EXHIBIT (h)(41)(a)
PARTICIPATION AGREEMENT
AMONG
PIONEER VARIABLE CONTRACTS TRUST,
THE UNITED STATES LIFE INSURANCE COMPANY IN THE CITY OF NEW YORK
PIONEER INVESTMENT MANAGEMENT, INC.
AND
PIONEER FUNDS DISTRIBUTOR, INC.
THIS AGREEMENT, made and entered into this 10th day of December, 2004, by
and among PIONEER VARIABLE CONTRACTS TRUST, a Delaware business trust (the
"Trust"), THE UNITED STATES LIFE INSURANCE COMPANY IN THE CITY OF NEW YORK, a
New York life insurance company (the "Company") on its own behalf and on behalf
of each of the segregated asset accounts of the Company set forth in Schedule A
hereto, as may be amended from time to time (the "Accounts"), PIONEER
INVESTMENT MANAGEMENT, INC., a Delaware corporation ("PIM") and PIONEER FUNDS
DISTRIBUTOR, INC. ("PFD"), a corporation organized under the laws of The
Commonwealth of Massachusetts. PIM and PFD are members of the UniCredito
Italiano banking group, register of banking groups.
WHEREAS, the Trust 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 or will be registered under the Securities Act of
1933, as amended (the "1933 Act");
WHEREAS, shares of beneficial interest of the Trust are divided into several
series and classes of shares, each series being designated a "Portfolio" and
representing an interest in a particular managed pool of securities and other
assets;
WHEREAS, the Trust is available to act as the investment vehicle for
separate accounts established for variable life insurance policies and/or
variable annuity contracts to be offered by insurance companies, including the
Company, which have entered into participation agreements with the Trust (the
"Participating Insurance Companies");
WHEREAS, the Trust has obtained an order from the Securities and Exchange
Commission (the "SEC"), dated July 9, 1997 (File No. 812-10494) (the "Mixed and
Shared Funding Exemptive Order") granting Participating Insurance Companies and
variable annuity and variable life insurance 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 Trust to be sold to and held by variable annuity and
variable life insurance companies that may or may not be affiliated with one
another and qualified pension and retirement plans ("Qualified Plans");
WHEREAS, PIM is duly registered as an investment adviser under the
Investment Advisers Act of 1940, as amended, and any applicable state
securities law, and is the Trust's investment adviser;
WHEREAS, the Company will issue certain variable annuity and/or variable
life insurance contracts (individually, the "Contract" or, collectively, the
"Contracts") which, if required by applicable law, will be registered under the
1933 Act;
WHEREAS, the Accounts are duly organized, validly existing segregated asset
accounts, established by resolution of the Board of Directors of the Company,
to set aside and invest assets attributable to the aforesaid variable annuity
and/or variable life insurance contracts that are allocated to the Accounts
(the Contracts and the Accounts covered by this Agreement, and each
corresponding Portfolio covered by this Agreement in which the Accounts may
invest, is specified in Schedule A attached hereto as may be modified from time
to time);
WHEREAS, the Company has registered or will register the Accounts as unit
investment trusts under the 1940 Act (unless exempt therefrom);
WHEREAS, the Portfolios offered by the Trust to the Company and the Accounts
are set forth on Schedule A attached hereto;
WHEREAS, PFD is registered as a broker-dealer with the Securities and
Exchange Commission (the "SEC") under the Securities Exchange Act of 1934, as
amended (hereinafter the "1934 Act"), and is a member in good standing of the
National Association of Securities Dealers, Inc. (the "NASD") and is authorized
to sell shares of the Portfolios to unit investment trusts such as the Accounts;
WHEREAS, American General Equity Services Corporation ("Policy
Underwriter"), the underwriter for the variable annuity and the variable life
policies, is registered as a broker-dealer with the SEC under the 1934 Act and
is a member in good standing of the NASD; and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares in one or more of the
Portfolios specified in Schedule A attached hereto (the "Shares") on behalf of
the Accounts to fund the Contracts, and PFD intends to sell such Shares to the
Accounts at net asset value;
NOW, THEREFORE, in consideration of their mutual promises, the Trust, PIM,
PFD and the Company agree as follows:
ARTICLE I. SALE OF TRUST SHARES
1.1. PFD and the Company agree to provide pricing information, execute
orders and wire payments for purchases and redemptions of Fund shares as set
forth in this Article I until such time as they mutually agree to utilize
the National Securities Clearing Corporation ("NSCC").
1.2 PFD agrees to sell to the Company those Shares which the Accounts order
in accordance with the terms of this Agreement (based on orders placed by
Contract owners or participants on that Business Day, as defined below) and
which are available for purchase by such Accounts. Each such order will be
executed on a daily basis at the net asset value next computed after receipt
by the Trust or its designee of the order for the Shares. For purposes of
this Section 1.2, the Company shall be the designee of the Trust for receipt
of such orders from Contract owners or participants and receipt by such
designee shall constitute receipt by the Trust; provided that the Trust or
its designee receives written (or facsimile) notice of such orders by the
time the Trust ordinarily
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calculates its net asset value as described from time to time in the Trust's
prospectus (which as of the date of this Agreement is 4:00 p.m. New York
time on such Business Day. "Business Day" shall mean any day on which the
New York Stock Exchange, Inc. (the "NYSE") is open for trading and on which
the Trust calculates its net asset value pursuant to the rules of the SEC.
1.3. PFD agrees to make the Shares available for purchase at the applicable
net asset value per share by the Company and the Accounts on those days on
which the Trust calculates its net asset value in accordance with the rules
of the SEC, provided that the Company notifies the Trust of such purchase
order (via fax or email) by 9:30 a.m. New York time on the next Business
Day. Notwithstanding the foregoing, the Board of Trustees of the Trust (the
"Board") may refuse to sell any Shares to the Company and the Accounts, or
suspend or terminate the offering of the Shares to the Company and the
Accounts if such action is required by law or by regulatory authorities
having jurisdiction over PIM, PFD or the Trust or is, in the sole discretion
of the Board acting in good faith and in light of its fiduciary duties under
federal and any applicable state laws, in the best interest of the
Shareholders of such Portfolio.
1.4. The Trust and PFD will sell Trust shares only to Participating
Insurance Companies and Qualified Plans which have agreed to participate in
the Trust to fund their Separate Accounts and/or Qualified Plans all in
accordance with the requirement of Section 817(h) of the Internal Revenue
Code, as amended (the "Code") and the Treasury regulations thereunder. The
Company will not resell the Shares except to the Trust or its agents.
1.5. The Trust agrees, upon the Company's request, to redeem for cash, any
full or fractional Shares held by the Accounts (based on orders placed by
Contract owners on that Business Day). Each such redemption request shall be
executed on a daily basis at the net asset value next computed after receipt
by the Trust or its designee of the request for redemption. For purposes of
this Section 1.5, the Company shall be the designee of the Trust for receipt
of requests for redemption from Contract owners or participants and receipt
by such designee shall constitute receipt by the Trust; provided that the
Company notifies the Trust of the request for redemption (via fax or email)
by 9:30 a.m. New York time on the next Business Day.
1.6 The Trust shall provide written confirmation to the Company (via email
or fax) by 1 p.m. New York time of the ending share balances held by the
Account on each Business Day after the Trust receives a purchase order
and/or request for redemption.
