EXHIBIT 99-B.8.51
FUND PARTICIPATION AGREEMENT
BETWEEN
FUND AND ALIAC
Aetna Life Insurance and Annuity Company (the "Company"), Ariel Growth
Fund and such other Ariel funds as may be listed on Schedule A attached hereto
(the "Fund" or the "Funds") and Ariel Distributors, Inc. (the "Distributor")
hereby agree to an arrangement whereby the Fund shall be made available to serve
as underlying investment media for Variable Annuity Contracts ("Contracts") to
be issued by the Company.
1. ESTABLISHMENT OF ACCOUNT.
The Company represents that it has established Separate Account F
may establish such other accounts as may be set forth in Schedule
B attached hereto and as may be amended from time to time with the
mutual consent of the parties hereto (the "Accounts"), each of
which is a separate account under Connecticut Insurance law that
is not required to be registered as an investment company under
the Investment Company Act of 1940, to serve as an investment
vehicle for the Contracts. Each Contract provides for the
allocation of net amounts received by the Company to an Account
for investment in the shares of one of more specified open-end
management investment companies available through that Account as
underlying investment media. Selection of a particular investment
management company and changes therein from time to time are made
by the participant or Contract owner, as applicable under a
particular Contract.
2. PRICING INFORMATION; ORDERS; SETTLEMENT.
(a) The Fund will make Fund shares available to be purchased by the
Company, and will accept redemption orders from the Company, on
behalf of each Account at the net asset value applicable to each
order on those days on which the Fund calculates its net asset
value (a "Business Day"). Fund shares shall be purchased and
redeemed in such quantity and at such time determined by the
Company to be necessary to meet the requirements of those
Contracts for which the Fund serve as underlying investment media,
provided, however, that the Board of Trustees of the Fund
(hereinafter the "Trustees") may upon reasonable notice to the
Company, refuse to sell shares of any Fund to any person, or
suspend or terminate the offering of shares of any Fund if such
action is required by law or by regulatory authorities having
jurisdiction or is, in the sole discretion of the Trustees, acting
in good faith and in the best interests of the shareholders of any
Fund and is acting in compliance with their fiduciary obligations
under federal and/or any applicable state laws.
(b) The Fund will provide to the Company closing net asset value,
dividend and capital gain information at the close of trading each
day that the New York Stock Exchange (the "Exchange" is open (each
such day a "Business Day"), and in no event later than
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7:00 p.m. Eastern time on such Business Day. The Company will send
via facsimile or electronic transmission to the Fund or its
specified agent orders to purchase and/or redeem Fund shares by
10:00 a.m. Eastern Time the following business day. Payment for
net purchases will be wired by the Company to an account
designated by the Fund to coincide with the order for shares of
the Fund.
(c) The Fund hereby appoints the Company as its agent for the limited
purpose of accepting purchase and redemption orders for Fund
shares relating to the Contracts from Contract owners or
participants. Orders from Contract owners or participants received
from any distributor of the Contracts (including affiliates of the
Company) by the Company, acting as agent for the Fund, prior to
the close of the Exchange on any given business day will be
executed by the Fund at the net asset value determined as of the
close of the Exchange on such Business Day, provided that the Fund
receives written (or facsimile) notice of such order by 10 a.m.
Eastern Time on the next following Business Day. Any orders
received by the Company acting as agent on such day but after the
close of the Exchange will be executed by the Fund at the net
asset value determined as of the close of the Exchange on the next
business day following the day of receipt of such order, provided
that the Fund receives written (or facsimile) notice of such order
by 10 a.m. Eastern Time within two days following the day of
receipt of such order.
(d) Payments for net redemptions of shares of the Fund will be wired
by the Fund to an account designated by the Company by 4:00 p.m.
Eastern Time on the same Business Day the Company places an order
to redeem Fund shares. Payments for net purchases of the Fund will
be wired by the Company to an account designated by the Fund by
4:00 p.m. Eastern Time on the same Business Day the Company places
an order to purchase Fund shares. Payments shall be in federal
funds transmitted by wire.
(e) Each party has the right to rely on information or confirmations
provided by the other party (or by any affiliate of the other
party), and shall not be liable in the event that an error is a
result of any misinformation supplied by the other party.
(f) The Company agrees to purchase and redeem the shares of the Funds
named in this Agreement or in Schedule A hereof offered by the
then current prospectus and statement of additional information of
the Fund in accordance with the provisions of such prospectus and
statement of additional information. The Company shall not permit
any person other than a Contract owner or Participant to give
instructions to the Company which would require the Company to
redeem or exchange shares of the Fund. This provision shall not be
construed to prohibit the Company from substituting shares of
another fund, as permitted by law.
