Ex. 99-B.8.48
Form of Fund Participation Agreement dated as of _______________, 2000 between
Pax World Balanced Fund, Inc. and Aetna Life Insurance and Annuity Company
FUND PARTICIPATION AGREEMENT
BETWEEN
AETNA LIFE INSURANCE AND ANNUITY COMPANY AND
PAX WORLD BALANCED FUND, INC.
AETNA LIFE INSURANCE AND ANNUITY COMPANY (the "Company") and PAX WORLD
BALANCED FUND, INC. (the "Fund") hereby agree to an arrangement whereby the Fund
shall be made available to serve as underlying investment media for Variable
Annuity Contracts ("Contracts") to be issued by the Company.
1. Establishment of Accounts; Availability of Fund.
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The Company represents that it has established the Variable Annuity
Accounts set forth on Schedule A attached hereto, as the same may be
amended from time to time with the mutual consent of the parties hereto
(the "Accounts"), each of which is a separate account under Connecticut
Insurance law, and has registered or will register each of the Accounts
(except for such Accounts for which no such registration is required) as a
unit investment trust under the Investment Company Act of 1940, as amended
(the "1940 Act"), to serve as an investment vehicle for the Contracts. Each
Contract provides for the allocation of net amounts received by the Company
to an Account for investment in the shares of one of more specified
open-end management investment companies available through that Account as
underlying investment media. Selection of a particular investment
management company and changes therein from time to time are made by the
participant or Contract owner, as applicable under a particular Contract.
2. Pricing Information; Orders; Settlement.
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(a) The Fund will make Fund shares available to be purchased by the
Company, and will accept redemption orders from the Company, on behalf
of each Account at the net asset value applicable to each order on
those days on which the Fund calculates its net asset value (a
"Business Day"). Fund shares shall be purchased and redeemed in such
quantity and at such time determined by the Company to be necessary to
meet the requirements of those Contracts for which the Fund(s) serve
as underlying investment media, provided, however, that the Board of
Directors of the Fund (hereinafter the "Directors") may upon
reasonable notice to the Company, refuse to sell shares of the Fund to
any person, or suspend or terminate the offering of shares of the Fund
if such action is required by law or by regulatory authorities having
jurisdiction or is, in the sole discretion of the Directors, acting in
good faith and in the best interests of the shareholders of the Fund
and is acting in compliance with their fiduciary obligations under
federal and/or any applicable state laws.
(b) The Fund will provide to the Company closing net asset value, dividend
and capital gain information at the close of trading each day that the
New York Stock Exchange (the "Exchange") is open (each such day a
"Business Day"), and in no event later than 6:30 p.m. New York time on
such Business Day. The Company will send via facsimile or electronic
transmission to the Fund or its specified agent orders to purchase
and/or redeem Fund shares by 8:00 p.m. New York time on such Business
Day (or, due to unforeseen circumstances, by 8:30 a.m. New York time
on the following Business Day). Payment for net purchases will be
wired by the Company to an account designated by the Fund to coincide
with the order for shares of the Fund.
(c) The Fund hereby appoints the Company as its agent for the limited
purpose of accepting purchase and redemption orders for Fund shares
relating to the Contracts from Contract owners or participants. Orders
from Contract owners or participants received from any distributor of
the Contracts (including affiliates of the Company) by the Company,
acting as agent for the Fund, prior to the close of the Exchange on
any given Business Day will be executed by the Fund at the net asset
value determined as of the close of the Exchange on such Business Day,
provided that the Fund receives written (or facsimile) notice of such
order by 8:00 p.m. New York time on such Business Day (or, due to
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unforeseen circumstances, by 8:30 a.m. New York time on the following
Business Day). Any orders received by the Company acting as agent on
such day but after the close of the Exchange will be executed by the
Fund at the net asset value determined as of the close of the Exchange
on the next Business Day following the day of receipt of such order by
the Company, provided that the Fund receives written (or facsimile)
notice of such order by 8:00 p.m. New York time on the next Business
Day following receipt of such order by the Company (or, due to
unforeseen circumstances, by 8:30 a.m. New York time on the second
Business Day following the day of receipt of such order by the
Company).
(d) Payments for net redemptions of shares of the Fund will be wired by
the Fund to an account designated by the Company on the same Business
Day the Company places an order to redeem Fund Shares. Payments for
net purchases of the Fund will be wired by the Company to an account
designated by the Fund on the same Business Day the Company places an
order to purchase Fund shares. Payments shall be in federal funds
transmitted by wire.