1.7. Each purchase, redemption and exchange order placed by the Company
shall be placed separately for each Portfolio and shall not be netted with
respect to any Portfolio. However, with respect to payment of the purchase
price by the Company and of redemption proceeds by the Trust, the Company
and the Trust shall net purchase and redemption orders with respect to each
Portfolio and shall transmit one net payment for all of the Portfolios in
accordance with Section 1.7 hereof.
1.8. In the event of net purchases, the Company shall transmit federal funds
to pay for the Shares by 2:00 p.m. New York time on the next Business Day
after an order to purchase the Shares is made in accordance with the
provisions of Section 1.2. hereof. Federal funds shall be received by the
Trust no later than the end of the next Business Day after the Trust or its
agent receives the purchase order. If payment in federal funds for any
purchase order is not received by the end of such Business Day, the Company
shall promptly, upon the Trust's request, reimburse the Trust for any
charges, costs, fees, interest or other expenses incurred by the Trust in
connection with any advances to, or borrowings or overdrafts by, the Trust,
or any similar expenses (including the cost of and any loss incurred by the
Trust in unwinding any purchase of securities by the Trust)
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incurred by the Trust as a result of portfolio transactions effected by the
Trust based upon such purchase request. In the event of net redemption, the
Trust shall transmit federal funds by wire for redeemed Shares by 2:00 p.m.
New York time on the next Business Day after an order to redeem Shares is
made in accordance with the provisions of Section 1.2. hereof. Federal funds
shall be received by the Company no later than the end of the next Business
Day after the Trust (or its agent) receives the redemption request. If
payment in federal funds for any redemption is not received by the end of
such Business Day, the Trust shall promptly, upon the Company's request,
reimburse the Company for any charges, costs, fees, interest or other
expenses incurred by the Company in connection with any advances to, or
borrowings or overdrafts by, the Company, or any similar expenses. The Trust
reserves the right to postpone the date of payment or satisfaction upon
redemption consistent with Section 22(e) of the 1940 Act and any rules
pomulgated thereunder. Payments for net redemptions shall be in federal
funds transmitted by wire. On any Business Day when the Federal Reserve Wire
Transfer System is closed for business, but the New York Stock Exchange is
open for business, purchase orders and redemption requests will be settled
on the next Business Day on which the Federal Reserve Wire Transfer System
is open for business.
1.9. Issuance and transfer of the Shares will be by book entry only. Stock
certificates will not be issued to the Company or the Accounts. The Shares
ordered from the Trust will be recorded in an appropriate title for the
Accounts or the appropriate subaccounts of the Accounts.
1.10. The Trust shall furnish the Company with advance notice by wire or by
telephone, followed by written confirmation of the day such dividend(s) and
distributions are expected to be paid. The Trust shall also furnish notice
(by fax or by email) no later than 5:00 p.m. New York time on the
ex-dividend date to the Company of any dividends or capital gain
distributions payable on the Shares. The Company hereby elects to receive
all such dividends and distributions as are payable in cash or Shares on a
Portfolio's Shares in additional Shares of that Portfolio. The Company
reserves the right to revoke this election and to receive all such dividends
and capital gains distributions in cash. The Trust shall notify the Company
by the end of the next following Business Day of the number of Shares so
issued as payment of such dividends and distributions.
1.11. The Trust or its custodian shall make the net asset value per share
for each Portfolio available to the Company by email or fax on each Business
Day as soon as reasonably practical after the net asset value per share
("NAV") is calculated and shall use its best efforts to make such net asset
value per share available by 6:00 p.m. New York time. If the Trust is unable
to meet the 6:00 p.m. deadline, the Trust shall notify the Company and
provide the Company with its best estimate of when the NAV will be
available. In the event of an error in the computation of a Portfolio's
XXXxx any dividend or capital gain distribution (each, a "pricing error"),
PIM or the Trust shall notify the Company as soon as possible after the
discovery of the error. Such notification may be verbal, but shall be
confirmed promptly in writing in accordance with Article XII of this
Agreement. A pricing error shall be corrected in accordance with the Trust's
internal policies and procedures. If an adjustment is necessary to correct a
material error that occurred through no fault of the Company and such
adjustment has caused Contract owners to receive less than the number of
Shares or redemption proceeds to which they are entitled, the number of
Shares of the applicable Account will be adjusted and the amount of any
underpayments will be paid by the Trust or PIM to the Company for crediting
of such amounts to the Contract owners' accounts. Upon notification by PIM
of any overpayment due to a material error, the Company shall promptly remit
to the Trust or PIM, as appropriate, any overpayment that has not been paid
to Contract owner; however, PIM acknowledges that the Company does not
intend to seek additional payments from any Contract owner who, because of a
pricing error, may have underpaid for units of interest credited to his/her
account. The costs of correcting such adjustments or of any delay in the
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communication of the NAV that causes the Company financial hardship shall be
borne by the Trust or PIM unless the Company is at fault in which case such
costs shall be borne by the Company.
ARTICLE II. CERTAIN REPRESENTATIONS, WARRANTIES AND COVENANTS
2.1. The Company represents and warrants that the Contracts are or will be
registered under the 1933 Act or are exempt from or not subject to
registration thereunder, and that the Contracts will be issued, sold, and
distributed in compliance in all material respects with all applicable state
and federal laws, including without limitation the 1933 Act, the Securities
Exchange Act of 1934, as amended (the "1934 Act"), and the 1940 Act. The
Company further represents and warrants that it (i) is an insurance company
duly organized and in good standing under applicable law; (ii) has legally
and validly established each Account as a segregated asset account under
applicable law; (iii) has registered or, prior to any issuance or sale of
the Contracts, will register the Accounts as unit investment trusts in
accordance with the provisions of the 1940 Act (unless exempt therefrom) to
serve as segregated investment accounts for the Contracts, and (iv) will
maintain such registration for so long as any Contracts are outstanding. The
Company shall amend the registration statements under the 1933 Act for the
Contracts and the registration statements under the 1940 Act for the
Accounts from time to time as required in order to effect the continuous
offering of the Contracts or as may otherwise be required by applicable law.
The Company shall register and qualify the Contracts for sales in accordance
with the securities laws of the various states only if and to the extent
deemed necessary by the Company. At the time the Company is required to
deliver the Trust's prospectus or statement of additional information to a
purchaser of Shares in accordance with the requirements of federal or state
securities laws, the Company shall distribute to such Contract purchasers
the then current Trust prospectus, as supplemented.
2.2. 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 Code, that it will
maintain such treatment and that it will notify the Trust or PIM immediately
upon having a reasonable basis for believing that the Contracts have ceased
to be so treated or that they might not be so treated in the future.
2.3. The Company represents and warrants that Policy Underwriter, the
underwriter for the individual variable annuity contracts and the variable
life policies, is a member in good standing of the NASD and is a registered
broker-dealer with the SEC. The Company represents and warrants that the
Company and Policy Underwriter will sell and distribute such contracts and
policies in accordance in all material respects with all applicable state
and federal securities laws, including without limitation the 1933 Act, the
1934 Act, and the 1940 Act and state insurance law suitability requirements.
2.4. The Trust represents and warrants that the Shares sold pursuant to this
Agreement shall be registered under the 1933 Act, duly authorized for
issuance in compliance with the laws of Delaware and that the Trust is and
shall remain registered under the 1940 Act. The Trust 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 Trust shall register and qualify the Shares for sale in
accordance with the laws of the various states only if and to the extent
deemed necessary by the Trust.