3. EXPENSES.
(a) Except as otherwise provided in this Agreement, all expenses
incident to the performance by the Fund under this Agreement shall
be paid by the Fund, including the cost of registration of Fund
shares with the Securities and Exchange Commission (the "SEC") and
in states where required. The Fund and Distributor shall pay no
fee
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or other compensation to the Company under this Agreement, and the
Company shall pay no fee or other compensation to the Fund or
Distributor, except as provided in 3(b) below and in Schedule C
attached hereto and made a part of this Agreement as may be
amended from time to time with the mutual consent of the parties
hereto. All expenses incident to performance by each party of its
respective duties under this Agreement shall be paid by that
party, unless otherwise specified in this Agreement.
(b) For the services and facilities provided by the Company pursuant
to this Agreement, Distributor shall make quarterly payments to
the Company based on the annual rate of ____% (____% quarterly) of
the average net assets of Fund shares held under the Contracts.
Distributor shall wire such payments to the Company within 20 days
after the end of each quarter, and shall also provide to the
Company supporting documentation for the calculation of the amount
payable to the Company.
(c) The Fund or the Distributor shall provide to the Company, at the
location provided by the Company, all periodic fund reports to
shareholders and other materials that are required by law to be
sent to Contract owners. In addition, the Fund or the Distributor
shall provide the Company with a sufficient quantity of its
prospectuses, statements of additional information and any
supplements to any of these materials, to be used in connection
with the offerings and transactions contemplated by this
Agreement. In addition, the Fund shall provide the Company with a
sufficient quantity of its proxy material that is required to be
sent to Contract owners.
4. REPRESENTATIONS.
The Company agrees that it and its agents shall not, without the
written consent of the Fund or the Distributor, make
representations concerning the Fund, or its shares except those
contained in the then current prospectuses and in current printed
sales literature approved by or deemed approved by the Fund or the
Distributor.
5. TERMINATION.
This agreement shall terminate as to the sale and issuance of new
Contracts:
(a) at the option of either the Company, the Distributor or the Fund,
upon sixty days advance written notice to the other parties;
(b) at the option of the Company, upon one week advance written notice
to the Distributor and the Fund, if Fund shares are not available
for any reason to meet the requirement of Contracts as determined
by the Company. Reasonable advance notice of election to terminate
shall be furnished by Company;
(c) at the option of either the Company, the Distributor or the Fund,
immediately upon institution of formal proceedings against the
broker-dealer or broker-dealers marketing the Contracts, the
Account, the Company, the Fund or the Distributor by
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the National Association of Securities Dealers, Inc. (the "NASD"),
the SEC or any other regulatory body;
(d) upon the determination of the Accounts to substitute for the
Fund's shares the shares of another investment company in
accordance with the terms of the applicable Contracts. The Company
will give 60 days written notice to the Fund and the Distributor
of any decision to replace the Fund's' shares;
(e) upon assignment of this Agreement, unless made with the written
consent of all other parties hereto;
(f) if Fund shares are not registered, issued or sold in conformance
with Federal law or such law precludes the use of Fund shares as
an underlying investment medium for Contracts issued or to be
issued by the Company. Prompt notice shall be given by the
appropriate party should such situation occur.
6. CONTINUATION OF AGREEMENT.
Termination as the result of any cause listed in Section 5 shall
not affect the Fund's obligation to furnish its shares to
Contracts then in force for which its shares serve or may serve as
the underlying medium unless such further sale of Fund shares is
prohibited by law or the SEC or other regulatory body.
7. ADVERTISING MATERIALS; FILED DOCUMENTS.
(a) Advertising and sales literature with respect to the Fund prepared
by the Company or its agents for use in marketing its Contracts
will be submitted to the Fund or its designee for review before
such material is submitted to any regulatory body for review. No
such material shall be used if the Fund or its designee reasonably
object to such use in writing, transmitted by facsimile within two
business days after receipt of such material.
(b) The Fund will provide additional copies of its financials as soon
as available to the Company and at least one complete copy of all
registration statements, prospectuses, statements of additional
information, annual and semi-annual reports, proxy statements and
all amendments or supplements to any of the above that relate to
the Fund promptly after the filing of such document with the SEC
or other regulatory authorities. At the Distributor's request, the
Company will provide to the Distributor at least one complete copy
of all registration statements, prospectuses, statements of
additional information, annual and semi-annual reports, proxy
statements, and all amendments or supplements to any of the above
that relate to the Account promptly after the filing of such
document with the SEC or other regulatory authority.
