EXHIBIT 26 (h) (11)
FUND PARTICIPATION AGREEMENT
FUND PARTICIPATION AGREEMENT
THIS AGREEMENT, made as of the 1st day of May, 2006, by and between
XXXXXXXXX XXXXXX ADVISERS MANAGEMENT TRUST ("TRUST") a Delaware business trust,
XXXXXXXXX XXXXXX MANAGEMENT INC. ("NB MANAGEMENT"), a New York corporation, and
PHOENIX LIFE INSURANCE COMPANY ("LIFE COMPANY"), a life insurance company
organized under the laws of the State of New York.
WHEREAS, TRUST is registered with the Securities and Exchange Commission
("SEC") under the Investment Company Act of 1940, as amended ("40 Act") as an
open-end, diversified management investment company; and
WHEREAS, TRUST is organized as a series fund comprised of several
portfolios ("Portfolios"), the currently available of which are listed on
Appendix A hereto; and
WHEREAS, TRUST was organized to act as the funding vehicle for certain
variable life insurance and/or variable annuity contracts ("Variable Contracts")
offered by life insurance companies through separate accounts of such life
insurance companies ("Participating Insurance Companies"); and
WHEREAS, TRUST has received an order from the SEC, dated May 5,1995 (File
No. 812-9164), granting Participating Insurance Companies and their separate
accounts exemptions from the provisions of Sections 9(a), 13(a), 15(a) and 15(b)
of the '40 Act, and Rules 6e-2(b)(15) and 6e-3(T)(b)(15) thereunder, to the
extent necessary to permit shares of the Portfolios of the TRUST to be sold to
and held by variable annuity and variable life insurance separate accounts of
both affiliated and unaffiliated life insurance companies and certain qualified
pension and retirement plans (the "Order"); and
WHEREAS, LIFE COMPANY has established or will establish one or more
separate accounts ("Separate Accounts") to offer Variable Contracts and is
desirous of having TRUST as one of the underlying funding vehicles for such
Variable Contracts; and
WHEREAS, NB MANAGEMENT is registered with the SEC as an investment adviser
under the Investment Advisers Act of 1940 and as a broker-dealer under the
Securities Exchange Act of 1934, as amended; and
WHEREAS, NB MANAGEMENT is the investment manager and administrator of the
Portfolios of the Trust and distributor of the shares of each Portfolio of
TRUST; and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, LIFE COMPANY intends to purchase shares of TRUST to fund the
aforementioned Variable Contracts and TRUST is authorized to sell such shares to
LIFE COMPANY at net asset value;
NOW, THEREFORE, in consideration of their mutual promises, LIFE COMPANY,
TRUST, and NB MANAGEMENT agree as follows:
Article I. SALE OF TRUST SHARES
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1.1 TRUST agrees to make available to the Separate Accounts of LIFE COMPANY
shares of the selected Portfolios as listed in Appendix B for investment of
proceeds from Variable Contracts allocated to the designated Separate Accounts,
such shares to be offered as provided in TRUST's Prospectus.
1.2 TRUST agrees to sell to LIFE COMPANY those shares of the selected
Portfolios of TRUST which LIFE COMPANY orders, executing such orders on a daily
basis at the net asset value next computed after receipt by TRUST or its
designee of the order for the shares of TRUST. For purposes of this Section 1.2,
LIFE COMPANY shall be the designee of TRUST for receipt of such orders from LIFE
COMPANY and receipt by such designee shall constitute receipt by TRUST; provided
that TRUST receives notice of such order by 9:30 a.m. Eastern standard time on
the next following Business Day. "Business Day" shall mean any day on which the
New York Stock Exchange is open for trading.
1.3 TRUST agrees to redeem for cash, on LIFE COMPANY's request, any full or
fractional shares of TRUST held by LIFE COMPANY, executing such requests on a
daily basis at the net asset value next computed after receipt by TRUST or its
designee of the request for redemption. For purposes of this Section 1.3, LIFE
COMPANY shall be the designee of TRUST for receipt of requests for redemption
from LIFE COMPANY and receipt by such designee shall constitute receipt by
TRUST; provided that TRUST receives notice of such request for redemption by
9:30 a.m. Eastern standard time on the next following Business Day.
1.4 TRUST shall furnish, on or before the ex-dividend date, notice to LIFE
COMPANY of any income dividends or capital gain distributions payable on the
shares of any Portfolio of TRUST. LIFE COMPANY hereby elects to receive all such
income dividends and capital gain distributions as are payable on a Portfolio's
shares in additional shares of the Portfolio. TRUST shall notify LIFE COMPANY of
the number of shares so issued as payment of such dividends and distributions.
LIFE COMPANY reserves the right to revoke this election by written notice to the
Trust.
1.5 TRUST shall make the net asset value per share for the selected
Portfolio(s) available to LIFE COMPANY on a daily basis as soon as reasonably
practicable after the net asset value per share is calculated but shall use its
best efforts to make such net asset value available by 6:30 p.m. Eastern
standard time. If TRUST provides LIFE COMPANY with materially incorrect share
net asset value information through no fault of LIFE COMPANY, LIFE COMPANY on
behalf of the Separate Accounts, shall be entitled to an adjustment to the
number of shares purchased or redeemed to reflect the correct share net asset
value. Any material error (determined in accordance with SEC guidelines) in the
calculation of net asset value per share, dividend or capital gain information
shall be reported promptly upon discovery to LIFE COMPANY. In the event that
such material error is the result of the Trust's (or its designated agents)
gross negligence,
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the Trust shall also be responsible for any of LIFE COMPANY's administrative or
other costs or losses incurred in correcting Variable Contract Owner accounts.
1.6 At the end of each Business Day, LIFE COMPANY shall use the information
described in Section 1.5 to calculate Separate Account unit values for the day.
Using these unit values, LIFE COMPANY shall process each such business day's
Separate Account transactions based on requests and premiums received by it by
the time as of which the TRUST calculates its share price as disclosed in the
prospectus for the TRUST to determine the net dollar amount of TRUST shares
which shall be purchased or redeemed at that day's closing net asset value per
share. The net share purchase or redemption orders so determined shall be
transmitted to TRUST by LIFE COMPANY by 9:30 a.m. Eastern standard time on the
Business Day next following LIFE COMPANY's receipt of such requests and premiums
in accordance with the terms of Sections 1.2 and 1.3 hereof.
