Exhibit (h)(4)
FUND PARTICIPATION AGREEMENT
THIS AGREEMENT, made as of the ___ day of ___________, 200__, by and
between XXXXXXXXX XXXXXX ADVISERS MANAGEMENT TRUST ("TRUST"), XXXXXXXXX XXXXXX
MANAGEMENT INC. ("NB MANAGEMENT"), a New York corporation, and
_______________________ ("LIFE COMPANY"), a life insurance company organized
under the laws of the State of ___________.
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 also offers its
shares to certain qualified pension and retirement plans; 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
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. New York Time on the next
following Business Day. "Business Day" shall mean any day on which the New York
Stock Exchange is open for trading and on which TRUST calculates its net asset
value pursuant to the rules of the SEC.
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. New York 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.
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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.
New York 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, 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. New York 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. New York 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. New York 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. New
York 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.
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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 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 _______________
and that it has legally and validly established each Separate Account as a
segregated asset account under such laws, and that ________________________, 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.
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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.
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.
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2.9 LIFE COMPANY hereby consents to the use by TRUST of the name
and telephone number of LIFE COMPANY and to the reference by TRUST to the
relationship between LIFE COMPANY and TRUST as part of an informational page on
TRUST'S site on the World Wide Web portion of the Internet. The LIFE COMPANY
hereby further consents to TRUST'S establishing a link between TRUST'S site and
LIFE COMPANY's site from the same place that LIFE COMPANY is listed on TRUST'S
site as described in the preceding sentence.
2.10 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.
2.11 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.
2.12 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.
2.13 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 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.
2.15 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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2.16 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.
2.17 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).
2.18 In the prospectus for the Portfolios, the TRUST reserves the
right to reject an investment or exchange order or to withdrawal 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 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
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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) by assessing and collecting
any redemption fee that may be adopted by the TRUST with respect to any
Portfolio, either to comply with SEC rules or in accordance with any such
determination made by the TRUST'S Board of Trustees.
2.19 LIFE COMPANY will, upon reasonable request, certify to the
TRUST and NB MANAGEMENT that LIFE COMPANY is in compliance with Items 2.17
and/or 2.18 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.
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).
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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. LIFE COMPANY will provide TRUST on a
semi-annual basis, or more frequently as reasonably requested by 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 as set in type
or in camera-ready copy) 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. Should LIFE COMPANY wish to print any of these documents in a format
different from that provided by TRUST, LIFE COMPANY shall provide Trust with
sixty (60) days' prior written notice and LIFE COMPANY shall bear the cost
associated with any format change.
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) camera-ready copy of the current prospectus for
printing by the LIFE COMPANY;
(ii) a copy of the statement of additional information
suitable for duplication;
(iii) camera-ready copy of proxy material suitable for
printing; and
(iv) camera-ready copy 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 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.
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3.5 LIFE COMPANY agrees that it will cooperate with NB MANAGEMENT
and the TRUST by providing to NB MANAGEMENT and the TRUST, within thirty (30)
days prior to any deadline imposed by applicable laws, rules or regulations,
information regarding shares sold and redeemed and whether the Separate Accounts
are registered or unregistered under the '40 Act and any other information
pertinent to enabling NB MANAGEMENT and the TRUST to pay registration or other
fees with respect to the TRUST shares sold during the fiscal year in accordance
with Rule 24f-2 or to register and qualify TRUST shares under any applicable
laws, rules or regulations in a timely manner.
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.
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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 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;
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(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,
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
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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, LIFE COMPANY shall submit to the Board
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 submitted more frequently if deemed
appropriate by the Board.
Article VI. VOTING
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 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
13
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 upon and in conformity with information
furnished to TRUST for inclusion therein by or on
behalf of LIFE COMPANY; or
14
(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:
15
(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
16
(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.
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.
17
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 180 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 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-day period;
(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
upon 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 upon 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 immediately upon notice to TRUST;
18
(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 upon 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 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 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 immediately upon such occurrence
without notice to LIFE COMPANY;
(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 immediately
upon 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 immediately upon
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
immediately upon such occurrence without notice.
19
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.
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: Xxxxx Xxxxxxx, General Counsel
If to LIFE COMPANY:
Attention: General Counsel
20
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.
21
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.
22
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: By:
------------------------------ ------------------------------
Name: Name:
Title: Title:
[LIFE COMPANY]
By:
------------------------------
Name:
Title:
23
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 - S Class Shares
AMT Mid-Cap Growth Portfolio - I Class Shares
AMT Mid-Cap Growth Portfolio - S Class Shares
AMT Partners Portfolio
AMT Regency Portfolio - I Class Shares
AMT Regency Portfolio - S Class Shares
AMT Socially Responsive Portfolio
AMT Balanced Portfolio
AMT Xxxxxx Brother Short Duration Bond Portfolio
00
XXXXXXXX X
25
