Exhibit 99.b(m)
FUND PARTICIPATION AGREEMENT
WHEREAS American International Life Assurance Company of New York ("Insurer")
for itself and on behalf of its Separate Account A (the "Account") desires to
purchase shares of the Xxxxxx Funds listed on the attached Schedule A (the
"Funds") to be made available to serve as underlying investment media for
certain annuity contracts (the "Contracts") to be offered by the Insurer;
WHEREAS Xxxxxx Retail Management, LP, the Funds' distributor (the
"Distributor"), desires to sell shares of the Funds to the Insurer for such
purposes; and
WHEREAS, the Insurer and the Distributor desire to enter into an agreement to
provide for certain administrative, service and procedural matters in connection
with such sales.
NOW THEREFORE, the Insurer and the Distributor agree as follows as of this ___
day of February, 2002.
1. The Insurer represents that it has established the Account as a separate
account under New York law to serve as an investment vehicle for the
Contracts. The Contracts provide for the allocation of net amounts
received by the Insurer to separate divisions of the Account for
investment in the shares of specified investment companies selected among
those investment companies available through the Account to act as
underlying investment media. Selection of a particular investment company
or companies is made by the owner of the Contract (the "Contract Owner")
who may change such selection from time to time in accordance with the
terms of the applicable Contract.
2. The Insurer agrees to make reasonable efforts to market its Contracts. It
will give equal emphasis and promotion to shares of the Funds as is given
to other underlying investments of the Account. In marketing its
Contracts, the Insurer will comply with all applicable state or federal
laws, including, but not limited to, delivering prospectuses for the Funds
to potential and actual Contract Owners as required by applicable
securities laws.
3. The Distributor represents that it is registered as a broker-dealer under
the Securities Exchange Act of 1934, and may properly cause shares of the
Funds to be made available for the purposes of this Agreement pursuant to
a general distribution agreement between the Funds and the Distributor,
that the Funds are duly registered under the Investment Company Act of
1940, as amended, and the shares of the Funds have been registered under
the Securities Act of 1933, as amended.
5. The Distributor shall provide net asset value, dividend information and
capital gain information at the close of trading each Business Day to the
Insurer. The Distributor shall use its best efforts to supply such
information by 6:30 p.m. Eastern Standard Time on such Business Day. The
Distributor appoints the Insurer as its agent for the limited purpose of
accepting orders for purchases and redemptions of shares of the Funds from
Contract Owners. Orders by the Insurer for the Account will be placed and
payment for net purchases will be wired to a custodial account designated
by the Funds. Orders for liquidation of shares of the Funds and payment
for the shares will be wired from the Funds' custodial account to an
account designated by the Insurer. The Funds will execute purchase and
redemption orders for shares at the net asset value as determined as of
the close of trading on the Business Day of receipt of such orders in
proper form by the Insurer, provided the Insurer receives such orders in
proper form by close of the New York Stock Exchange and that such orders
are received by the Distributor no later than 10:00 a.m. Eastern Standard
Time of the following Business Day ("Settlement Date"). The Insurer shall
make payment for such orders by 4:00 p.m. Eastern Standard Time of the
Settlement Date. Orders received after such times will be executed at the
closing price on the next Business Day. The Insurer elects to have
dividends and capital gains distributions reinvested in additional shares
at the ex-dividend date net asset value. The Insurer reserves the right to
revoke this election and to receive all such dividend income and capital
gain distributions in cash. The Funds reserve the right to suspend sales
of their shares at any time and from time to time or to refuse any order
to purchase their shares but such suspensions or refusals shall not be
unreasonable. Business Day shall mean each day the New York Stock Exchange
is open for trading.
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The Fund shall transmit to the Company by 8:30 a.m. Eastern Standard Time on
each Business Day a confirmation of any net purchase or redemption orders for
shares of the Fund with a trade date of the second preceding Business Day.
However, on any Business Day that is the first Business Day of the month, the
Fund shall transmit such confirmation by 11:00 a.m. Eastern Standard Time. On
each Business Day, the Fund shall also transmit to the Insurer a reconciliation
of the number of shares in the Account.
