FUND PARTICIPATION AGREEMENT
AXA EQUITABLE LIFE INSURANCE COMPANY,
XXXXXXX XXXXX VARIABLE INSURANCE TRUST,
XXXXXXX SACHS ASSET MANAGEMENT, L.P.,
AND
XXXXXXX, XXXXX & CO.
OCTOBER 20, 2009
FUND PARTICIPATION AGREEMENT
Among
AXA Equitable Life Insurance Company,
Xxxxxxx Sachs Variable Insurance Trust,
Xxxxxxx Xxxxx Asset Management, L.P.,
and
Xxxxxxx, Sachs & Co.
THIS AGREEMENT, effective October 20, 2009, by and among AXA Equitable
Life Insurance Company (the "Company"), a New York Corporation, on its own
behalf and on behalf of certain separate accounts (the "Accounts"); Xxxxxxx
Xxxxx Variable Insurance Trust, a statutory trust formed under the laws of
Delaware (the "Fund"); Xxxxxxx Sachs Asset Management, L.P. (the "Adviser"), the
Funds' investment adviser; and Xxxxxxx, Xxxxx & Co.(the "Distributor"), a New
York limited partnership.
WHEREAS, the Fund engages in business as an open-end management
investment company and is available to act as the investment vehicle for
separate accounts established for variable life insurance policies and/or
variable annuity contracts (collectively, the "Variable Insurance Products") to
be offered by insurance companies (the "Participating Insurance Companies"); and
WHEREAS, the beneficial interest in the Fund is divided into several
series of shares, each designated a "Portfolio" and representing the interest in
a particular managed portfolio of securities and other assets; and
WHEREAS, the Fund has obtained an order from the Securities and
Exchange Commission (the "SEC"), dated February 2, 1998 (File No. 812-10794)
(the "Mixed and Shared Funding Exemptive Order"), granting Participating
Insurance Companies and variable annuity
and variable life insurance separate accounts exemptions from the provisions of
sections 9(a), 13(a), 15(a), and 15(b) of the Investment Company Act of 1940, as
amended (hereinafter the "1940 Act"), and Rules 6e-2(b)(15) and 6e-3(T)(b)(15)
thereunder, to the extent necessary to permit shares of the Fund to be sold to
and held by variable annuity and variable life insurance separate accounts of
life insurance companies that may or may not be affiliated with one another and
qualified pension and retirement plans ("Qualified Plans"); and
WHEREAS, the Fund is registered as an open-end management investment
company under the 1940 Act and shares of the Portfolio(s) are registered under
the Securities Act of 1933, as amended (the "1933 Act"); and
WHEREAS, the Adviser is duly registered as an investment adviser under
the Investment Advisers Act of 1940, as amended; and
WHEREAS, the Distributor is duly registered as a broker-dealer under
the Securities Exchange Act of 1934, as amended, (the "1934 Act") and is a
member in good standing of the Financial Industry Regulatory Authority (the
"FINRA"); and
WHEREAS, the Company has issued and plans to continue to issue certain
variable life insurance policies and/or variable annuity contracts supported
wholly or partially by the Accounts (the "Contracts"); and such Contracts are
listed in Schedule A attached hereto and incorporated herein by reference, as
such schedule may be amended from time to time by mutual written agreement of
the parties; and
WHEREAS, each Account is a duly organized, validly existing segregated
asset account, established by resolution of the Board of Directors of the
Company under the insurance laws of the State of NewYork, to set aside and
invest assets attributable to the Contracts; and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to continue to purchase shares in the
Portfolios listed on Schedule B attached
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hereto and incorporated herein by reference, as such schedule may be amended
from time to time by mutual written agreement of the parties (the "Portfolios"),
on behalf of the Accounts to fund the Contracts, and the Fund is authorized to
sell such shares to insurance company separate accounts such as the Accounts at
net asset value; and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company also intends to continue to purchase shares in other
open-end investment companies or series thereof not affiliated with the Fund
(the "Unaffiliated Funds") on behalf of the Accounts to fund the Contracts.
NOW, THEREFORE, in consideration of their mutual promises, the Company,
the Fund, the Distributor and the Adviser agree as follows:
ARTICLE I. Sale of Fund Shares
1.1. The Fund agrees to sell to the Company for the Accounts those
shares of the Portfolios which the Account orders, executing such orders on each
Business Day at the net asset value next computed after receipt by the Fund or
its designee of the order for the shares of the Portfolios. For purposes of this
Section 1.1, the Company shall be the designee of the Fund for receipt of such
orders and receipt by such designee shall constitute receipt by the Fund,
provided that the Fund receives notice of any such order by 10:00 a.m. Eastern
time on the next following Business Day. "Business Day" shall mean any day on
which the New York Stock Exchange (the "NYSE") is open for trading and on which
the Portfolio calculates its net asset value pursuant to the rules of the SEC as
described in the then-current registration statement of the Fund on Form N-1A.
"Valuation Time" shall mean the time as of which the Fund calculates net asset
value for the shares of the Portfolios on the relevant Business Day.
1.2. The Fund agrees to make shares of the Portfolios available for
purchase at the applicable net asset value per share by the Company and the
Accounts on any Business Day. Notwithstanding the foregoing, the Fund may refuse
to sell shares of any Portfolio to any person,
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or suspend or terminate the offering of 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 Fund acting in good faith, necessary or appropriate
in the best interests of the shareholders of such Portfolio. All orders for the
purchase of Portfolio shares accepted by the Fund shall be subject to the terms
of the then current prospectus of the Fund. The Company shall use its best
efforts, and shall reasonably cooperate with, the Fund to enforce stated
prospectus policies regarding transactions in Portfolio shares. The Company
acknowledges that orders for Portfolio shares accepted by it in violation of the
stated policies of the Fund as set forth in the Fund's then-current prospectus
may be subsequently revoked or cancelled by the Fund and that the Fund shall not
be responsible for any losses incurred by the Company or the Contract owner as a
result of such cancellation. In addition, the Company acknowledges that the Fund
has the right to refuse any purchase order for any reason, particularly if the
Fund determines that a Portfolio would be unable to invest the money effectively
in accordance with its investment policies or would otherwise be adversely
affected due to the size of the transaction, frequency of trading, or other
factors.
1.3. The Fund will not sell shares of the Portfolios to any other
Participating Insurance Company separate account unless an agreement containing
provisions the substance of which are the same as Sections 2.1, 2.2 (except with
respect to designation of applicable law), 3.5, 3.6, 3.7, and Article VII of
this Agreement is in effect to govern such sales.
1.4. The Fund agrees to redeem for cash or in kind, on the Company's
request, any full or fractional shares of the Fund held by the Company,
executing such requests on each Business Day at the net asset value next
computed after receipt by the Fund or its designee of the request for
redemption. For purposes of this Section 1.4, the Company shall be the designee
of the Fund for receipt of requests for redemption and receipt by such designee
shall constitute receipt by the Fund, provided that the Fund receives notice of
any such request for redemption by 10:00 a.m. Eastern time on the next following
Business Day.
1.5. The parties hereto acknowledge that the arrangement contemplated
by this Agreement is not exclusive; the Fund's shares may be sold to other
Participating Insurance
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Companies (subject to Section 1.3) and the cash value of the Contracts may be
invested in other investment companies.
