FUND PARTICIPATION AGREEMENT
THIS AGREEMENT, made and entered into this ____ day of ___________,
2002 (the "Agreement"), by and among The American Life Insurance Company of New
York, organized under the laws of the State of New York (the "Company"), on
behalf of itself and each separate account of the Company named in Schedule A to
this Agreement, as may be amended from time to time (each such separate account
being hereinafter referred to as a "Separate Account" and, collectively, as the
"Separate Accounts"); Delaware Group Premium Fund, an open-end management
investment company organized as a business trust under the laws of the State of
Delaware (the "Trust"); Delaware Management Company, a series of Delaware
Management Business Trust, a business trust organized under the laws of the
State of Delaware and investment adviser to the Trust (the "Adviser"); and
Delaware Distributors, L.P., a limited partnership organized under the laws of
the State of Delaware and principal underwriter/distributor of the Trust (the
"Distributor").
WHEREAS, the Trust engages in business as an open-end diversified,
management investment company and was established for the purpose of serving as
the investment vehicle for separate accounts established for variable life
insurance contracts and variable annuity contracts (collectively, the "Variable
Insurance Products") to be offered by insurance companies that have entered into
participation agreements with the Trust substantially similar to this Agreement
("Participating Insurance Companies"); and
WHEREAS, beneficial interests in the Trust are divided into several
series of shares, each representing the interest in a particular managed
portfolio of securities and other assets (each, a "Fund" and collectively, the
"Funds"); and
WHEREAS, the Trust has obtained an order from the Securities and
Exchange Commission ("SEC"), dated November 2, 1987 (File No. 812-6777),
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 Investment Company Act of 1940, as amended
("1940 Act"), and Rules 6e-2(b)(15) and 6e-3(T)(b)(15) hereunder, to the extent
necessary to permit shares of the Trust to be sold to and held by variable
annuity and variable life insurance separate accounts of life insurance
companies that may or may not be affiliated with one another and qualified
pension and retirement plans ("Qualified Plans") ("Mixed and Shares Funding
Exemptive Order"); and
WHEREAS, the Trust is registered as an open-end management investment
company under the 1940 Act and shares of the Fund(s) are registered under the
Securities Act of 1933, as amended ("1933 Act"); and
WHEREAS, the Adviser is a series of a business trust which is duly
registered as an investment adviser under the Investment Advisers Act of 1940,
as amended, and any applicable state securities laws; and
1
WHEREAS, the Distributor is duly registered as a broker-dealer under
the Securities Exchange Act of 1934, as amended ("1934 Act") and is a member in
good standing of the National Association of Securities Dealers, Inc. ("NASD");
and
WHEREAS, the Company, as depositor, has established the Separate
Accounts to serve as investment vehicles for certain variable annuity contracts
and variable life insurance policies and funding agreements offered by the
Company set forth on Schedule A ("Contracts"); and
WHEREAS, the Company has registered interests under the Contracts that
are supported wholly or partially by the Separate Accounts under the 1933 Act;
and
WHEREAS, each Separate Account is a duly organized, validly existing
segregated asset account, established by resolution of the Board of Directors of
the Company under the insurance laws of the State of New York to set aside and
invest assets attributable to the Contracts; and
WHEREAS, the Company has registered each Separate Account as a unit
investment trust under the 1940 Act and has registered (or will register prior
to sale) the securities deemed to be issued by each Separate Account under the
1933 Act to the extent required; and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares in the Fund(s) listed in
Schedule B hereto (the "Designated Fund(s)"), on behalf of the Separate Accounts
to fund the Contracts, and the Trust is authorized to sell such shares to unit
investment trusts, such as the Separate Accounts, at net asset value; and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Separate Accounts also intend to purchase shares in other
open-end investment companies or series thereof not affiliated with the Trust
("Unaffiliated Funds") to fund the Contracts.
NOW, THEREFORE, in consideration of their mutual promises, the Company,
the Trust, the Adviser and the Distributor agree as follows:
ARTICLE I. - SALE OF FUND SHARES
1.1 The Distributor agrees to sell to the Company those shares of the
Designated Funds that the Company orders on behalf of each Separate
Account, executing such orders on a daily basis at the net asset value
(and with no sales charges) next computed after receipt and acceptance
by the Trust or its designee of the orders for the shares of the
Designated Funds. For purposes of this Section 1.1, the Company will be
designee of the Trust solely for the purpose of receiving such orders
from each Separate Account and receipt by such designee will constitute
receipt by the Trust, provided that the Company provides the Trust with
a purchase order by 9:00 a.m. Eastern Time on the next following
Business Day. "Business Day" will mean any day on which the New York
Stock Exchange is open for trading and on which the Trust calculates
its net asset value pursuant to the rules of the SEC. If a purchase
order is received by the Trust after 9:00 a.m. Eastern Time on a
Business Day, such redemption request will be considered to be received
on the next following Business Day and payment by the Company for such
2
purchase order pursuant to Section 1.2 of this Agreement will be made
by the Company on the next following Business Day. The Trust may net
the redemption requests it receives from the Company under Section 1.3
of this Agreement against purchase orders it receives from the Company
under this Section 1.1. The Trust and the Company will be responsible
for assuring their compliance with the Purchase and Redemption Order
Procedures set forth in Schedule D.
1.2 The Company will transmit payment for shares of any Designated Fund
purchased by 3:00 p.m. Eastern Time on the same Business Day an order
to purchase such shares is provided to the Trust, in accordance with
Section 1.1. Payment will be made in federal funds transmitted by wire.
Upon receipt by the Trust of the purchase payment, such funds shall
cease to be the responsibility of the Company and shall become the
responsibility of the Trust.
1.3 The Trust agrees to redeem, upon the Company's request, any full or
fractional shares of a Designated Fund held by the Company, executing
such requests on a daily basis at the net asset value next computed
after receipt and acceptance by the Trust or its designee. For purposes
of this Section 1.3, the Company will be the designee of the Trust
solely for the purpose of receiving request for redemption from each
Separate Account and receipt by such designee will constitute receipt
by the Trust, provided that the Company provides the Trust with a
redemption request by 9:00 .am. Eastern Time on the next following
Business Day. Payment for shares of any Designated Fund redeemed will
be made in federal funds transmitted by wire to the Company's account
as designated by the Company in writing from time to time, by 3:00 p.m.
Eastern Time on the Business Day the Trust receives notice of the
redemption request for such shares from the Company. The Trust reserves
the right to delay payment of redemption proceeds, but in no event may
such payment be delayed longer than the period permitted under Section
22(e) of the 0000 Xxx. The Trust will not bear any responsibility
whatsoever for the proper disbursement or crediting of redemption
proceeds; the Company alone will be responsible for such action. If a
redemption request is received by the Trust after 9:00 a.m. Eastern
Time on a Business Day, such redemption request will be considered to
be received on the next following Business Day and payment for redeemed
shares will be made by the Trust on the next following Business Day.
The Trust may net purchase orders it receives from the Company under
Section 1.1 of this Agreement against the redemption requests it
receives from the Company under this Section 1.3. The Trust and the
Company will be responsible for assuring their compliance with the
Purchase and Redemption Order Procedures set forth in Schedule D.
1.4 The Trust agrees to make shares of the Designated Funds available
indefinitely for purchase at the applicable net asset value per share
by the Company on behalf of the Separate Accounts on those days on
which the Trust calculates the net asset value of each Designated Fund
pursuant to rules of the SEC; provided, however, that the Board of
Trustees of the Trust (the "Trustees") may refuse to sell shares of any
Designated Fund to any person, or suspend or terminate the offering of
shares of any Designated 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 light of their
fiduciary duties under
3
federal and any applicable state laws, necessary in the best interests
of the shareholders of such Designated Fund.
1.5 The Trust and the Distributor agree that shares of the Designated Funds
on Schedule B will be sold only to Participating Insurance Companies
and their separate accounts, Qualified Plans or such other persons as
are permitted under applicable provisions of the Internal Revenue Code
of 1986, as amended (the "Code), and regulations promulgated
thereunder, the sale of which will not impair the tax treatment
currently afforded the Contracts. No shares of any Designated Fund on
Schedule B will be sold directly to the general public.
1.6 The Trust will not sell shares of any Designated Fund to any insurance
company or separate account unless an agreement containing provisions
substantially similar to those in Sections 2.1, 2.2 and 2.4 of Article
II, Section 3.4 of Article III, Sections 4.4 and 4.5 of Article IV,
Section 6.1 of Article VI and Article VII of this Agreement are in
effect to govern such sales.
1.7 The Company agrees to purchase and redeem the shares of the Designated
Funds offered by the then current prospectus of the relevant Designated
Fund in accordance with the provisions of such prospectus.
1.8 Issuance and transfer of the shares of the Designated Funds will be by
book entry only. Share certificates will not be issued to the Company
or to any Separate Account. Purchase and redemption orders for shares
of the Designated Funds will be recorded in an appropriate title for
each Separate Account or the appropriate sub-account of each Separate
Account.