2.5. The Trust represents that it is lawfully organized and validly existing
under the laws of the State of Delaware.
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2.6. PFD represents and warrants that it is a member in good standing of the
NASD and is registered as a broker-dealer with the SEC. PFD represents that
it will sell and distribute the Shares in accordance in all material
respects with all applicable state and federal securities laws, including
without limitation the 1933 Act, the 1934 Act, and the 0000 Xxx.
2.7. PIM represents and warrants that it is and shall remain duly registered
as an investment adviser under the Investment Advisers Act of 1940, as
amended.
2.8. No less frequently than annually, the Company shall submit to the Board
such reports, material or data as the Board may reasonably request so that
it may carry out fully the obligations imposed upon it by the conditions
contained in the Mixed and Shared Funding Exemptive Order pursuant to which
the SEC has granted exemptive relief to permit mixed and shared funding.
2.9. The Trust and PIM represent and warrant that all of their respective
officers, employees, investment advisers, and other individuals or entities
dealing with the money and/or securities of the Trust are, and shall
continue to be at all times, covered by one or more blanket fidelity bonds
or similar coverage for the benefit of the Trust in an amount not less than
the minimal coverage required by Rule 17g-1 under the 1940 Act or related
provisions as may be promulgated form time to time. The aforesaid bonds
shall include coverage for larceny and embezzlement and shall be issued by a
reputable bonding company. The Company represents and warrants that all of
its respective officers, employees, and other individuals or entities
employed or controlled by the Company dealing with the money and/or
securities of the Trust are, and shall continue to be at all times, covered
by a blanket fidelity bond or similar coverage in an deemed appropriate by
the Company. The aforesaid bond shall include coverage for larceny and
embezzlement and shall be issued by a reputable bonding company. The Company
agrees that any amounts received under such bond relating to a claim arising
under this Agreement will be held by the Company for the benefit of the
Trust. The Company agrees to make all reasonable efforts to maintain such
bond and agrees to notify the Trust and PIM in writing in the event such
coverage terminates.
2.10. The Company represents and warrants, for purposes other than
diversification under Section 817 of the Code, that the Contracts are
currently at the time of issuance and, assuming the Trust meets the
requirements of Article VI, will be treated as annuity contracts under
applicable provisions of the Code, and that it will make every effort to
maintain such treatment and that it will notify the Trust, PFD and PIM
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. In addition, the Company represents and warrants that each Account
is a "segregated asset account" and that interests in the Account are
offered exclusively through the purchase of or transfer into a "variable
contract" within the meaning of such terms under Section 817 of the Code and
the regulations thereunder. The Company will use every effort to continue to
meet such definitional requirements, and it will notify the Trust, PFD and
PIM immediately upon having a reasonable basis for believing that such
requirements have ceased to be met or that they might not be met in the
future. The Company represents and warrants that it will not purchase Trust
shares with assets derived from tax-qualified retirement plans except,
indirectly, through Contracts purchased in connection with such plans.
ARTICLE III. PROSPECTUS AND PROXY STATEMENTS; VOTING
3.1. At least annually, the Trust or its designee shall provide the Company,
free of charge, with as many copies of the current prospectus (describing
only the Portfolios listed in Schedule A hereto) for the Shares as the
Company may reasonably request for distribution to existing Contract
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owners whose Contracts are funded by such Shares. If requested by the
Company, and agreed to by the Trust or its designee from time to time, in
lieu of providing copies of the current prospectus, the Trust or its
designee shall provide a master of such prospectus suitable for duplication
and/or printing by the Company and the Company shall be reimbursed by the
Trust or its designee for such costs, as they relate to the printing of
these materials to existing Contract owners whose Contracts are funded by
the Shares. The Trust or its designee shall provide the Company, at the
Company's expense, with as many copies of the current prospectus for the
Shares as the Company may reasonably request for distribution to prospective
purchasers of Contracts. If requested by the Company in lieu thereof, the
Trust or its designee shall provide such documentation (including a "camera
ready" copy of the new prospectus as set in type or, at the request of the
Company, as a diskette in the form sent to the financial printer) and other
assistance as is reasonably necessary in order for the parties hereto once
each year (or more frequently if the prospectus for the Shares is
supplemented or amended) to have the prospectus for the Contracts and the
prospectus for the Shares printed together in one document; the expenses of
such printing to be apportioned between (a) the Company and (b) the Trust or
its designee in proportion to the number of pages of the Contract and
Shares' prospectuses, taking account of other relevant factors affecting the
expense of printing, such as covers, columns, graphs and charts; the Trust
or its designee to bear the cost of printing the Trust's prospectus portion
of such document for distribution to owners of existing Contracts funded by
the Shares and the Company to bear the expenses of printing the portion of
such document relating to the Accounts; provided, however, that the Company
shall bear all printing expenses of such combined documents where used for
distribution to prospective purchasers or to owners of existing Contracts
not funded by the Shares. In the event that the Company requests that the
Trust or its designee provides the Trust's prospectus in a "camera ready,"
diskette format or other mutually agreed upon format, the Trust shall be
responsible for providing the prospectus in the format in which it or PIM is
accustomed to formatting prospectuses and shall bear the expense of
providing the prospectus in such format (e.g., typesetting expenses), and
the Company shall bear the expense of adjusting or changing the format to
conform with any of its prospectuses, subject to PIM's approval which shall
not be unreasonably withheld. Notwithstanding the foregoing, the Trust shall
also provide the Company, at the Trust's expense, no less frequently than
annually, copies of the Portfolios prospectuses in PDF format for use on the
Company's and/or affiliated producer's websites.
3.2. The prospectus for the Shares shall state that the statement of
additional information for the Shares is available from the Trust or its
designee. The Trust or its designee, at its expense, shall print and provide
such statement of additional information to the Company (or a master of such
statement suitable for duplication by the Company) for distribution to any
owner of a Contract funded by the Shares. Upon request, the Company shall be
reimbursed by the Trust or its designee for the duplication, printing and
distribution costs for delivery of the materials to existing Contract Owners
whose Contracts are funded by the Shares. The Trust shall also provide such
statement of additional information to the Company in a mutually agreed upon
electronic format. The Trust or its designee, at the Company's expense,
shall print and provide such statement to the Company (or a master of such
statement suitable for duplication by the Company) for distribution to a
prospective purchaser who requests such statement or to an owner of a
Contract not funded by the Shares.
3.3. The Trust or its designee shall provide the Company free of charge, if
and to the extent applicable to the Shares, copies of the Trust's proxy
materials, reports to Shareholders and other communications to Shareholders
(or, upon request, a master of such materials suitable for duplication or
printing by the Company) in such quantity as the Company shall reasonably
require for distribution to Contract owners. The Company shall be reimbursed
by the Trust or its designee
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for printing and/or duplication costs as they relate to delivery of these
materials to Contract owners. The cost of distributing such documents shall
be borne by the Trust or its designee.