1.6. The Company shall pay for Fund shares by 3:00 p.m. Eastern time
on the next Business Day after an order to purchase Fund shares is received in
accordance with the provisions of Section 1.1 hereof. Payment shall be in
federal funds transmitted by wire and/or by a credit for any shares redeemed the
same day as the purchase.
1.7. The Fund shall pay and transmit the proceeds of redemptions of
Fund shares by 4:00 p.m. Eastern Time on the next Business Day after a
redemption order is received in accordance with Section 1.4 hereof; provided,
however, that the Fund may delay payment for up to seven days or in
extraordinary circumstances to the extent permitted under Section 22(e) of the
1940 Act or rules thereunder. Payment shall be in federal funds transmitted by
wire and/or a credit for any shares purchased the same day as the redemption.
1.8. Issuance and transfer of the Fund's shares will be by book entry
only. Stock certificates will not be issued to the Company or the Accounts.
Shares purchased from the Fund will be recorded in an appropriate title for the
relevant Account or the relevant sub-account of an Account.
1.9. The Fund shall furnish same day notice (by electronic
communication, BLASTFAX or telephone, followed by electronic confirmation) to
the Company of any income, dividends or capital gain distributions payable on a
Portfolio's shares. The 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 that Portfolio. The Company reserves the right to revoke
this election and to receive all such income dividends and capital gain
distributions in cash. The Fund shall notify the Company by the end of the next
following Business Day of the number of shares so issued as payment of such
dividends and distributions.
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1.10. The Fund shall make the net asset value per share for each
Portfolio available to the Company on each Business Day as soon as reasonably
practicable after the net asset value per share is calculated and shall use
reasonable efforts to make the net asset value per share for each Portfolio
available by 6:30 p.m. Eastern time. In the event of an error in the computation
of a Portfolio's net asset value per share ("NAV") or any dividend or capital
gain distribution (each, a "pricing error"), the Adviser or the Fund shall
notify the Company as soon as reasonably possible after discovery of the error.
Such notification may be verbal, but shall be confirmed promptly in writing. A
pricing error shall be corrected according to the Funds materiality policy If an
adjustment is necessary to correct a material error which has caused Contract
owners to receive less than the amount to which they are entitled, the number of
shares of the applicable sub-account of such Contract owners will be adjusted
and the amount of any underpayments shall be credited by the Adviser to the
Company for crediting of such amounts to the applicable sub-accounts of such
Contract owners. Upon notification by the Adviser of any overpayment due to a
material error, the Company shall promptly remit to the Adviser any overpayment
that has not been paid to Contract owners. In no event shall the Company be
liable to Contract owners for any such adjustments or underpayment amounts. The
parties may amend the foregoing provisions of this Agreement to comport with the
then-currently acceptable standards, on terms mutually satisfactory to all
parties.
ARTICLE II. Representations and Warranties
2.1. The Company represents and warrants that: (a) the securities
deemed to be issued by the Accounts under the Contracts are or will be
registered under the 1933 Act, or are not so registered in proper reliance upon
an exemption from such registration requirements; (b) the Contracts will be
issued and sold in compliance in all material respects with all applicable
federal and state laws , including, without limitation, the 1933 Act, the 1934
Act and the 1940 Act; and (c) the sale of the Contracts shall comply in all
material respects with state insurance suitability requirements.
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2.2. The Company represents and warrants that: (a) it is an insurance
company duly organized and in good standing under applicable law; (b) it has
legally and validly established each Account prior to any issuance or sale of
units thereof as a separate account under New York State law; and (c) it has
registered each Account as a unit investment trust in accordance with the
provisions of the 1940 Act to serve as a segregated investment account for the
Contracts, and will maintain such registration for so long as any Contracts are
outstanding as required by applicable law or, alternatively, the Company has not
registered one or more Accounts in proper reliance upon an exclusion from such
registration requirements.
2.3. The Fund represents and warrants that: (a) the Fund shares sold
pursuant to this Agreement shall be registered under the 1933 Act; (b) the Fund
shares sold pursuant to this Agreement shall be duly authorized for issuance and
sold in compliance with all applicable federal securities laws including,
without limitation, the 1933 Act, the 1934 Act, and the 1940 Act; (c) the Fund
is and shall remain a registered investment company under the 1940 Act as
required by applicable law; and (d) the Fund shall amend the registration
statement for its shares under the 1933 Act and the 1940 Act from time to time
as required in order to effect the continuous offering of its shares.
2.4. The Fund represents and warrants that it has adopted a plan
pursuant to Rule 12b-1 under the 1940 Act for its Class II shares. The parties
acknowledge that the Fund reserves the right to modify its existing plan or to
adopt additional plans pursuant to Rule 12b-1 under the 1940 Act (including with
respect to its Class I and Class III shares) and to impose an asset-based or
other charge to finance distribution expenses as permitted by applicable law and
regulation. The Fund, the Distributor and the Adviser agree to comply with
applicable provisions and SEC interpretation of the 1940 Act with respect to any
distribution plan.
2.5. The Fund represents and warrants that it shall register and
qualify the shares for sale in accordance with the laws of the various states if
and to the extent required by applicable law.
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2.6. The Fund represents and warrants 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.
2.7. The Fund will at all times invest money paid to purchase
Portfolio shares in such a manner as to ensure that the Contracts will be
treated as variable contracts under the Code and the regulations issued
thereunder. Without limiting the scope of the foregoing or anything contained in
Article VI of this Agreement, the Fund represents and warrants that each
Portfolio of the Fund will comply with Section 817(h) of the Code and Treasury
Regulation 1.817-5, relating to the diversification requirements for variable
annuity, endowment, or life insurance contracts and any amendments or other
modifications to such Section or Regulations (and any revenue rulings, revenue
procedures, notices, and other published announcements of the Internal Revenue
Service interpreting these provisions). In the event the Fund should fail to so
qualify, it will take all reasonable steps (a) to notify the Company of such
breach and (b) to resume compliance with such diversification requirement within
the grace period afforded by Treasury Regulations 1.817-5.
2.8. The Adviser represents and warrants that it is and shall remain
duly registered as an investment adviser under all applicable federal and state
securities laws and that it shall perform its obligations for the Fund in
compliance in all material respects with any applicable state and federal
securities laws.
2.9. The Distributor represents and warrants that it is and shall
remain duly registered under all applicable federal and state securities laws
and that it shall perform its obligations for the Fund in compliance in all
material respects with the laws of any applicable state and federal securities
laws.
2.10. The Fund and the Adviser represent and warrant that all of their
respective officers, employees, investment advisers, and other individuals or
entities dealing with the money and/or securities of the Fund are, and shall
continue to be at all times, covered by one or more blanket
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fidelity bonds or similar coverage for the benefit of the Fund in an amount not
less than the minimal coverage required by Rule 17g-1 under the 1940 Act or
related provisions as may be promulgated from time to time. The aforesaid bonds
shall include coverage for larceny and embezzlement and shall be issued by a
reputable bonding company.