1.9 The Trust will furnish notice (by wire, telephone or facsimile) to the
Company as soon as reasonably practicable of the declaration of any
income, dividends or capital gain distributions payable on each
Designated Fund's shares. The Company, on its behalf and on behalf of
each Separate Account, hereby elects to receive all such income,
dividends and distributions as are payable on a Designated Fund's
shares in the form of additional shares of that Designated Fund at the
ex-dividend date net asset values. The Company reserves the right to
revoke this election upon prior reasonable written notice to the Trust
and to receive all such dividends and distributions in cash. The Trust
will notify the Company promptly of the number of shares so issued as
payment of such dividends and distributions.
1.10 The Trust will make the net asset value per share for each Designated
Fund available to the Company via electronic means on a daily basis as
soon as reasonably practical after the net asset value per share is
calculated and will use its best efforts to make such net asset value
per share available by 6:30 p.m., Eastern Time, each Business Day. If
the Trust provides the Company materially incorrect net asset value per
share information (as determined under SEC guidelines), the Company and
the Trust shall be entitled to an adjustment to the number of shares
purchased or redeemed to reflect the correct net asset value per share.
Any material error in the calculation or reporting of net asset value
per share, dividend or capital gain information shall be reported to
the Company upon
4
discovery by the Trust. In no event, however, will the Trust be
liable for material errors in calculating or reporting net asset
values where such errors are the result of information supplied by
the Company or persons under its control.
ARTICLE II. - REPRESENTATIONS AND WARRANTIES
2.1 The Company represents and warrants that the securities deemed to be
issued by the Separate Accounts under the Contracts are or will be
registered under the Securities Act of 1933 (the "1933 Act"), or are
exempt from registration thereunder, and that the Contracts will be
issued and sold in compliance with all applicable federal and state
laws, rules and regulations (collectively, "laws"). The Company further
represents and warrants that: (i) it is an insurance company duly
organized and in good standing under applicable law; (ii) it has
legally and validly established each Separate Account as a segregated
asset account under Section 4240 of the New York Insurance Law, as
amended; (iii) each Separate Account is or will be registered as a unit
investment trust in accordance with the provisions of the 1940 Act to
serve as a segregated investment account for the Contracts, or is
excluded from registration thereunder, and will comply in all material
respects with the provisions of the 1940 Act, to the extent applicable;
and (iv) it will maintain the registration contemplated by the
preceding clause (iii) for so long as any Contracts are outstanding.
The Company will amend each registration statement under the 1933 Act
for the Contracts and the registration statement under the 1940 Act for
the Separate Accounts from time to time as required under applicable
law in order to effect the continuous offering of the Contracts or as
may otherwise be required by applicable law. The Company will register
and qualify the Contracts for sale in accordance with the securities
laws of the various states as applicable.
2.2 Subject to the Trust's representations in Article III, the Company
represents and warrants that the Contracts are currently and at all
times will be treated as annuity contracts and/or life insurance
policies (as applicable) under applicable provisions of the Code, and
that it will maintain such treatment and that it will notify the Trust,
the Adviser and the Distributor 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 Separate Account is a
"segregated asset account" and that interests in the Separate 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 regulations thereunder. The Company will cause such
definitional requirements to be met at all times and it will notify the
Trust, the Adviser and the Distributor 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 agrees
that any prospectus offering a Contract that is a "modified endowment
contract" as that term is defined in Section 7702A of the Code (or any
successor or replacement provision) will identify such Contract as a
modified endowment contract.
2.3 The Company represents and warrants that it will not purchase shares of
the Designated Fund(s) with assets derived from tax-qualified
retirement plans except, indirectly, through Contracts purchased in
connection with such plans.
5
2.4 The Trust represents and warrants that shares for the Designated
Funds(s) sold pursuant to this Agreement will be registered under the
1933 Act and duly authorized for issuance in accordance with applicable
law and that the Trust is and will remain registered as an open-end,
management investment company under the 1940 Act for as long as such
shares of the Designated Fund(s) are sold. The Trust will amend the
registration statement for its shares under the 1933 Act and itself
under the 1940 Act from time to time as required under applicable law
in order to effect the continuous offering of its shares.
2.5 The Trust and the Adviser each represents and warrants that it will use
its best efforts to comply with any applicable state insurance laws or
regulations as they may apply to the investment objectives, policies
and restrictions of the Designated Funds. The Trust and the Distributor
each represents and warrants that it will use its best efforts to
ensure that the Designated Funds' shares will be sold in compliance
with the insurance laws of the State of New York and all applicable
state insurance and securities laws. The Company and the Trust will
endeavor to mutually cooperate with respect to the implementation of
any modifications necessitated by any change in state insurance laws,
regulations or interpretations of the foregoing that affect the
Designated Funds (a "Law Change") and to keep each other informed of
any Law Change that becomes known to such party. In the event of a Law
Change, the Trust agrees that, except in those circumstances where the
Trust has advised the Company that implementation of a Law Change is
not in the best interests of all of the Trust's shareholders with an
explanation regarding why such action is lawful, any action required by
a Law Change will be taken. The Trust makes no other representation as
to whether any aspect of its operations (including, but not limited to,
fees and expenses, and investment policies) complies with the insurance
laws or regulations of any state. The Company represents that it will
use its best efforts to notify the Trust of any restrictions imposed by
state insurance laws that may become applicable to the Trust as a
result of the Separate Accounts' investments therein. The Trust and the
Adviser agree that they will furnish the information reasonably
required by state insurance laws to assist the Company in obtaining the
authority needed to issue the Contracts in various states.
2.6 The Trust reserves the right to adopt a plan pursuant to Rule 12b-1
under the 1940 Act and to impose asset-based or other sales charges to
finance distribution expenses as permitted by applicable laws. The
Trust represents and warrants that, to the extent that it decides to
finance distribution expenses pursuant to Rule 12b-1 under the 1940
Act, the Trust undertakes to have the Trustees, a majority of whom are
not "interested" persons of the Trust, formulate and approve any plan
under Rule 12b-1 to finance distribution expenses. The Trust shall
notify the Company immediately upon determining to finance distribution
expenses pursuant to a plan adopted in accordance with Rule 12b-1 under
the 0000 Xxx.
2.7 The Trust represents that it is lawfully organized and validly existing
under the laws of the State of Delaware and that it does and will
comply in all material respects with applicable provisions of the 1940
Act.
6
2.8 The Trust represents and warrants that all of is trustees, officers,
employees, investment advisers, and other individuals/entities having
access to the funds and/or securities of the Trust are and will
continue to be at all times covered by a blanket fidelity bond or
similar coverage for the benefit of the Trust in an amount not less
than the minimal coverage as required currently by Rule 17g-1 of the
1940 Act or related provisions as may be promulgated from time to time.
The aforesaid bond includes coverage for larceny and embezzlement and
is issued by a reputable bonding company.
2.9 The Company represents and warrants that all of its directors,
officers, employees, and other individuals/entities employed by the
Company dealing with the money and/or securities of the Separate
Accounts are covered by a blanket fidelity bond or similar coverage in
an amount not less than $5 million. The aforesaid bond includes
coverage for larceny and embezzlement and is issued by a reputable
bonding company. The Company agrees to hold for the benefit of the
Trust and to pay to the Trust any amounts lost from larceny,
embezzlement or other events covered by the aforesaid bond to the
extent such amounts derive from activities described in this Agreement.
The Company agrees to make all reasonable efforts to see that this bond
or another bond containing these provisions is always in effect, and
agrees to notify the Trust in the event that such coverage no longer
applies.
2.10 The Adviser represents and warrants that: (i) it is duly registered as
an investment adviser under the Investment Advisers Act of 1940, as
amended, and will remain duly registered under all applicable federal
and state securities laws; and (ii) it will perform its obligations for
the Trust in accordance in all material respects with the laws of the
State of Delaware and any applicable state and federal securities laws.
2.11 The Distributor represents and warrants that it: (i) is registered as a
broker-dealer under the Securities and Exchange Act of 1934, as amended
(the "1934 Act") and will remain duly registered under all applicable
federal and state securities laws; (ii) is a member in good standing of
the National Association of Securities Dealers, Inc. ("NASD"); (iii)
serves as principal underwriter/distributor of the Trust; and (iv) will
perform its obligations for the Trust in accordance in all material
respects with the laws of the State of Delaware and any applicable
state and federal securities laws.
ARTICLE III. - FUND COMPLIANCE
3.1 Subject to the Company's representations and warranties in Sections 2.1
and 2.2 hereof, the Trust, the Distributor and the Adviser each
represents and warrants that the Trust will at all times sell its
shares and invest its assets in such a manner as to ensure that the
Contracts will be treated as annuity contracts under the Code, and the
regulations issued thereunder. Specifically for further clarification
of the foregoing, the Trust and Adviser each represents and warrants
that the Trust and each Designated Fund thereof will at all times
comply with Section 817(h) of the Code and Treasury Regulation
Section 1.817-5, as amended from time to time, and any Treasury
interpretations thereof, relating to the diversification requirements
for variable annuity, endowment, or life insurance contracts and with
Section 817(d) of the Code, relating to the definition of a "variable
contract" and any amendments or other modifications or successor
provisions to such Sections or
7
Regulations or any other applicable Code requirements. In the event
of a breach of this Article III by the Trust, the Trust, Distributor,
and Adviser will take all steps necessary to: (a) notify the Company
of such breach, and (b) adequately diversify the Trust or Designated
Fund so as to achieve compliance within the 30-day grace period
afforded by Regulation 1.817-5.