6. All expenses incident to the performance by the Distributor under this
Agreement shall be paid by the Distributor. All expenses incident to the
performance by the Insurer under this Agreement shall be paid by the
Insurer. The Funds shall pay the cost of registration of their shares with
the Securities and Exchange Commission ("SEC"). The Funds shall distribute
to the Insurer their proxy materials, periodic fund reports to
shareholders and other material the Funds may require to be sent to
participants. The Distributor shall provide the Insurer with the Funds'
prospectuses and sales literature to be used in connection with
transactions contemplated by this Agreement in such quantities as the
Insurer may reasonably request. The Distributor or the Funds shall pay the
cost of printing of proxy material, shareholder reports and prospectuses
so long as these documents are requested in the form used generally in the
public offering of the Funds' shares. The Insurer shall bear the costs of
mailing such material to potential and existing shareholders.
7. Each Business Day the Insurer and the Fund will reconcile their records so
that an appropriate number of shares of each of the Funds are credited to
the Accounts invested in the Funds.
(a) In the event of any error (other than a Pricing Error, as
hereinafter defined) or delay with respect to the procedures
outlined in this Section 7 which is caused by the Fund, the
Fund shall make any adjustments on its accounting system
necessary to correct such error or delay and shall reimburse
the Accounts for any losses or reasonable costs incurred
directly as a result of the error or delay.
(b) In the event of any error or delay with respect to the
procedures outlined in this Section 7 which is caused by the
Insurer, the Insurer shall adjust its records accordingly in
order to correct such error or delay. The Insurer will notify
the Fund of the error and required correction and shall
reimburse Fund for any losses or reasonable costs incurred as
a result of the error or delay. In the event of an error or
delay caused by the Insurer, the Fund will process any
adjustment with the trade date of the day such error or delay
is identified by the Insurer to the Fund.
(c) The Insurer and Fund, respectively, each agree to provide the
other prompt notice of any errors or delays of the type
referred to in this Section 7(a) and to use reasonable efforts
to take such action as may be appropriate to avoid or mitigate
any such costs or losses.
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8. In the event of an error in the computation of a Fund's net asset value
per share which, in accordance with procedures adopted by the Fund's Board
of Directors consistent with views expressed by the staff of the
Securities and Exchange Commission regarding appropriate error correction
standards, as shall be in effect or amended from time to time, requires
adjustment to transactions previously effected on behalf of an Account (a
"Pricing Error"), the Fund shall notify the Insurer as soon as possible
after discovery of the Pricing Error. Such notification may be oral, but
shall be confirmed promptly in writing. In such event, the Fund shall
reimburse the affected Fund for any loss (without taking into
consideration any positive effect of such Pricing Error) and shall make
appropriate adjustments to the Insurer's accounts, which adjustments shall
net the impact of individual Contract gains and losses; this will result
in either a net payment to the Account from the Fund (in the event of net
Contract losses) or from the Account to the Fund (in the event of net
Contract gains), but only to the extent the Insurer is able to and does
subtract such gains from the Contract's Account Values. In addition, in
the event that the Pricing Error causes the Insurer to incur any direct
costs for re-processing Contract accounts under an Account, such as
preparing and mailing revised statements, the Fund shall reimburse the
Insurer for all such reasonable costs upon receipt from the Insurer of an
invoice or other statement documenting such costs in reasonable detail.
9. (a) The Insurer and its agents shall make no representations concerning
the Funds or Funds' shares except those contained in the then current
prospectus or Statement of Additional Information of the Funds and in
current printed sales literature of the Distributor except with the
permission of the Distributor. The Insurer agrees to indemnify the Funds
and the Distributor with regard to any misuse or misrepresentations by the
Insurer or such agents associated with the material.
(b) The Distributor, the Funds and their agents shall make no representations
concerning the Insurer, the Account or the Contracts except those
contained in the then current prospectus for such Contracts, or in reports
for the Account or prepared for distribution to owners of the Contracts,
or in current printed sales literature or other promotional material
approved by the Insurer, except with the permission of the Insurer. The
Distributor agrees to indemnify the Insurer with regard to any misuse or
misrepresentation by the Distributor or any Fund or such agents associated
with the material.
10. Administrative services to participants shall be the responsibility of the
Insurer and shall not be the responsibility of the Distributor or the
Funds.
