Exhibit 1.A(8)(r)
PARTICIPATION AGREEMENT
THIS AGREEMENT is made as of the 1st day of December, 1999, by and among
Xxxxxxxx Xxxxxxxx Series Trust ("TRUST") a Massachusetts business trust;
Xxxxxxxx Xxxxxxxx Asset Management Inc. ("XXXXXXXX XXXXXXXX"); a Delaware
Corporation, and ReliaStar Life Insurance Company ("LIFE COMPANY"); a life
insurance company organized under the laws of the State of Minnesota.
WHEREAS, TRUST is registered with the Securities and Exchange Commission ("SEC")
under the Investment Company Act of 1940, as amended ("40 Act") as an open-end
management investment company; and
WHEREAS, TRUST is organized as a series fund comprised of several portfolios
("Portfolios"), the currently available of which are listed on Appendix A
hereto; and
WHEREAS, TRUST was organized to act as the funding vehicle for certain variable
life insurance and/or variable annuity contracts ("Variable Contracts") offered
by life insurance companies through separate accounts of such life insurance
companies ("Participating Insurance Companies") and also offers its shares to
certain qualified pension and retirement plans; and
WHEREAS, TRUST has received an order from the SEC, dated _________________ (File
No. __________), 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 '40 Act, and Rules 6e-2(b)(15) and 6e-3(T)(b)(15) thereunder, to the
extent necessary to permit shares of the Portfolios of the TRUST 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 (the "Order"); and
WHEREAS, LIFE COMPANY has established or will establish one or more separate
accounts ("Separate Accounts") to offer Variable Contracts and is desirous of
having TRUST as one of the underlying funding vehicles for such Variable
Contracts; and
WHEREAS, XXXXXXXX XXXXXXXX is registered with the SEC as an investment adviser
under the Investment Advisers Act of 1940 and as a broker-dealer under the
Securities Exchange Act of 1934, as amended; and
WHEREAS, XXXXXXXX XXXXXXXX is the investment adviser, administrator, and (for
Class I shares) distributor of the shares of each Portfolio of TRUST; and
WHEREAS, to the extent permitted by applicable insurance laws and regulations,
LIFE COMPANY intends to purchase shares of TRUST to fund the aforementioned
Variable Contracts and TRUST is authorized to sell such shares to LIFE COMPANY
at net asset value;
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NOW, THEREFORE, in consideration of their mutual promises, LIFE COMPANY, TRUST,
and XXXXXXXX XXXXXXXX agree as follows:
Article I. SALE OF TRUST SHARES
1.1 TRUST agrees to make available to the Separate Accounts of LIFE COMPANY
shares of the selected Portfolios as listed in Appendix B for investment of
proceeds from Variable Contracts allocated to the designated Separate Accounts,
such shares to be offered as provided in TRUST's Prospectus.
1.2 TRUST agrees to sell to LIFE COMPANY those shares of the selected Portfolios
of TRUST which LIFE COMPANY orders, executing such orders on a daily basis at
the net asset value next computed after receipt by TRUST or its designee of the
order for the shares of TRUST. For purposes of this Section 1.2, LIFE COMPANY
shall be the designee of TRUST for receipt of such orders from LIFE COMPANY and
receipt by such designee shall constitute receipt by TRUST; provided that TRUST
receives notice of such order by 10:00 a.m. New York time on the next following
Business Day and reflect instructions received by the Life Company from Variable
Contract owners in good order prior to the time the net asset value of the Trust
is calculated in accordance with the Fund Registration Statement on the prior
Business Day. Orders reflecting instructions received by the Life Company in
good order after the time the net asset value of the Trust is calculated will
not be deemed received until the next succeeding Business Day. "Business Day"
shall mean any day on which the New York Stock Exchange is open for trading and
on which TRUST calculates its net asset value pursuant to the rules of the SEC.
1.3 TRUST agrees to redeem for cash, on LIFE COMPANY's request, any full or
fractional shares of TRUST held by LIFE COMPANY, executing such requests on a
daily basis at the net asset value next computed after receipt by TRUST or its
designee of the request for redemption. For purposes of this Section 1.3, LIFE
COMPANY shall be the designee of TRUST for receipt of requests for redemption
from LIFE COMPANY and receipt by such designee shall constitute receipt by
TRUST; provided that TRUST receives notice of such request for redemption by
10:00 a.m. New York time on the next following Business Day and reflect
instructions received by the Life Company from Variable Contract owners in good
order prior to the time the net asset value of the Trust is calculated in
accordance with the Fund Registration Statement on the prior Business Day.
Orders reflecting instructions received by the Life Company in good order after
the time the net asset value of the Trust is calculated will not be deemed
received until the next succeeding Business Day.
1.4 TRUST shall furnish, on or before the ex-dividend date, notice to LIFE
COMPANY of any income dividends or capital gain distributions payable on the
shares of any Portfolio of TRUST. LIFE COMPANY hereby elects to receive all such
income dividends and capital gain distributions as are payable on a Portfolio's
shares in additional shares of the Portfolio. TRUST shall notify LIFE COMPANY of
the number of shares so issued as payment of such dividends and distributions.