2.11. The Fund and the Adviser represent, warrant, and covenant: (i)
that each Portfolio shall be classified as a regulated investment company or
"disregarded entity" for federal income tax purposes and shall at all times
maintain such classification; (ii) to notify the Company upon having a
reasonable basis for believing that the Fund or any Portfolio has ceased to
comply, or might not so comply, with the aforesaid classification as a regulated
investment company or "disregarded entity," and (iii) that each Portfolio shall
not be a "publicly-traded partnership" within the meaning of the Code and the
regulations thereunder.
2.12. The Fund and the Adviser represent and warrant that they will
provide the Company with as much advance notice as is reasonably practicable of
any material change affecting the Portfolios (including, but not limited to, any
material change in the registration statement or prospectus affecting the
Portfolios) and any proxy solicitation affecting the Portfolios and consult with
the Company in order to implement any such change in an orderly manner,
recognizing the expenses of changes and attempting to minimize such expenses by
implementing them in conjunction with regular annual updates of the prospectus
for the Contracts.
2.13. The Company represents and warrants, for purposes other than
diversification under Section 817 of the Internal Revenue Code of 1986, as
amended (the "Code"), that the Contracts are currently and at the time of
issuance will be treated as annuity contracts or life insurance policies under
applicable provisions of the Code, and that it will maintain such treatment and
that it will notify the Fund, the Distributor and the Adviser immediately upon
having a reasonable basis for believing that the Contracts have ceased to be so
treated or that they may not be so treated in the future. In addition, the
Company represents and warrants that interests in each Account are offered
exclusively through the purchase of or transfer into a
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"variable contract" within the meaning of such terms under Section 817 of the
Code and the regulations thereunder. The Company will continue to meet such
definitional requirements, and it will notify the Fund, the Distributor and the
Adviser immediately upon having a reasonable basis for believing that such
requirements have ceased to be met or that they may not be met in the future.
2.14. Each party represents and warrants that it is currently in
compliance, and will remain in compliance, with all applicable anti-money
laundering laws, regulations, and requirements. In addition, the Company
represents and warrants that it has adopted and implemented policies and
procedures reasonably designed to achieve compliance with the applicable
requirements administered by the Office of Foreign Assets Control ("OFAC") of
the U.S. Department of the Treasury.
Notwithstanding the foregoing, the Company represents and warrants
that:
o as part of processing an application for a Contract, it
will verify the identity of applicants and, if an
applicant is not a natural person, will verify the
identity of prospective principal and beneficial owners
submitting an application for a Contract in accordance
with the Company's AML/CTF Risk Assessment Process,
o as part of processing an application for a Contract, it
will verify that no applicant, including prospective
principal or beneficial Contract owners, is a "specially
designated national" or a person from an embargoed or
"blocked" country as indicated by the OFAC list of such
persons,
o as part of its ongoing compliance with the USA Patriot
Act, it will, from time to time, reverify that no
Contract owner, including a principal or beneficial
Contract owners, is a "specially designated national" or
a person from an embargoed or "blocked" country as
indicated by the OFAC list of such persons,
o it will ensure that money tendered to the Fund as payment
for Portfolio shares did not originate with a bank
lacking a physical place of business (i.e., a "shell"
bank) or from a country or territory named on the list of
high-risk or non-cooperating countries or jurisdictions
published by the Financial Action Task Force, and
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if any of the foregoing cease to be true, the Fund or its agents, in
compliance with the USA Patriot Act or Bank Secrecy Act, may seek authority to
block transactions in Account units arising from accounts of one or more such
Contract owners with the Company or of one or more of the Company's accounts
with the Fund.
2.15. The Company represents and warrants that it is currently in
compliance, and will remain in compliance, with all applicable laws, rules and
regulations relating to consumer privacy, including, but not limited to,
Regulation S-P.
2.16. The Company represents and warrants that it has adopted, and will
at all times during the term of this Agreement maintain, reasonable and
appropriate procedures ("Late Trading Procedures") designed to ensure that any
and all orders for the purchase or sale of Fund shares communicated to the Fund
are the net result of transactions in units issued by an Account, instructions
for which are received by the Company prior to the Valuation Time on such
Business Day and were not modified after the Valuation Time, and that all orders
for the purchase and sale of Account units received from Contract owners but not
rescinded by the Valuation Time are reflected in the corresponding orders for
the purchase or redemption of Portfolio shares. Each transmission of orders by
the Company shall constitute a representation by the Company that such orders
are accurate and complete and are the net result of transactions in units issued
by an Account, instructions for which are received by the Company by the
Valuation Time on the Business Day for which the order is to be priced and that
such transmission includes all orders for the purchase and sale of Account units
received from Contract owners but not rescinded by the Valuation Time. The
Company agrees to provide the Fund or its designee with a copy of the Late
Trading Procedures and such certifications and representations regarding the
Late Trading Procedures as the Fund or its designee may reasonably request. The
Company will promptly notify the Fund in writing of any material change to the
Late Trading Procedures.
2.17. The Company represents and warrants that it has adopted, and will
at all times during the term of this Agreement maintain, reasonable and
appropriate procedures ("Market
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Timing Procedures") designed to minimize any adverse impact on other Fund
investors due to excessive trading. The Company agrees to provide the Fund or
its designee with a copy of the Market Timing Procedures and such certifications
and representations regarding the Market Timing Procedures as the Fund or its
designee may reasonably request. The Company will promptly notify the Fund in
writing of any material change to the Market Timing Procedures. The parties
agree to cooperate in light of any conflict between the Market Timing Procedures
and actions taken or policies adopted by the Fund designed to minimize any
adverse impact on other Fund investors due to excessive trading.
2.18. The Fund, the Adviser and the Distributor make no representation
as to whether any aspect of the Fund's operations (including, but not limited
to, fees and expenses and investment policies) complies with the insurance laws
or regulations of the various states.
ARTICLE III. Prospectuses and Proxy Statements; Voting
3.1. At least annually, the Adviser or Distributor shall provide the
Company with as many copies of the Fund's current prospectus as the Company may
reasonably request, with expenses to be borne in accordance with Schedule C
hereof. If requested by the Company in lieu thereof, the Adviser, Distributor or
Fund shall provide such documentation (including an electronic version of the
current prospectus) and other assistance as is reasonably necessary in order for
the Company once each year (or more frequently if the prospectus for the Fund is
amended) to have the prospectus for the Contracts and the prospectus for the
Fund printed together in one document.
3.2. If applicable state or federal laws or regulations require that
the Statement of Additional Information ("SAI") for the Fund be distributed to
all Contract owners, then the Fund, Distributor and/or the Adviser shall provide
the Company with copies of the Fund's SAI in such quantities, with expenses to
be borne in accordance with Schedule C hereof, as the Company may reasonably
require to permit timely distribution thereof to Contract owners. The Adviser,
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the Distributor and/or the Fund shall also provide an SAI to any Contract owner
or prospective owner who requests such SAI from the Fund.
3.3. The Fund, the Distributor and/or the Adviser shall provide the
Company with copies of the Fund's proxy material, reports to shareholders and
other communications to shareholders in such quantity, with expenses to be borne
in accordance with Schedule C hereof, as the Company may reasonably require to
permit timely distribution thereof to Contract owners.
3.4. It is understood and agreed that, except with respect to
information regarding the Company provided in writing by that party, the Company
shall not be responsible for the content of the prospectus or SAI for the Fund.