(e) In lieu of applicable provisions set forth in paragraphs 2(a) through
2(d) above, the parties may agree to provide pricing information,
execute orders and wire payments for purchases and redemptions through
National Securities Clearing Corporation's Fund/SERV system in which
case such activities will be governed by the provisions set forth in
an Exhibit to this Agreement.
(f) Each party has the right to rely on information or confirmations
provided by the other party (or by any affiliate of the other party),
and shall not be liable in the event that an error is a result of any
misinformation supplied by the other party.
(g) The Fund shall indemnify and hold the Company harmless, from the
effective date of this Agreement, against any amount the Company is
required to pay to Contract owners or participants due to: (i) an
incorrect calculation by the Fund of a Fund's daily net asset value,
dividend rate, or capital gains distribution rate or (ii) incorrect or
late reporting by the Fund of the daily net asset value, dividend
rate, or capital gain distribution rate of the Fund. In addition, the
Fund shall be liable to the Company for systems and out of pocket
costs incurred by the Company in making a Contract owner's or a
participant's account whole, if such costs or expenses are a result of
the Fund's failure to provide timely or correct net asset values,
dividend and capital gains or financial information and if such
information is not corrected by 4:00 p.m. New York time of the next
Business day after releasing such incorrect information provided the
incorrect NAV as well as the correct NAV for each day that the error
occurred is provided. If a mistake is caused in supplying such
information or confirmations, which results in a reconciliation with
incorrect information, the amount required to make a Contract owner's
or a participant's account whole shall be borne by the party providing
the incorrect information, regardless of when the error is corrected.
(h) The Company agrees to purchase and redeem the shares of the Fund
offered by the then current prospectus and statement of additional
information of the Fund in accordance with the provisions of such
prospectus and statement of additional information.
3. Fees.
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In consideration of services provided by the Company under this Agreement,
the Fund shall pay fees to the Company as set forth in Schedule B.
4. Expenses.
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(a) Except as provided in this Agreement, all expenses incident to the
performance by the Fund under this Agreement shall be paid by the
Fund, including the cost of registration of Fund shares with the
Securities and Exchange Commission (the "SEC") and in states where
required. The Fund 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, except as provided herein and in
Schedule B attached hereto - and made a part of this Agreement as may
be amended from time to time with the mutual consent of the parties
hereto. All expenses incident to performance by each party of its
respective duties under this Agreement shall be paid by that party,
unless otherwise specified in this Agreement.
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(b) The Fund shall provide to the Company, at the location designated by
the Company, periodic fund reports to shareholders and other materials
that are required by law to be sent to Contract owners or
participants. In addition, the Fund shall provide the Company with a
sufficient quantity of its prospectuses, statements of additional
information and any supplements to any of these materials to be used
in connection with the offerings and transactions contemplated by this
Agreement
(c) The Fund shall provide the Company with a sufficient quantity of its
proxy material that is required to be sent to Contract owners or
participants. The cost associated with proxy preparation, group
authorization letters, programming for tabulation and necessary
materials (including postage) will be paid by the Fund.
5. Representations.
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The Company agrees that it and its agents shall not, without the written
consent of the Fund make representations concerning the Fund or its shares
except those contained in the then current prospectuses and in current
printed sales literature approved by the Fund.
In addition, the Company hereby represents and warrants to the Fund as
follows:
(a) Each Account of the Company set forth on Schedule A is either (i)
registered with the SEC as a unit investment trust under the 1940 Act
or (ii) not required to be registered under the 1940 Act pursuant to
applicable exemptions or exclusions;
(b) it will comply with all applicable requirements of laws, rules and
regulations of governmental or self-regulatory authorities having
jurisdiction for its acts and duties under this Agreement; and
(c) it will promptly notify the Fund in the event that the Company is for
any reason unable to perform any of its obligations under this
Agreement.
6. Termination.
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This agreement shall terminate as to the sale and issuance of new
Contracts:
(a) at the option of either the Company or the Fund, upon sixty days
advance written notice to the other parties;
(b) at the option of the Company, upon one week advance written notice to
the Fund, if Fund shares are not available for any reason to meet the
requirement of Contracts as determined by the Company. Reasonable
advance notice of election to terminate shall be furnished by Company;
(c) at the option of either the Company or the Fund, immediately upon
institution of formal proceedings against the broker-dealer or
broker-dealers marketing the Contracts, the Account, the Company or
the Fund by the National Association of Securities Dealers, Inc. (the
"NASD"), the SEC or any other regulatory body;
(d) upon the determination of the Accounts to substitute for the Fund's
shares the shares of another investment company in accordance with the
terms of the applicable Contracts. The Company will give 60 days
written notice to the Fund of any decision to replace the Fund's'
shares;
(e) upon assignment of this Agreement, unless made with the written
consent of all other parties hereto;
(f) if Fund shares are not registered, issued or sold in conformance with
Federal law or such law precludes the use of Fund shares as an
underlying investment medium for Contracts issued or to be issued by
the Company. Prompt notice shall be given by the appropriate party
should such situation occur.