3.2 The Trust and the Distributor each represents and warrants that shares
of the Designated Funds will be sold only to Participating Insurance
Companies, their separate accounts, Qualified Plans, and any other
persons eligible to purchase the Designated Fund; provided, that the
purchase of shares by such persons would not preclude the Company from
"looking through" to the investments of each Designated Fund in which
it invests, pursuant to the "look through" rules set forth in Treasury
Regulation 1.817-5. No shares of any Designated Fund will be sold to
the general public.
3.3 The Trust represents and warrants that each Designated Fund is
currently qualified as a Regulated Investment Company under Subchapter
M of the Code, and that the Trust will maintain such qualification
(under Subchapter M or any successor or similar provision) and that the
Trust will notify the Company immediately upon having a reasonable
basis for believing that any Designated Fund has ceased to so qualify
of that it might not so qualify or that it might not so qualify in the
future.
3.4 Without in any way limiting the effect of Sections 8.2 and 8.3 hereof,
and without in any way limiting or restricting any other remedies
available to the Company, the Distributor and/or Adviser will pay all
costs associated with or arising out of any failure, or any anticipated
or reasonably foreseeable failure, of the Trust or any Designated Fund
to comply with Section 3.1, 3.2 or 3.3 hereof, including all costs
associated with reasonable and appropriate corrections or responses to
any such failure; such costs may include, but are not limited to, the
costs involved in creating, organizing and registering a new investment
company as a funding medium for the Contracts and/or the costs of
obtaining whatever regulatory authorizations are required to substitute
shares or another investment company for those of the failed Designated
Fund (including but not limited to an order pursuant to Section 26(b)
of the 1940 Act); such costs are to include, but are not limited to,
reasonable fees and expenses of legal counsel and other advisers to the
Company and any federal income taxes or tax penalties and interest
thereon (or "toll charges" or exactments or amounts paid in settlement)
incurred by the Company with respect to itself or its Contract owners
in connection with any such failure or anticipated or reasonably
foreseeable failure.
3.5 The Trust agrees to provide the Company with a certificate or statement
indicating compliance by each Fund of the Trust with Section 817(h) of
the Code, such certificate or statement to be sent to the Company no
later than thirty (30) days following the end of each calendar quarter.
ARTICLE IV. - PROSPECTUS AND PROXY STATEMENTS; VOTING
4.1 The Trust or the Distributor will provide the Company with as many
copies of the current Trust prospectus and any supplements thereto for
the Designated Funds as the Company
8
may reasonably request for distribution to Contract owners at the
time of Contract fulfillment and confirmation. To the extent that
the Designated Funds are one or more of several funds or series of
the Trust, the Trust be obligated to provide the Company only with
disclosure related to the Designated Funds. The Trust will provide
the copies of said prospectus to the Company or to its mailing
agent. If requested by the Company, in lieu thereof, the Trust or
the Distributor will provide such documentation, including a final
copy of a current prospectus set in type or camera ready or
electronic format and other assistance as is reasonably necessary
in order for the Company at least annually (or more frequently if
the Trust prospectus is amended more frequently) to have the new
prospectus for the Contracts and the Trust's new prospectus
printed together. The Trust or the Distributor will, upon request,
provide the Company with a copy of the Trust's prospectus through
electronic means (in .pdf format, or in such other electronic
format as the parties shall agree to in writing) to facilitate the
Company's efforts to provide Trust prospectuses via electronic
delivery. Expenses associated with providing such documentation
shall be allocated in accordance with Article VI of this Agreement.
4.2 The Trust's prospectus will state that a Statement of Additional
Information ("SAI") for the Trust is available, and will disclose how
investors may obtain the SAI.
4.3 The Trust, the Distributor or the Adviser will provide the Company or
its mailing agent with copies of its proxy material, if any, with
respect to the Designated Funds, reports to shareholders/Contract
owners and other communications to shareholders/Contract owners in such
quantity as the Company will reasonably require with expenses to be
borne in accordance with Article V of this Agreement. The Company will
distribute this proxy material, reports and other communications to
existing Contract owners. If requested by the Company, the Trust, the
Distributor or the Adviser shall provide an electronic copy of such
documentation in a format suitable to posting on a website maintained
by or on behalf of the Company.
4.4 If and to the extent required by law, the Company will:
(a) solicit voting instructions from Contract owners;
(b) vote the shares of Designated Funds held in the Separate
Accounts in accordance with instructions received from
Contract owners; and
(c) vote shares of Designated Funds held in the Separate Accounts
for which no timely instructions have been received from the
Company's Contract owners in the same proportion as shares of
the Designated Funds 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 Contract owners.
The Company reserves the right to vote shares of the Designated Funds
held in any segregated asset account in its own right, to the extent
permitted by law. The Company will be responsible for assuring that the
Separate Accounts calculate voting privileges in a manner consistent
with all legal
9
requirements, including the Proxy Voting Procedures set
forth in Schedule C and the Mixed and Shared Funding Order, as
described in Section 7.1.
4.5 The Trust will comply with all provisions of the 1940 Act requiring
voting by shareholders and, in particular, the Trust will either
provide for annual meetings (except insofar as the SEC may interpret
Section 16 of the 1940 Act not to require such meetings) or, as the
Trust currently intends, comply with Section 16(c) of the 1940 Act
(although the Trust is not one of the Trusts described in Section 16(c)
of that Act) as well as with Sections 16(a) and, if an when applicable,
16(b). Further, the Trust will act in accordance with the SEC's
interpretation of the requirements of Section 16(a) with respect to
periodic elections of directors or trustees and with whatever rules the
SEC may promulgate with respect thereto.
ARTICLE V. - SALES MATERIAL AND INFORMATION
5.1 The Company will furnish, or will cause to be furnished, to the Trust
or its designee, each piece of sales literature or other promotional
material in which the Trust, the Adviser or the Distributor is named.
No such material will be used until approved by the Trust or the
Distributor, if the Trust or the Distributor reasonably object to such
use within ten (10) business days after receipt of such material. The
Trust or its designee reserves the right to object reasonably to the
continued use of any such sales literature or other promotional
material in which the Trust (or any Designated Fund), the Adviser, any
sub-adviser or the Distributor is named and no such material shall be
used if the Trust or its designee so objects.
5.2 The Company will not give any information or make any representations
or statements on behalf of the Trust or concerning the Trust or any
Designated Fund in connection with the sale of the Contracts other than
the information or representations contained in the registration
statement, prospectus or SAI for shares of the Designated Funds, as
such registration statement, prospectus and SAI may be amended or
supplemented from time to time, or in reports or proxy statements for
the Designated Funds, or in sales literature or other material provided
by the Trust, the Adviser or the Distributor, except with permission of
the Trust, the Adviser or the Distributor. The Trust, the Adviser or
the Distributor agree to respond to any request for approval on a
prompt and timely basis.
5.3 The Trust, the Adviser or the Distributor, or a designee, will furnish,
or will cause to be furnished, to the Company or its designee, each
piece of sales literature or other promotional material in which the
Company or any Separate Account is named, prior to its use. No such
material will be used until approved by the Company or its designee, if
the Company reasonably objects to such use within five (5) business
days after receipt of such material or to its continued use.
5.4 The Trust, the Adviser or the Distributor will not give any information
or make any representations or statements on behalf of the Company or
concerning the Company, any Separate Account, or the Contracts other
than the information or representations contained in a registration
statement, prospectus or SAI for the Contracts, as such registration
statement, prospectus and SAI may be amended or supplemented from time
10
to time, or in published reports for each Separate Account or the
Contracts which are in the public domain or approved by the Company for
distribution to Contract owners, or in sales literature or other
material provided by the Company, except with permission of the
Company. The Company agrees to respond to any request for approval on a
prompt and timely basis.
5.5 The Trust will provide to the Company at least one complete copy of all
registration statements, prospectuses, SAIs, reports, proxy statements,
sales literature and other promotional materials, applications for
exemptions, requests for no-action letters, and all amendments to any
of the above, that relate to the Trust or shares of the Designated
Funds, within a reasonable time after filing of such document with the
SEC or the NASD or contemporaneously with the first use or public
availability of such documents.