It is also understood and agreed that, except with respect to information
regarding the Fund, the Distributor, the Adviser or the Portfolios provided in
writing or approved of in writing by the Fund, the Distributor or the Adviser,
neither the Fund, the Distributor nor Adviser are responsible for the content of
the prospectus or SAI for the Contracts.
3.5. If and to the extent required by law the Company shall:
(a) solicit voting instructions from Contract owners;
(b) vote the Portfolio shares held in the Accounts in accordance
with instructions received from Contract owners;
(c) vote Portfolio shares held in the Accounts for which no
instructions have been received in the same proportion as Portfolio shares for
which instructions have been received from Contract owners;
(d) vote Portfolio shares held in its general account or
otherwise in the same proportion as Portfolio shares for which instructions have
been received from Contract owners. The Company reserves the right to vote Fund
shares in its own right, to the extent permitted by law; and
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(e) except with respect to matters as to which the Company has
the right in connection with certain Contracts under Rule 6e-2 or Rule 6e-3(T)
under the 1940 Act, to vote Portfolio shares without regard to voting
instructions from Contract owners, neither the Company nor any of its affiliates
will recommend action in connection with, or oppose or interfere with, the
actions of the Fund Board to hold shareholder meetings for the purpose of
obtaining approval or disapproval from shareholders (and, indirectly, from
Contract owners) of matters put before the shareholders.
3.6. The Company shall be responsible for assuring that each of its
separate accounts holding shares of a Portfolio calculates voting privileges as
directed by the Fund and agreed to by the Company and the Fund. The Fund agrees
to promptly notify the Company of any changes or amendments of the Mixed and
Shared Funding Exemptive Order.
3.7. The Fund will comply with all provisions of the 1940 Act
requiring voting by shareholders.
ARTICLE IV. Sales Material and Information
4.1. The Company shall furnish, or shall cause to be furnished, to the
Fund or its designee, a copy of each piece of sales literature or other
promotional material that the Company develops or proposes to use and in which
the Fund (or a Portfolio thereof), the Adviser or the Distributor is named in
connection with the Contracts, at least five (5) Business Days prior to its use.
No such material shall be used if the Fund or its designee objects to such use
within three (3) Business Days after receipt of such material.
4.2. The Company shall not give any information or make any
representations or statements on behalf of or concerning the Fund, the
Portfolios, the Adviser or the Distributor in connection with the sale of the
Contracts other than the information or representations contained in the
registration statement, including the prospectus or SAI for the Fund, as the
same may be amended or supplemented from time to time, or in sales literature or
other promotional material
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approved by the Fund, the Distributor or the Adviser, except with the permission
of the Fund, the Distributor or the Adviser.
4.3. The Fund, the Adviser or the Distributor shall furnish, or shall
cause to be furnished, to the Company, a copy of each piece of sales literature
or other promotional material in which the Company and/or its separate
account(s) is named at least five (5) Business Days prior to its use. No such
material shall be used if the Company objects to such use within three (3)
Business Days after receipt of such material.
4.4. The Fund, the Distributor and the Adviser shall not give any
information or make any representations on behalf of the Company or concerning
the Company, the Accounts, or the Contracts other than the information or
representations contained in a registration statement, including the prospectus
or SAI for the Contracts, as the same may be amended or supplemented from time
to time, or in sales literature or other promotional material approved by the
Company or its designee, except with the permission of the Company.
4.5. The Fund or its designees will provide to the Company at least
one complete copy of all registration statements, prospectuses, SAIs, sales
literature and other promotional materials, applications for exemptions,
requests for no-action letters, and all amendments and supplements to any of the
above, that relate to the Fund within a reasonable period of time following the
filing of such document(s) with the SEC or FINRA or other regulatory
authorities.
4.6. The Company will provide to the Fund or its designees at least
one complete copy of all registration statements, prospectuses, SAIs, reports,
solicitations for voting instructions, sales literature and other promotional
materials, applications for exemptions, requests for no-action letters, and all
amendments and supplements to any of the above, that relate to the Accounts with
respect to the Fund, within a reasonable period of time following the filing of
such document(s) with the SEC, FINRA, or other regulatory authority.
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4.7. For purposes of Articles IV and VIII, the phrase "sales
literature and other promotional material" includes, but is not limited to,
advertisements (such as material published, or designed for use in, a newspaper,
magazine, or other periodical, radio, television, telephone or tape recording,
videotape display, signs or billboards, motion pictures, or other public media;
e.g., on-line networks such as the Internet or other electronic media), sales
literature (i.e., any written communication distributed or made generally
available to customers or the public, including brochures, circulars, research
reports, market letters, form letters, seminar texts, reprints or excerpts of
any other advertisement, sales literature, or published article), educational or
training materials or other communications distributed or made generally
available to some or all agents or employees, and shareholder reports, and proxy
materials (including solicitations for voting instructions) and any other
material constituting sales literature or advertising under the FINRA rules, the
1933 Act or the 0000 Xxx.
4.8. At the request of any party to this Agreement, each other party
will make available to the other party's independent auditors and/or
representatives of the appropriate regulatory authorities, all records, data and
access to operating procedures that may be reasonably requested in connection
with compliance and regulatory requirements related to this Agreement or any
party's obligations under this Agreement.
ARTICLE V. Fees and Expenses
5.1. The Fund, the Distributor and the Adviser shall pay no fee or
other compensation to the Company under this Agreement, and the Company shall
pay no fee or other compensation to the Fund, the Distributor or Adviser under
this Agreement; provided, however, (a) the parties will bear their own expenses
as reflected in Schedule C and other provisions of this Agreement, and (b) the
parties may enter into other agreements relating to the Company's investment in
the Fund, including services agreements.
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ARTICLE VI. Diversification and Qualification
6.1. The Fund, the Distributor and the Adviser represent and warrant
that the Fund and each Portfolio thereof will at all times comply with Section
817(h) of the Code and Treasury Regulation ss.1.817-5, as amended from time to
time, and any Treasury interpretations thereof, relating to the diversification
requirements for variable annuity, endowment, or life insurance contracts and
any amendments or other modifications or successor provisions to such Section or
Regulations. The Fund, the Distributor or the Adviser shall provide timely to
the Company a quarterly written diversification certification, in the form
attached hereto as Schedule D, as to whether each Portfolio complies with the
diversification requirements of Section 817(h) of the Code.
6.2. The Fund, the Distributor and the Adviser represent and warrant
that shares of the Portfolios will be sold only to Participating Insurance
Companies and their separate accounts and to Qualified Plans. No shares of any
Portfolio of the Fund will be sold to the general public.
6.3. The Fund, the Distributor and the Adviser represent and warrant
that prior to allowing an purchase of shares of the Fund, the status of each
purchaser, including any insurance company separate account or Qualified Plan,
is verified and documented.
6.4. The Fund, the Distributor or the Adviser will notify the Company
immediately upon having a reasonable basis for believing that the Fund or any
Portfolio has ceased to comply with the aforesaid Section 817(h) diversification
requirements or might not so comply in the future.
6.5. Without in any way limiting the effect of Sections 8.2 hereof and
without in any way limiting or restricting any other remedies available to the
Company, the Adviser or Distributor will pay all reasonable costs associated
with or arising out of any failure, or any anticipated or reasonably foreseeable
failure, of the Fund or any Portfolio to comply with
17
Sections 6.1 or 6.2 hereof, including all reasonable costs associated with
reasonable and appropriate corrections or responses to any such failure.