1.5 TRUST shall make the net asset value per share for the selected Portfolio(s)
available to LIFE COMPANY on a daily basis as soon as reasonably practicable
after the net asset value per share is calculated but shall use its reasonable
best efforts to make such net asset value available by 6:30 p.m. New York time.
If TRUST provides LIFE COMPANY with materially incorrect share net asset value
information, LIFE COMPANY shall be entitled to payment by XXXXXXXX XXXXXXXX of
an amount equal to LIFE COMPANY'S reasonable administrative, clerical, and other
expenses in correcting the error, and LIFE COMPANY on behalf of the Separate
Accounts, shall be entitled to an adjustment to the number of shares purchased
or redeemed to reflect the correct share net asset value. Any material error in
the calculation of net asset value per share, dividend or capital gain
information shall be reported promptly upon discovery to LIFE COMPANY.
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1.6 At the end of each Business Day, LIFE COMPANY shall use the information
described in Section 1.5 to calculate Separate Account unit values for the day.
Using these unit values, LIFE COMPANY shall process each such Business Day's
Separate Account transactions based on requests and premiums received by it by
the close of trading on the floor of the New York Stock Exchange (currently 4:00
p.m. New York time) to determine the net dollar amount of TRUST shares which
shall be purchased or redeemed at that day's closing net asset value per share.
The net purchase or redemption orders so determined shall be transmitted to
TRUST by LIFE COMPANY by 10:00 a.m. New York Time on the Business Day next
following LIFE COMPANY's receipt of such requests and premiums in accordance
with the terms of Sections 1.2 and 1.3 hereof.
1.7 If LIFE COMPANY's order requests the purchase of TRUST shares, LIFE COMPANY
shall pay for such purchase by wiring federal funds to TRUST or its designated
custodial account on the day the order is transmitted by LIFE COMPANY. If LIFE
COMPANY's order requests a net redemption resulting in a payment of redemption
proceeds to LIFE COMPANY, TRUST shall wire the redemption proceeds to LIFE
COMPANY by the next Business Day, unless doing so would require TRUST to dispose
of portfolio securities or otherwise incur additional costs, but in such event,
proceeds shall be wired to LIFE COMPANY within the period required pursuant to
the 1940 Act or other applicable law and TRUST shall notify the person
designated in writing by LIFE COMPANY as the recipient for such notice of such
delay by 3:00 p.m. New York Time the same Business Day that LIFE COMPANY
transmits the redemption order to TRUST. If LIFE COMPANY's order requests the
application of redemption proceeds from the redemption of shares to the purchase
of shares of another fund advised, administered or distributed by XXXXXXXX
XXXXXXXX, the amount wire transferred by LIFE COMPANY shall be reduced by the
amount of such proceeds and TRUST shall apply such proceeds the same Business
Day that LIFE COMPANY transmits such order to TRUST.
1.8 Notwithstanding Section 1.7, TRUST reserves the right to suspend the right
of redemption or postpone the date of payment or satisfaction upon redemption
consistent with Section 22(e) of the '40 Act and any rules thereunder.
1.9 TRUST agrees that all shares of the Portfolios of TRUST will be sold only to
Participating Insurance Companies which have agreed to participate in TRUST to
fund their Separate Accounts and/or to certain qualified pension and other
retirement plans, all in accordance with the requirements of Section 817(h) of
the Internal Revenue Code of 1986, as amended ("Code") and Treasury Regulation
1.817-5. Shares of the Portfolios of TRUST will not be sold directly to the
general public.
1.10 TRUST may refuse to sell shares of any Portfolio to any person, or suspend
or terminate the offering of the shares of any Portfolio if such action is
required by law or by regulatory authorities having jurisdiction or is, in the
sole discretion of the Board of Trustees of TRUST, deemed necessary and in the
best interests of the shareholders of such Portfolios.
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Article II. REPRESENTATIONS AND WARRANTIES
2.1 LIFE COMPANY represents and warrants that it is an insurance company duly
organized and in good standing under the laws of Minnesota and that it has
legally and validly established each Separate Account as a segregated asset
account under such laws, and that Washington Square Securities, Inc., the
principal underwriter for the Variable Contracts, is registered as a
broker-dealer under the Securities Exchange Act of 1934.
2.2 LIFE COMPANY represents and warrants that it has registered or, prior to any
issuance or sale of the Variable Contracts, will register each Separate Account
as a unit investment trust ("UIT") in accordance with the provisions of the '40
Act and cause each Separate Account to remain so registered to serve as a
segregated asset account for the Variable Contracts, unless an exemption from
registration is available.
2.3 LIFE COMPANY represents and warrants that the Variable Contracts will be
registered under the Securities Act of 1933 (the "33 Act") unless an exemption
from registration is available prior to any issuance or sale of the Variable
Contracts and that the Variable Contracts will be issued and sold in compliance
in all material respects with all applicable federal and state laws.