1.7 If LIFE COMPANY's order requests the net purchase of TRUST shares, LIFE
COMPANY shall pay for such purchase by wiring federal funds to TRUST or its
designated custodial account on the day the order is actually transmitted by
LIFE COMPANY by 3:00 p.m. Eastern standard time. If LIFE COMPANY's order
requests a net redemption resulting in a payment of redemption proceeds to LIFE
COMPANY, TRUST shall wire the redemption proceeds to LIFE COMPANY on the day the
order is actually received by TRUST by 3:00 p.m. Eastern standard time unless
doing so would require TRUST to dispose of portfolio securities or otherwise
incur additional costs, but in such event, proceeds shall be wired to LIFE
COMPANY within seven days and TRUST shall notify the person designated in
writing by LIFE COMPANY as the recipient for such notice of such delay by 3:00
p.m. Eastern standard time the same business day that LIFE COMPANY transmits the
redemption order to TRUST. If LIFE COMPANY's order requests the application of
redemption proceeds from the redemption of shares to the purchase of shares of
another fund administered or distributed by NB MANAGEMENT, TRUST shall so apply
such proceeds on the same Business Day that LIFE COMPANY transmits such order to
TRUST.
1.8 Notwithstanding Section 1.7, TRUST reserves the right to suspend the
right of redemption or postpone the date of payment or satisfaction upon
redemption consistent with Section 22(e) of the 40 Act and any rules thereunder.
1.9 TRUST agrees that all shares of the Portfolios of TRUST will be sold
only to Participating Insurance Companies which have agreed to participate in
TRUST to fund their Separate Accounts and/or to certain qualified pension and
other retirement plans, all in accordance with the requirements of Section
817(h) of the Internal Revenue Code of 1986, as amended ("Code") and Treasury
Regulation 1.817-5. Shares of the Portfolios of TRUST will not be sold directly
to the general public.
1.10 TRUST may refuse to sell shares of any Portfolio to any person, or
suspend or terminate the offering of the shares of any Portfolio if such action
is required by law or by regulatory authorities having jurisdiction or is, in
the sole discretion of the Board of Trustees of
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TRUST, acting in good faith and in light of its fiduciary duties under federal
and any applicable state laws, deemed necessary and in the best interests of the
shareholders of such Portfolios.
Article II. REPRESENTATIONS AND WARRANTIES
------------------------------
2.1 LIFE COMPANY represents and warrants that it is an insurance company
duly organized and in good standing under the laws of New York and that it has
legally and validly established each Separate Account as a segregated asset
account under such laws, and that Phoenix Equity Planning Corporation the
principal underwriter for the Variable Contracts, is registered as a
broker-dealer under the Securities Exchange Act of 1934.
2.2 LIFE COMPANY represents and warrants that it has registered or, prior
to any issuance or sale of the Variable Contracts, will register each Separate
Account as a unit investment trust ("UIT") in accordance with the provisions of
the '40 Act and cause each Separate Account to remain so registered to serve as
a segregated asset account for the Variable Contracts, unless an exemption from
registration is available.
2.3 LIFE COMPANY represents and warrants that the Variable Contracts will
be registered under the Securities Act of 1933 (the "`33 Act") unless an
exemption from registration is available prior to any issuance or sale of the
Variable Contracts and that the Variable Contracts will be issued and sold in
compliance in all material respects with all applicable federal and state laws
and further that the sale of the Variable Contracts shall comply in all material
respects with state insurance law suitability requirements.
2.4 LIFE COMPANY represents and warrants that the Variable Contracts are
currently and at the time of issuance will be treated as life insurance,
endowment or annuity contracts under applicable provisions of the Code, that it
will maintain such treatment and that it will notify TRUST immediately upon
having a reasonable basis for believing that the Variable Contracts have ceased
to be so treated or that they might not be so treated in the future.
2.5 LIFE COMPANY represents and warrants that it shall deliver such
prospectuses, statements of additional information, proxy statements and
periodic reports of the Trust as required to be delivered under applicable
federal or state law and interpretations of federal and state securities
regulators thereunder in connection with the offer, sale or acquisition of the
Variable Contracts.
2.6 TRUST represents and warrants that the Portfolio shares offered and
sold pursuant to this Agreement will be registered under the '33 Act and sold in
accordance with all applicable federal and state laws, and TRUST shall be
registered under the '40 Act prior to and at the time of any issuance or sale of
such shares. TRUST shall amend its registration statement under the '33 Act and
the '40 Act from time to time as required in order to effect the continuous
offering of its shares. TRUST shall register and qualify its shares for sale in
accordance with the laws of the various states to the extent necessary to
perform its obligations under this Agreement.
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2.7 TRUST represents and warrants that each Portfolio currently complies,
and will continue to comply with the diversification requirements set forth in
Section 817(h) of the Code, and the rules and regulations thereunder, including
without limitation Treasury Regulation 1.817-5 (or any successor or similar
provisions), and will notify LIFE COMPANY immediately upon having a reasonable
basis for believing any Portfolio has ceased to comply or might not so comply
and will immediately take all reasonable steps to adequately diversify the
Portfolio to achieve compliance within the grace period afforded by Regulation
1.817-5.
2.8 TRUST represents and warrants that each Portfolio invested in by the
Separate Account is currently qualified as a "regulated investment company"
under Subchapter M of the Code, that it will maintain such qualification under
Subchapter M (or any successor or similar provisions) and will notify LIFE
COMPANY immediately upon having a reasonable basis for believing any Portfolio
has ceased to so qualify or might not so qualify in the future.
2.9 The TRUST represents that to the extent that it decides to finance
distribution expenses pursuant to Rule 12b-1 under the 1940 Act, it will have a
board of trustees, a majority of whom are not interested persons of the TRUST,
to formulate and approve any plan under Rule 12b-1 to finance distribution
expenses.