5.6 The Company will provide to the Trust at least one complete copy of all
definitive prospectuses, definitive SAIs, reports, solicitations for
voting instructions, sales literature and other promotional materials,
applications for exemptions, requests for no-action letters, and all
amendments to any of the above, that relate to any Contract or any
Separate Account (collectively, "Contract Materials"),
contemporaneously with the filing of each such document with the SEC or
the NASD (except that with respect to post-effective amendments to such
prospectuses and SAIs and sales literature and promotional material,
only those prospectuses and SAIs and sales literature and promotional
material that relate to or refer to the Trust or any Designated Fund
will be provided). In addition, the Company will provide to the Trust
at least one complete copy of (i) a registration statement that relates
to the Contracts or any Separate Account, containing representative and
relevant disclosure concerning the Trust; and (ii) any post-effective
amendments to any registration statements relating to the Contracts or
such Separate Account that refer to or relate to the Trust or any
Designated Fund. The Company shall provide to the Trust and the
Distributor copies of any complaints received from Contract owners
pertaining to the Trust or any Designated Fund.
5.7 For purposes of this Article V, 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 or tape
recording, videotape display, signs or billboards, motion pictures, or
other public media, (I.E., on-line networks such as the Internet or
other electronic messages)), sales literature (I.E., any written
communication distributed or made generally available to customers or
the public, including brochures, circulars, research reports, market
letters, form letters, seminar texts, 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, SAIs, shareholder reports, and proxy
materials and any other material constituting sales literature or
advertising under the NASD Conduct Rules, the 1933 Act or the 0000 Xxx.
5.8 The Trust, the Adviser and the Distributor hereby consent to the
Company's use of their respective names as well as the names of the
Designated Funds in connection with marketing the Contracts, subject to
the terms of Sections 5.1 or 5.2 of this Agreement.
11
The Trust, the Adviser and the Distributor hereby consent to the
use of any trademark, trade name, service xxxx or logo used by the
Trust, the Adviser and the Distributor, subject to the Trust's,
the Adviser's and/or the Distributor's approval of such use and in
accordance with reasonable requirements of the Trust, the Adviser
or the Distributor. Such consent will terminate with the
termination of this Agreement. The Company agrees and acknowledges
that the Trust, the Adviser or the Distributor is the owner of the
name, trademark, trade name, service xxxx and logo and that all
use of any designation comprised in whole or in part of the name,
trademark, trade name, service xxxx and logo under this Agreement
shall inure to the benefit of the Trust, Adviser and/or
Distributor.
5.9 The Trust, the Adviser, the Distributor and the Company agree to adopt
and implement procedures reasonably designed to ensure that information
concerning the Company, the Trust, the Adviser or the Distributor,
respectively, and their respective affiliated companies, that 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) and is properly marked as "Not For Use
With The Public" or "For Broker-Dealer Use Only" and that such
information is only so used.
ARTICLE VI. - FEES, COSTS AND EXPENSES
6.1 The Fund, Distributor and Adviser shall pay no fee or other
compensation to the Company under this Agreement and the Company shall
pay no fee or other compensation to the Fund, Distributor or Adviser
under this Agreement, although the Parties hereto will bear certain
expenses in accordance with this Agreement.
6.2 Each party shall, in accordance with the allocation of expenses
specified in this Agreement, 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 (i) for distribution and shareholder-related services
under a plan adopted in accordance with Rule 12b-1 under the 1940 Act
and (ii) other services that are not primarily intended to result in
the sale of shares of the Designated Funds, which are provided to
Contract owners relating to the Designated Funds.
6.3 All expenses incident to performance by the Trust of this Agreement
will be paid by the Trust or the Distributor to the extent permitted by
law. All shares of the Designated Funds will be duly authorized for
issuance and registered in accordance with applicable federal law and,
to the extent deemed advisable by the Trust, in accordance with
applicable state law, prior to sale. The Trust will bear the expenses
for the cost of registration and qualification of the Trust's shares,
including without limitation, the preparation of and filing with the
SEC of Forms N-1A and Rule 24f-2 Notices on behalf of the Trust and
payment of all applicable registration or filing fees (if applicable)
with respect to shares of the Trust; preparation and filing of the
Trust's prospectus, SAI and registration statement, proxy materials and
reports; typesetting the Trust's prospectus; typesetting and printing
proxy materials and reports to Contract owners (including the costs of
printing a Trust prospectus that constitutes an annual report); the
preparation of all statements and notices required by any federal or
state law; all taxes on the issuance or
12
transfer of shares of the Designated Funds; any expenses permitted
to be paid or assumed by the Trust with respect to the Designated
Funds pursuant to a plan, if any, under Rule 12b-1 under the 1940
Act; and other costs associated with preparation of prospectuses
and SAIs regarding the Designated Funds in electronic or typeset
format for distribution to existing Contract owners.
6.4 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 Contracts' prospectus and SAI; the cost of
printing the Trust's prospectus for use in connection with offering the
Contracts; the costs of printing and distributing to Contract owners
the Trust's prospectus and the Trust's proxy materials and reports; and
the cost of printing and distributing such annual individual account
statements for Contract owners as are required by state laws.
ARTICLE VII. - MIXED AND SHARED FUNDING RELIEF
7.1 The Trust represents and warrants that it has received an order from
the SEC granting Participating Insurance Companies and variable annuity
separate accounts and variable life insurance separate accounts relief
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 Designated Funds to be sold to
and held by variable annuity separate accounts and variable life
insurance separate accounts of both affiliated and unaffiliated
Participating Insurance Companies and qualified pension and retirement
plans outside of the separate account context (the "Mixed and Shares
Funding Order"). The parties to this Agreement agree that the
conditions or undertakings required by the Mixed and Shared Funding
Order that may be imposed on the Company, the Trust and/or the Adviser
by virtue of the receipt of such order by the SEC will: (i) apply only
upon the sale of shares of the Designated Fund to a variable life
insurance separate account (and then only to the extent required under
the 1940 Act); (ii) be incorporated herein by reference; and (iii) such
parties agree to comply with such conditions and undertakings to the
extent applicable to each such party notwithstanding any provision of
the agreement to the contrary.
7.2 The Trust represents and warrants that the Trustees will monitor the
Trust for the existence of any material irreconcilable conflict among
the interests of the Contract owners of all Separate Accounts investing
in the Designated Funds. A material irreconcilable conflict may arise
for a variety of reasons, including, but not limited to: (1) 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 interpretative
letter, 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 any
Designated Fund are being managed; (e) a difference in voting
instructions given by Participating Insurance Companies or by variable
annuity and variable life insurance Contract owners; or (f) a decision
by an insurer to disregard the voting instructions of Contract owners.
The Trustees will promptly inform the Company if it determines that a
material irreconcilable conflict exists and explain the implications
thereof.
13
7.3 The Company will promptly report any potential or existing conflicts of
which it is aware to the Trustees. The Company agrees to assist the
Trustees in carrying out their responsibilities under the Mixed and
Shared Funding Order by promptly providing the Trustees with all
information reasonably necessary for the Trustees to consider any
issues raised. This includes, but is not limited to, an obligation by
the Company to promptly inform the Trustees whenever Contract owner
voting instructions are to be disregarded. Such responsibilities will
be carried out by the Company with a view only to the interests of its
Contract owners.
7.4 If it is determined by a majority of the Trustees constituting the
Trust's Board of Trustees, or a majority of the disinterested Trustees
of the Board, that a material irreconcilable conflict exists, the
Company and other Participating Insurance Companies will, at their
expense and to the extent reasonably practicable (as determined by a
majority of the disinterested trustees), take whatever steps are
necessary to remedy or eliminate the material irreconcilable conflict,
up to and including: (a) withdrawing the assets allocable to some or
all of the Separate Accounts from the Trust or any Designated Fund and
reinvesting such assets in a different investment medium, including
(but not limited to) another Designated Fund, or submitting the
question whether such segregation should be implemented to a vote of
all affected Contract owners and, as appropriate, segregating the
assets of any appropriate group (I.E., variable annuity Contract owners
or variable life insurance Contract owners of one or more Participating
Insurance Companies) that votes in favor of such segregation, or
offering to the affected Contract owners the option of making such a
change; and (b) establishing a new registered management investment
company or managed separate account.
7.5 If a material irreconcilable conflict arises because of a decision by
the Company to disregard Contract owner voting instructions, and such
disregard of voting instructions could conflict with the majority of
Contract owner voting instructions, and the Company's judgment
represents a minority position or would preclude a majority vote, the
Company may be required, at the Trust's election, to withdraw the
investment of the affected sub-account of the Separate Account in the
Designated Fund and terminate this Agreement with respect to such
sub-account; provided, however, that such withdrawal and termination
will be limited to the extent required by the foregoing material
irreconcilable conflict as determined by a majority of the
disinterested Trustees of the Trust. No charge or penalty will be
imposed as a result of such withdrawal. Any such withdrawal and
termination must take place within six (6) months after the Trust gives
written notice to the Company that this provision is being implemented.
Until the end of such six-month period, the Distributor and the Adviser
will, to the extent permitted by law and the Mixed and Shared Funding
Order, continue to accept and implement orders by the Company for the
purchase (and redemption) of shares of the Trust.