7. Continuation of Agreement.
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Termination as the result of any cause listed in Section 6 shall not affect
the Fund's obligation to furnish its shares to Contracts then in force for
which its shares serve or may serve as the underlying medium unless such
further sale of Fund shares is prohibited by law or the SEC or other
regulatory body.
8. Advertising Materials; Filed Documents.
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(a) Advertising and sales literature with respect to the Fund prepared by
the Company or its agents for use in marketing its Contracts will be
submitted to the Fund or its designee for review before such material
is submitted to any regulatory body for review. The Fund or its
designee shall advise the submitting party in writing within three (3)
Business Days of receipt of such materials of its approval or
disapproval of such materials. No such material shall be used if such
regulatory body objects to such use.
(b) The Fund will provide additional copies of its financials as soon as
available to the Company and at least one complete copy of all
registration statements, prospectuses, statements of additional
information, annual and semi-annual reports, proxy statements and all
amendments or supplements to any of the above that relate to the Fund
promptly after the filing of such document with the SEC or other
regulatory authorities. At the Fund's request, the Company will
provide to the Fund at least one complete copy of all registration
statements, prospectuses, statements of additional information, annual
and semi-annual reports, proxy statements, and all amendments or
supplements to any of the above that relate to the Account promptly
after the filing of such document with the SEC or other regulatory
authority.
(c) The Fund will provide via Excel spreadsheet diskette format or in
electronic transmission to the Company at least quarterly portfolio
information necessary to update Fund profiles with seven Business days
following the end of each quarter.
9. Proxy Voting.
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(a) The Company shall provide pass-through voting privileges on Fund
shares held by registered separate accounts to all Contract owners and
participants to the extent the SEC continues to interpret the 1940 Act
as requiring such privileges. The Company shall provide pass-through
voting privileges on Fund shares held by unregistered separate
accounts to all Contract owners.
(b) The Company will distribute to Contract owners and participants, as
appropriate, all proxy material furnished by the Fund and will vote
Fund shares in accordance with instructions received from such
Contract owners and participants. If and to the extent required by
law, the Company, with respect to each group Contract and in each
Account, shall vote Fund shares for which no instructions have been
received in the same proportion as shares for which such instructions
have been received. The Company and its agents shall not oppose or
interfere with the solicitation of proxies for Fund shares held for
such Contract owners and participants.
10. Indemnification.
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(a) The Company agrees to indemnify and hold harmless the Fund and its
officers, directors, shareholders, employees, agents and each person,
if any, who controls the Fund within the meaning of the Securities Act
of 1933, as amended (the "1933 Act"), against any losses, claims,
damages or liabilities to which the Fund or any such officer,
director, shareholder, employee, agent or controlling person may
become subject, under the 1933 Act or otherwise, insofar as such
losses, claims, damages, or liabilities (or actions in respect
thereof) arise out of or result from (i) a breach by the Company of
any of the terms or conditions of this Agreement, (ii) the willful
misfeasance, bad faith or gross negligence by the Company in the
performance of its duties hereunder, (iii) any untrue statement or
alleged untrue statement of any material fact contained in the
Registration Statement, prospectus or sales literature of the Company
or the omission or the alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein not misleading, or (iv) conduct, statements or representations
(other than statements or representations contained in the
prospectuses or sales literature of the Fund) of the Company or its
agents, with respect to the sale and distribution of Contracts for
which Fund shares are the underlying investment. The Company will
reimburse any
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legal or other expenses reasonably incurred by the Fund and each such
officer, director, shareholder, employee, agent or controlling person
in connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that the Company will
not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon (i) an
untrue statement or omission made in such Registration Statement,
prospectus or sales literature in conformity with written materials
furnished to the Company by the Fund specifically for use therein or
(ii) the willful misfeasance or gross negligence by the Fund in the
performance of its duties hereunder, whichever is applicable. This
indemnity agreement will be in addition to any liability which the
Company may otherwise have.