3.4 The Trust or PIM 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 Trust's registration statement, particularly any
change resulting in change to the registration statement or prospectus or
statement of additional information for any Account. The Trust and PIM will
cooperate with the Company so as to enable the Company to solicit proxies
from Contract owners or to make changes to its prospectus, statement of
additional information or registration statement, in an orderly manner. The
Trust and PIM will make reasonable efforts to attempt to have changes
affecting Contract prospectuses become effective simultaneously with the
annual updates for such prospectuses.
3.5. The Trust hereby notifies the Company that it may be appropriate to
include in the prospectus pursuant to which a Contract is offered disclosure
regarding the potential risks of mixed and shared funding.
3.6. If and to the extent required by law, the Company shall:
(a)solicit voting instructions from Contract owners;
(b)vote the Shares in accordance with instructions received from
Contract owners; and
(c)vote the Shares for which no instructions have been received in the
same proportion as the Shares of such Portfolio for which
instructions have been received from Contract owners;
so long as and to the extent that the SEC continues to interpret the 1940
Act to require pass through voting privileges for variable contract owners.
The Company will in no way recommend action in connection with or oppose or
interfere with the solicitation of proxies for the Shares held for such
Contract owners. The Company reserves the right to vote shares held in any
segregated asset account in its own right, to the extent permitted by law.
Participating Insurance Companies shall be responsible for assuring that
each of their separate accounts holding Shares calculates voting privileges
in the manner required by the Mixed and Shared Funding Exemptive Order. The
Trust and PIM will notify the Company of any changes of interpretations or
amendments to the Mixed and Shared Funding Exemptive Order.
ARTICLE IV. SALES MATERIAL AND INFORMATION
4.1. The Company shall furnish, or shall cause to be furnished, to PFD or
its designee, each piece of sales literature or other promotional material
in which the Trust, PIM, any other investment adviser to the Trust, or any
affiliate of PIM are named, at least five (5) Business Days prior to its
use. No such material shall be used if PFD or its designee reasonably
objects to such use within five (5) Business Days after receipt of such
material. PFD or its designee shall notify the Company within five
(5) Business Days of receipt of its approval or disapproval of such
materials.
4.2. The Company shall not make any representation on behalf of the Trust,
PIM, any other investment adviser to the Trust or any affiliate of PIM and
shall not give any information on behalf
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of the Trust, PIM, any other investment adviser to the Trust, or any
affiliate of PIM or concerning the Trust or any other such entity in
connection with the sale of the Contracts other than the information
contained in the registration statement, prospectus or statement of
additional information for the Shares, as such registration statement,
prospectus and statement of additional information may be amended or
supplemented from time to time, or in reports or proxy statements for the
Trust, or in sales literature or other promotional material approved by the
Trust, PIM, PFD or their respective designees, except with the permission of
the Trust, PIM or their respective designees. The Trust, PIM, PFD or their
respective designees each agrees to respond to any request for approval on a
prompt and timely basis. The Company shall adopt and implement procedures
reasonably designed to ensure that information concerning the Trust, PIM,
PFD or any of their affiliates which is intended for use only by brokers or
agents selling the Contracts (i.e., information that is not intended for
distribution to Contract owners or prospective Contract owners) is so used,
and neither the Trust, PIM, PFD nor any of their affiliates shall be liable
for any losses, damages or expenses relating to the improper use of such
broker only materials.
4.3. PFD 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 and/or the Accounts is named, at least five
(5) Business Days prior to its use. No such material shall be used if the
Company or its designee reasonably objects to such use within five
(5) Business Days after receipt of such material. The Company shall notify
PFD within five (5) Business Days of receipt of its approval or disapproval
of such materials.
4.4. The Trust, PIM and PFD shall not give any information or make any
representations on behalf of the Company or concerning the Company, the
Accounts, or the Contracts in connection with the sale of the Contracts
other than the information or representations contained in a registration
statement, prospectus, or statement of additional information for the
Contracts, as such registration statement, prospectus and statement of
additional information may be amended or supplemented from time to time, or
in reports for the Accounts, or in sales literature or other promotional
material approved by the Company or its designee, except with the permission
of the Company. The Company or its designee agrees to respond to any request
for approval on a prompt and timely basis. The parties hereto agree that
this Section 4.4. is neither intended to designate nor otherwise imply that
PIM is an underwriter or distributor of the Contracts.
4.5. The Company and the Trust shall provide, or shall cause to be provided,
to the other at least one complete copy of all registration statements,
prospectuses, statements of additional information, reports, proxy
statements, sales literature and other promotional materials, and all
amendments to any of the above, that relate to the Contracts, or to the
Trust or its Shares, prior to or contemporaneously with the filing of such
document with the SEC or other regulatory authorities.
4.6. For purpose of this Article IV and Article VIII, the phrase "sales
literature or other promotional material" includes but is not limited to
advertisements (such as material published, or designed for use in, a
newspaper, magazine, or other periodical, radio, television, telephone,
electronic messages or tape recording, videotape display, signs or
billboards, motion pictures, or other public media, including, for example,
on-line networks such as the Internet or other electronic media), and sales
literature (such as brochures, electronic messages, circulars, reprints or
excerpts or any other advertisement, sales literature, or published
articles), distributed or made generally available to customers or the
public, educational or training materials or communications distributed or
made generally available to some or all agents or employees, and shareholder
reports, proxy materials (including solicitations for voting instructions)
and any other material constituting
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sales literature or advertising under the NASDR Conduct Rules, the 1933 Act
or the 1940 Act. However, such phrase "sales literature or other promotional
material" shall not include any material that simply lists the names of
Portfolios of the Trust in a list of investment options.
4.7. At the request of any party to this Agreement, each other party will
make available to the other party's independent auditors and/or
representative of the appropriate regulatory agencies, all records, data,
access to operating procedures that may be reasonably requesting in
connection with compliance and regulatory requirements related to the
Agreement or any party's obligations under this Agreement.
4.8 Subject to the terms of Sections 4.1 and 4.2 of this Agreement, the
Trust (and its Portfolios), PIM and PFD hereby each consents in connection
with the marketing of the Contracts to the Company's use of their names or
other identifying marks, including PIONEER INVESTMENTS(R) and Pioneer's sail
logo, in connection with the marketing of the Contracts. The Trust, PIM or
PFD or their affiliates may withdraw this authorization as to any particular
use of any such name or identifying xxxx at any time: (i) upon a reasonable
determination that such use would have a material adverse effect on its
reputation or marketing efforts or its affiliates or (ii) if any of the
Portfolios of the Trust cease to be available through the Company. Except as
set forth in the previous sentence, the Company will not cause or permit,
without prior written permission, the use, description or reference to a
Pioneer party's name, or to the relationship contemplated in this Agreement,
in any advertisement, or promotional materials or activities, including
without limitation, any advertisement or promotional materials published,
distributed, or made available, or any activity conducted through, the
Internet or any other electronic medium.
ARTICLE V. FEES AND EXPENSES
5.1. Neither the Trust, PIM nor PFD shall pay any fee or other compensation
to the Company under this Agreement, other than pursuant to Schedule B
attached hereto, and the Company shall pay no fee or other compensation to
the Trust, PIM or PFD under this Agreement. Notwithstanding the foregoing,
the parties hereto will bear certain expenses under the provisions of this
Agreement and shall reimburse other parties for expenses initially paid by
one party but allocated to another party. In addition, nothing herein shall
prevent the parties hereto from otherwise agreeing to perform, and arranging
for appropriate compensation for, other services relating to the Trust
and/or to the Accounts pursuant to this Agreement.