7.6 If a material irreconcilable conflict arises because a particular state
insurance regulator's decision applicable to the Company conflicts with
the decisions of the majority of other state insurance regulators, then
the Company will withdraw the investment of the affected sub-account of
the Separate Account in the Designated Fund and terminate this
Agreement with respect to such sub-account; provided, however, that
such withdrawal and termination will be limited to the extent required
by the foregoing material
14
irreconcilable conflict as determined by a majority of the
disinterested Trustees. No charge or penalty will be imposed as a
result of such withdrawal. Any such withdrawal and termination
must take place within six (6) months after the Trust gives
written notice to the Company that this provision is being
implemented. Until the end of such six-month period the Trust
will, to the extent permitted by law and the Mixed and Shared
Funding Order, continue to accept and implement orders by the
Company for the purchase (and redemption) of shares of the
Designated Funds.
7.7 For purposes of Section 7.4 through 7.7 of this Agreement, a majority
of the disinterested Trustees of the Trust will 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 will not be required by
Section 7.4 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 adversely
remedy any material irreconcilable conflict, then the Company will
withdraw the investment of the affected sub-account of the Separate
Account in the Designated Fund 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 will be limited to the extent required by any such material
irreconcilable conflict as determined by a majority of the
disinterested Trustees of the Trust.
7.8 The Company will at least annually submit to the Trustees such reports,
materials or data as the Trustees of the Trust may reasonably request
so that the Trustees may fully carry out the duties imposed upon it as
delineated in the Mixed and Shared Funding Order, and said reports,
materials and data will be submitted more frequently if deemed
appropriate by the Trustees.
7.9 If and to the extent that Rule 6e-2 and Rule 6e-3(T) are amended, or
Rule 6e-3 is adopted, to provide 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 Order) on terms and
conditions materially different from those contained in the Mixed and
Shared Funding Order, then: (a) the Trust and/or the Participating
Insurance Companies, as appropriate, will take such steps as may be
necessary to comply with Rules 6e-2 and 6e-3(T), as amended, and Rule
6e-3, as adopted, to the extent such rules are applicable; and (b)
Sections 4.3, 4.4, 4.5, 7.1, 7.2, 7.3, 7.4, 7.5 and 7.6 of this
Agreement will 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
(a) The Company agrees to indemnify and hold harmless the Trust,
the Adviser, the Distributor, and each of the Trust's or the
Adviser's or the Distributor's directors,
15
trustees, officers, employees or agents and each person,
if any , who controls or is associated with the Trust,
the Adviser or the Distributor within the meaning of
such terms under the federal securities laws
(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
actions in respect thereof (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 litigation in
respect thereof) or settlements:
(1) 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 SAI 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 or the alleged
omission to state therein a material fact required to
be stated or necessary to make such statements not
misleading in light of the circumstances in which
they were made; provided, that this agreement to
indemnify will not apply as to any Indemnified Party
if such statement or omission of such alleged
statement or omission was made in reliance upon and
in conformity with information furnished to the
Company by or on behalf of the Trust, the Adviser, of
the Distributor for use in the registration
statement, prospectus or SAI for the Contracts or in
the Contracts or sales literature (or any amendment
or supplement) or otherwise for use in connection
with the sale of the Contracts or shares of the
Designated Funds; or
(2) arise out of or as a result of statements or
representations by or on behalf of the Company (other
than statements or representations contained in the
Trust registration statement, prospectus, SAI or
sales literature or other promotional material of the
Trust, or any amendment or supplement to the
foregoing, not supplied by the Company or persons
under its control) or wrongful conduct of the Company
or persons under its control, with respect to the
sale or distribution of the Contracts or shares of
the Designated Funds; or
(3) arise out of untrue statement or alleged untrue
statement of a material fact contained in the Trust
registration statement, prospectus, SAI or sales
literature or other promotional material of the Trust
(or any amendment or supplement thereto) or the
omission or alleged omission to state therein a
material fact required to be stated therein or
necessary to make such statements not misleading in
light of the circumstances in which they were made,
if such statement or omission was made in reliance
upon and in conformity with information furnished to
the Trust by or on behalf of the Company or persons
under its control; or
16
(4) arise as a result of any failure by the Company to
provide the services and furnish the materials under
the terms of this Agreement; or
(5) arise out of 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 by the Company of this
Agreement;
except to the extent provided in Sections 8.1(b) and 8.4
hereof. This indemnification will be in addition to any
liability that the Company otherwise may have.
(b) No party will be entitled to indemnification under Section
8.1(a) if such loss, claim, damage, liability or litigation is
due to the willful misfeasance, bad faith, gross negligence,
or reckless disregard in the performance of such party's
duties and obligations under this Agreement.
(c) The Indemnified Parties promptly will notify in writing the
Company of the commencement of any litigation, proceedings,
complaints or litigation by regulatory authorities against
them in connection with the issuance or sale of the shares of
the Designated Funds or the Contracts or the operation of the
Trust.
8.2 INDEMNIFICATION BY THE ADVISER AND DISTRIBUTOR
(a) The Adviser and Distributor each agrees to indemnify and hold
harmless the Company and each of its directors, officers,
employees or agents and each person, if any, who controls or
is associated with the Company within the meaning of such
terms under the federal securities (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 Adviser and Distributor) or litigation in respect
thereof (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
litigation in respect thereof) or settlements:
(1) 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 SAI for the Trust or sales literature or other
promotional material generated or approved by the
Adviser or the Distributor on behalf 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 or necessary to make such
statements not misleading in light of the
circumstances in which they were made; provided that
this agreement to indemnify will not apply as to any
Indemnified Party if such statement or omission of
such alleged statement or omission was made in
reliance upon and in conformity with information
furnished to the Adviser, the Distributor or the
Trust by or on
17
behalf of the Company for use in the
registration statement, prospectus or SAI for the
Trust or in sales literature generated or approved by
the Adviser or the Distributor on behalf of the Trust
(or any amendment or supplement thereto) or otherwise
for use in connection with the sale of the Contracts
or shares of the Designated Funds; or
(2) arise out of or as a result of statements or
representations (other than statements or
representations contained in the Contracts or in the
Contract or Trust registration statements,
prospectuses or statements of additional information
or sales literature or other promotional material for
the Contracts or of the Trust, or any amendment or
supplement to the foregoing, not supplied by the
Adviser or the Distributor or persons under the
control of the Adviser or the Distributor
respectively) or wrongful conduct of the Adviser or
the Distributor or persons under the control of the
Adviser or the Distributor respectively, with respect
to the sale or distribution of the Contracts or
shares of the Designated Funds; or
(3) arise out of any untrue statement or alleged untrue
statement of a material fact contained in a
registration statement, prospectus, SAI or sales
literature or other promotional material covering the
Contracts (or any amendment or supplement thereto),
or the omission or alleged omission to state therein
a material fact required to be stated or necessary to
make such statement or statements not misleading in
light of the circumstances in which they were made,
if such statement or omission was made in reliance
upon and in conformity with information furnished to
the Company by or on behalf of the Adviser or the
Distributor or persons under the control of the
Adviser or the Distributor; or
(4) arise as a result of any failure by the Adviser or
the Distributor to provide the services and furnish
the materials under the terms of this Agreement; or
(5) arise out of or result from any material breach of
any representation and/or warranty made by the
Adviser or the Distributor in this Agreement, or
arise out of or result from any other material breach
of this Agreement by the Adviser or the Distributor
(including a failure, whether intentional or in good
faith or otherwise, to comply with the requirements
of Subchapter M of the Code specified in Article III,
Section 3.3 of this Agreement, as described more
fully in Section 8.5 below);
except to the extent provided in Sections 8.2(b) and 8.4
hereof. This indemnification will be in addition to any
liability that the Adviser or Distributor otherwise may have.
(b) No party will be entitled to indemnification under Section
8.2(a) if such loss, claim, damage, liability or litigation is
due to the willful misfeasance, bad faith,
18
gross negligence, or reckless disregard in the performance
of such party's duties and obligations under this Agreement.
(c) In no event shall the Adviser or the Distributor be liable
under the indemnification provisions contained in this
Agreement to any individual or entity, including without
limitation, the Company, or any Contract owner, with respect
to any losses, claims, damages, liabilities or expenses that
arise out of or result from the failure by the Company to
maintain its segregated asset account(s) under applicable
state law and as a duly registered unit investment trust under
the provisions of the 1940 Act (unless exempt therefrom) or,
subject to compliance by the Designated Funds with the
diversification requirements specified in Article III, the
failure by the Company to maintain its Contracts (with respect
to which any Designated Fund serves as an underlying funding
vehicle) as life insurance, endowment or annuity contracts
under applicable provisions of the Code.
(d) The Indemnified Parties promptly will notify in writing the
Adviser and the Distributor of the commencement of any
litigation, proceedings, complaints or litigation by
regulatory authorities against them in connection with the
issuance or sale of the Contracts or the operation of the
Separate Account.