2.10 The TRUST represents that the TRUST's investment policies, fees and
expenses are and shall at all times remain in compliance with the laws of the
State of Delaware and the TRUST represents that its respective operations are
and shall at all times remain in material compliance with the laws of the State
of Delaware to the extent required to perform this Agreement.
2.11 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 the 1940 Act.
2.12 The TRUST represents and warrants that its directors, officers,
employees dealing with the money and/or securities of the Trust are and shall
continue to be at all times covered by a blanket fidelity bond or similar
coverage for the benefit of the TRUST in an amount not less than the minimum
coverage as required by Rule 17g-(1) under the 1940 Act or related provisions as
may be promulgated from time to time. The aforesaid blanket fidelity bond shall
include coverage for larceny and embezzlement and shall be issued by a reputable
bonding company.
2.13 NB MANAGEMENT represents and warrants that it is a member in good
standing of the NASD and is registered as a broker-dealer with the SEC. NB
MANAGEMENT further represents that it will sell and distribute the Trust's share
in accordance with the laws of the State of Delaware and any applicable state
and federal securities law.
2.14 NB MANAGEMENT represents and warrants that it is registered as an
investment adviser and shall remain duly registered under all applicable federal
and state securities laws and that it shall perform its obligations for the
Trust in compliance in all material respects with the laws of the State of
Delaware and any applicable state and federal securities laws.
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2.15 Each party represents and warrants that the execution and delivery of
this Agreement and the consummation of the transactions contemplated herein have
been duly authorized by all necessary corporate, partnership 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.
2.16 LIFE COMPANY represents and warrants that all orders for the purchase
and sale of TRUST shares submitted to the TRUST (or counted by LIFE COMPANY in
submitting a net order under Section 1.6 of the Agreement) for execution at a
price based on the net asset value per share ("NAV") of the Trust's Portfolios
next computed after receipt by LIFE COMPANY on a particular Business day, will
have been received in good order by LIFE COMPANY prior to the time as of which
the TRUST calculates its NAV on that Business Day, as disclosed in the
prospectus for the pertinent Portfolio (the "trading deadline"), in accordance
with Rule 22c-1 under the 1940 Act (subject only to exceptions as permitted
under Rule 22c-1(c) under the 1940 Act, respecting initial purchase payments on
variable annuity contracts, and to the established administrative procedures of
LIFE COMPANY as described under Rule 6e-3(T), paragraph (b)(12)(iii) under the
1940 Act respecting premium processing for variable life insurance contracts).
The TRUST may refuse to sell Shares of any Series to any person, or suspend
or terminate the offering of the Shares of any Series if such action is required
by law or by regulatory authorities having jurisdiction or is, in the sole
discretion of the Board of Trustees of the TRUST (the "Board"), deemed
necessary, desirable or appropriate. Without limiting the foregoing, it has been
determined that there is a significant risk that the TRUST and its shareholders
may be adversely affected by short-term or excessive trading activity,
particularly activity used to try and take advantage of short-term swings in the
market. Accordingly, the TRUST reserves the right to reject any purchase order,
including those purchase orders with respect to shareholders or accounts whose
trading has been or may be disruptive to the TRUST or that may otherwise
adversely affect the Trust. The LIFE COMPANY agrees to use its reasonable best
efforts to render assistance to, and to cooperate with, the TRUST to achieve
compliance with the TRUST's policies and restrictions on short-term or excessive
trading activity as they may be amended from time to time, or to the extent
required by applicable regulatory requirements.
2.17 In the prospectus for the Portfolios, the TRUST reserves the right to
reject an investment or exchange order or to withdraw the exchange privilege
from any investor that NB MANAGEMENT believes is trying to "time the market" or
is otherwise making exchanges that Xxxxxxxxx Xxxxxx Management Inc. believes to
be excessive (collectively, these practices are referred to herein as "excessive
short-term trading"). The Trust prospectus also discloses, and NB MANAGEMENT and
LIFE COMPANY acknowledge, that frequent exchanges can interfere with fund
management and affect costs and performance for other shareholders. Accordingly,
LIFE COMPANY agrees that it will cooperate with NB MANAGEMENT and the TRUST, by
taking steps acceptable to NB MANAGEMENT and the TRUST to prevent its contract
owners
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from excessive short-term trading in any Portfolio of the TRUST, which may
include any one or more of the following measures: (i) by providing information,
upon reasonable request, to NB MANAGEMENT and the TRUST, about cash flows into
and out of any of the Portfolios from the separate accounts of LIFE COMPANY;
(ii) by providing information, upon reasonable request, to NB MANAGEMENT and the
TRUST, about any policies and procedures that LIFE COMPANY employs respecting
frequent transfers of contract value among sub-accounts of the Separate
Accounts, and about compliance with any such policies and procedures; (iii) by
providing information, upon reasonable request, to NB MANAGEMENT and the TRUST
respecting Variable Contract owner transactions, holdings and other information
pertinent to the prevention of excessive short-term trading (although NB
MANAGEMENT and TRUST acknowledge that such information need not include
information that would identify owners of the Variable Contracts); (iv) by
taking steps necessary, upon reasonable request of NB MANAGEMENT or the TRUST,
to eliminate or prevent excessive short-term trading, including, but not limited
to, restricting or withdrawing exchange privileges from Variable Contract owners
that engage in excessive short-term trading to the extent permitted under
applicable law and the terms of the Variable Contracts, and/or restricting
and/or withdrawing a Variable Contract owner's ability to make exchanges through
automated means such as telephone, fax, or internet transmission; and (v) to the
extent required by applicable laws, rules, or regulations, or in the event the
LIFE COMPANY has the ability to do so, the LIFE COMPANY will provide the TRUST
the Taxpayer Identification Number or other identifying information contained in
the LIFE COMPANY's records, of any particular or all Variable Contract owners
that purchased, redeemed, transferred, or exchanged Shares, and the amount and
dates of such purchases, redemptions, transfers and exchanges. The LIFE COMPANY
will also execute any instructions from the TRUST to restrict or prohibit
further purchases or exchanges of Shares by a Variable Contract owner who has
been identified by the LIFE COMPANY or the TRUST as having engaged in
transactions in such Shares that violate the TRUST's policies and restrictions
on short term or excessive trading activity. In addition, the LIFE COMPANY
understands that consistent with federal and state laws, the Fund may impose
redemption fees on the redemption of Shares held for a short period of time as
may be specified in the TRUST's prospectuses, and the LIFE COMPANY agrees that,
to the extent it may make such Portfolio available, it will ensure that any
redemption by a Variable Contract owner will comply with such requirements.