5.2. The Trust or its designee shall bear the expenses for the cost of
registration and qualification of the Shares under all applicable federal
and state laws, including preparation and filing of the Trust's registration
statement, and payment of filing fees and registration fees; preparation and
filing of the Trust's proxy materials and reports to Shareholders; setting
in type and printing its prospectus and statement of additional information
(to the extent provided by and as determined in accordance with Article III
above); setting in type and printing the proxy materials and reports to
Shareholders (to the extent provided by and as determined in accordance with
Article III above); the preparation of all statements and notices required
of the Trust by any federal or state law with respect to its Shares; all
taxes on the issuance or transfer of the Shares; and the costs of
distributing the Trust's prospectuses (as supplemented or amended), reports
to Shareholders and proxy materials to owners of Contracts and participants
funded by the Shares and any expenses permitted to be paid or assumed by the
Trust pursuant to a plan, if any, under Rule 12b-1 under the 1940 Act. The
Trust shall not bear any expenses of marketing the Contracts.
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5.3. The Company shall bear the expenses of distributing the Shares'
prospectus or prospectuses in connection with new sales of the Contracts and
of distributing the Trust's Shareholder reports. The Company shall bear all
expenses associated with the registration, qualification, and filing of the
Contracts under applicable federal securities and state insurance laws; the
cost of preparing, printing and distributing the Contract prospectus and
statement of additional information; and the cost of preparing, printing and
distributing annual individual account statements for Contract owners as
required by state insurance laws.
5.4. The Company agrees to provide certain administrative services,
specified in Schedule B attached hereto, in connection with the arrangements
contemplated by this Agreement. The parties intend that the services
referred to in the Section 5.4 be recordkeeping, shareholder communication,
and other transaction facilitation and processing, and related
administrative serves and are not the services of an underwriter or
principal underwriter of the Trust and the Company is not an underwriter for
Shares within the meaning of the 1933 Act.
ARTICLE VI. DIVERSIFICATION AND RELATED LIMITATIONS
6.1. The Trust and PIM represent and warrant that each Portfolio of the
Trust in which an Account invests will meet the diversification requirements
of Section 817(h)(1) of the Code and Treas. Reg. 1.817-5, relating to the
diversification requirements for variable annuity, endowment, or life
insurance contracts, as they may be amended from time to time (and any
revenue rulings, revenue procedures, notices, and other published
announcements of the Internal Revenue Service interpreting these sections),
as if those requirements applied directly to each such Portfolio.
6.2. The Trust and PIM represent that each Portfolio will elect to be
qualified as a Regulated Investment Company under Subchapter M of the Code
and that they will maintain such qualification (under Subchapter M or any
successor or similar provision).
6.3. No Shares of the Trust will be sold directly to the general public.
ARTICLE VII. POTENTIAL MATERIAL CONFLICTS
7.1. The Trust agrees that the Board, constituted with a majority of
disinterested trustees, will monitor each Portfolio of the Trust for the
existence of any material irreconcilable conflict between the interests of
the variable annuity contract owners and the variable life insurance policy
owners of the Company and/or affiliated companies ("contract owners")
investing in the Trust. A material irreconcilable conflict may arise for a
variety of reasons, including: (a) an action by any state insurance
regulatory authority; (b) a change in applicable federal or state insurance,
tax, or securities laws or regulations, or a public ruling, private letter
ruling, no-action or interpretive letter, or any similar action by
insurance, tax or securities regulatory authorities; (c) an administrative
or judicial decision in nay relevant proceeding; (d) the manner in which the
investments of any Portfolio are being managed; (e) a difference in voting
instructions given by variable annuity contract and variable life insurance
contract owners or by contract owners of different Participating Insurance
Companies; or (f) a decision by a Participating Insurance Company to
disregard the voting instructions of contract owners. The Board shall have
the sole authority to determine if a material irreconcilable conflict
exists, and such determination shall be binding on the Company only if
approved in the form of a resolution by a majority of the Board, or a
majority of the disinterested trustees of the Board. The Board will give
prompt notice of any such determination to the Company.
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7.2. The Company agrees that it will be responsible for assisting the Board
in carrying out its responsibilities under the conditions set forth in the
Trust's exemptive application pursuant to which the SEC has granted the
Mixed and Shared Funding Exemptive Order by providing the Board, as it may
reasonably request, with all information necessary for the Board to consider
any issues raised and agrees that it will be responsible for promptly
reporting any potential or existing conflicts of which it is aware to the
Board including, but not limited to, an obligation by the Company to inform
the Board whenever contract owner voting instructions are disregarded. The
Company also agrees that, if a material irreconcilable conflict arises, it
will at its own cost remedy such conflict up to and including
(a) withdrawing the assets allocable to some or all of the Accounts from the
Trust or any Portfolio and reinvesting such assets in a different investment
medium, including (but not limited to) another Portfolio of the Trust, or
submitting to a vote of all affected contract owners whether to withdraw
assets from the Trust or any Portfolio and reinvesting such assets in a
different investment medium and, as appropriate, segregating the assets
attributable to any appropriate group of contract owners (e.g., annuity
contract owners, life insurance owners or variable contract owners of one or
more Participating Insurance Companies) that votes in favor of such
segregation, or offering to any of the affected contract owners the option
of segregating the assets attributable to their contracts or policies, and
(b) establishing a new registered management investment company and
segregating the assets underlying the Contracts, unless a majority of
Contract owners materially adversely affected by the conflict have voted to
decline the offer to establish a new registered management investment
company.
7.3. A majority of the disinterested trustees of the Board shall determine
whether any proposed action by the Company adequately remedies any material
irreconcilable conflict. In the event that the Board determines that any
proposed action does not adequately remedy any material irreconcilable
conflict, the Company will withdraw from investment in the Trust each of the
Accounts designated by the disinterested trustees and terminate this
Agreement within six (6) months after the Board informs the Company in
writing of the foregoing determination; provided, however, that such
withdrawal and termination shall be limited to the extent required to remedy
any such material irreconcilable conflict as determined by a majority of the
disinterested trustees of the Board.
7.4 If a material irreconcilable conflict arises because of a decision by
the Company to disregard Contract owner voting instructions and that
decision represents a minority position or would preclude a majority vote,
the Company may be required, at the Trust's election, to withdraw the
Account's investment in the Trust and terminate this Agreement; provided,
however, that such withdrawal and termination shall be limited to the extent
required by the foregoing material irreconcilable conflict as determined by
a majority of the Trust's independent trustees. Any such withdrawal and
termination must take place within six (6) months after the Trust gives
written notice that this provision is being implemented, and until the end
of that six-month period PFD and the Trust shall continue to accept and
implement orders by the Company for the purchase and redemption of shares of
the Trust.
7.5. If material irreconcilable conflict arises because of particular state
insurance regulator's decision applicable to the Company conflicts with the
majority of other state regulators, then the Company will withdraw the
Account's investment in the Trust and terminate this Agreement within six
(6) months after the Trust's Board informs the Company in writing that it
has determined that such decision has created a material irreconcilable
conflict; provided, however,
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that such withdrawal and termination shall be limited to the extent required
by the foregoing material irreconcilable conflict as determined by a
majority of the disinterested members of the Trust's Board. Until the end of
the foregoing six (6) month period, the Trust and PFD shall continue to
accept and implement orders by the Company for the purchase and redemption
of shares of the Trust.