2.4 LIFE COMPANY represents and warrants that the Variable 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 TRUST immediately upon
having a reasonable basis for believing that the Variable Contracts have ceased
to be so treated or that they might not be so treated in the future.
2.5 LIFE COMPANY represents and warrants that it shall deliver such
prospectuses, statements of additional information, proxy statements and
periodic reports of the Trust as required to be delivered under applicable
federal or state law in connection with the offer, sale or acquisition of the
Variable Contracts.
2.6 LIFE COMPANY represents and warrants that no existing text or formatting of
TRUST'S prospectus as delivered to LIFE COMPANY in electronic format will be
revised or altered by LIFE COMPANY or any employee or agent of LIFE COMPANY;
provided, that if XXXXXXXX XXXXXXXX is notified in advance and does not
reasonably object to the addition of hyperlinks and other common electronic
features shall not constitute a revision or alteration of the material.
2.7 TRUST represents and warrants that the Portfolio shares offered and sold
pursuant to this Agreement will be registered under the '33 Act and sold in
accordance with all applicable federal and state laws, and TRUST shall be
registered under the '40 Act prior to and at the time of any issuance or sale of
such shares. TRUST shall amend its registration statement under the '33 Act and
the '40 Act from time to time as required in order to effect the continuous
offering of its shares. TRUST shall register and qualify its shares for sale in
accordance with the laws of the various states only if and to the extent deemed
advisable by TRUST.
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2.8 TRUST represents and warrants that each Portfolio will comply with the
diversification requirements set forth in Section 817(h) of the Code, and the
rules and regulations thereunder, including without limitation Treasury
Regulation 1.817-5, and will notify LIFE COMPANY immediately upon having a
reasonable basis for believing any Portfolio has ceased to comply or might not
so comply and will immediately take all reasonable steps to adequately diversify
the Portfolio to achieve compliance within the grace period afforded by
Regulation 1.817-5.
2.9 TRUST represents and warrants that each Portfolio invested in by the
Separate Account is currently qualified as a "regulated investment company"
under Subchapter M of the Code, that it will make every reasonable effort to
maintain such qualification and will notify LIFE COMPANY immediately upon having
a reasonable basis for believing it has ceased to so qualify or might not so
qualify in the future.
Article III. PROSPECTUSES, PERIODIC REPORTS, AND PROXY STATEMENTS
3.1 TRUST shall prepare and be responsible for filing with the SEC and any state
regulators requiring such filing all shareholder reports, notices, proxy
materials (or similar materials such as voting instruction solicitation
materials), prospectuses and statements of additional information of TRUST.
TRUST shall bear the costs of registration and qualification of shares of the
Portfolios, preparation and filing of the documents listed in this Section 3.1
and all taxes to which an issuer is subject on the issuance and transfer of its
shares.
3.2 TRUST will bear the printing costs (or duplicating costs with respect to the
statement of additional information), mailing costs, and, in the case of proxy
solicitations, tabulation costs, associated with the delivery of the following
TRUST (or individual Portfolio) documents, and any supplements thereto, to
existing variable Contract owners of LIFE COMPANY:
(i) prospectuses and statements of additional information;
(ii) annual and semi-annual reports; and
(iii) proxy materials.
If requested by LIFE COMPANY, the TRUST shall provide such documentation
(including a final copy of the TRUST's prospectus as set in type or in
camera-ready copy) and other assistance as is reasonably necessary in order for
LIFE COMPANY to print the current prospectus for the TRUST either as a
standalone document or together with the prospectus for the Variable Contracts
or the prospectuses for other funds offered through the Variable Contracts.
Should LIFE COMPANY wish to print any of these documents in a format different
from that provided by TRUST, LIFE COMPANY shall provide Trust with sixty (60)
days, prior written notice and LIFE COMPANY shall bear the cost associated with
any format change (but not the cost of printing or mailing).
LIFE COMPANY will submit any bills for printing, duplicating and/or mailing
costs, relating to the TRUST documents described above, to TRUST for
reimbursement by TRUST. LIFE COMPANY shall monitor such costs and shall use its
best efforts to control these costs. LIFE COMPANY will provide TRUST on a
semi-annual basis, or more frequently as reasonably
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requested by TRUST, with a current tabulation of the number of existing Variable
Contract owners of LIFE COMPANY whose Variable Contract values are invested in
TRUST. This tabulation will be sent to TRUST in the form of a letter signed by a
duly authorized officer of LIFE COMPANY attesting to the accuracy of the
information contained in the letter.
TRUST will provide, at its expense, LIFE COMPANY with the following TRUST (or
individual Portfolio) documents, and any supplements thereto, with respect to
prospective Variable Contract owners of LIFE COMPANY:
(i) camera-ready copy of the current prospectus for printing by
the LIFE COMPANY;
(ii) a copy of the statement of additional information suitable for
duplication;
(iii) camera-ready copy of proxy material suitable for printing; and
(iv) camera-ready copy of the annual and semiannual reports for
printing by the LIFE COMPANY.