2.18 LIFE COMPANY will, upon reasonable request, certify to the TRUST and
NB MANAGEMENT that LIFE COMPANY is in compliance with Items 2.16 and/or 2.17
above.
Article III. PROSPECTUS AND PROXY STATEMENTS
-------------------------------
3.1 TRUST shall prepare and be responsible for filing with the SEC and any
state regulators requiring such filing all shareholder reports, notices, proxy
materials (or similar materials such as voting instruction solicitation
materials), prospectuses and statements of additional information of TRUST.
TRUST shall bear the costs of registration and qualification of shares of the
Portfolios, preparation and filing of the documents listed in this Section 3.1
and all taxes to which an issuer is subject on the issuance and transfer of its
shares.
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3.2 TRUST will bear the printing costs (or duplicating costs with respect
to the statement of additional information) and mailing costs associated with
the delivery of the following TRUST (or individual Portfolio) documents, and any
supplements thereto, to existing Variable Contract owners of LIFE COMPANY
(regardless of whether such documents are printed together with, or separate
from, the documents for other trusts in the Variable Contracts):
(i) prospectuses and statements of additional information;
(ii) annual and semi-annual reports; and
(iii) proxy materials (including, but not limited to, the proxy cards,
notice and statement, as well as the costs associated with
tabulating votes).
LIFE COMPANY will submit any bills for printing, duplicating and/or
mailing costs, relating to the TRUST documents described above, to TRUST for
reimbursement by TRUST. LIFE COMPANY shall monitor such costs and shall use its
best efforts to control these costs. Upon submission of any bills, LIFE COMPANY
will provide TRUST with a current tabulation of the number of existing Variable
Contract owners of LIFE COMPANY whose Variable Contract values are invested in
TRUST. This tabulation will be sent to TRUST in the form of a letter signed by a
duly authorized officer of LIFE COMPANY attesting to the accuracy of the
information contained in the letter. If requested by LIFE COMPANY, the TRUST
shall provide such documentation (including a final copy of the TRUST's
prospectus in electronic pdf format) and other assistance as is reasonably
necessary in order for LIFE COMPANY to print together in one document the
current prospectus for the Variable Contracts issued by LIFE COMPANY and the
current prospectus for the TRUST.
3.3 TRUST will provide, at its expense, LIFE COMPANY with the following
TRUST (or individual Portfolio) documents, and any supplements thereto, with
respect to prospective Variable Contract owners of LIFE COMPANY:
(i) electronic pdf format of the current prospectus for printing by
the LIFE COMPANY;
(ii) a copy of the statement of additional information suitable for
duplication;
(iii) electronic pdf format of proxy material suitable for printing;
and
(iv) electronic pdf format of the annual and semi-annual reports for
printing by the LIFE COMPANY.
3.4 TRUST will provide LIFE COMPANY with at least one complete copy of all
prospectuses, statements of additional information, annual and semi-annual
reports, proxy statements, exemptive applications and all amendments or
supplements to any of the above that
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relate to the Portfolios promptly after the filing of each such document with
the SEC or other regulatory authority. LIFE COMPANY will provide TRUST with at
least one complete copy of all prospectuses, statements of additional
information, annual and semi-annual reports, proxy statements, exemptive
applications and all amendments or supplements to any of the above that relate
to a Separate Account promptly after the filing of each such document with the
SEC or other regulatory authority.
Article IV. SALES MATERIALS; PRIVACY
------------------------
4.1 LIFE COMPANY will furnish, or will cause to be furnished, to TRUST and
NB MANAGEMENT, each piece of sales literature or other promotional material in
which TRUST or NB MANAGEMENT is named, at least five (5) Business Days prior to
its intended use. No such material will be used if TRUST or NB MANAGEMENT
objects to its use in writing within five (5) Business Days after receipt of
such material.
4.2 TRUST and NB MANAGEMENT will furnish, or will cause to be furnished, to
LIFE COMPANY, each piece of sales literature or other promotional material in
which LIFE COMPANY or its Separate Accounts are named, at least five (5)
Business Days prior to its intended use. No such material will be used if LIFE
COMPANY objects to its use in writing within five (5) Business Days after
receipt of such material.
4.3 TRUST and its affiliates and agents shall not give any information or
make any representations on behalf of LIFE COMPANY or concerning LIFE COMPANY,
the Separate Accounts, or the Variable Contracts issued by LIFE COMPANY, other
than the information or representations contained in a registration statement or
prospectus for such Variable Contracts, as such registration statement and
prospectus may be amended or supplemented from time to time, or in reports of
the Separate Accounts or reports prepared for distribution to owners of such
Variable Contracts, or in sales literature or other promotional material
approved by LIFE COMPANY or its designee, except with the written permission of
LIFE COMPANY.
4.4 LIFE COMPANY and its affiliates and agents shall not give any
information or make any representations on behalf of TRUST or concerning TRUST
other than the information or representations contained in a registration
statement or prospectus for TRUST, as such registration statement and prospectus
may be amended or supplemented from time to time, or in sales literature or
other promotional material approved by TRUST or its designee, except with the
written permission of TRUST.
4.5 For purposes of this Agreement, the phrase "sales literature or other
promotional material" or words of similar import include, without limitation,
advertisements (such as material published, or designed for use, in a newspaper,
magazine or other periodical, radio, television, telephone or tape recording,
videotape display, signs or billboards, motion pictures or other public media),
sales literature (such as any written communication distributed or made
generally available to customers or the public, including brochures, circulars,
research reports, market letters, form letters, seminar texts, or reprints or
excerpts of any other advertisement, sales literature, or
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published article), educational or training materials or other communications
distributed or made generally available to some or all agents or employees,
registration statements, prospectuses, statements of additional information,
shareholder reports and proxy materials, and any other material constituting
sales literature or advertising under National Association of Securities
Dealers, Inc. rules, the '40 Act or the '33 Act.