7.6 For purposes of Sections 7.3 through 7.6 of this Agreement, a majority
of the disinterested members of the Board shall determine whether any
proposed action adequately remedies any material irreconcilable conflict,
but in no event will the Trust be required to establish a new funding medium
for the Contracts. The Company shall not be required by Section 7.2 to
establish a new funding medium for the contracts if an offer to do so has
been declined by vote of a majority of Contract owners affected by the
material irreconcilable conflict. In the event that the Board determines
that any proposed action does not adequately remedy any material
irreconcilable conflict, then the Company will withdraw the Account's
investment in the Trust and terminate this Agreement within six (6) months
after the Board informs the Company in writing of the foregoing
determination; provided, however, that such withdrawal and termination shall
be limited to the extent required by any such material irreconcilable
conflict as determined by a majority of the independent trustees.
7.7. If and to the extent that Rule 6e-2 and Rule 6e-3(T) are amended, or
Rule 6e-3 is adopted, to provide exemptive relief from any provision of the
1940 Act or the rules promulgated thereunder with respect to mixed or shared
funding (as defined in the Mixed and Shared Funding Exemptive Order) on
terms and conditions materially different from those contained in the Mixed
and Shared Funding Exemptive Order, then (a) the Trust and/or the
Participating Insurance Companies, as appropriate, shall take such steps as
may be necessary to comply with Rule 6e-2 and 6e-3(T), as amended, and Rule
6e-3, as adopted, to the extent such rules are applicable; and (b) Sections
3.5, 3.6, 7.1, 7.2, 7.3 and 7.7 of this Agreement shall continue in effect
only to the extent that terms and conditions substantially identical to such
Sections are contained in such Rule(s) as so amended or adopted.
ARTICLE VIII. INDEMNIFICATION
8.1.Indemnification by the Company
The Company agrees to indemnify and hold harmless the Trust, PIM, PFD,
any affiliates of PIM, and each of their respective directors, trustees,
officers and each person, if any, who controls the Trust or PIM within the
meaning of Section 15 of the 1933 Act, and any agents or employees of the
foregoing (each an "Indemnified Party," or collectively, the "Indemnified
Parties" for purposes of this Section 8.1) against any and all losses,
claims, damages, liabilities (including amounts paid in settlement with the
written consent of the Company) or expenses (including reasonable counsel
fees) to which any Indemnified Party 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:
(a)arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the registration
statement, prospectus or statement of additional information for the
Contracts or contained in the Contracts or sales literature or other
promotional material for the Contracts (or any amendment or
supplement to any of the foregoing), or arise out of or are based
upon the omission
13
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 reasonable reliance upon
and in conformity with information furnished to the Company or its
designee by or on behalf of the Trust, PIM or PFD for use in the
registration statement, prospectus or statement of additional
information for the Contracts or in the Contracts or sales literature
or other promotional material (or any amendment or supplement) or
otherwise for use in connection with the sale of the Contracts or
Shares; or
(b)arise out of or as a result of statements or representations not
supplied by the Company or its designee, or persons under its control
(other than statements or representations contained in the Trust's
registration statement, prospectus, statement of additional
information or in sales literature or other promotional material of
the Trust and on which the Company has reasonably relied) or wrongful
conduct of the Company or persons under its control, with respect to
the sale or distribution of the Contracts or Shares; or
(c)arise out of any untrue statement or alleged untrue statement of a
material fact contained in the registration statement, prospectus,
statement of additional information, or sales literature or other
promotional literature of the Trust, or any amendment thereof 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 Trust by or on behalf of the Company; or
(d)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 other material breach of this Agreement by the
Company; or
(e)arise as a result of any failure by the Company to perform any of its
obligations under this Agreement;
as limited by and in accordance with the provisions of this Article VIII.
8.2.Indemnification by PIM and PFD
PIM and PFD agree to indemnify and hold harmless the Company and Policy
Underwriter and each of their trustees and officers and each person, if any,
who controls the Company or Policy Underwriter within the meaning of
Section 15 of the 1933 Act, and any agents or employees of the foregoing
(each an "Indemnified Party," or collectively, the "Indemnified Parties" for
purposes of this Section 8.2) against any and all losses, claims, damages,
liabilities (including amounts paid in settlement with the written consent
of the Trust) or expenses (including reasonable counsel fees) to which any
Indemnified Party 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 Shares or the Contracts and:
14
(a)arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the registration
statement, prospectus, statement of additional information or sales
literature or other promotional material of the Trust (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 statement 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 reasonable reliance upon and in conformity with information
furnished to the Trust, PIM, PFD or their respective designees by or
on behalf of the Company for use in the registration statement,
prospectus or statement of additional information for the Trust or in
sales literature or other promotional material for the Trust (or any
amendment or supplement) or otherwise for use in connection with the
sale of the Contracts or Shares; or
(b)arise out of or as a result of statements or representations (other
than statements or representations contained in the Contract's
registration statement, prospectus, statement of additional
information or in sales literature or other promotional material for
the Contracts not supplied by the Trust, PIM, PFD or any of their
respective designees or persons under their respective control and on
which any such entity has reasonably relied) or wrongful conduct of
the Trust, PIM, PFD or persons under their control, with respect to
the sale or distribution of the Contracts or Shares; or
(c)arise out of any untrue statement or alleged untrue statement of a
material fact contained in the registration statement, prospectus,
statement of additional information, or sales literature or other
promotional literature of the Accounts or relating to the Contracts,
or any amendment thereof 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 Trust, PIM or PFD; or
(d)arise out of or result from any material breach of any representation
and/or warranty made by the Trust in this Agreement (including a
failure, whether unintentional or in good faith or otherwise, to
comply with the diversification requirements specified in Article VI
of this Agreement) or arise out of or result from any other material
breach of this Agreement by the Trust; or
(e)arise out of or result from the materially incorrect or untimely
calculation or reporting of the daily net asset value per share or
dividend or capital gain distribution rate; or
(f)arise as a result of any failure by PIM or PFD to perform any of
their respective obligations under this Agreement;
as limited by and in accordance with the provisions of this Article VIII.
8.3. In no event shall the Trust, PIM or PFD be liable under the
indemnification provisions contained in this Agreement to any individual or
entity, including without limitation, the Company,
15
or any Participating Insurance Company or any Contract owner, with respect
to any losses, claims, damages, liabilities or expenses that arise out of or
result from (i) a breach of any representation, warranty, and/or covenant
made by the Company hereunder or by any Participating Insurance Company
under an agreement containing substantially similar representations,
warranties and covenants; (ii) the failure by the Company or any
Participating Insurance Company to maintain its segregated asset account
(which invests in any Portfolio) as a legally and validly established
segregated asset account under applicable state law and as a duly registered
unit investment trust under the provisions of the 1940 Act (unless exempt
therefrom); or (iii) the failure by the Company or any Participating
Insurance Company to maintain its variable annuity and/or variable life
insurance contracts (with respect to which any Portfolio serves as an
underlying funding vehicle) as life insurance, endowment or annuity
contracts under applicable provisions of the Code.