(b) The Fund agrees to indemnify and hold harmless the Company and its
directors, officers, employees, agents and each person, if any, who
controls the Company within the meaning of the 1933 Act against any
losses, claims, damages or liabilities to which the Company or any
such director, officer, employee, agent or controlling person may
become subject, under the 1933 Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or result from (i) a breach by the Fund of any of the
terms or conditions of this Agreement, (ii) the willful misfeasance,
bad faith or gross negligence by the Fund in the performance of its
duties hereunder or, (iii) any untrue statement of any material fact
contained in the Registration Statement, prospectuses or sales
literature of the Fund or the omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein not misleading. The Fund will reimburse any legal or other
expenses reasonably incurred by the Company or any such director,
officer, employee, agent or controlling person in connection with
investigating or defending any such loss, claim, damage, liability or
action; provided, however, that the Fund will not be liable in any
such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon (i) an untrue statement or alleged
untrue statement or omission or alleged omission made in such
Registration Statement, prospectuses or sales literature which are in
conformity with written materials furnished to the Fund by the Company
specifically for use therein or (ii) the willful misfeasance or gross
negligence by the Company in the performance of its duties hereunder,
whichever is applicable.
(c) Promptly after receipt by an indemnified party hereunder of notice of
the commencement of an action, such indemnified party will, if a claim
in respect thereof is to be made against the indemnifying party
hereunder, notify the indemnifying party of the commencement thereof;
but the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party
otherwise than under this Section 10. In case any such action is
brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party
will be entitled to participate therein and, to the extent that it may
wish to, assume the defense thereof, with counsel satisfactory to such
indemnified party, and after notice from the indemnifying party to
such indemnified party of its election to assume the defense thereof,
the indemnifying party will not be liable to such indemnified party
under this Section 10 for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation.
11. Miscellaneous.
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(a) Amendment and Waiver. Neither this Agreement, nor any provision
hereof, may be amended, waived, discharged or terminated orally, but
only by an instrument in writing signed by all parties hereto.
(b) Notices. All notices and other communications hereunder shall be given
or made in writing and shall be delivered personally, or sent by
telex, telecopier or registered or certified mail, postage prepaid,
return receipt requested, or recognized overnight courier service to
the party or parties to whom they are directed at the following
addresses, or at such other addresses as may be designated by notice
from such party to all other parties.
To the Company:
Aetna Life Insurance and Annuity Company
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
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Attention: Xxxxx X. Xxxxxxxx, Counsel
To the Fund:
Pax World Balanced Fund, Inc.
c/o Pax World Management Corp.
000 Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000-0000
Attn: Xxxxxx X. Xxxxx, President
With a copy to:
Xxxxxxx Xxxxxxxx & Xxxxx, LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxx X. Lake, Esq.
Any notice, demand or other communication given in a manner prescribed
in this subsection (b) shall be deemed to have been delivered on
receipt.
(c) Successors and Assigns. This agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective permitted
successors and assigns.
(d) Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one
agreement, and any party hereto may execute this Agreement by signing
any such counterpart.
(e) Severability. In case any one or more of the provisions contained in
this Agreement should be invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining
provisions contained herein shall not in any way be affected or
impaired thereby.
(f) Entire Agreement. This Agreement constitutes the entire agreement and
understanding between the parties hereto and supersedes all prior
agreement and understandings relating to the subject matter hereof.
(g) Governing Law. This Agreement shall be governed and interpreted in
accordance with the laws of the State of New Hampshire.
(h) Non Exclusivity. It is understood by the parties that this Agreement
is not an exclusive arrangement in any respect.
(i) Confidentiality. The terms of this Agreement and the Schedules thereto
will be held confidential by each party except to the extent that
either party or its counsel may deem it necessary to disclose such
terms.
12. Limitation on Liability of Officers, Directors, etc.
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This Agreement has been executed on behalf of the Fund by the undersigned
officer of the Fund in his or her capacity as an officer of the Fund. The
obligations of this Agreement shall be binding upon the assets and property
of the Fund only and shall not be binding on any officer, director or
shareholder of the Fund individually.
IN WITNESS WHEREOF, the undersigned have executed this Agreement by their
duly authorized officers effective as of the 8th day of August, 2000.
AETNA LIFE INSURANCE AND ANNUITY COMPANY
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By:_____________________________________
Name:________________________________
Title:_______________________________
PAX WORLD BALANCED FUND, INC.
By:__________________________________
Name: Xxxxxx X. Xxxxx
Title: President
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Schedule A
Variable Annuity Accounts
Variable Annuity Account B
Variable Annuity Account C
Variable Annuity Account D
Variable Annuity Account F
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