3.4 TRUST, upon request of LIFE COMPANY, will provide LIFE COMPANY with
electronic copies of any of the TRUST (or individual portfolio) documents listed
in Section 3.1 of this Agreement, for use by LIFE COMPANY in the delivery of the
TRUST'S documents on an individual basis to current and prospective Variable
Contract Owners.
3.5 TRUST will provide LIFE COMPANY with at least one complete copy of all
prospectuses, statements of additional information, annual and semi-annual
reports, proxy statements, exemptive applications and all amendments or
supplements to any of the above that relate to the Portfolios promptly after the
filing of each such document with the SEC or other regulatory authority. LIFE
COMPANY will provide TRUST with at least one complete copy of all prospectuses,
statements of additional information, annual and semi-annual reports, proxy
statements, exemptive applications and all amendments or supplements to any of
the above that relate to a Separate Account promptly after the filing of each
such document with the SEC or other regulatory authority.
Article IV. SALES MATERIALS
4.1 LIFE COMPANY will furnish, or will cause to be furnished, to XXXXXXXX
XXXXXXXX each piece of sales literature or other promotional material in which
TRUST, XXXXXXXX XXXXXXXX, or PAINEWEBBER is named, at least fifteen (15)
Business Days prior to its intended use. No such material will be used if TRUST,
or XXXXXXXX XXXXXXXX objects to its use in writing within ten (10) Business Days
after receipt of such material.
4.2 TRUST and XXXXXXXX XXXXXXXX will furnish, or will cause to be furnished, to
LIFE COMPANY, each piece of sales literature or other promotional material in
which LIFE COMPANY or its Separate Accounts are named, at least fifteen (15)
Business Days prior to its intended use. No such material will be used if LIFE
COMPANY objects to its use in writing within ten (10) Business Days after
receipt of-such material.
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4.3 TRUST and its affiliates and agents shall not give any information or make
any representations on behalf of LIFE COMPANY or concerning LIFE COMPANY, the
Separate Accounts, or the Variable Contracts issued by LIFE COMPANY, other than
the information or representations contained in a registration statement or
prospectus for such Variable Contracts, as such registration statement and
prospectus may be amended or supplemented from time to time, or in reports of
the Separate Accounts or reports prepared for distribution to owners of such
Variable Contracts, or in sales literature or other promotional material
approved by LIFE COMPANY or its designee, except with the written permission of
LIFE COMPANY.
4.4 LIFE COMPANY and its affiliates and agents shall not give any information or
make any representations on behalf of TRUST, XXXXXXXX XXXXXXXX, or PAINEWEBBER
or concerning TRUST, XXXXXXXX XXXXXXXX, or PAINEWEBBER other than the
information or representations contained in a registration statement or
prospectus for TRUST, as such registration statement and prospectus may be
amended or supplemented from time to time, or in sales literature or other
promotional material approved by TRUST or its designee, except with the written
permission of TRUST, XXXXXXXX XXXXXXXX, or PAINEWEBBER.
4.5 For purposes of this Agreement, the phrase "sales literature or other
promotional material" or words of similar import include, without limitation,
advertisements (such as material published, or designed for use, in a newspaper,
magazine or other periodical, radio, television, telephone or tape recording,
videotape display, signs or billboards, motion pictures or other public media),
sales literature (such as any written communication distributed or made
generally available to customers or the public, including brochures, circulars,
research reports, market letters, form letters, seminar texts, or reprints or
excerpts of any other advertisement, sales literature, or published article),
educational or training materials or other communications distributed or made
generally available to some or all agents or employees, registration statements,
prospectuses, statements of additional information, shareholder reports and
proxy materials, and any other material constituting sales literature or
advertising under National Association of Securities Dealers, Inc. rules, the
'40 Act or the '33 Act, but shall not include depositor or variable account
financial statements sent to existing customers.
Article V. POTENTIAL CONFLICTS
5.1 The Board of Trustees of TRUST (the "Board") will monitor TRUST for the
existence of any material irreconcilable conflict between the interests of the
Variable Contract owners of Participating Insurance Company Separate Accounts
investing in the Portfolios. A material irreconcilable conflict may arise for a
variety of reasons, including: (a) state insurance regulatory authority action;
(b) a change in applicable federal or state insurance, tax, or securities laws
or regulations, or a public ruling, private letter ruling, or any similar action
by insurance, tax, or securities regulatory authorities; (c) an administrative
or judicial decision in any relevant proceeding; (d) the manner in which the
investments of the Portfolios are being managed; (e) a difference in voting
instructions given by variable annuity 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 voting
instructions of Variable Contract owners.
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5.2 LIFE COMPANY will report any potential or existing conflicts to the Board.
LIFE COMPANY will be responsible for assisting the Board in carrying out its
responsibilities under the Conditions set forth in the notice issued by the SEC
for the Portfolios on ________, 1999 (the "Notice") (Investment Company Act
Release No. ________), which LIFE COMPANY has reviewed, by providing the Board
with all information reasonably necessary for it to consider any issues raised.
This responsibility includes, but is not limited to, an obligation by LIFE
COMPANY to inform the Board whenever Variable Contract owner voting instructions
are disregarded by LIFE COMPANY. These responsibilities will be carried out with
a view only to the interests of the Variable Contract owners.