8.4. Neither the Company, the Trust, PIM nor PFD shall be liable under the
indemnification provisions contained in this Agreement with respect to any
losses, claims, damages, liabilities or expenses to which an Indemnified
Party would otherwise be subject by reason of such Indemnified Party's
willful misfeasance, willful misconduct, 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.
8.5. Promptly after receipt by an Indemnified Party under this Section 8.5.
of notice of commencement of any action, such Indemnified Party will, if a
claim in respect thereof is to be made against the indemnifying party under
this section, 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. In case any such action is brought against any
Indemnified Party, and it notified the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate
therein and, to the extent that it may wish, assume the defense thereof,
with counsel satisfactory to such Indemnified Party. After notice from the
indemnifying party of its intention to assume the defense of an action, the
Indemnified Party shall bear the expenses of any additional counsel obtained
by it, and the indemnifying party shall not be liable to such Indemnified
Party under this section for any legal or other expenses subsequently
incurred by such Indemnified Party in connection with the defense thereof
other than reasonable costs of investigation.
8.6. A successor by law of the parties to this Agreement shall be entitled
to the benefits of the indemnification contained in this Article VIII. The
indemnification provisions contained in this Article VIII shall survive any
termination of this Agreement.
ARTICLE IX. APPLICABLE LAW
9.1. This Agreement shall be construed and the provisions hereof interpreted
under and in accordance with the laws of The Commonwealth of Massachusetts.
9.2. 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 (including, but not limited to, the Mixed and Shared Funding Exemptive
Order) and the terms hereof shall be interpreted and construed in accordance
therewith.
16
ARTICLE X. NOTICE OF FORMAL PROCEEDINGS OR LITIGATION
The Trust, PIM, PFD and the Company agree that each such party shall
promptly notify the other parties to this Agreement, in writing, of the
institution of any formal proceedings brought against such party or its
designees by the NASD, the SEC, or any insurance department or any other
regulatory body regarding such party's duties under this Agreement or
related to the sale of the Contracts, the operation of the Accounts, or the
purchase of the Shares. Each of the parties further agrees promptly to
notify the other parties of the commencement of any litigation or proceeding
against it or any of its respective officers, directors, trustees, employees
or 1933 Act control persons in connection with this Agreement, the issuance
or sale of the Contracts, the operation of the Accounts, or the sale or
acquisition of Shares. The indemnification provisions contained in this
Article X shall survive any termination of this Agreement.
ARTICLE XI. TERMINATION
11.1. This Agreement shall terminate with respect to the Accounts, or one,
some, or all Portfolios:
(a)at the option of any party upon six (6) months' advance written
notice delivered to the other parties; provided, however, that such
notice shall not be given earlier than six (6) months following the
date of this Agreement; or
(b)at the option of the Company to the extent that the Shares of
Portfolios are not reasonably available to meet the requirements of
the Contracts or are not "appropriate funding vehicles" for the
Contracts, as reasonably determined by the Company. Without limiting
the generality of the foregoing, the Shares of a Portfolio would not
be "appropriate funding vehicles" if, for example, such Shares did
not meet the diversification or other requirements referred to in
Article VI hereof; or if the Company would be permitted to disregard
Contract owner voting instructions pursuant to Rule 6e-2 or 6e-3(T)
under the 1940 Act. Prompt notice of the election to terminate for
such cause and an explanation of such cause shall be furnished to the
Trust by the Company; or
(c)at the option of the Trust, PIM or PFD upon institution of formal
proceedings against the Company by the NASD, the SEC, or any
insurance department or any other regulatory body regarding the
Company's duties under this Agreement or related to the sale of the
Contracts, the operation of the Accounts, or the purchase of the
Shares; provided that the party terminating this Agreement under this
provision shall give notice of such termination to the other parties
to this Agreement; or
(d)at the option of the Company upon institution of formal proceedings
against the Trust by the NASD, the SEC, or any state securities or
insurance department or any other regulatory body regarding the
duties of the Trust, PIM or PFD under this Agreement or related to
the sale of the Shares; provided that the party terminating this
Agreement under this provision shall give notice of such termination
to the other parties to this Agreement; or
17
(e)at the option of the Company, the Trust, PIM or PFD upon receipt of
any necessary regulatory approvals and/or the vote of the Contract
owners having an interest in the Accounts (or any subaccounts) to
substitute the shares of another investment company for the
corresponding Portfolio Shares in accordance with the terms of the
Contracts for which those Portfolio Shares had been selected to serve
as the underlying investment media. The Company will give thirty
(30) days' prior written notice to the Trust of the Date of any
proposed vote or other action taken to replace the Shares; or
(f)at the option of the Trust, PIM or PFD by written notice to the
Company, if any one or all of the Trust, PIM or PFD respectively,
shall determine, in their sole judgment exercised in good faith, that
the Company has suffered a material adverse change in its business,
operations, financial condition, or prospects since the date of this
Agreement or is the subject of material adverse publicity; or
(g)at the option of the Company by written notice to the Trust, PIM or
PFD, if the Company shall determine, in its sole judgment exercised
in good faith, that the Trust, PIM or PFD has suffered a material
adverse change in this business, operations, financial condition or
prospects since the date of this Agreement or is the subject of
material adverse publicity; or
(h)at the option of any party to this Agreement, upon another
unaffiliated party's material breach of any provision of or
representation contained in this Agreement.
11.2. The notice shall specify the Portfolio or Portfolios, Contracts and,
if applicable, the Accounts as to which the Agreement is to be terminated.
11.3. It is understood and agreed that the right of any party hereto to
terminate this Agreement pursuant to Section 11.1(a) may be exercised for
cause or for no cause.
11.4. Except as necessary to implement Contract owner initiated
transactions, or as required by state insurance laws or regulations, the
Company shall not redeem the Shares attributable to the Contracts (as
opposed to the Shares attributable to the Company's assets held in the
Accounts), and the Company shall not prevent Contract owners from allocating
payments to a Portfolio that was otherwise available under the Contracts,
until thirty (30) days after the Company shall have notified the Trust of
its intention to do so.
11.5. Notwithstanding any termination of this Agreement, the Trust and PFD
shall, at the option of the Company, continue for a period not exceeding six
(6) months to make available additional shares of the Portfolios pursuant to
the terms and conditions of this Agreement, for all Contracts in effect on
the effective date of termination of this Agreement (the "Existing
Contracts"), except as otherwise provided under Article VII of this
Agreement; provided, however, that in the event of a termination pursuant to
Section 11.1. (c), (f) or (h), the Trust, PIM and PFD shall at their option
have the right to terminate immediately all sales of Shares to the Company.
Specifically, without limitation, the owners of the Existing Contracts shall
be permitted to transfer or reallocate investment under the Contracts,
redeem investments in any Portfolio and/or invest in the Trust upon the
making of additional purchase payments under the Existing Contracts.
18
11.6 Notwithstanding any termination of this Agreement, each party's
obligations under Article VIII to indemnify the other parties shall survive
and not be affected by any termination of this Agreement. In addition, with
respect to Existing Contracts, all provisions of this Agreement shall also
survive and not be affected by any termination of this Agreement
ARTICLE XII. 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 Trust:
Pioneer Variable Contracts Trust
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxxxx Xxxxxxxx, Secretary
If to the Company:
The United States Life Insurance Company in the City of New York
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: General Counsel
With a copy to:
American General Life Insurance Company
0000-X Xxxxx Xxxxxxx
Xxxxxxx, Xxxxx 00000
Attn: General Counsel
If to PIM:
Pioneer Investment Management, Inc.