8.3 INDEMNIFICATION BY THE TRUST
(a) The Trust agrees to indemnify and hold harmless the Company
and each of its directors, officers, employees or agents and
each person, if any, who controls or is associated with the
Company within the meaning of such terms under the federal
securities laws (collectively, the "Indemnified Parties" for
purposes of this Section 8.3) against any and all losses,
claims, damages, liabilities (including amounts paid in
settlement with the written consent of the Trust) or
litigation in respect thereof (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 litigation in respect thereof) or
settlements, are related to the operations of the Trust and:
(1) arise as a result of any failure by the Trust to
provide the services and furnish the materials under
the terms of this Agreement; or
(2) arise out of or result from any material breach of
any representation and/or warranty made by the Trust
in this Agreement or arise out of or result from any
other material breach of this Agreement by the Trust
(including a failure, whether intentional or in good
faith or otherwise, to comply with the requirements
of Subchapter M of the Code specified in Article III,
Section 3.3 of this Agreement as described more fully
in Section 8.5 below); or
19
(3) arise out of or result from the materially incorrect
or untimely calculation or reporting of daily net
asset value per share of a Designated Fund or
dividend or capital gain distribution on shares of a
Designated Fund;
except to the extent provided in Sections 8.3(b) and 8.4 hereof. This
indemnification will be in addition to any liability that the Trust
otherwise may have.
(b) No party will be entitled to indemnification under Section
8.3(a) if such loss, claim, damage, liability or litigation is
due to the willful misfeasance, bad faith, gross negligence,
or reckless disregard in the performance of such party's
duties and obligations under this Agreement.
(c) In no event shall the Trust be liable under the
indemnification provisions contained in this Agreement to any
individual or entity, including without limitation, the
Company, or any Contract owner, with respect to any losses,
claims, damages, liabilities or expenses that arise out of or
result from the failure by the Company to maintain its
segregated asset account(s) under applicable state law and as
a duly registered unit investment trust under the provisions
of the 1940 Act (unless exempt therefrom) or, subject to
compliance by the Designated Funds with the diversification
requirements specified in Article III, the failure by the
Company to maintain its Contracts (with respect to which any
Designated Fund serves as an underlying funding vehicle) as
life insurance, endowment or annuity contracts under
applicable provisions of the Code.
(d) The Indemnified Parties each agree to promptly notify in
writing the Trust of the commencement of any litigation,
proceedings, complaints or actions by regulatory authorities
against itself or any of its respective officers or directors
in connection with the Agreement, the issuance or sale of the
Contracts, the operation of the Separate Account(s), or the
sale or acquisition of shares of the Trust.
20
8.4 INDEMNIFICATION PROCEDURE
Any person obligated to provide indemnification under this Article VIII
("Indemnifying Party" for the purpose of this Section 8.4) will not be
liable under the indemnification provisions of this Article VIII with
respect to any claim made against a party entitled to indemnification
under this Article VIII ("Indemnified Party" for the purpose of this
Section 8.4) if such Indemnified Party has failed to notify in writing
the Indemnifying Party in accordance with its obligations under
Sections 8.1(c), 8.2(c) or 8.3(d), as applicable, but failure to notify
the Indemnifying Party or any such claim will not relieve the
Indemnifying Party from any liability which it may have to the
Indemnified Party against whom such action is brought otherwise than on
account of the indemnification provision of this Article VIII, except
to the extent that the failure to notify results in the failure of
actual notice to the Indemnifying Party and such Indemnifying Party is
damaged solely as a result of failure to give such notice. In case any
such action is brought against the Indemnified Party, the Indemnifying
Party will be entitled to participate, at its own expense, in the
defense thereof. The Indemnifying Party also will be entitled to assume
the defense thereof, with counsel satisfactory to the party named in
the action. After notice from the Indemnifying Party to the Indemnified
Party of the Indemnifying Party's election to assume the defense
thereof, the Indemnified Party 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 other
than reasonable costs of investigation, unless: (a) the Indemnifying
Party and the Indemnified Party will have mutually agreed to the
retention of such counsel; or (b) the named parties to any such
proceeding (including any impleaded parties) include both the
Indemnifying Party and the Indemnified Party and representation of both
parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. The Indemnifying Party will
not be liable for any settlement of any proceeding effected without its
written consent but if settled with such consent or if there is a final
judgment for the plaintiff, the Indemnifying Party agrees to indemnify
the Indemnified Party from and against any loss or liability by reason
of such settlement or judgment. A successor by law of the parties to
this Agreement will be entitled to the benefits of the indemnification
contained in this Article VIII. The indemnification provisions
contained in this Article VIII will survive any termination of this
Agreement.
8.5 INDEMNIFICATION FOR FAILURE TO COMPLY WITH DIVERSIFICATION REQUIREMENTS
The Trust and the Adviser acknowledge that if a Designated Fund fails
(whether intentionally or in good faith or otherwise) to comply with
the diversification requirements specified in Article III, Section 3.3
of this Agreement, the Contracts consequently may not be treated as
variable contracts for federal income tax purposes, which would have
adverse tax consequences for Contract owners and could also adversely
affect the Company's corporate tax liability. Accordingly, without in
any way limiting the effects of Sections 8.2(a) and 8.3(a) hereof and
without in any way limiting or restricting any other remedies available
to the Company, the Trust, the Adviser and the Distributor will pay on
a joint and several basis all costs associated with or arising out of
any failure, or any anticipated or reasonably foreseeable failure, of
any Designated Fund to comply with Section 3.3 of this Agreement,
including all costs associated with
21
correcting or responding to any such failure; such costs may
include, but are not limited to, the costs involved in creating,
organizing, and registering a new investment company as a funding
medium for the Contracts and/or the costs of obtaining whatever
regulatory authorizations are required to substitute shares of
another investment company for those of the failed Designated Fund
(including but not limited to an order pursuant to Section 26(b)
of the 1940 Act); reasonable fees and expenses of legal counsel
and other advisers of the Company and any federal income taxes or
tax penalties (or "toll charges" or exactments or amounts paid in
settlement) reasonably incurred by the Company in connection with
any such failure or anticipated or reasonably foreseeable failure.
Such indemnification and reimbursement obligation shall be in
addition to any other indemnification and reimbursement
obligations of the Trust, the Adviser and/or the Distributor under
this Agreement.
8.6 INDEMNIFICATION FOR FAILURE TO COMPLY WITH CODE PROVISIONS
The Company acknowledges that if a Separate Account fails (whether
intentionally or in good faith or otherwise) to comply with the Code
provisions specified in Article II, Section 2.2 of this Agreement or
other Code provisions related to the maintenance of the contracts as
variable contracts for federal income tax purposes the failure of the
contracts to be treated as variable contracts for federal income tax
purposes would have adverse consequences for the Designated Funds
serving as funding vehicles for Participating Insurance Companies.
Accordingly, without in any way limiting the effects of Sections 8.1(a)
hereof and without in any way limiting or restricting any other
remedies available to the Trust, the Adviser and the Distributor, the
Company will pay all costs associated with or arising out of any
failure, or any anticipated or reasonably foreseeable failure, of any
Separate Account to comply with Section 2.2 of this Agreement or Code
provisions related to the maintenance of the contracts as variable
contracts for federal income tax purposes, including all costs
associated with correcting or responding to any such failure; such
costs may include, but are not limited to, reasonable fees and expenses
of legal counsel and other advisers of the Trust, the Adviser and the
Distributor in connection with any such failure or anticipated or
reasonably foreseeable failure. Such indemnification and reimbursement
obligation shall be in addition to any other indemnification and
reimbursement obligations of the Company under this Agreement.
ARTICLE IX. - APPLICABLE LAW
9.1 This Agreement will be construed and the provisions hereof interpreted
under and in accordance with the laws of the State of Delaware
applicable to contracts entirely entered into and performed in Delaware
by Delaware residents.
9.2 This Agreement will be subject to the provisions of the 1933 Act, the
1934 Act and the 1940 Act, and the rules and regulations and ruling
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 Order) and the terms hereof will be
interpreted and construed in accordance therewith. If in the future,
the Mixed and Shared Funding
22
Order should no longer be necessary under applicable laws, then
Article VII shall no longer apply.