4.6 Subject to law and regulatory authority, each party hereto shall treat
as confidential all information pertaining to the owners of the Variable
Contracts and all information reasonably identified as confidential in writing
by any other party hereto and, except as permitted by this Agreement, shall not
disclose, disseminate or utilize such names and addresses and other confidential
information until such time as it may come into the public domain without the
express written consent of the affected party. Each party hereto shall be solely
responsible for the compliance of their officers, directors, employees, agents,
independent contractors, and any affiliated and non-affiliated third parties
with all applicable privacy-related laws and regulations including but not
limited to the Xxxxx-Xxxxx-Xxxxxx Act and Regulation S-P. The provisions of this
Section 4.6 shall survive the termination of this Agreement.
Article V. POTENTIAL CONFLICTS
-------------------
5.1 The Board of Trustees of TRUST (the "Board") will monitor TRUST for the
existence of any material irreconcilable conflict between the interests of the
Variable Contract owners of Participating Insurance Company Separate Accounts
investing in the TRUST. A material irreconcilable conflict may arise for a
variety of reasons, including: (a) state insurance regulatory authority action;
(b) a change in applicable federal or state insurance, tax, or securities laws
or regulations, or a public ruling, private letter ruling, or any similar action
by insurance, tax, or securities regulatory authorities; (c) an administrative
or judicial decision in any relevant proceeding; (d) the manner in which the
investments of the TRUST are being managed; (e) a difference in voting
instructions given by variable annuity and variable life insurance contract
owners or by contract owners of different Participating Insurance Companies; or
(f) a decision by a Participating Insurance Company to disregard voting
instructions of Variable Contract owners.
5.2 LIFE COMPANY will report any potential or existing conflicts to the
Board. LIFE COMPANY will be responsible for assisting the Board in carrying out
its responsibilities under the Conditions set forth in the notice issued by the
SEC for the TRUST on April 12, 1995 (the "Notice") (Investment Company Act
Release No. 21003), by providing the Board with all information reasonably
necessary for it to consider any issues raised. This responsibility includes,
but is not limited to, an obligation by LIFE COMPANY to inform the Board
whenever Variable Contract owner voting instructions are disregarded by LIFE
COMPANY. These responsibilities will be carried out with a view only to the
interests of the Variable Contract owners.
5.3 If a majority of the Board or a majority of its disinterested trustees
determines that a material irreconcilable conflict exists, affecting the LIFE
COMPANY, LIFE COMPANY, at its expense and to the extent reasonably practicable
(as determined by a majority of disinterested trustees), will take any steps
necessary to remedy or eliminate the irreconcilable material conflict,
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including: (a) withdrawing the assets allocable to some or all of the Separate
Accounts from the TRUST or any Portfolio thereof and reinvesting those assets in
a different investment medium, which may include another Portfolio of TRUST or
another investment company or submitting the question as to whether such
segregation should be implemented to a vote of all affected Variable Contract
owners and, as appropriate, segregating the assets of any appropriate group
(i.e., Variable Contract owners of one or more Participating Insurance
Companies) that votes in favor of such segregation, or offering to the affected
Variable Contract owners the option of making such a change; and (b)
establishing a new registered management investment company or managed separate
account. If a material irreconcilable conflict arises because of LIFE COMPANY's
decision to disregard Variable Contract owner voting instructions, and that
decision represents a minority position or would preclude a majority vote, LIFE
COMPANY may be required, at the election of the TRUST, to withdraw its Separate
Account's investment in the TRUST, and no charge or penalty will be imposed as a
result of such withdrawal. The responsibility to take such remedial action shall
be carried out with a view only to the interests of the Variable Contract
owners.
For the purposes of this Section 5.3, a majority of the disinterested
members of the Board shall determine whether or not any proposed action
adequately remedies any material irreconcilable conflict, but in no event will
the TRUST or NB MANAGEMENT (or any other investment adviser of the TRUST) be
required to establish a new funding medium for any Variable Contract. Further,
LIFE COMPANY shall not be required by this Section 5.3 to establish a new
funding medium for any Variable Contract if any offer to do so has been declined
by a vote of a majority of Variable Contract owners materially affected by the
irreconcilable material conflict.
5.4 The Board's determination of the existence of a material irreconcilable
conflict and its implications shall be made known promptly and in writing to
LIFE COMPANY.
5.5 No less than annually, the TRUST will request from the LIFE COMPANY
such reports, materials or data as the Board may reasonably request so that the
Board may fully carry out the obligations imposed upon it by these Conditions.
Such reports, materials, and data shall be requested more frequently if deemed
appropriate by the Board.
Article VI. VOTING
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6.1 LIFE COMPANY will provide pass-through voting privileges to all
Variable Contract owners so long as the SEC continues to interpret the '40 Act
as requiring pass-through voting privileges for Variable Contract owners.
Accordingly, LIFE COMPANY, where applicable, will vote shares of TRUST held by
its Separate Accounts in a manner consistent with voting instructions timely
received from its Variable Contract owners. LIFE COMPANY shall vote shares for
which it has not received timely voting instructions, as well as shares it owns,
in the same proportion as it votes those shares for which it has received voting
instructions.
6.2 If and to the extent Rule 6e-2 and Rule 6e-3(T) are amended, or Rule
6e-3 is adopted, to provide exemptive relief from any provision of the '40 Act
or the rules thereunder with respect to mixed and shared funding on terms and
conditions materially different from any
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exemptions granted in the Order, then TRUST and/or LIFE COMPANY, as appropriate,
shall take such steps as may be necessary to comply with Rule 6e-2 and Rule
6e-3(T), as amended, and Rule 6e-3, as adopted, to the extent such Rules are
applicable.