11. (a) So long as the Insurer complies with its obligations in this Section
11, the Distributor shall pay the Insurer a service fee (the "Service
Fee") on shares of the Funds held in the Account at the annual rates
specified in Schedule A (excluding any accounts for the Insurer's own
corporate retirement plans), subject to Section 11(b) hereof.
(b) The Insurer understands and agrees that:
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(i) all Service Fee payments are subject to the limitations contained in
each Fund's Distribution Plan, which may be varied or discontinued
at any time;
(ii) the Insurer's failure to provide the services described in Section
11(c) or otherwise comply with the terms of the Agreement will
render it ineligible to receive service fees; and
(iii) the Distributor may amend this Section 11 to change the terms of the
Service Fee payments with prior written notice to the Insurer.
(c) The Insurer will provide the following services to the Contract Owners
purchasing Fund shares:
(i) Maintain regular contact with Contract Owners and assist in
answering inquiries concerning the Funds;
(ii) Assist in distributing shareholder reports, prospectuses and
other sale and service literature provided by the Distributor or the
Fund;
(iii) Assist the Distributor and its affiliates in the establishment
and maintenance of shareholder accounts and records;
(iv) Assist Contract Owners in effecting administrative changes,
such as exchanging shares in or out of the Funds;
(v) Assist in processing purchase and redemption transactions; and
(vi) Provide any other information or services as the Contract
Owners or the Distributor may reasonably request.
The Insurer will support the Distributor's marketing efforts by granting
reasonable requests for visits to the Insurer offices by the Distributor's
wholesalers.
(d) The Insurer's compliance with the service requirement set forth in this
Agreement will be evaluated from time to time by monitoring redemption
levels of Fund shares held in the Account and by such other methods as the
Distributor deems appropriate.
(e) The provisions of this Section 11 shall remain in effect for not more than
one year from the date of its execution or adoption and thereafter for
successive annual periods only so long as such continuance is specifically
approved at least annually by the Trustees of each of the Funds in
conformity with Rule 12b-1 under the Investment Company Act of 1940 (the
"1940 Act"). This Agreement shall automatically terminate in the event of
its assignment (as defined by the 1940 Act). In addition, this Section 8
may be terminated at any time, without the payment of any penalty, by
either party upon written notice delivered or mailed by registered mail,
postage prepaid, to the other party, or, as provided
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in Rule 12b-1 under the 1940 Act by the Trustees of any Fund or by the
vote of the holders of the outstanding voting securities of any Fund.
(f) The Distributor shall provide the Trustees of each of the Funds, and such
Trustees shall review at least quarterly, a written report of the amounts
paid to the Insurer under this Agreement and the purposes for which such
expenditures were made.
12. This Agreement shall terminate:
(a) at the option of the Insurer or the Distributor upon 90 days'
advance written notice to the other party;
(b) by the Distributor with respect to any Fund, upon 60 days prior
notice of a decision by the Distributor to cease the public offering
of shares of the Fund.
(c) at the option of the Insurer if shares of the Funds are not
available for any reason to meet the requirements of Contracts.
Reasonable advance notice of election to terminate shall be
furnished by the Insurer;
(d) upon termination of the Distributors' general distribution agreement
with the Funds. Notice of such termination shall be promptly
furnished by the Distributor to the Insurer. This paragraph (d)
shall not be deemed to apply if, contemporaneously with such
termination, a new contract of substantially similar terms is
entered into between the Distributor and the Funds;
(e) upon assignment of this Agreement, at the option of any party not
making the assignment, unless made with the written consent of each
other; and
(f) by one party upon material breach of the terms of this Agreement by
the other party.
13. Termination pursuant to Section 12 shall not affect the Distributor's
obligation to furnish shares of the Funds to the Contracts then in force
for which the shares of the Funds serve or may serve as the underlying
medium unless such further sale of shares of the Funds are prohibited by
law, subject to the Funds' rights set forth in Section 4 to suspend sales
of their shares or refuse any order to purchase shares.
14. Each notice required by this Agreement shall be given in writing and
delivered via certified mail return receipt requested to:
If to the Insurer:
American International Life
Assurance Company of New York
Pension Department
00 Xxxx Xxxxxx/00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxx Xxxxxxxxx
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If to the Distributor:
Xxxxxx Retail Management, LP.