(c) The Fund or the Distributor will provide via Excel spreadsheet
diskette format or in electronic transmission to the Company at
least quarterly portfolio information necessary to update Fund
profiles within ten business days following the end of each
quarter.
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(d) The Fund will reimburse the Company for any incorrect information
provided to the Company under this Section as provided for in
Schedule C.
8. PROXY VOTING.
(a) The Company shall provide pass-through voting privileges on Fund
shares held by the separate accounts to all Contract owners.
(b) The Company will distribute to Contract owners all proxy material
furnished by the Fund and will vote Fund shares in accordance with
instructions received from such Contract owners. The Company and
its agents shall not oppose or interfere with the solicitation of
proxies for Fund shares held for such Contract owners and
participants.
9. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless the Fund and the
Distributor, and its directors, officers, employees, agents and
each person, if any, who controls the Fund or its Distributor
within the meaning of the Securities Act of 1933 (the "1933 Act")
against any losses, claims, damages or liabilities to which the
Fund or any such director, officer, employee, agent, or
controlling person may become subject, under the 1933 Act or
otherwise, insofar as such losses, claims, damages, or liabilities
(or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement, prospectus or sales
literature of the Company or arise out of or are based upon the
omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, or arise out of or as a result of conduct,
statements or representations (other than statements or
representations contained in the prospectuses or sales literature
of the Fund) of the Company or its agents, with respect to the
sale and distribution of Contracts for which Fund shares are the
underlying investment. The Company will reimburse any legal or
other expenses reasonably incurred by the Fund or any such
director, officer, employee, agent, investment Distributor, or
controlling person in connection with investigating or defending
any such loss, claim, damage, liability or action; PROVIDED,
however, that the Company will not be liable in any such case to
the extent that any such loss, claim, damage or liability arises
out of or is based upon (i) an untrue statement or omission or
alleged omission made in such Registration Statement or prospectus
in conformity with written materials furnished to the Company by
the Fund specifically for use therein or (ii) the willful
misfeasance, bad faith, or gross negligence by the Fund or
Distributor in the performance of its duties or the Fund's or
Distributor's reckless disregard of obligations or duties under
this Agreement or to the Company, whichever is applicable. This
indemnity agreement will be in addition to any liability which
Company may otherwise have.
(b) The Fund and the Distributor agree to indemnify and hold harmless
the Company and its directors, officers, employees, agents and
each person, if any, who controls the Company within the meaning
of the 1933 Act against any losses, claims, damages or
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liabilities to which the Company or any such director, officer,
employee, agent or controlling person may become subject, under
the 1933 Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement,
prospectuses or sales literature of the Fund or arise out of or
are based upon the omission or the alleged omission to state
therein a material fact required to be stated therein or material
fact required to be stated therein or necessary to make the
statements therein not misleading. The Fund will reimburse any
legal or other expenses reasonably incurred by the Company or any
such director, officer, employee, agent, or controlling person in
connection with investigating or defending any such loss, claim,
damage, liability or action; PROVIDED, HOWEVER, that the Fund will
not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an
untrue statement or omission or alleged omission made in such
Registration Statement or prospectuses which are in conformity
with written materials furnished to the Fund by the Company
specifically for use therein or (ii) the willful misfeasance, bad
faith, or gross negligence by the Company in the performance of
its duties or the Company's reckless disregard of obligations or
duties under this Agreement or to the Fund or Distributor,
whichever is applicable. This indemnity agreement will be in
addition to any liability which the Fund or Distributor may
otherwise have.
(c) Promptly after receipt by an indemnified party hereunder of notice
of the commencement of action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying
party hereunder, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to any
indemnified party otherwise than under this Section 9. In case any
such action is brought against any indemnified party, and it
notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to
the extent that it may wish to, assume the defense thereof, with
counsel satisfactory to such indemnified party, and after notice
from the indemnifying party to such indemnified party of its
election to assume the defense thereof, the indemnifying party
will not be liable to such indemnified party under this Section 9
for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other
than reasonable costs of investigation.
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10. MISCELLANEOUS.
(a) AMENDMENT AND WAIVER. Neither this Agreement, nor any provision
hereof, may be amended, waived, discharged or terminated orally,
but only by an instrument in writing signed by all parties hereto.
(b) NOTICES. All notices and other communications hereunder shall be
given or made in writing and shall be delivered personally, or
sent by telex, facsimile or registered or certified mail, postage
prepaid, return receipt requested, or recognized overnight courier
service to the party or parties to whom they are directed at the
following addresses, or at such other addresses as may be
designated by notice from such party to all other parties.