ARTICLE X. - TERMINATION
10.1 This Agreement will terminate automatically in the event of its
assignment, unless made with the prior written consent of each party,
or:
(a) at the option of any party, with or without cause, with
respect to one, some or all of the Designated Funds, upon six
(6) month's advance written notice to the other parties or, if
later, upon receipt of any required exemptive relief or orders
from the SEC, unless otherwise agreed in a separate written
agreement among the parties; or
(b) at the option of the Company, upon written notice to the other
parties, with respect to any Designated Fund if shares of the
Designated Fund are not reasonably available to meet the
requirements of the Contracts as determined in good faith by
the Company; or
(c) at the option of the Company, upon written notice to the other
parties, with respect to any Designated Fund in the event any
of the Designated Fund's shares are not registered, issued or
sold in accordance with applicable state and/or federal law or
such law precludes the use of such shares as the underlying
investment media of the Contracts issued or to be issued by
the Company; or
(d) at the option of the Trust upon institution of formal
proceedings against the Company by the NASD, the SEC, the
insurance commission of any state or any other regulatory body
regarding the Company's duties under this Agreement or related
to the sale of the Contracts, the administration of the
Contracts, the operation of any Separate Account, or the
purchase of the Trust shares, provided that the Trust
determines in its reasonable judgment that any such proceeding
would have a material adverse effect on the Company's ability
to perform its obligations under this Agreement; or
(e) at the option of the Company upon institution of formal
proceedings against the Trust, the Adviser or the Distributor
by the NASD, the SEC or any state securities or insurance
commission or any other regulatory body, provided that the
Company determines in its reasonable judgment that any such
proceeding would have a material adverse effect on the
Trust's, the Adviser's or the Distributor's ability to perform
its obligations under this Agreement; or
(f) at the option of the Company, if the Trust or any Designated
Fund ceases to qualify as a Regulated Investment Company under
Subchapter M of the Code, or under any successor or similar
provision, or if the Company reasonably believes that any
Designated Fund may fail to so qualify; or
(g) subject to the Company's compliance with Article II, at the
option of the Company, with respect to any Designated Fund, if
any Designated Fund fails to
23
meet the diversification requirements specified in Section 3.3
hereof or if the Company reasonably believes any Designated
Fund may fail to meet such requirements; or
(h) at the option of any party to this Agreement, upon another
party's material breach of any provision of this Agreement; or
(i) at the option of the Company, if the Company determines in its
sole judgment exercised in good faith that either the Trust,
the Adviser or the Distributor has suffered a material adverse
change in its business, operations or financial condition
since the date of this Agreement or is the subject of material
adverse publicity which is likely to have a material adverse
impact upon the business and operations of the Company or the
Contracts (including the sale thereof); or
(j) at the option of the Trust, the Adviser or the Distributor, if
the Trust, the Adviser or the Distributor respectively,
determines in its sole judgment exercised in good faith that
the Company has suffered a material adverse change in its
business, operations or financial condition since the date of
this Agreement or is the subject of material adverse publicity
which is likely to have a material adverse impact upon the
business and operations of the Trust, the Adviser or the
Distributor; or
(k) at the option of the Company or the Trust upon receipt of any
necessary regulatory approvals and/or the vote of the Contract
owners having an interest in a Separate Account (or any
sub-account) to substitute the shares of another investment
company for the corresponding Designated Fund's shares in
accordance with the terms of the Contracts for which those
Designated Fund shares had been selected to serve as the
underlying portfolio. The Company will give sixty (60) days'
prior written notice to the Trust of the date of any proposed
vote or other action taken to replace the shares of a
Designated Fund or of the filing of any required regulatory
approval(s); or
(l) at the option of the Company or the Trust upon a determination
by a majority of the Trust Board, or a majority of the Trust's
disinterested Trustees, that a material irreconcilable
conflict exists among the interests of: (1) all Contract
owners of variable insurance products of all separate
accounts; or (2) the interests of the Participating Insurance
Companies investing in the Trust as set forth in Article VII
of this Agreement; or
(m) subject to the Trust' compliance with Article III, at the
option of the Trust in the event any of the Contracts are not
issued or sold in accordance with applicable federal and/or
state law, or will not be treated as annuity contracts, life
insurance policies and/or variable contracts (as applicable)
under applicable provisions of the Code, or in the event any
representation or warranty of the Company in Section 2.1 is no
longer true. Termination will be effective immediately upon
such occurrence without notice.
10.2 NOTICE REQUIREMENT
24
(a) In the event that any termination of this Agreement is based
upon the provisions of Article VII, such prior written notice
will be given in advance of the effective date of termination
as required by such provisions.
(b) In the event that a party to this Agreement terminates the
Agreement based upon the provisions of Sections 10.1(b)-(h),
prompt written notice of the election to terminate this
Agreement for cause shall be furnished by the party
terminating the Agreement to the non-terminating party(ies).
The Agreement shall be terminated effective upon receipt of
such notice by the non-terminating party(ies).
(c) In the event that a party to this Agreement terminates the
Agreement based upon the provisions of Sections 10.1(i) or
(j), prior written notice of the election to terminate this
Agreement for cause shall be furnished by the party
terminating the Agreement to the non-terminating party(ies).
Such prior written notice shall be given by the party
terminating this Agreement to the non-terminating party(ies)
at least sixty (60) days before the effective date of
termination.
10.3 EFFECT OF TERMINATION
Notwithstanding any termination of this Agreement, the Trust and the
Distributor will, at the option of the Company, continue to make
available additional shares of the Designated Funds pursuant to the
terms and conditions of this Agreement, for all Contracts in effect on
the effective date of termination of this Agreement (hereinafter
referred to as "Existing Contracts"), unless the Distributor requests
that the Company seek an order pursuant to Section 26(b) of the 1940
Act to permit the substitution of other securities for the shares of
the Designated Funds. The Distributor and the Company each will be
responsible for one-half of the cost of seeking such order and the
Company agrees that it will cooperate with the Distributor and seek
such an order upon request. Specifically, without limitation, the
owners of the Existing Contracts will be permitted to reallocate
investments in the Designated Funds (as in effect on such date), redeem
investments in the Designated Funds and/or invest in the Designated
Funds upon the making of additional purchase payments under the
Existing Contracts. The parties agree that this Section 10.3 will not
apply to any terminations under Article VII and the effect of such
Article VII terminations will be governed by Article VII of this
Agreement. The parties further agree that this Section 10.3 will not
apply to any termination under 10.1(m) of this Agreement.
10.4 SURVIVING PROVISIONS
Notwithstanding any termination of this Agreement, each party's
obligations under Article VIII to indemnify other parties will survive
and not be affected by any termination of this Agreement. In addition,
with respect to Existing Contracts, all provisions of this Agreement
also will survive and not be affected by any termination of this
Agreement.
ARTICLE XI. -- NOTICES
25
Any notice will be deemed duly given when sent by 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 parties. All notices will be deemed given three (3) business days after
the date received or rejected by the address:
IF TO THE COMPANY:
The American Life Insurance Company of New York
000 Xxxxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Attn: General Counsel
IF TO THE TRUST:
Delaware Group Premium Fund
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attn: General Counsel
IF TO THE ADVISER:
Delaware Management Company
Xxx Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attn: General Counsel
IF TO THE DISTRIBUTOR:
Delaware Distributors, L.P.
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attn: General Counsel
ARTICLE XII. -- MISCELLANEOUS
12.1 All persons dealing with the Trust must look solely to the property of
the Trust or, in the event of a claim relating to a particular
Designated Fund, the relevant Designated Fund for the enforcement of
any claims against the Trust or the Designated Fund, as the case may
be, as neither the trustees, officers, agents or shareholders assume
any personal liability for obligations entered into on behalf of the
Trust or any Designated Funds.
12.2 The Trust, the Adviser and the Distributor each acknowledges that the
identities of the customers of the Company or any of its affiliates
(collectively the "Protected Parties" for purposes of this Section
12.2), information maintained regarding Protected Parties, and
26
all computer programs and procedures developed by the Protected
Parties or any of their employees or agents in connection with the
Company's performance of its duties under this Agreement are the
valuable property of the Protected Parties. The Trust, the Adviser
and the Distributor agree that if they come into possession of any
list or compilation of the identities of or other information
about the Protected Parties' customers, or any other property of
the Protected Parties, other than such information as may be
independently developed or compiled by the Trust, the Adviser or
the Distributor from information supplied to them by the Protected
Parties' customers who also maintain accounts directly with the
Trust, the Adviser and the Distributor, the Trust, the Adviser and
the Distributor will hold such information or property in
confidence and refrain from using, disclosing or distributing any
of such information or other property except: (a) with the
Company's prior written consent; or (b) as required by law or
judicial process. Subject to the requirements of legal process and
regulatory authority, each party hereto in particular shall treat
as confidential any "non-public personal information" about any
"consumer" of any party as such terms are defined in the SEC's
Regulation S-P and shall not disclose or use such information
without the express consent of such party. Such consent shall
specify the purposes for which information may be disclosed or
used, which disclosure or use shall be consistent with Regulation
S-P. The Trust and the Adviser each acknowledges that any breach
of the agreements in this Section 12.2 would result in immediate
and irreparable harm to the Protected Parties for which there
would be no adequate remedy at law and agree that in the event of
such a breach, the Protected Parties will be entitled to equitable
relief by way of temporary and permanent injunctions, as well as
such other relief as any court of competent jurisdiction deems
appropriate.
12.3 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.
12.4 This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together will constitute one and the
same instrument.
12.5 If any provision of this Agreement will be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the
Agreement will not be affected thereby.
12.6 This Agreement will not be assigned by any party hereto, without the
prior written consent of all of the parties.
12.7 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 law.
12.8 The parties to this Agreement acknowledge and agree that this Agreement
shall not be exclusive in any respect.