Xxx Xxxx Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn.: Retirement Plans and Insurance Products
Or to such other address as may be specified in a written notice given to
the other party. The date of service of notice or demand shall be the
receipt of any certified mail receipt.
15. The Insurer will distribute all proxy materials furnished by the Funds and
will vote shares of the Funds in accordance with instructions received
from the Contract Owners of such shares of the Funds. The Insurer shall
vote the shares of the Funds for which no instructions have been received
in the same proportion as shares of the Funds for which said instructions
have been received from Contract Owners provided that the Insurer reserves
the right to vote Fund shares held in the Account in its own right, to the
extent permitted by law. The Insurer and its agents will in no way
recommend action in connection with or oppose or interfere with the
solicitation of proxies for the shares of the Funds held for such Contract
Owners. The Insurer will provide to the Funds a list of Contract Owners
(and their addressees) upon written notice from any officer or director of
the Funds. Such information will be used for proxy solicitation purposes
only.
16. Each party hereto shall cooperate with each other party and all
appropriate governmental authorities (including, without limitation, the
SEC, the NASD, and state insurance regulators) and shall permit
authorities of competent jurisdiction reasonable access to its books and
records in connection with any investigation or inquiry relating to this
Agreement or the transactions contemplated hereby.
17. (a) Each party ("Indemnifying Party") hereby agrees to defend, indemnify
and hold wholly harmless the other party and the Funds ("Indemnified
Party") and each of an Indemnified Party's directors, officers, employees,
and agents from any liability, loss, cost or expense whatsoever incurred
by such Indemnified Party by reason of the Indemnifying Party's breach of
its obligations pursuant to this Agreement, including the violation of any
applicable federal or state law or regulation.
(b) An Indemnifying Party shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or
litigation to which an Indemnified Party is 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 or duties under this
Agreement.
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(c) An Indemnifying Party shall not be liable under this indemnification
provision or Section 9 with respect to any claim made against an
Indemnified Party unless such Indemnified party shall have notified the
Indemnifying Party 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 the Indemnifying Party of any
such claim shall 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 this indemnification provision. In
case any such action is brought against an Indemnified Party, the
Indemnifying Party shall be entitled to assume the defense thereof, with
counsel satisfactory to the party named in the action. After notice from
the Indemnifying party to such party of the Indemnifying Party's election
to assume the defense thereof, the Indemnified Party shall bear the fees
and expenses of any additional counsel retained by it, and the
Indemnifying 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.
18. (a) Prospectus, advertising and sales literature with respect to the Funds
prepared by the Insurer or its agents for use in marketing its Contracts
will be submitted to the Distributor for review and acceptance before such
material is submitted to the SEC or NASD for review or otherwise used. No
such material will be used if the Distributor reasonably objects to its
use in writing within ten days after receipt of such material.
(b) Prospectus, advertising and sales literature prepared by the Distributor
which name the Insurer or its agents for use in marketing the Funds will
be submitted to the Insurer for review and acceptance before such material
is submitted to the SEC and NASD for review, or otherwise used. No such
materials will be used if the Insurer reasonably objects to its use in
writing within ten days after receipt of such materials.
19. Notwithstanding the termination of this Agreement, each party's obligation
to indemnify the other pursuant to Sections 9 and 17 shall survive.
20. The Agreement shall be subject to the provisions of the 1933, 1934 and
1940 Acts and the rules and regulations thereunder, including any
exemptive relief therefrom and the orders of the SEC setting forth such
relief.
21. This Agreement shall be construed in accordance with the laws of the
Commonwealth of Massachusetts.
22. This Agreement contains the entire understanding and agreement among the
parties with respect to the subject matter of this Agreement and may not
be amended except by written agreement of the parties hereto.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written.
American International Life Assurance Company of New York on its own behalf and
on behalf of Separate Account A
By: ______________________________
Name:
Title:
XXXXXX RETAIL MANAGEMENT, LP
By: ______________________________
Name:
Title:
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SCHEDULE A
Fund Service Fee
---- -----------
Xxxxxx Fund for Growth and Income 0.__%
Xxxxxx Health Sciences Trust 0.__%
Xxxxxx International Voyager Fund 0.__%
Xxxxxx New Century Growth Fund 0.__%
Xxxxxx Voyager Fund 0.__%