Article VII. INDEMNIFICATION
---------------
7.1 Indemnification by LIFE COMPANY. LIFE COMPANY agrees to indemnify and
hold harmless TRUST and NB MANAGEMENT and each of their Trustees, directors,
officers, employees and agents and each person, if any, who controls TRUST or NB
MANAGEMENT within the meaning of Section 15 of the '33 Act (collectively, the
"Indemnified Parties" for purposes of this Article VII) against any and all
losses, claims, damages, liabilities (including amounts paid in settlement with
the written consent of LIFE COMPANY, which consent shall not be unreasonably
withheld) or litigation (including legal and other expenses), to which the
Indemnified Parties may become subject under any statute, regulation, at common
law or otherwise, insofar as such losses, claims, damages, liabilities or
expenses (or actions in respect thereof) or settlements:
(a) arise out of or are based upon any untrue statements or alleged
untrue statements of any material fact contained in the
Registration Statement, prospectus, or sales literature for the
Variable Contracts or contained in the Variable Contracts (or
any amendment or supplement to any of the foregoing), or arise
out of or are based upon the omission or the alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading,
provided that this agreement to indemnify shall not apply as to
any Indemnified Party if such statement or omission or such
alleged statement or omission was made in reliance upon and in
conformity with information furnished to LIFE COMPANY by or on
behalf of TRUST for use in the registration statement,
prospectus or sales literature for the Variable Contracts or in
the Variable Contracts (or any amendment or supplement) or
otherwise for use in connection with the sale of the Variable
Contracts or TRUST shares; or
(b) arise out of or as a result of statements or representations
(other than statements or representations contained in the
registration statement, prospectus or sales literature of TRUST
not supplied by LIFE COMPANY, or persons under its control) or
wrongful conduct of LIFE COMPANY or any of its directors,
officers, employees or agents, with respect to the sale or
distribution of the Variable Contracts or TRUST shares; or
(c) arise out of any untrue statement or alleged untrue statement of
a material fact contained in a registration statement,
prospectus, or sales literature of TRUST or any amendment
thereof or supplement thereto or the omission or alleged
omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not
misleading if such statement or omission or such alleged
statement or omission was made in reliance
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upon and in conformity with information furnished to TRUST for
inclusion therein by or on behalf of LIFE COMPANY; or
(d) arise as a result of any failure by LIFE COMPANY to
substantially provide the services and furnish the materials
under the terms of this Agreement; or
(e) arise out of or result from any material breach of any
representation and/or warranty made by LIFE COMPANY in this
Agreement or arise out of or result from any other material
breach of this Agreement by LIFE COMPANY.
7.2 LIFE COMPANY shall not be liable under this indemnification provision
with respect to any losses, claims, damages, liabilities or litigation incurred
or assessed against an Indemnified Party as such may arise from such Indemnified
Party's willful misfeasance, bad faith, or gross negligence in the performance
of such Indemnified Party's duties or by reason of such Indemnified Party's
reckless disregard of obligations or duties under this Agreement or to TRUST,
whichever is applicable.
7.3 LIFE COMPANY shall not be liable under this indemnification provision
with respect to any claim made against an Indemnified Party unless such
Indemnified Party shall have notified LIFE COMPANY in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify LIFE COMPANY of any
such claim shall not relieve LIFE COMPANY from any liability which it may have
to the Indemnified Party against whom such action is brought otherwise than on
account of this indemnification provision. In case any such action is brought
against an Indemnified Party, LIFE COMPANY shall be entitled to participate at
its own expense in the defense of such action. LIFE COMPANY also shall be
entitled to assume the defense thereof, with counsel reasonably satisfactory to
the party named in the action. After notice from LIFE COMPANY to such party of
LIFE COMPANY's election to assume the defense thereof, the Indemnified Party
shall bear the fees and expenses of any additional counsel retained by it, and
LIFE COMPANY will not be liable to such party under this 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.
7.4 Indemnification by NB MANAGEMENT. NB MANAGEMENT agrees to indemnify and
hold harmless LIFE COMPANY and each of its directors, officers, employees, and
agents and each person, if any, who controls LIFE COMPANY within the meaning of
Section 15 of the '33 Act (collectively, the "Indemnified Parties" for the
purposes of this Article VII) against any and all losses, claims, damages,
liabilities (including amounts paid in settlement with the written consent of NB
MANAGEMENT which consent shall not be unreasonably withheld) or litigation
(including legal and other expenses) to which the Indemnified Parties may become
subject under any statute, or regulation, at common law or otherwise, insofar as
such losses, claims, damages, liabilities or expenses (or actions in respect
thereof) or settlements:
13
(a) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the
registration statement, prospectus or sales literature of TRUST
(or any amendment or supplement to any of the foregoing), or
arise out of or are based upon the omission or the alleged
omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not
misleading, provided that this agreement to indemnify shall not
apply as to any Indemnified Party if such statement or omission
or such alleged statement or omission was made in reliance upon
and in conformity with information furnished to NB MANAGEMENT or
TRUST by or on behalf of LIFE COMPANY for use in the
registration statement or prospectus for TRUST or in sales
literature (or any amendment or supplement) or otherwise for use
in connection with the sale of the Variable Contracts or TRUST
shares; or
(b) arise out of or as a result of statements or representations
(other than statements or representations contained in the
registration statement, prospectus or sales literature for the
Variable Contracts not supplied by NB MANAGEMENT or persons
under its control) or wrongful conduct of TRUST or NB MANAGEMENT
or persons under their control, with respect to the sale or
distribution of the Variable Contracts or TRUST shares; or
(c) arise out of any untrue statement or alleged untrue statement of
a material fact contained in a registration statement,
prospectus, or sales literature covering the Variable Contracts,
or any amendment thereof or supplement thereto, or the omission
or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein
not misleading, if such statement or omission or such alleged
statement or omission was made in reliance upon and in
conformity with information furnished to LIFE COMPANY for
inclusion therein by or on behalf of TRUST; or
(d) arise as a result of (i) a failure by TRUST to substantially
provide the services and furnish the materials under the terms
of this Agreement; or (ii) a failure by a Portfolio(s) invested
in by the Separate Account to comply with the diversification
requirements of Section 817(h) of the Code; or (iii) a failure
by a Portfolio(s) invested in by the Separate Account to qualify
as a "regulated investment company" under Subchapter M of the
Code; or
(e) arise out of or result from any material breach of any
representation and/or warranty made by NB MANAGEMENT or TRUST in
this Agreement or arise out of or result from any other material
breach of this Agreement by NB MANAGEMENT or TRUST.