6.6. The Company agrees that if the Internal Revenue Service ("IRS")
asserts in writing in connection with any governmental audit or review of the
Company (or, to the Company's knowledge, of any Contract owner) that any
Portfolio has failed to comply with the diversification requirements of Section
817(h) of the Code or the Company otherwise becomes aware of any facts that
could give rise to any claim against the Fund, the Distributor or the Adviser as
a result of such a failure or alleged failure:
(a) The Company shall promptly notify the Fund, the Distributor
and the Adviser of such assertion or potential claim;
(b) The Company shall consult with the Fund, the Distributor
and the Adviser as to how to minimize any liability that may arise as a result
of such failure or alleged failure;
(c) The Company shall use its best efforts to minimize any
liability of the Fund, the Distributor and the Adviser resulting from such
failure, including, without limitation, demonstrating, pursuant to Treasury
Regulations, Section 1.817-5(a)(2), to the commissioner of the IRS that such
failure was inadvertent;
(d) Any written materials to be submitted by the Company to
the IRS, any Contract owner or any other claimant in connection with any of the
foregoing proceedings or contests (including, without limitation, any such
materials to be submitted to the IRS pursuant to Treasury Regulations, Section
1.817-5(a)(2)) shall be provided by the Company to the Fund, the Distributor and
the Adviser (together with any supporting information or analysis)
contemporaneous with such submission;
(e) The Company shall provide the Fund, the Distributor and
the Adviser with such cooperation as the Fund, the Distributor and the Adviser
shall reasonably request (including,
18
without limitation, by permitting the Fund, the Distributor and the Adviser to
review the relevant books and records of the Company) in order to facilitate the
review by the Fund, the Distributor and the Adviser of any written submissions
provided to it or its assessment of the validity or amount of any claim against
it arising from such failure or alleged failure;
(f) The Company shall not with respect to any claim of the IRS
or any Contract owner that would give rise to a claim against the Fund, the
Distributor and the Adviser (i) compromise or settle any claim, (ii) accept any
adjustment on audit, or (iii) forgo any allowable administrative or judicial
appeals, without the express written consent of the Fund, the Distributor and
the Adviser, which shall not be unreasonably withheld; provided that, the
Company shall not be required to appeal any adverse judicial decision unless the
Fund, the Distributor, or the Adviser shall have provided an opinion of
independent counsel to the effect that a reasonable basis exists for taking such
appeal; and further provided that the Fund, the Distributor and the Adviser
shall bear the costs and expenses, including reasonable attorney's fees,
incurred by the Company in complying with this clause (f).
6.7. The Company shall ensure that at the time each Contract is issued
it is treated as a life insurance, endowment, or annuity contract with respect
to the Company under applicable provisions of the Code, and that as long as the
Accounts hold shares of the Fund the Company shall maintain such treatment for
each outstanding Contract. The Company shall notify the Fund and the Distributor
immediately upon having any basis for believing that the Contracts will not be
treated as life insurance, endowment, or annuity contracts under applicable
provisions of the Code.
6.8. The Company shall ensure that no Portfolio fails to remain
eligible for "look-through" treatment under Treasury Regulation 1.817-5(f) by
reason of a current or future failure of the Company, the Accounts or the
Contracts to comply with any applicable requirements of the Code or Treasury
Regulations. The Company shall notify the Fund and the Distributor immediately
upon having any basis for believing that the failure of the Company, the
Accounts or the Contracts to comply with any applicable requirements of the Code
or Treasury Regulations
19
could render a Portfolio ineligible, or jeopardize a Portfolio's eligibility,
for "look-through" treatment under Treasury Regulation 1.817-5(f). In the event
of such a failure, the Company shall take all necessary steps to cure any such
failure, including, if necessary, obtaining a waiver or closing agreement with
respect to such failure from the U.S. Internal Revenue Service at the Company's
expense.
ARTICLE VII. Potential Conflicts and Compliance With Mixed and Shared Funding
Exemptive Order
7.1. The Fund's Board of Trustees (the "Board") will monitor the Fund
for the existence of any material irreconcilable conflict between the interests
of the Contract owners of all separate accounts investing in the Fund. An
irreconcilable material conflict may arise for a variety of reasons, including:
(a) an action by any state insurance regulatory authority; (b) a change in
applicable federal or state insurance, tax, or securities laws or regulations,
or a public ruling, private letter ruling, no-action or interpretative letter,
or any similar action by insurance, tax, or securities regulatory authorities;
(c) an administrative or judicial decision in any relevant proceeding; (d) the
manner in which the investments of any Portfolio is being managed; (e) a
difference in voting instructions given by variable annuity contract 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 the voting instructions of Contract owners. The
Board shall promptly inform the Company if it determines that an irreconcilable
material conflict exists and the implications thereof.
7.2. The Company will report any potential or existing material
conflicts of which it is aware to the Board. The Company will assist the Board
in carrying out its responsibilities under the Mixed and Shared Funding
Exemptive Order, by providing the Board with all information reasonably
necessary for the Board to consider any issues raised. This includes, but is not
limited to, an obligation by the Company to inform the Board whenever Contract
owner voting instructions are to be disregarded. Such responsibilities shall be
carried out by the Company with a view only to the interests of its Contract
owners.
20
7.3. If it is determined by a majority of the Board, or a majority of
its directors who are not interested persons of the Fund, the Distributor, the
Adviser or any subadviser to any of the Portfolios, as defined in Section
2(a)(19) of the 1940 Act (the "Independent Trustees"), that a material
irreconcilable conflict exists, the Company and other Participating Insurance
Companies shall, at their expense and to the extent reasonably practicable (as
determined by a majority of the Independent Trustees), take whatever steps are
necessary to remedy or eliminate the irreconcilable material conflict, up to and
including: (1) withdrawing the assets allocable to some or all of the separate
accounts from the Fund or any Portfolio and reinvesting such assets in a
different investment medium, including (but not limited to) another Portfolio,
or submitting the question whether such segregation should be implemented to a
vote of all affected Contract owners and, as appropriate, segregating the assets
of any appropriate group (i.e., annuity contract owners, life insurance contract
owners, or variable contract owners of one or more Participating Insurance
Companies) that votes in favor of such segregation, or offering to the affected
contract owners the option of making such a change; and (2) establishing a new
registered management investment company or managed separate account.
7.4. If a material irreconcilable conflict arises because of a decision
by the Company to disregard Contract owner voting instructions and that decision
represents a minority position or would preclude a majority vote, the Company
may be required, at the Fund's election, to withdraw the Account's investment in
the Fund and terminate this Agreement; provided, however, that such withdrawal
and termination shall be limited to the extent required by the foregoing
material irreconcilable conflict as determined by a majority of the Independent
Trustees. Any such withdrawal and termination must take place within six (6)
months after the Fund gives written notice that this provision is being
implemented, and until the end of that six-month period the Adviser, the
Distributor and the Fund shall continue to accept and implement orders by the
Company for the purchase (and redemption) of shares of the Fund.