5.3 If a majority of the Board or a majority of its disinterested trustees or
directors, determines that a material irreconcilable conflict exists, affecting
the LIFE COMPANY, LIFE COMPANY, at its expense and to the extent reasonably
practicable (as determined by a majority of disinterested trustees or
directors), will take any reasonable steps necessary to remedy or eliminate the
irreconcilable material conflict, including: (a) withdrawing the assets
allocable to some or all of the Separate Accounts from the Funds or any series
thereof and reinvesting those assets in a different investment medium, which may
include another series of TRUST or another investment company or submitting the
question as to whether such segregation should be implemented to a vote of all
affected Variable Contract owners and, as appropriate, segregating the assets of
any appropriate group (i.e., Variable Contract owners of one or more
Participating Insurance Companies) that votes in favor of such segregation, or
offering to the affected Variable Contract owners the option of making such a
change; and (b) establishing a new registered management investment company or
managed separate account. If a material irreconcilable conflict arises because
of LIFE COMPANY's decision to disregard Variable Contract owner voting
instructions, and that decision represents a minority position or would preclude
a majority vote, LIFE COMPANY may be required, at the election of the relevant
Portfolio, to withdraw its Separate Account's investment in such Portfolio, and
no charge or penalty will be imposed as a result of such withdrawal. The
responsibility to take such remedial action shall be carried out with a view
only to the interests of the Variable Contract owners.
For the purposes of this Section 5.3, a majority of the disinterested members of
the Board shall determine whether or not any proposed action adequately remedies
any irreconcilable material conflict, but in no event will the relevant
Portfolio or XXXXXXXX XXXXXXXX (or any other investment adviser of the
Portfolios) be required to establish a new funding medium for any Variable
Contract. Further, LIFE COMPANY shall not be required by this Section 5.3 to
establish a new funding medium for any Variable Contract if any offer to do so
has been declined by a vote of a majority of Variable Contract owners materially
affected by the irreconcilable material conflict.
5.4 The Board's determination of the existence of an irreconcilable material
conflict and its implications shall be made known promptly and in writing to
LIFE COMPANY.
5.5 No less than annually, LIFE COMPANY shall submit to the Board such reports,
materials or data as the Board may reasonably request so that the Board may
fully carry out the obligations imposed upon it by these Conditions. Such
reports, materials, and data shall be submitted more frequently if deemed
appropriate by the Board.
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Article VI. VOTING
6.1 LIFE COMPANY will provide pass-through voting privileges to all Variable
Contract owners so long as the SEC continues to interpret the '40 Act as
requiring pass-through voting privileges for Variable Contract owners. This
condition will apply to Separate Accounts investing in TRUST. Accordingly, LIFE
COMPANY, where applicable, will vote shares of a Portfolio held in its Separate
Accounts in a manner consistent with voting instructions timely received from
its Variable Contract owners. LIFE COMPANY will be responsible for assuring that
each of its Separate Accounts that participates in any Portfolio calculates
voting privileges in a manner consistent with other participants as defined in
the Conditions set forth in the Notice ("Participants"). The obligation to
calculate voting privileges in a manner consistent with all other Separate
Accounts investing in a Portfolio will be a contractual obligation of all
Participants under the agreements governing participation in the Portfolios.
Each Participant will vote shares for which it has not received timely voting
instructions, as well as shares it owns, in the same proportion as it votes
those shares for which it has received voting instructions.
6.2 If and to the extent 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 '40 Act or the
rules thereunder with respect to mixed and shared funding on terms and
conditions materially different from any exemptions granted in the Order, then
TRUST, XXXXXXXX XXXXXXXX and/or the Participants, as appropriate, shall take
such steps as may be necessary to comply with Rule 6e-2 and Rule 6e-3(T), as
amended, and Rule 6e-3, as adopted, to the extent such Rules are applicable.