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxxx, General Counsel
If to PFD:
Pioneer Funds Distributor, Inc.
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxx, Senior Vice President
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ARTICLE XIII. MISCELLANEOUS
13.1.Subject to the requirements of legal process and regulatory authority,
each party hereto shall treat as confidential all information reasonably
identified as confidential in writing by any party hereto and, except as
permitted by this Agreement or as otherwise required by applicable law
or regulation, shall not disclose, disseminate or utilize such other
confidential information without the express written consent of the
affected party until such time as it may come into the public domain.
Notwithstanding anything to the contrary in this Agreement, in addition
to and not in lieu of other provisions in this Agreement:
(a)"Confidential Information" includes without limitation all
information regarding the customers of the Company, the Trust, PIM,
PFD or any of their subsidiaries, affiliates or licensees; or the
accounts, account numbers, names, addresses, social security numbers
or any other personal identifier of such customers; or any
information derived therefrom.
(b)Neither the Company, the Trust, PIM or PFD may disclose Confidential
Information for any purpose other than to carry out the purpose for
which Confidential Information was provided to the Company, the
Trust, PIM or PFD as set forth in this Agreement; and the Company,
the Trust, PIM and PFD agree to cause their employees, agents and
representatives, or any other party to whom the Company, the Trust,
PIM or PFD may provide access to or disclose Confidential Information
to limit the use and disclosure of Confidential Information to that
purpose.
(c)The Company, the Trust, PIM and PFD agree to implement appropriate
measures designed to ensure the security and confidentiality of
Confidential Information, to protect such information against any
anticipated threats or hazards to the security and integrity of such
information, and to protect against unauthorized access to, or use
of, Confidential Information that could result in substantial harm or
inconvenience to any of the customers of the Company or any of its
subsidiaries, affiliates or licensees; the Company, the Trust, PIM
and PFD further agree to cause all their respective agents,
representatives or subcontractors, or any other party to whom they
provide access to or disclose Confidential Information, to implement
appropriate measures to meet the objectives set forth in this
Section 13.1.
13.2. The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions
hereof or otherwise affect their construction or effect.
13.3. This Agreement may be executed simultaneously in one or more
counterparts, each of which taken together shall constitute one and the same
instrument.
13.4. If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the Agreement
shall not be affected thereby.
13.5. The Schedule attached hereto, as modified from time to time, is
incorporated herein by reference and is part of this Agreement.
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13.6. Each party hereto shall cooperate with each other party in connection
with inquiries by appropriate governmental authorities (including without
limitation the SEC, the NASD, 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.
13.7. 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.
13.8. A copy of the Trust's Certificate of Trust is on file with the
Secretary of State of Delaware. The Company acknowledges that the
obligations of or arising out of this instrument are not binding upon any of
the Trust's trustees, officers, employees, agents or shareholders
individually, but are binding solely upon the assets and property of the
Trust in accordance with its proportionate interest hereunder. The Company
further acknowledges that the assets and liabilities of each Portfolio are
separate and distinct and that the obligations of or arising out of this
instrument are binding solely upon the assets or property of the Portfolio
on whose behalf the Trust has executed this instrument. The Company also
agrees that the obligations of each Portfolio hereunder shall be several and
not joint, in accordance with its proportionate interest hereunder, and the
Company agrees not to proceed against any Portfolio for the obligations of
another Portfolio.
13.9. Any controversy or claim arising out of or relating to this Agreement,
or breach thereof, shall be settled by arbitration in a forum jointly
selected by the relevant parties (but if applicable law requires some other
forum, then, such other forum) in accordance with the Commercial Arbitration
Rules of the American Arbitration Association, and judgment upon the award
rendered by the arbitrators may be entered in any court having jurisdiction
thereof.
13.10. Neither this Agreement nor any of the rights and obligations
hereunder may be assigned by any party without the prior written consent of
all parties hereto.
13.11. The Trust, PIM and PFD agree that the obligations assumed by the
Company shall be limited in any case to the Company and its assets and
neither the Trust, PIM nor PFD shall seek satisfaction of any such
obligation from the shareholders of Company, the directors, officers,
employees or agents of the Company, or any of them.
13.12. No provision of the Agreement may be deemed or construed to modify or
supersede any contractual rights, duties, or indemnifications, as between
PIM and the Trust and PFD and the Trust.
13.13. This Agreement, including any Schedules or Exhibits hereto, may be
amended only by a written instrument executed by each party hereto.
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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
and its seal to be hereunder affixed hereto as of the date specified above.
THE UNITED STATES LIFE
INSURANCE COMPANY IN THE CITY OF NEW
YORK
By its authorized officer,
By:
-----------------------------
Name:
Title:
Date:
ATTEST:
By:
-----------------------------
Name:
Title:
Date:
PIONEER VARIABLE CONTRACTS TRUST,on
behalf of the Portfolios
By its authorized officer and not
individually,
By:
-----------------------------
Date:
PIONEER INVESTMENT MANAGEMENT,INC.
By its authorized officer,
By:
-----------------------------
Date:
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SCHEDULE A
ACCOUNTS, CONTRACTS AND PORTFOLIOS
SUBJECT TO THE PARTICIPATION AGREEMENT
As of December 10, 2004
Name of Separate
Account and Date Portfolios and
Established by Board of Contracts Funded Class of Shares
Directors By Separate Account Available to Contracts
----------------------- ------------------------ ------------------------
The United States Life Platinum Investor Pioneer Fund VCT
Insurance Company in the Variable Life Insurance Portfolio (Class I)
City of New York Policies Pioneer Growth
Separate Account USL Opportunities VCT
VL-R, established Portfolio (Class I)
August 8, 1997
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Schedule B
1. Administrative Services
Administrative services to Contract owners and participants shall be the
responsibility of the Company and shall not be the responsibility of the Trust
or PFD. The Company will provide properly registered and licensed personnel and
any systems needed for all Contract owners servicing and support - for both
fund and annuity and life insurance information and questions, including:
. Communicate all purchase, withdrawal, and exchange orders it receives
from its customers to PFD;
. Respond to Contract owner and participant inquires;
. Delivery of both Trust and Contract prospectuses as required under
applicable law;
. Entry of initial and subsequent orders;
. Transfer of cash to Portfolios;
. Explanations of Portfolio objectives and characteristics;
. Entry of transfers between Portfolios;
. Portfolio balance and allocation inquires; and
. Mail Trust proxies.
2. Administrative Service Fees
For the administrative services set forth above, PIM or any of its affiliates
shall pay a servicing fee based on the annual rate of __% of the average
aggregate net daily assets invested in the Class I Shares of the Portfolios
through the Accounts at the end of each calendar quarter. Such payments will be
made to the Company within thirty (30) days after the end of each calendar
quarter. Such fees shall be paid quarterly in arrears. 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. The Company will calculate the asset balance on each
day on which the fee is to be paid pursuant to this Agreement with respect to
each Portfolio for the purpose of reconciling its calculation of average
aggregate net daily assets with PIM's calculation. Annually (as of December 31)
or upon reasonable request of PIM, Company will provide PIM a statement showing
the number of subaccounts in each Class of Shares of each Portfolio as of the
most recent calendar quarter end.
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