of any
counsel retained by them.
(c) The Company agrees to indemnify, defend, and hold the
Fund, its officers, trustees, employees and agents and any person
who controls the Fund within the meaning of Section 15 of the
1933 Act (in this Section 11(b), referred to collectively as
"Indemnified Parties") , free and harmless from and against any
and all claims, demands, liabilities and expenses (including the
cost of investigating or defending against such claims, demands
or liabilities, amounts paid in settlement with the consent of
the Company and any counsel fees incurred in connection
therewith) which the Indemnified Parties may incur under the 1933
Act or under common law or otherwise (i) arising out of or based
upon any alleged untrue statement of a material fact contained in
the Contract Registration Statement or in the Contracts
themselves or in any sales literature generated or approved by
the Company on behalf of the Contracts or Accounts or arising out
of or based upon any alleged omission to state a material fact in
connection with such information required to be stated in the
Contract Registration Statement, Contracts or such sales
literature necessary to make the statements therein not
misleading, except insofar as such claims, demands, liabilities
or expenses arise out of or are based upon any such untrue
statement or omission or alleged untrue statement or omission
made in reliance upon and in conformity with information
furnished in writing by or on behalf of the Fund to the Company
for use in the Contract Registration Statement, the Contracts or
such sales literature or otherwise for use in connection with the
sale of Contracts or Shares; (ii) arising out of or based upon
statements or representations (other than statements made in
reliance upon and in conformity with information furnished in
writing by or on behalf of the Fund) or wrongful conduct of the
Company or persons under its control concerning the sale or
distribution of the Contracts or Shares; (iii) arising out of or
based upon any alleged omission to state a material fact required
to be stated in the Fund Registration Statement or necessary to
make the statements therein not misleading, if such claims,
demands, liabilities or expenses arise out of or are based upon
any such untrue statement or omission or alleged untrue statement
or omission made in reliance upon and in conformity with
information furnished in writing by or on behalf of the Company
to the Fund for use in the Fund Registration Statement; or (iv)
arise out of or result from any material breach of the
representations and/or warranties made by the Company in this
Agreement or any other material breach of this Agreement by the
Company.
(d) The Company shall not be liable to the Fund under this
indemnity agreement with respect to any claim made against the
Fund or any other Indemnified Party unless the Fund or other such
person shall have notified the Company in writing of the claim
within a reasonable time after the summons or other first written
notification giving information of the nature of the claim shall
have been served upon the Indemnified Party (or after the
Indemnified Party shall have received notice of service on any
designated agent). However, failure to notify the Company of any
claim shall not relieve the Company from any liability which it
may have to an Indemnified Party otherwise than on account of
this indemnity agreement. The Company shall be entitled to
participate, at its own expense, in the defense or, if it so
elects, to assume the defense of any suit brought to enforce any
claims subject to this indemnity agreement. , If the Company
elects to assume the defense of any such claim, the defense shall
be conducted by counsel chosen by the Company and satisfactory to
the Indemnified Parties in the suit whose approval shall not be
unreasonably withheld. In the event that the Company elects to
assume the defense of a suit and retain counsel, the Indemnified
Parties shall bear the fees and expenses of any additional
counsel retained by them. If the Company does not elect to
assume the defense of any suit, it will reimburse the Indemnified
Parties for the reasonable fees and expenses of any counsel
retained by them.
(e) These indemnification provisions shall survive
termination of this Agreement.
13. Limitation of Liability of the Trustees and
Shareholders of the Fund. The trustees of the Fund and the
shareholders of its Series shall not be liable for any
obligations of the Fund or any Series under this Contract, and
the Company agrees that, in asserting any rights or claims under
this Contract, it shall look only to the assets and property of
the Fund or the particular Series in settlement of such right or
claims, and not to such trustees or shareholders.
14. Potential Conflicts. (a) The trustees of the Fund
will monitor the operations of the Fund for the existence of any
material irreconcilable conflict among the interests of all
Contract owners of all separate accounts investing in each Series
of the Fund. An irreconcilable conflict may arise, among other
things, from (a) an action by any sate insurance regulatory
authority; (b) a change in applicable insurance laws or
regulations; (c) a tax ruling or provision of the Internal
Revenue Code or the regulations thereunder; (d) any other
development relating to the tax treatment of insurers, contract
holders or policy owners or beneficiaries of variable annuity or
variable life insurance products; (e) the manner in which the
investments of any Series are managed; (f) a difference in voting
instructions given by variable annuity contract owners, on the
one hand, and variable life insurance policy owners on the other
hand, or by the contract holders or policy owners of different
Participating Insurance Companies; or ; (g) a decision by an
insurer to override the voting instructions of participating
contract owners.
(b) The Company is responsible for reporting any potential
or existing conflicts to the trustees of the Fund. The Company
will be responsible for assisting the trustees in carrying out
their responsibilities under this Section 14(b) and Section
14(a), by providing the trustees with all information reasonably
necessary for them to consider the issues raised. The Fund will
also request its investment adviser to report to the trustees any
such conflict which comes to the attention of the adviser.