7.5. If a material irreconcilable conflict arises because a particular
state insurance regulator's decision applicable to the Company conflicts with
the majority of other state
21
regulators, then the Company will withdraw the Account's investment in the Fund
and terminate this Agreement within six (6) months after the Board informs the
Company in writing that it has determined that such decision has created an
irreconcilable material conflict; provided, however, that such withdrawal and
termination shall be limited to the extent required by the foregoing material
irreconcilable conflict as determined by a majority of the Independent Trustees.
Until the end of the foregoing six-month period, the Fund shall continue to
accept and implement orders by the Company for the purchase (and redemption) of
shares of the Fund.
7.6. For purposes of Sections 7.3 through 7.5 of this Agreement, a
majority of the Independent Trustees shall determine whether any proposed action
adequately remedies any irreconcilable material conflict, but in no event will
the Fund be required to establish a new funding medium for the Contracts. The
Company shall not be required by Section 7.3 to establish a new funding medium
for the Contracts if an offer to do so has been declined by vote of a majority
of Contract owners affected by the irreconcilable material conflict. In the
event that the Board determines that any proposed action does not adequately
remedy any irreconcilable material conflict, then the Company will withdraw the
Account's investment in the Fund and terminate this Agreement within six (6)
months after the Board informs the Company in writing of the foregoing
determination; provided, however, that such withdrawal and termination shall be
limited to the extent required by any such material irreconcilable conflict as
determined by a majority of the Independent Trustees.
7.7. If and to the extent that 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
1940 Act or the rules promulgated thereunder with respect to mixed or shared
funding (as defined in the Mixed and Shared Funding Exemptive Order) on terms
and conditions materially different from those contained in the Mixed and Shared
Funding Exemptive Order, then (a) the Fund and/or the Participating Insurance
Companies, as appropriate, shall take such steps as may be necessary to comply
with Rules 6e-2 and 6e-3(T), as amended, and Rule 6e-3, as adopted, to the
extent such rules are applicable; and (b) Sections 3.5, 3.6, 3.7, 7.1, 7.2, 7.3,
7.4, and 7.5 of this Agreement shall
22
continue in effect only to the extent that terms and conditions substantially
identical to such Sections are contained in such Rule(s) as so amended or
adopted.
ARTICLE VIII. Indemnification
8.1. Indemnification By The Company
(a) As limited by and in accordance with Section 8.1(b) and
8.1(c) hereof, the Company agrees to indemnify and hold harmless the Fund, the
Distributor and the Adviser and each of their respective officers and directors
or trustees and each person, if any, who controls the Fund, the Distributor or
the Adviser within the meaning of Section 15 of the 1933 Act (collectively, the
"Indemnified Parties" for purposes of this Section 8.1) against any and all
losses, claims, expenses, damages and liabilities (including amounts paid in
settlement with the written consent of the Company) or litigation (including
reasonable 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, expenses, damages or liabilities (or actions in respect
thereof) or settlements are related to the sale or acquisition of the Fund's
shares or the Contracts and:
(i) arise out of or are based upon any untrue statements or
alleged untrue statements of any material fact contained in
the registration statement or prospectus or SAI covering the
Contracts or contained in the Contracts or sales literature
or other promotional material for the Contracts (or any
amendment or supplement to any of the foregoing), or arise
out of or are based upon the omission or the alleged
omission to state therein a material fact required to be
stated 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 in writing to the Company or approved in writing
to the Company by or on behalf of the Adviser, Distributor
or Fund for use in the registration statement or prospectus
for the Contracts or in the Contracts or sales literature or
other promotional material (or any amendment or supplement
to any of the foregoing) or otherwise for use in connection
with the sale of the Contracts or Fund shares; or
23
(ii) arise out of or as a result of statements or
representations (other than statements or representations
contained in the registration statement, prospectus, SAI or
sales literature or other promotional material of the Fund
not supplied by the Company or persons under its control) or
wrongful conduct of the Company or persons under its
control, with respect to the sale or distribution of the
Contracts or Fund Shares; or
(iii) arise out of any untrue statement or alleged untrue
statement of a material fact contained in a registration
statement, prospectus, SAI, or sales literature or other
promotional material of the Fund, 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 a statement or omission was made in
reliance upon information furnished in writing to the Fund
by or on behalf of the Company; or
(iv) arise as a result of any failure by the Company to
provide the services and furnish the materials under the
terms of this Agreement; or
(v) arise out of or result from any material breach of any
representation and/or warranty made by the Company in this
Agreement or arise out of or result from any other material
breach of this Agreement by the Company, including without
limitation Section 2.13 and Section 6.5 hereof.
(b) The Company shall not be liable under this indemnification
provision with respect to any losses, claims, expenses, 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 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
any of the Indemnified Parties.
(c) The 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 the 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 the Company of any
such claim shall not relieve the Company from any liability which it may have to
the Indemnified Party against whom such
24
action is brought otherwise than on account of this indemnification provision,
except to the extent that the Company has been prejudiced by such failure to
give notice. In case any such action is brought against the Indemnified Parties,
the Company shall be entitled to participate, at its own expense, in the defense
of such action. The Company also shall be entitled to assume the defense
thereof, with counsel satisfactory to the party named in the action. After
notice from the Company to such party of the 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 the 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. The Company shall not be liable under this
indemnification provision with respect to any claim, action, suit, or preceding
settled by an Indemnified Party without the Company's written approval.
(d) The Indemnified Parties will promptly notify the Company of
the commencement of any litigation or proceedings against them in connection
with the issuance or sale of the Fund Shares or the Contracts or the operation
of the Fund.
8.2. Indemnification by the Adviser
(a) The Adviser agrees to indemnify and hold harmless the
Company and its directors and officers and each person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act (collectively, the
"Indemnified Parties" for purposes of this Section 8.2) against any and all
losses, claims, expenses, damages, liabilities (including amounts paid in
settlement with the written consent of the Adviser) or litigation (including
reasonable 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 are related to the sale or acquisition of the Fund's
shares or the Contracts and:
(i) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in
the registration
25
statement or prospectus or SAI or sales literature or other
promotional material of the Fund prepared by the Fund, the
Distributor or the Adviser (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 in writing to the
Adviser, the Distributor or the Fund by or on behalf of the
Company for use in the registration statement, prospectus or
SAI for the Fund or in sales literature or other promotional
material (or any amendment or supplement to any of the
foregoing) or otherwise for use in connection with the sale
of the Contracts or the Fund shares; or
(ii) arise out of or as a result of statements or
representations (other than statements or representations
contained in the registration statement, prospectus, SAI or
sales literature or other promotional material for the
Contracts not supplied by the Adviser or persons under its
control) or wrongful conduct of the Fund, the Distributor or
the Adviser or persons under their control, with respect to
the sale or distribution of the Contracts or Fund shares; or
(iii) arise out of any untrue statement or alleged untrue
statement of a material fact contained in a registration
statement, prospectus, SAI, or sales literature or other
promotional material covering the Contracts, or any
amendment 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 statement or
statements therein not misleading, if such statement or
omission was made in reliance upon information furnished in
writing to the Company by or on behalf of the Adviser, the
Distributor or the Fund; or
(iv) arise as a result of any failure by the Fund, the
Distributor or the Adviser to provide the services and
furnish the materials under the terms of this Agreement
(including a failure, whether unintentional or in good faith
or otherwise, to comply with the diversification and other
qualification requirements specified in Article VI of this
Agreement); or
(v) arise out of or result from any material breach of any
representation and/or warranty made by the Fund, the
Distributor or the Adviser in this Agreement or arise out of
or result from any other material breach of this Agreement
by the Adviser, the Distributor or the Fund (including,
without limitation, any material breach, whether
unintentional or in good faith or
26
otherwise, of the representations, warranties, or covenants
set forth in Section 2.11 of this Agreement); or
(vi) arise out of or result from the incorrect or untimely
calculation or reporting by the Fund, the Distributor or the
Adviser of a Portfolio's daily NAV per share (subject to
Section 1.10 of this Agreement) or dividend or capital gain
distribution rate.
as limited by and in accordance with the provisions of Sections 8.2(b) and
8.2(c) hereof. This indemnification is in addition to and apart from the
responsibilities and obligations of the Adviser specified in Article VI hereof.