Article VII. INDEMNIFICATION
7.1 Indemnification by LIFE COMPANY. LIFE COMPANY agrees to indemnify and hold
harmless TRUST, XXXXXXXX XXXXXXXX and each of their Trustees, directors,
officers, employees and agents and each person, if any, who controls TRUST or
XXXXXXXX XXXXXXXX within the meaning of Section 15 of the '33 Act (collectively,
the "Indemnified Parties" for purposes of this Article VII) against any and all
losses, claims, damages, liabilities (including amounts paid in settlement with
the written consent of LIFE COMPANY, which consent shall not be unreasonably
withheld) or litigation (including reasonable legal and other expenses), to
which the Indemnified Parties may become subject under any statute, regulation,
at common law or otherwise, insofar as such losses, claims, damages, liabilities
or expenses (or actions in respect thereof) or settlements are related to the
offer, sale or acquisition of TRUST's shares or the Variable Contracts and:
(a) arise out of or are based upon any untrue statements or
alleged untrue statements of any material fact contained in
the Registration Statement, prospectus, or sales literature
for the Variable Contracts or contained in the Variable
Contracts (or any amendment or supplement to any of the
foregoing), or arise out of or are based upon the omission or
the alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements
therein not misleading, provided that this agreement to
indemnify shall not apply as to any Indemnified Party if such
statement or omission or such alleged statement or omission
was made in reliance upon and in conformity with information
furnished to LIFE
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COMPANY by or on behalf of TRUST for use in the registration
statement or prospectus for the Variable Contracts or in the
Variable Contracts or sales literature (or any amendment or
supplement) or otherwise for use in connection with the sale
of the Variable Contracts or TRUST shares; or
(b) arise out of or as a result of statements or representations
(other than statements or representations' contained in the
registration statement, prospectus or sales literature of
TRUST not supplied by LIFE COMPANY, or persons under its
control) or wrongful conduct of LIFE COMPANY or persons under
its control, with respect to the sale or distribution of the
Variable Contracts or TRUST shares; or
(c) arise out of any untrue statement or alleged untrue statement
of a material fact contained in a registration statement,
prospectus, or sales literature of 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 statements therein not
misleading if such statement or omission or such alleged
statement or omission was made in reliance upon and in
conformity with information furnished to TRUST by or on behalf
of LIFE COMPANY; or
(d) arise as a result of any failure by LIFE COMPANY to
substantially provide the services and furnish the materials
under the terms of this Agreement; or
(e) arise out of or result from any material breach of any
representation and/or warranty made by LIFE COMPANY in this
Agreement or arise out of or result from any other material
breach of this Agreement by LIFE COMPANY.
7.2 LIFE COMPANY shall not be liable under this indemnification provision with
respect to any losses, claims, damages, liabilities or litigation incurred or
assessed against an Indemnified Party as such may arise from such Indemnified
Party's willful misfeasance, bad faith, or gross negligence in the performance
of such Indemnified Party's duties or by reason of such Indemnified Party's
reckless disregard of obligations or duties under this Agreement or to TRUST,
whichever is applicable.
7.3 LIFE COMPANY shall not be liable under this indemnification provision with
respect to any claim made against an Indemnified Party unless such Indemnified
Party shall have notified LIFE COMPANY in writing within a reasonable time after
the summons or other first legal process giving information of the nature of the
claim shall have been served upon such Indemnified Party (or after such
Indemnified Party shall have received notice of such service on any designated
agent), but failure to notify LIFE COMPANY of any such claim shall not relieve
LIFE COMPANY from any liability which it may have to the Indemnified Party
against whom such action is brought otherwise than on account of this
indemnification provision. In case any such action is brought against an
Indemnified Party, LIFE COMPANY shall be entitled to participate at its own
expense in the defense of such action. LIFE COMPANY also shall be entitled to
assume the defense thereof, with counsel satisfactory to the party named in the
action. After notice from LIFE COMPANY to such party of LIFE COMPANY's election
to assume the defense thereof, the Indemnified Party shall bear the fees and
expenses of any additional counsel retained by it, and LIFE COMPANY will not be
liable to such party under this
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Agreement for any legal or other expenses subsequently incurred by such party
independently in connection with the defense thereof.
7.4 Indemnification by XXXXXXXX XXXXXXXX. XXXXXXXX XXXXXXXX agrees to indemnify
and hold harmless LIFE COMPANY and each of its directors, officers, employees,
and agents and each person, if any, who controls LIFE COMPANY within the meaning
of Section 15 of the '33 Act (collectively, the "Indemnified Parties" for the
purposes of this Article VII) against any and all losses, claims, damages,
liabilities (including amounts paid in settlement with the written consent of
XXXXXXXX XXXXXXXX which consent shall not be unreasonably withheld) or
litigation (including reasonable legal and other expenses) to which the
Indemnified Parties may become subject under any statute, or regulation, at
common law or otherwise, insofar as such losses, claims, damages, liabilities or
expenses (or actions in respect thereof) or settlements are related to the
offer, sale or acquisition of TRUST's shares or the Variable Contracts and:
(a) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the
registration statement or prospectus or sales literature of
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 statements
therein not misleading, provided that this agreement to
indemnify shall not apply as to any Indemnified Party if such
statement or omission or such alleged statement or omission
was made in reliance upon and in conformity with information
furnished to XXXXXXXX XXXXXXXX or TRUST by or on behalf of
LIFE COMPANY for use in the registration statement or
prospectus for TRUST or in sales literature (or any amendment
or supplement) or otherwise for use in connection with the
sale of the Variable Contracts or TRUST shares; or
(b) arise out of or as a result of statements or representations
(other than statements or representations contained in the
registration statement, prospectus or sales literature for the
Variable Contracts not supplied by XXXXXXXX XXXXXXXX or
persons under its control) or wrongful conduct of TRUST or
XXXXXXXX XXXXXXXX or persons under their control, with
respect-to the sale or distribution of the Variable Contracts
or TRUST shares; or
(c) arise out of any untrue statement or alleged untrue statement
of a material fact contained in a registration statement,
prospectus, or sales literature covering the Variable
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
statements therein not misleading, if such statement or
omission or such alleged statement or omission was made in
reliance upon and in conformity with information furnished to
LIFE COMPANY for inclusion therein by or on behalf of TRUST;
or
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(d) arise as a result of (i) a failure by TRUST to substantially
provide the services and furnish the materials under the terms
of this Agreement; or (ii) a failure by a Portfolio(s)
invested in by the Separate Account to comply with the
diversification requirements of Section 817(h) of the Code; or
(iii) a failure by a Portfolio(s) invested in by the Separate
Account to qualify as a "regulated investment company" under
Subchapter M of the Code; or
(e) arise out of or result from any material breach of any
representation and/or warranty made by XXXXXXXX XXXXXXXX in
this Agreement or arise out of or result from any other
material breach of this Agreement by XXXXXXXX XXXXXXXX.