(c) If a majority of the trustees of the Fund or a majority
of its disinterested trustees determine that a material
irreconcilable conflict exists involving the Company, the Company
shall, at its expense and to the extent reasonably practicable
(as determined by a majority of the disinterested trustees), take
whatever steps are necessary to eliminate the irreconcilable
material conflict, including withdrawing the assets allocable to
some or all of the separate accounts from the Fund or any Series
and reinvesting such assets in a different investment medium,
including another Series of the Fund, offering to the affected
Contract owners the option of making such a change or
establishing a new funding medium, including a registered
investment company.
For purposes of this Section 14(c), the trustees or the
disinterested trustees shall determine whether any proposed
action adequately remedies any irreconcilable material conflict.
In the event of a determination of the existence of an
irreconcilable material conflict, the trustees shall cause the
Fund to take such action, such as the establishment of one or
more additional Series, as they in their sole discretion
determine to be in the interest of all shareholders and Contract
owners in view of all applicable factors, such as the cost,
feasibility, tax, regulatory and other considerations. In no
event will the Fund be required by this Section 14(c) to
establish a new funding medium for any Contract.
The Company shall not be required by this Section 14(c) to
establish a new funding medium for any Contract if an offer to do
so has been declined by a vote of a majority of the Contract
owners materially adversely affected by the material
irreconcilable conflict. The Company will recommend to its
Contract owners that they decline an offer to establish a new
funding medium only if the Company believes it is in the best
interests of the Contract owners.
15. Duration and Termination. This Agreement shall become
effective as of the date hereof and shall continue in force until
terminated as set forth below:
(a) At the option of either party, upon 180 days' notice,
unless a shorter time is agreed to by the parties;
(b) At the option of either party, upon the institution of
formal proceedings against the other party by the SEC, the NASD
or any other regulatory body, the expected or anticipated outcome
of which would, in the judgment of the terminating party,
materially impair the other party's ability to meet and perform
its obligations under this Agreement. Prompt notice of an
election to terminate under this provision shall be furnished by
the terminating party and shall be effective upon receipt.
(c) In the event the Fund's Shares are not registered,
issued or sold in accordance with applicable federal or state law
or such law precludes the use of Shares as the underlying
investment medium of the Contracts, the Company may terminate
this Agreement effective upon giving notice to the Fund.
(d) In the event the Contracts cease to qualify as annuity
contracts or life insurance contracts, as applicable under the
Code or if the Fund reasonably believes that the Contracts may
fail to so qualify, the Fund may terminate this Agreement
effective upon giving notice to the Company.
(e) At the option of the Fund, upon the Company's breach of
any material provision of this Agreement, which breach has not
been cured to the satisfaction of the Fund within 10 days after
written notice of such breach is delivered to the Company.
(f) At the option of the Company, upon the Fund's breach of
any material provision of this Agreement, which breach has not
been cured to the satisfaction of the Company within 10 days
after written notice of such breach is delivered to the Fund.
(g) At the option of the Fund, if the Contracts are not
registered, issued or sold in accordance with applicable federal
and/or state law. Termination shall be effective immediately
without notice.
(h) If this Agreement is assigned without the prior written
consent of the other party, termination shall be effective
immediately without notice.
16. Amendment of this Agreement. No provision of this
Agreement may be changed, waived, discharged or terminated
orally, but only by an instrument in writing signed by the party
against which enforcement of the change, waiver, discharge or
termination is sought.
17. Governing Law. This Agreement shall be construed in
accordance with the laws of the State of Delaware and the 1940
Act, except that Section 13 shall be construed in accordance with
the laws of the Commonwealth of Massachusetts. To the extent
that the applicable laws of the State of Delaware or the
Commonwealth of Massachusetts conflict with the applicable provi
sions of the l940 Act, the latter shall control.
18. Notice. Any notice required or permitted to be given
by either party to the other shall be deemed sufficient upon
receipt in writing at the other party's principal offices.
19. Miscellaneous. The captions in this Agreement are
included for convenience of reference only and in no way define
or delimit any of the provisions hereof or otherwise affect their
construction or effect. 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. This Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their respective
successors. As used in this Agreement, the terms "assignment"
shall have the same meaning as such terms have in the l940 Act.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their officers designated as of the
day and year first above written.
ATTEST: XXXXXXXX XXXXXXXX SERIES TRUST
_____________________________ By: _____________________________
Name:
Title:
ATTEST: KEYPORT LIFE INSURANCE COMPANY
_____________________________ By: _____________________________
Name:
Title:
Schedule A
Accounts of Company Participating in Series of Xxxxxxxx
Xxxxxxxx Series Trust:
Name of Separate Account Date Established
Variable Account A January 30, 1996
Schedule B
Series of Xxxxxxxx Xxxxxxxx Series Trust offered to Accounts
of Company:
Balanced Portfolio
Global Growth Portfolio
Growth Portfolio
Growth and Income Portfolio
Strategic Income Portfolio
Tactical Allocation Portfolio