(b) The Adviser shall not be liable under this indemnification
provision with respect to any losses, claims, expenses, 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 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
any of the Indemnified Parties.
(c) The Adviser 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 the Adviser 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 Adviser of any
such claim shall not relieve the Adviser 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, except to the extent that the Adviser
has been prejudiced by such failure to give notice. In case any such action is
brought against the Indemnified Parties, the Adviser will be entitled to
participate, at its own expense, in the defense thereof. The Adviser also shall
be entitled to assume the defense thereof, with counsel satisfactory to the
party named in the action. After notice from the Adviser to such party of the
Adviser'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
Adviser will not be liable to such
27
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. The Adviser shall not be liable under this
indemnification provision with respect to any claim, action, suit, or preceding
settled by an Indemnified Party without the Adviser's written approval.
(d) The Company agrees promptly to notify the Adviser of the
commencement of any litigation or proceedings against it or any of its officers
or directors in connection with the issuance or sale of the Contracts or the
operation of the Account.
ARTICLE IX. Applicable Law
9.1. This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the State of Delaware,
without regard to the Delaware conflict of laws provisions.
9.2. This Agreement shall be subject to the provisions of the 1933
Act, the 1934 Act and the 1940 Act, and the rules and regulations and rulings
thereunder, including such exemptions from those statutes, rules and regulations
as the SEC may grant (including, but not limited to, the Mixed and Shared
Funding Exemptive Order) and the terms hereof shall be interpreted and construed
in accordance therewith.
ARTICLE X. Termination
10.1. This Agreement shall terminate:
(a) at the option of any party, with or without cause, with
respect to some or all Portfolios, upon sixty (60) days' advance written notice
delivered to the other parties; or
28
(b) at the option of the Company by written notice to the
other parties with respect to any Portfolio based upon the Company's
determination that shares of such Portfolio are not reasonably available to meet
the requirements of the Contracts; or
(c) at the option of the Company by written notice to the
other parties with respect to any Portfolio in the event any of the Portfolio's
shares are not registered, issued or sold in accordance with applicable state
and/or federal law or such law precludes the use of such Portfolio as the
underlying investment option of the Contracts issued or to be issued by the
Company; or
(d) at the option of the Fund, the Distributor or the Adviser
in the event that formal administrative proceedings are instituted against the
Company or its affiliates by FINRA, the SEC, the insurance commissioner or
comparable official of any state or any other regulatory body regarding the
Company's duties under this Agreement or related to the sale of the Contracts,
the operation of any Account, or the purchase of the Fund shares, if, in each
case, the Fund, Distributor or Adviser, as the case may be, reasonably
determines in its sole judgment exercised in good faith, that any such
administrative proceedings will have a material adverse effect upon the ability
of the Company to perform its obligations under this Agreement; or
(e) at the option of the Company in the event that formal
administrative proceedings are instituted against the Fund, the Distributor or
the Adviser by FINRA, the SEC, or any state securities or insurance department
or any other regulatory body, if the Company reasonably determines in its sole
judgment exercised in good faith, that any such administrative proceedings will
have a material adverse effect upon the ability of the Fund, the Distributor or
the Adviser to perform their obligations under this Agreement; or
(f) at the option of the Company by written notice to the Fund
with respect to any Portfolio if the Company reasonably believes that the
Portfolio will fail to meet the diversification requirements of Section 817(h)
of the Code specified in Article VI hereof; or
29
(g) at the option of any non-defaulting party hereto in the
event of a material breach of this Agreement by any party hereto (the
"defaulting party") other than as described in Section 10.1(b)-(f); provided,
that the non-defaulting party gives written notice thereof to the defaulting
party, with copies of such notice to all other non-defaulting parties, and if
such breach shall not have been remedied within thirty (30) days after such
written notice is given, then the non-defaulting party giving such written
notice may terminate this Agreement by giving thirty (30) days written notice of
termination to the defaulting party; or
(h) at any time upon written agreement of all parties to this
Agreement.
10.2. Notice Requirement
No termination of this Agreement shall be effective unless and until
the party terminating this Agreement gives prior written notice to all other
parties of its intent to terminate, which notice shall set forth the basis for
the termination. Furthermore,
(a) in the event any termination is based upon the provisions
of Article VII, or the provisions of Section 10.1(a) of this Agreement, the
prior written notice shall be given in advance of the effective date of
termination as required by those provisions unless such notice period is
shortened by mutual written agreement of the parties;
(b) in the event any termination is based upon the provisions
of Section 10.1(d) or 10.1(e) of this Agreement, the prior written notice shall
be given at least sixty (60) days before the effective date of termination; and
(c) in the event any termination is based upon the provisions
of Section 10.1(b), 10.1(c), 10.1(f) or 10.1(g), the prior written notice shall
be given in advance of the effective date of termination, which date shall be
determined by the party sending the notice.
30
10.3. Effect of Termination
Notwithstanding any termination of this Agreement, other than as a
result of a failure by either the Fund or the Company to meet the
diversification requirements of Section 817(h) of the Code, the Fund, the
Distributor and the Adviser shall, at the option of the Company, continue to
make available additional shares of the Fund pursuant to the terms and
conditions of this Agreement, for all Contracts in effect on the effective date
of termination of this Agreement (hereinafter referred to as "Existing
Contracts"). Specifically, without limitation, the owners of the Existing
Contracts shall be permitted to reallocate investments in the Fund, redeem
investments in the Fund and/or invest in the Fund upon the making of additional
purchase payments under the Existing Contracts. The parties agree that this
Section 10.3 shall not apply to any terminations under Article VII of this
Agreement and the effect of such Article VII terminations shall be governed by
Article VII of this Agreement.
10.4. Surviving Provisions
Notwithstanding any termination of this Agreement, each party's
obligations under Article VIII of this Agreement to indemnify other parties
shall survive and not be affected by any termination of this Agreement. In
addition, with respect to Existing Contracts, all provisions of this Agreement
shall also survive and not be affected by any termination of this Agreement.
ARTICLE XI. Notices
11.1. Any notice shall be sufficiently given when sent by registered
or certified mail to the other party at the address of such party set forth
below or at such other address as such party may from time to time specify in
writing to the other parties.
If to the Company:
AXA Equitable Life Insurance Company
1290 Avenue of the Xxxxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Funds Management Group
31
If to the Fund, Adviser or Distributor:
Xxxxx X. Xxxxxxx
Xxx Xxx Xxxx Xxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
ARTICLE XII. Miscellaneous
12.1. Except as required by law, subpoena, court order or regulatory
order or request, each party hereto shall treat as confidential the names and
addresses of the owners of the 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 without the express
written consent of the affected party until such time as such information may
come into the public domain.