7.5 XXXXXXXX XXXXXXXX shall not be liable under this indemnification provision
with respect to any losses, claims, damages, liabilities or litigation to which
an Indemnified Party would otherwise be subject by reason of such Indemnified
Party's willful misfeasance, bad faith, or gross negligence in the performance
of such Indemnified Party's duties or by reason of such Indemnified Party's
reckless disregard of obligations and duties under this Agreement or to LIFE
COMPANY.
7.6 XXXXXXXX XXXXXXXX shall not be liable under this indemnification provision
with respect to any claim made against an Indemnified Party unless such
Indemnified Party shall have notified XXXXXXXX XXXXXXXX in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify XXXXXXXX XXXXXXXX
of any such claim shall not relieve XXXXXXXX XXXXXXXX from any liability which
it may have to the Indemnified Party against whom such action is brought
otherwise than on account of this indemnification provision. In case any such
action is against the Indemnified Parties, XXXXXXXX XXXXXXXX shall be entitled
to participate at its own expense in the defense thereof. XXXXXXXX XXXXXXXX also
shall be entitled to assume the defense thereof, with counsel satisfactory to
the party named in the action. After notice from XXXXXXXX XXXXXXXX to such party
of XXXXXXXX XXXXXXXX' election to assume the defense thereof, the Indemnified
Party shall bear the fees and expenses of any additional counsel retained by it,
and XXXXXXXX XXXXXXXX will not be liable to such party under this Agreement for
any legal or other expenses subsequently incurred by such party independently in
connection with the defense thereof.
Article VIII. TERM; TERMINATION
8.1 This Agreement shall be effective as of the date hereof and shall continue
in force until terminated in accordance with the provisions herein.
8.2 This Agreement shall terminate in accordance with the following provisions:
(a) At the option of LIFE COMPANY or TRUST at any time from the
date hereof upon 60 days' notice, unless a shorter time is
agreed to by the parties;
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(b) At the option of LIFE COMPANY, if TRUST shares are not
reasonably available to meet the requirements of the Variable
Contracts as determined by LIFE COMPANY. Prompt notice of
election to terminate shall be furnished by LIFE COMPANY, said
termination to be effective ten days after receipt of notice
unless TRUST makes available a sufficient number of shares to
reasonably meet the requirements of the Variable Contracts
within said ten-day period;
(c) At the option of LIFE COMPANY, upon the institution of formal
proceedings against TRUST by the SEC, or any other regulatory
body, the expected or anticipated ruling, judgment or outcome
of which would, in LIFE COMPANY's reasonable judgment,
materially impair TRUST's ability to meet and perform Trust's
obligations and duties hereunder. Prompt notice of election to
terminate shall be furnished by LIFE COMPANY with said
termination to be effective upon receipt of notice;
(d) At the option of TRUST, upon the institution of formal
proceedings against LIFE COMPANY by the SEC, the National
Association of Securities Dealers, Inc., or any other
regulatory body, the expected or anticipated ruling, judgment
or outcome of which would, in TRUST's reasonable judgment,
materially impair LIFE COMPANY's ability to meet and perform
its obligations and duties hereunder. Prompt notice of
election to terminate shall be furnished by TRUST with said
termination to be effective upon receipt of notice;
(e) In the event TRUST's shares are not registered, issued or sold
in accordance with applicable state or federal law, or such
law precludes the use of such shares as the underlying
investment medium of Variable Contracts issued or to be issued
by LIFE COMPANY. Termination shall be effective upon such
occurrence without notice;
(f) At the option of TRUST if the Variable Contracts cease to
qualify as annuity contracts or life insurance contracts, as
applicable, under the Code, or if TRUST reasonably believes
that the Variable Contracts may fail to so qualify.
Termination shall be effective upon receipt of notice by LIFE
COMPANY;
(g) At the option of LIFE COMPANY, upon TRUST's breach of any
material provision of this Agreement, which breach has not
been cured to the satisfaction of LIFE COMPANY within ten days
after written notice of such breach is delivered to TRUST;
(h) At the option of TRUST, upon LIFE COMPANY's breach of any
material provision of this Agreement, which breach has not
been cured to the satisfaction of TRUST within ten days after
written notice of such breach is delivered to LIFE COMPANY;
(i) At the option of TRUST, if the Variable Contracts are not
registered, issued or sold in accordance with applicable
federal and/or state law. Termination shall be effective
immediately upon such occurrence without notice;
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(j) In the event this Agreement is assigned without the prior
written consent of LIFE COMPANY, TRUST, and XXXXXXXX XXXXXXXX,
termination shall be effective immediately upon such
occurrence without notice.