14
7.5 NB MANAGEMENT shall not be liable under this indemnification provision
with respect to any losses, claims, damages, liabilities or litigation to which
an Indemnified Party would otherwise be subject by reason of such Indemnified
Party's willful misfeasance, bad faith, or gross negligence in the performance
of such Indemnified Party's duties or by reason of such Indemnified Party's
reckless disregard of obligations and duties under this Agreement or to LIFE
COMPANY.
7.6 NB MANAGEMENT shall not be liable under this indemnification provision
with respect to any claim made against an Indemnified Party unless such
Indemnified Party shall have notified NB MANAGEMENT in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify NB MANAGEMENT of
any such claim shall not relieve NB MANAGEMENT from any liability which it may
have to the Indemnified Party against whom such action is brought otherwise than
on account of this indemnification provision. In case any such action is brought
against the Indemnified Parties, NB MANAGEMENT shall be entitled to participate
at its own expense in the defense thereof. NB MANAGEMENT also shall be entitled
to assume the defense thereof, with counsel reasonably satisfactory to the party
named in the action. After notice from NB MANAGEMENT to such party of NB
MANAGEMENT's election to assume the defense thereof, the Indemnified Party shall
bear the fees and expenses of any additional counsel retained by it, and NB
MANAGEMENT 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.
7.7 The provision of this Article VII shall survive the termination of this
Agreement.
Article VIII. TERM; TERMINATION
-----------------
8.1 This Agreement shall be effective as of the date hereof and shall
continue in force until terminated in accordance with the provisions herein.
8.2 This Agreement shall terminate in accordance with the following
provisions:
(a) At the option of LIFE COMPANY or TRUST at any time from the date
hereof upon 90 days' notice, unless a shorter time is agreed to
by the parties;
(b) At the option of LIFE COMPANY, if TRUST shares are not
reasonably available to meet the requirements of the Variable
Contracts as determined by LIFE COMPANY. Prompt notice of
election to terminate shall be furnished by LIFE COMPANY, said
termination to be effective ten (10) days after receipt of
notice unless TRUST makes available a sufficient number of
shares to reasonably meet the requirements of the Variable
Contracts within said ten (10) day period;
15
(c) At the option of LIFE COMPANY, upon the institution of formal
proceedings against TRUST or NB MANAGEMENT by the SEC, the
National Association of Securities Dealers, Inc., or any other
regulatory body, the expected or anticipated ruling, judgment or
outcome of which would, in LIFE COMPANY's reasonable judgment,
materially impair TRUST's or NB MANAGEMENT's ability to meet and
perform their respective obligations and duties hereunder.
Prompt notice of election to terminate shall be furnished by
LIFE COMPANY with said termination to be effective ten (10) days
after receipt of notice;
(d) At the option of TRUST, upon the institution of formal
proceedings against LIFE COMPANY by the SEC, the National
Association of Securities Dealers, Inc., or any other regulatory
body, the expected or anticipated ruling, judgment or outcome of
which would, in TRUST's reasonable judgment, materially impair
LIFE COMPANY's ability to meet and perform its obligations and
duties hereunder. Prompt notice of election to terminate shall
be furnished by TRUST with said termination to be effective ten
(10) days after receipt of notice;
(e) At the option of LIFE COMPANY, in the event TRUST's shares are
not registered, issued or sold in accordance with applicable
state or federal law, or such law precludes the use of such
shares as the underlying investment medium of Variable Contracts
issued or to be issued by LIFE COMPANY. Termination shall be
effective ten (10) days after notice to TRUST;
(f) At the option of TRUST if the Variable Contracts cease to
qualify as annuity contracts or life insurance contracts, as
applicable, under the Code, or if TRUST reasonably believes that
the Variable Contracts may fail to so qualify. Termination shall
be effective ten (10) days after receipt of notice by LIFE
COMPANY;
(g) At the option of LIFE COMPANY, upon TRUST's breach of any
material provision of this Agreement, which breach has not been
cured to the satisfaction of LIFE COMPANY within ten (10) days
after written notice of such breach is delivered to TRUST;
(h) At the option of TRUST, upon LIFE COMPANY's breach of any
material provision of this Agreement, which breach has not been
cured to the satisfaction of TRUST within ten (10) days after
written notice of such breach is delivered to LIFE COMPANY;
(i) At the option of TRUST, if the Variable Contracts are not
registered, issued or sold in accordance with applicable federal
and/or state law. Termination shall be effective ten (10) days
after notice to LIFE COMPANY;
16
(j) At the option of LIFE COMPANY in the event that any Portfolio
ceases to qualify as a Regulated Investment Company under
Subchapter M of the Code or under any successor or similar
provision, or if LIFE COMPANY reasonably believes that any
Portfolio may fail to so qualify. Termination shall be effective
ten (10) days after notice to the TRUST;
(k) At the option of LIFE COMPANY in the event that any Portfolio
fails to meet the diversification requirements specified in
Article II hereof or if LIFE COMPANY reasonably believes that
any Portfolio may fail to meet such diversification
requirements. Termination shall be effective ten (10) days after
notice to the TRUST;
(l) In the event this Agreement is assigned without the prior
written consent of LIFE COMPANY, TRUST, and NB MANAGEMENT,
termination shall be effective ten (10) days after such
occurrence without notice;
(m) At the option of the LIFE COMPANY, it may substitute shares of
another investment company or series thereof for shares of the
TRUST in accordance with the terms of the Contracts, provided
that the LIFE COMPANY has given at least forty-five days prior
written notice to the TRUST of the date of substitution;
(n) At the option of the LIFE COMPANY, it may elect to move from a
direct Advisory relationship to a Subadvised amendment with NB
MANAGEMENT provided that the LIFE COMPANY has given at least
forty-five days prior written notice to the TRUST, and that NB
MANAGEMENT will give the LIFE COMPANY its best efforts to effect
this change.