12.2. The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions hereof or
otherwise affect their construction or effect.
12.3. This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
12.4. 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.
12.5. Each party hereto shall cooperate with each other party and all
appropriate governmental authorities (including without limitation the SEC,
FINRA and state insurance
32
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.
12.6. Any controversy or claim arising out of or relating to this
Agreement, or breach thereof, shall be settled by arbitration in a forum jointly
selected by the relevant parties (but if applicable law requires some other
forum, then such other forum) in accordance with the Commercial Arbitration
Rules of the American Arbitration Association, and judgment upon the award
rendered by the arbitrators may be entered in any court having jurisdiction
thereof.
12.7. The rights, remedies and obligations contained in this Agreement
are cumulative and are in addition to any and all rights, remedies and
obligations, at law or in equity, which the parties hereto are entitled to under
state and federal laws.
12.8. This Agreement or any of the rights and obligations hereunder
may not be assigned by any party without the prior written consent of all
parties hereto; provided, however, that a transaction that does not result in a
change of actual control or management of a party hereto shall not be deemed to
be an assignment of this Agreement for purposes of this Section 12.8. Any
assignment of this Agreement in violation of this Section 12.8 shall be void.
12.9. The Company agrees that the obligations assumed by the Fund,
Distributor and the Adviser pursuant to this Agreement shall be limited in any
case to the Fund, Distributor and Adviser and their respective assets and the
Company shall not seek satisfaction of any such obligation from the shareholders
of the Fund, Distributor or the Adviser, the Directors, officers, employees or
agents of the Fund, Distributor or Adviser, or any of them.
12.10. The Fund, the Distributor and the Adviser agree that the
obligations assumed by the Company pursuant to this Agreement shall be limited
in any case to the Company and its assets and neither the Fund, Distributor nor
Adviser shall seek satisfaction of any such obligation
33
from the shareholders of the Company, the directors, officers, employees or
agents of the Company, or any of them.
12.11. No provision of this Agreement may be deemed or construed to
modify or supersede any contractual rights, duties, or indemnifications, as
between the Adviser and the Fund, and the Distributor and the Fund.
34
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed in its name and on its behalf by its duly authorized
representative and its seal to be hereunder affixed hereto as of the date
specified below.
AXA EQUTIABLE LIFE INSURANCE COMPANY, ON BEHALF OF CERTAIN
SEPARATE ACCOUNTS
By its authorized officer,
By:
--------------------------------------------
Title: Senior Vice President
XXXXXXX SACHS VARIABLE INSURANCE TRUST
By its authorized officer,
By:
--------------------------------------------
Title:
XXXXXXX XXXXX ASSET MANAGEMENT, L.P.
By its authorized officer,
By:
--------------------------------------------
Title:
XXXXXXX, SACHS & CO.
By its authorized officer,
By:
----------------------------------------------
Title:
35
SCHEDULE A
CONTRACTS
---------
AXA Equitable Separate Account 49 - All Contracts
AXA Equitable Separate Account 65 - All Contracts
SCHEDULE B
PORTFOLIOS
----------
All available Xxxxxxx Xxxxx Variable Insurance Trust Funds and share classes if
available according to the Funds' current Prospectuses and Statements of
Additional Information.
SCHEDULE C
EXPENSES
--------
The Fund and/or the Distributor and/or Adviser, and the Company will coordinate
the functions and pay the costs of the completing these functions based upon an
allocation of costs in the tables below. Costs shall be allocated to reflect the
Fund's share of the total costs determined according to the number of pages of
the Fund's respective portions of the documents.
------------------------------------------------------------------------------------------------------------------
ITEM FUNCTION PARTY RESPONSIBLE FOR PARTY RESPONSIBLE FOR
COORDINATION EXPENSE
------------------------------------------------------------------------------------------------------------------
Mutual Fund Prospectus Printing of prospectuses Company Inforce - Fund
Prospective - Company
------------------------------------------------------------------------------------------------------------------
Distribution (including Company Fund
postage) to Inforce
Clients
------------------------------------------------------------------------------------------------------------------
Distribution (including Company Company
postage) to Prospective
Clients
------------------------------------------------------------------------------------------------------------------
Mutual Fund Prospectus If Required by Fund, Fund, Distributor or Fund, Distributor or
Update & Distribution Distributor or Adviser Adviser Adviser
------------------------------------------------------------------------------------------------------------------
If Required by Company Company (Fund, Company
Distributor or Adviser
to provide Company with
document in PDF format)
------------------------------------------------------------------------------------------------------------------
Mutual Fund SAI Printing Fund, Distributor or Fund, Distributor or
Adviser Adviser
------------------------------------------------------------------------------------------------------------------
Distribution (including Party who receives the Party who receives the
postage) request request
------------------------------------------------------------------------------------------------------------------
Proxy Material for Mutual Printing of proxy Fund, Distributor or Fund, Distributor or
Fund required by Law Adviser Adviser
------------------------------------------------------------------------------------------------------------------
Distribution (including Company Fund, Distributor or
labor) of proxy required
Adviser by Law
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
ITEM FUNCTION PARTY RESPONSIBLE FOR PARTY RESPONSIBLE FOR
COORDINATION EXPENSE
------------------------------------------------------------------------------------------------------------------
Mutual Fund Annual & Printing of reports Fund, Distributor or Fund, Distributor or
Semi-Annual Report Adviser Adviser
------------------------------------------------------------------------------------------------------------------
Distribution Company Fund, Distributor or
Adviser
------------------------------------------------------------------------------------------------------------------
Other communication to New If Required by Law, the Company Distributor or Adviser
and Prospective clients Fund, Distributor or
Adviser
------------------------------------------------------------------------------------------------------------------
If Required by Company Company Company
------------------------------------------------------------------------------------------------------------------
Other communication to Distribution (including Company Fund, Distributor or
inforce labor and printing) if Adviser
required by the Fund,
Distributor or Adviser
------------------------------------------------------------------------------------------------------------------
Distribution (including Company Company
labor and printing) if
required by Company
------------------------------------------------------------------------------------------------------------------
Operations of the Fund All operations and Fund, Distributor or Fund or Adviser
related expenses, Adviser
including the cost of
registration and
qualification of shares,
taxes on the issuance or
transfer of shares, cost
of management of the
business affairs of the
Fund, and expenses paid
or assumed by the fund
pursuant to any Rule
12b-1 plan
------------------------------------------------------------------------------------------------------------------
Operations of the Accounts Federal registration of Company Company
units of separate account
(24f-2 fees)
------------------------------------------------------------------------------------------------------------------
SCHEDULE D
Diversification Compliance Certification
Name of Portfolio: FUND
--------------------------------------------------------------------------------
CERTIFICATION
Fund was in compliance with the federal tax rules relating to diversification
requirements under Section 817(h) of the Internal Revenue Code and Treasury
Regulation 1.817-5, for the quarter ending [Insert most recently ended fiscal
quarter].
-------------------------------------------------- ---------------------
Signed by Date
--------------------------------------------------------------------------------