8.3 Notwithstanding any termination of this Agreement pursuant to Section 8.2
hereof, TRUST at its option may elect to continue to make available additional
TRUST shares, as provided below, for so long as TRUST desires pursuant to the
terms and conditions of this Agreement, for all Variable Contracts in effect on
the effective date of termination of this Agreement (hereinafter referred to as
"Existing Contracts"). Specifically, without limitation, if TRUST so elects to
make additional TRUST shares available, the owners of the Existing Contracts or
LIFE COMPANY, whichever shall have legal authority to do so, shall be permitted
to reallocate investments in TRUST, redeem investments in TRUST and/or invest in
TRUST upon the payment of additional premiums or a transfer from other
sub-accounts under the Existing Contracts. In the event of a termination of this
Agreement pursuant to Section 8.2 hereof, TRUST and XXXXXXXX XXXXXXXX as
promptly as is practicable under the circumstances, shall notify LIFE COMPANY
whether TRUST elects to continue to make TRUST shares available after such
termination. If TRUST shares continue to be made available after such
termination, the provisions of this Agreement shall remain in effect and
thereafter either TRUST or LIFE COMPANY may terminate the Agreement, as so
continued pursuant to this Section 8.3, upon sixty (60) days prior written
notice to the other party.
8.4 Except as necessary to implement Variable Contract owner initiated
transactions, or as required by state insurance laws or regulations, LIFE
COMPANY shall not redeem the shares attributable to the Variable Contracts (as
opposed to the shares attributable to LIFE COMPANY's assets held in the Separate
Accounts), and LIFE COMPANY shall not prevent Variable Contract owners from
allocating payments to a Portfolio that was otherwise available under the
Variable Contracts, until thirty (30) days after the LIFE COMPANY shall have
notified TRUST of its intention to do so.
Article IX. NOTICES
Any notice hereunder shall be given by registered or certified mail return
receipt requested 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 TRUST or XXXXXXXX XXXXXXXX:
If to LIFE COMPANY:
ReliaStar Life Insurance Company
00 Xxxxxxxxxx Xxxxxx Xxxxx
0xx Xxxxx
Xxxxxxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxx, Esq.
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Notice shall be deemed given on the date of receipt by the addressee as
evidenced by the return receipt.
Article X. MISCELLANEOUS
10.1 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.
10.2 This Agreement may be executed simultaneously in two or more counterparts,
each of which taken together shall constitute one and the same instrument.
10.3 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.
10.4 This Agreement shall be construed and the provisions hereof interpreted
under and in accordance with the laws of the State of Minnesota. It shall also
be subject to the provisions of the federal securities laws and the rules and
regulations thereunder and to any orders of the SEC granting exemptive relief
therefrom and the conditions of such orders.
10.5 The parties agree that the assets and liabilities of each Portfolio are
separate and distinct from the assets and liabilities of each other Portfolio.
No Portfolio shall be liable or shall be charged for any debt, obligation or
liability of any other Portfolio. No Trustee, officer or agent shall be
personally liable for such debt, obligation or liability of any Portfolio and no
Portfolio or other investor, other than the Portfolio or other investors
investing in the Portfolio which incurs a debt, obligation or liability, shall
be liable therefor.
10.6 Each party shall cooperate with each other party and all appropriate
governmental authorities (including without limitation the SEC, the National
Association of Securities Dealers, Inc. 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.
10.7 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.
10.8 No provision of this Agreement may be amended or modified in any manner
except by a written agreement properly authorized and executed by TRUST,
XXXXXXXX XXXXXXXX and the LIFE COMPANY.
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IN WITNESS WHEREOF, the parties have caused their duly authorized-officers to
execute this Fund Participation Agreement as of the date and year first above
written.
XXXXXXXX XXXXXXXX SERIES TRUST
By:
---------------------------
Name:
Title:
XXXXXXXX XXXXXXXX ASSET MANAGEMENT INC.
By:
---------------------------
Name:
Title:
RELIASTAR LIFE INSURANCE COMPANY
By:
---------------------------
Name:
Title:
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APPENDIX A
Xxxxxxxx Xxxxxxxx Series Trust Portfolios
-----------------------------------------
Money Market
High Grade Fixed Income
Strategic Fixed Income
Strategic Income
Global Income
High Income
Balanced
Growth and Income
Tactical Allocation
Growth
Aggressive Growth
Small Cap
Global Growth
S&P 500 Index (not currently available)
00
XXXXXXXX X
Separate Accounts Selected Portfolios
----------------- -------------------
Select Life Variable Account Global Income (Class I)
Growth and Income (Class I)
Tactical Allocation (Class I)
S&P 500 Index (Class I) (when
available)
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