8.3 Notwithstanding any termination of this Agreement pursuant to Section
8.2 hereof, TRUST shall, at the option of the LIFE COMPANY, continue to make
available additional TRUST shares, as provided below, for so long as LIFE
COMPANY desires pursuant to the terms and conditions of this Agreement, for all
Variable Contracts in effect on the effective date of termination of this
Agreement (hereinafter referred to as "Existing Contracts"). Specifically,
without limitation, if LIFE COMPANY so elects to make additional TRUST shares
available, the owners of the Existing Contracts or LIFE COMPANY, whichever shall
have legal authority to do so, shall be permitted to reallocate investments in
TRUST, redeem investments in TRUST and/or invest in TRUST upon the payment of
additional premiums under the Existing Contracts. In the event of a termination
of this Agreement pursuant to Section 8.2 hereof, LIFE COMPANY, as promptly as
is practicable under the circumstances, shall notify TRUST and NB MANAGEMENT
whether LIFE COMPANY elects to continue to make TRUST shares available after
such termination. If TRUST shares continue to be made available after such
termination, the provisions of this Agreement shall remain in effect.
17
8.4 Except as necessary to implement Variable Contract owner initiated
transactions, or as required by state insurance laws or regulations, LIFE
COMPANY shall not redeem the shares attributable to the Variable Contracts (as
opposed to the shares attributable to LIFE COMPANY's assets held in the Separate
Accounts or invested directly), and LIFE COMPANY shall not prevent Variable
Contract owners from allocating payments to a Portfolio that was otherwise
available under the Variable Contracts, until thirty (30) days after the LIFE
COMPANY shall have notified TRUST of its intention to do so.
Article IX. NOTICES
-------
Any notice hereunder shall be given by registered or certified mail return
receipt requested to the other party at the address of such party set forth
below or at such other address as such party may from time to time specify in
writing to the other party.
If to TRUST or NB MANAGEMENT:
Xxxxxxxxx Xxxxxx Management Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attention: President
With a Copy to:
Xxxxx Xxxxxxxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
Email: xxxxxxxxxx@xx.xxx
If to LIFE COMPANY:
Phoenix Life Insurance Company
Xxx Xxxxxxxx Xxx
Xxxxxxxx, XX 00000-0000
Attention: Xxxx X. Xxxxx, Vice President and Secretary
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Email: Xxxx.Xxxxx@xxxxxxxxx.xxx
With a Copy to:
Xxxxxx X. Xxxxxx, Second Vice President
Telephone: 000-000-0000
Facsimile: 000-000-0000
Email: xxxxxx.xxxxxx@xxxxxxxxx.xxx
18
Notice shall be deemed given on the date of receipt by the addressee as
evidenced by the return receipt.
Article X. MISCELLANEOUS
-------------
10.1 The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions hereof or
otherwise affect their construction or effect.
10.2 This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
10.3 If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the Agreement shall
not be affected thereby.
10.4 This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the State of New York. It
shall also be subject to the provisions of the federal securities laws and the
rules and regulations thereunder and to any orders of the SEC granting exemptive
relief therefrom and the conditions of such orders.
10.5 The parties agree that the assets and liabilities of each Portfolio
are separate and distinct from the assets and liabilities of each other
Portfolio. No Portfolio shall be liable or shall be charged for any debt,
obligation or liability of any other Portfolio. No Trustee, officer or agent
shall be personally liable for such debt, obligation or liability of any
Portfolio.
10.6 Each party shall cooperate with each other party and all appropriate
governmental authorities (including without limitation the SEC, the National
Association of Securities Dealers, Inc. and state insurance regulators) and
shall permit such authorities reasonable access to its books and records in
connection with any investigation or inquiry relating to this Agreement or the
transactions contemplated hereby.
10.7 The rights, remedies and obligations contained in this Agreement are
cumulative and are in addition to any and all rights, remedies and obligations,
at law or in equity, which the parties hereto are entitled to under state and
federal laws.
10.8 No provision of this Agreement may be amended or modified in any
manner except by a written agreement properly authorized and executed by TRUST,
NB MANAGEMENT and the LIFE COMPANY.
19
IN WITNESS WHEREOF, the parties have caused their duly authorized officers
to execute this Fund Participation Agreement as of the date and year first above
written.
XXXXXXXXX XXXXXX XXXXXXXXX XXXXXX
ADVISERS MANAGEMENT TRUST MANAGEMENT INC.
By: /s/ Xxxxx X. Xxxxxxx By: Xxxxx X. Xxxxxxx
------------------------------------ --------------------------
Name: Xxxxx X. Xxxxxxx Name: Xxxxx X. Xxxxxxx
Title: Chairman and CEO Title: President
PHOENIX LIFE INSURANCE COMPANY
By: /s/ Xxxx Xxxxxxx X'Xxxxxxx
-----------------------------------
Name: Xxxx Xxxxxxx X'Xxxxxxx
Title: Senior Vice President
20
APPENDIX A
The currently available Portfolios of the TRUST are:
AMT Xxxxxxxx Portfolio - S Class Shares
AMT Focus Portfolio - S Class Shares
AMT Growth Portfolio
AMT Guardian Portfolio - I Class Shares
AMT Guardian Portfolio - S Class Shares
AMT International Portfolio
AMT Mid-Cap Growth Portfolio - I Class Shares
AMT Mid-Cap Growth Portfolio - S Class Shares
AMT Partners Portfolio
AMT Regency Portfolio
AMT Socially Responsive Portfolio - I Class Shares
AMT Socially Responsive Portfolio - S Class Shares
AMT Balanced Portfolio
AMT Limited Maturity Bond Portfolio
21
APPENDIX B
PHOENIX LIFE INSURANCE COMPANY
Name of Separate Accounts and date established by Board of Directors:
---------------------------------------------------------------------
Phoenix Life Variable Accumulation Account was established by the Board of
Directors June 21, 1982.
Phoenix Life Variable Universal Life Account was established by the Board of
Directors August 17, 1998.
and all underlying registered contracts in which they invest.*
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--------------------------------------------------------------------------------
* LIFE Company shall promptly provide a complete list of all underlying
-----------------------------------------------------------------------
registered contracts upon request by the Fund or the Adviser
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22