12.9 Each party to this Agreement will cooperate with each other party and
all appropriate governmental authorities (including without limitation
the SEC, the NASD and state insurance regulators) and will permit each
other and such authorities reasonable access to
27
its books and records in connection with any investigation or inquiry
relating to this Agreement or the transactions contemplated hereby.
12.10 Each party represents that the execution and delivery of this Agreement
and the consummation of the transactions contemplated herein have been
duly authorized by all necessary corporate or trust action, as
applicable, by such party and when so executed and delivered this
Agreement will be the valid and binding obligation of such party
enforceable in accordance with its terms.
12.11 This Agreement may be amended by written instrument signed by all
parties to the Agreement. Notwithstanding the above, the parties to
this Agreement may amend the schedules to this Agreement from time to
time to reflect changes in or relating to the Contracts, the Separate
Accounts or the Funds of the Trust or other applicable terms of this
Agreement.
28
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed in its name and behalf by its duly authorized
representative and its seal to be hereunder affixed hereto as of the date
specified below.
THE AMERICAN LIFE INSURANCE
COMPANY OF NEW YORK
By:
---------------------------------------------
Name:
Title:
DELAWARE GROUP PREMIUM FUND
By:
---------------------------------------------
Name:
Title:
DELAWARE MANAGEMENT COMPANY
By:
---------------------------------------------
Name:
Title:
DELAWARE DISTRIBUTORS, L.P.
By:
---------------------------------------------
Name:
Title:
29
PARTICPATION AGREEMENT
SCHEDULE A
The following Separate Accounts and Associated Contracts of The American Life
Insurance Company of New York are permitted in accordance with the provisions of
the Participation Agreement to invest in the Designated Funds of the Delaware
Group Premium Fund shown in Schedule B.
NAME OF SEPARATE ACCOUNT: THE AMERICAN SEPARATE ACCOUNT 5
CONTRACT(S): 3805-FPA-AX
NAME OF SEPARATE ACCOUNT:
CONTRACT(S):
NAME OF SEPARATE ACCOUNT:
CONTRACT(S):
NAME OF SEPARATE ACCOUNT:
CONTRACT(S):
Date: _____________________
A-1
PARTICIPATION AGREEMENT
SCHEDULE B
In accordance with the provisions of the Participation Agreement, the Separate
Account(s) shown on Schedule A may invest in the following Funds of the Trust:
Date: _____________________
B-1
PARTICIPATION AGREEMENT
SCHEDULE C
PROXY VOTING PROCEDURES
The following is a list of procedures and corresponding responsibilities for the
handling of proxies and voting instructions relating to the Delaware Group
Premium Fund (the "Trust") under the Participation Agreement (the "Agreement").
The defined terms herein shall have the meanings assigned in the Agreement
except that the term "Company" shall also include the department or third party
assigned by the Company to perform the steps delineated below.
1. The proxy proposals are given to the Company by the Trust as early as
possible before the date set by the Trust for the shareholder meeting to
enable the Company to consider and prepare for the solicitation of voting
instructions from owners of the Contracts and to facilitate the
establishment of tabulation procedures. At this time the Trust will inform
the Company of the Record, Mailing and Meeting dates. This will be done
verbally approximately two months before meeting.
2. Promptly after the Record Date, the Company will perform a "tape run," or
other activity, which will generate the names, addresses and number of
units which are attributed to each contract owner/policyholder (the
"Customer") as of the Record Date. Allowance should be made for account
adjustments made after this date that could affect the status of the
Customers' accounts as of the Record Date.
NOTE: The number of proxy statements is determined by the activities
described in this Step #2. The Company will use its best efforts to call
in the number of Customers to the Trust, as soon as possible, but no later
than two weeks after the Record Date.
3. The Trust's Annual Report must be sent to each Customer by the Company
either before or together with the Customers' receipt of voting,
instruction solicitation material. The Trust will provide the last Annual
Report to the Company pursuant to the terms of Section 6.2 of the
Agreement.
4. The text and format for the Voting Instruction Cards ("Cards" or Card") is
provided to the Company by the Trust. The Company, at its expense, shall
produce and personalize the Voting Instructions Cards. The Trust or its
affiliate must approve the Card before it is printed. Allow approximately
2-4 business days for printing information on the Cards. Information
commonly found on the Cards includes:
- name (legal name as found on account registration)
- address
- Trust or account number
- coding to state number of units
Date: _____________________
C-1
- individual Card number for use in tracking and verification of votes
(already on Cards as printed by the Trust).
(This and related steps may occur later in the chronological process due
to possible uncertainties relating to the proposals.)
5. During this time, the Trust will develop, produce and pay for the Notice
of Proxy and the Proxy Statement (one document). Printed and folded
notices and statements will be sent to Company for insertion into
envelopes (envelopes and return envelopes are provided and paid for by the
Company). Contents of envelope sent to Customers by the Company will
include:
- Voting Instruction Card(s)
- one proxy notice and statement (one document)
- return envelope (postage pre-paid by Company) addressed to the
Company or its tabulation agent
- "urge buckslip" - optional, but recommended. (This is a small,
single sheet of paper that requests Customers to vote as quickly as
possible and that their vote is important. One copy will be supplied
by the Trust.)
- cover letter - optional, supplied by Company and reviewed and
approved in advance by the Trust
6. The above contents should be received by the Company approximately 3-5
business days before mail date. Individual in charge at Company reviews
and approves the contents of the mailing package to ensure correctness and
completeness. Copy of this approval sent to the Trust.
7. Package mailed by the Company.
* The Trust must allow at least 15-day solicitation time to the Company as
the shareowner. (A 5-week period is recommended.) Solicitation time is
calculated as calendar days from (but NOT including) the meeting, counting
backwards.
8. Collection and tabulation of Cards begins. Tabulation usually takes place
in another department or another vendor depending on process used. An
often used procedure is to sort Cards on arrival by proposal into vote
categories of all yes, no or mixed replies, and to begin data entry.
9. Signature on Card checked against legal name on account registration which
was printed on the Card. NOTE: For Example, if the account registration is
under "Xxxx X. Xxxxx, Trustee," then that is the exact legal name to be
printed on the Card and is the signature needed on the Card.
10. If Cards are mutilated, or for any reason are illegible or are not signed
properly, they are sent back to Customer with an explanatory letter and a
new Card and return envelope. The mutilated or illegible Card is
disregarded and considered to be NOT RECEIVED for purposes of vote
tabulation. Any Cards that have been "kicked out" (e.g., mutilated,
2
illegible) or the procedure are "hand verified," i.e., examined as to
whether they did not complete the system. Any questions on those Cards are
usually remedied individually.
11. There are various control procedures used to ensure proper tabulation of
votes and accuracy of that tabulation. The most prevalent is to sort the
Cards as they first arrive into categories depending upon their vote; an
estimate of how the vote is progressing may then be calculated. If the
initial estimates and the actual vote do not coincide, then an internal
audit of that vote should occur. This may entail a recount.
12. The actual tabulation of votes is done in units which is then converted to
shares. (It is very important that the Trust receives the tabulations
stated in terms of a percentage and the number of SHARES.) The Trust must
review and approve tabulation format.
13. Final tabulation in shares is verbally given by the Company to the Trust
on the morning of the meeting not later than 10:00 a.m. Eastern time. The
Trust may request an earlier deadline if reasonable and if required to
calculate the vote in time for the meeting.
14. A Certification of Mailing and Authorization to Vote Shares will be
required from the Company as well as an original copy of the final vote.
The Trust will provide a standard form for each Certification.
15. The Company will be required to box and archive the Cards received from
the Customers. In the event that any vote is challenged or if otherwise
necessary for legal, regulatory, or accounting purposes, the Trust will be
permitted reasonable access to such Cards.
16. All approvals and "signing-off" may be done orally, but must always be
followed up in writing.
3
PARTICIPATION AGREEMENT
SCHEDULE D
PURCHASE AND REDEMPTION ORDER PROCEDURES
The following is a list of procedures and corresponding responsibilities for the
processing of purchase and redemption orders relating to the Delaware Group
Premium Fund (the "Trust") under the Participation Agreement (the "Agreement").
The defined terms herein shall have the meanings assigned in the Agreement
except that the term "Company" shall also include the department assigned by the
Company to perform the steps delineated below.
1. The Company shall transmit any purchase or redemption order to the Trust
or its designated affiliate electronically by an automated file in a form
acceptable to the Trust.
2. The purchase or redemption order must be received no later than the times
specified in Sections 1.1 and 1.3 of the Agreement.
3. The Trust or its designated affiliate shall send confirmations of the
purchase and redemption orders to the Company no later than 10:30 a.m. on
the Business Day that the purchase or redemption order is deemed to be
received pursuant to Sections 1.1 or 1.3 of the Agreement.
4. The Company shall submit any corrections to the purchase or redemption
order to the Trust or its designated affiliate no later than 11:30 a.m. on
the same Business Day that the purchase or redemption order is deemed to
be received pursuant to the Sections 1.1 or 1.3 of the Agreement.
4