To the Company:
Aetna Life Insurance and Annuity Company
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxx, Counsel
To the Fund and Distributor:
Ariel Funds
000 X. Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, XX 00000
Attention: Xxxxx Xxxxxxx
Any notice, demand or other communication given in a manner prescribed in
this subsection (b) shall be deemed to have been delivered on receipt.
(c) SUCCESSORS AND ASSIGNS. This agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective
permitted successors and assigns.
(d) COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one
agreement, and any party hereto may execute this Agreement by
signing any such counterpart.
(e) SEVERABILITY. In case any one or more of the provisions contained
in this Agreement should be invalid, illegal or unenforceable in
any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be
affected or impaired thereby.
(f) ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
and understanding between the parties hereto and supersedes all
prior agreement and understandings relating to the subject matter
hereof.
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(g) GOVERNING LAW. This Agreement shall be governed and interpreted in
accordance with the laws of the State of Connecticut.
(h) It is understood by the parties that this Agreement is not an
exclusive arrangement in any respect.
(i) The terms of this Agreement and the Schedules thereto will be held
confidential by each party except to the extent that either party
or its counsel may deem it necessary to disclose such terms.
IN WITNESS WHEREOF, the undersigned have executed this Agreement by their
duly authorized officers effective as of the 1st day of April, 1998.
AETNA LIFE INSURANCE AND ANNUITY COMPANY
By: /s/ Xxxxxx X. XxXxxxx
---------------------------
Name: Xxxxxx X. Xxxxxxx
-------------------------
Title: Vice President
------------------------
ARIEL GROWTH FUND
By: /s/ Xxxxx X. Xxxxxxx
---------------------------
Name: Xxxxx X. Xxxxxxx
-------------------------
Title: Vice President
------------------------
ARIEL DISTRIBUTORS, INC.
By: /s/ Xxxxx X. Xxxxxxx
---------------------------
Name: Xxxxx X. Xxxxxxx
-------------------------
Title: Vice President
------------------------
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SCHEDULE A
(for any additional Funds)
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SCHEDULE B
(For any future separate accounts - See Section 1(a)
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SCHEDULE C
The following costs, expenses and reimbursements will be paid by the party
indicated:
1. For purposes of Sections 2 and 7, the Fund or the Distributor shall be
liable to the Company for systems and out of pocket costs incurred by the
Company in making a Contract owner's or a participant's account whole, if
such costs or expenses are a result of the Fund's failure to provide
timely or correct net asset values, dividend and capital gains or
financial information and if such information is not corrected by 4pm
Eastern Time of the next business day after releasing such incorrect
information provided the incorrect NAV as well as the correct NAV for
each day that the error occurred is provided. If a mistake is caused in
supplying such information or confirmations, which results in a
reconciliation with incorrect information, the amount required to make a
Contract owner's or a Participant's account whole shall be borne by the
party providing the incorrect information, regardless of when the error
is corrected.
2. For purposes of Section 3, the Fund or the Distributor shall pay for the
cost of distributing periodic fund reports to shareholders, prospectuses,
prospectus supplements, statements of additional information and other
materials that are required by law to be sent to existing Contract owners
or existing participants. The Company will send an invoice to the
Distributor for the amount of such costs.
3. The Fund or the Distributor shall pay all expenses in connection with the
provision to the Company of a sufficient quantity of its proxy material
under Section 3. The cost associated with proxy preparation, group
authorization letters, programming for tabulation and necessary materials
(including postage) will be paid by the Fund. The Company will send an
invoice to the Distributor for the amount of such costs.
4. To compensate the Company for some of its administrative costs related to
participant recordkeeping in connection with this Agreement, the
Distributor shall pay the Company a fee of $___ per participant account
per fund per year. The Company will send an invoice to the Distributor
for the amount of such fees.
Dated as of the 1st day of April, 1998.
AETNA LIFE INSURANCE AND ANNUITY COMPANY
By: /s/ Xxxxxx X. XxXxxxx
-------------------------------
Name: Xxxxxx X. XxXxxxx
-----------------------------
Title: V.P.
----------------------------
ARIEL GROWTH FUND
By: /s/ Xxxxx X. Xxxxxxx
-------------------------------
Name: Xxxxx X. Xxxxxxx
-----------------------------
Title: V.P.
----------------------------
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ARIEL DISTRIBUTORS, INC.
By: /s/ Xxxxx X. Xxxxxxx
-------------------------------
Name: Xxxxx X. Xxxxxxx
-----------------------------
Title: V.P.
----------------------------
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