PARTICIPATION AGREEMENT
THIS AGREEMENT, made and entered into as of the ____ day of _____, 2000
("Agreement"), by and among Delaware Group Premium Fund, Inc., a Delaware
corporation ("PREMIUM FUND"); Delaware Investments, a Delaware corporation
("ADVISER"), Allstate Life Insurance Company of New York, a New York corporation
("LIFE COMPANY"), on behalf of itself and its segregated asset accounts listed
in Schedule A hereto, as the parties hereto may amend from time to time (each,
an "Account," and collectively, the "Accounts"); and Allstate Life Financial
Services, Inc., an affiliate of LIFE COMPANY and the principal underwriter of
the Contracts ("UNDERWRITER") (collectively, the "Parties").
WITNESSETH THAT:
WHEREAS, PREMIUM FUND is registered with the Securities and Exchange
Commission ("SEC") as an open-end management investment company under the
Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, PREMIUM FUND currently consists of 2 separate series ("Series"),
shares ("Shares") of each of which are registered under the Securities Act of
1933, as amended (the "1933 Act") and are currently sold to one or more separate
accounts of life insurance companies to fund benefits under variable annuity
contracts and variable life insurance contracts; and
WHEREAS, PREMIUM FUND will make Shares of each Series listed on Schedule A
hereto, as the Parties hereto may amend from time to time (each a "Fund";
reference herein to "PREMIUM FUND" includes reference to each Fund, to the
extent the context requires) available for purchase by the Accounts; and
WHEREAS, LIFE COMPANY will be the issuer of certain variable annuity
contracts and variable life insurance contracts ("Contracts") as set forth on
Schedule A hereto, as the Parties hereto may amend from time to time, interests
under which Contracts, if required by applicable law, will be registered under
the 1933 Act; and
WHEREAS, LIFE COMPANY will fund the Contracts through the Accounts, each of
which may be divided into two or more subaccounts ("Subaccounts"; reference
herein to an "Account" includes reference to each Subaccount thereof to the
extent the context requires); and
WHEREAS, LIFE COMPANY will serve as the depositor of the Accounts, each of
which is registered as a unit investment trust investment company under the 1940
Act (or exempt therefrom), and the security interests deemed to be issued by the
Accounts under the Contracts will be registered as securities under the 1933 Act
(or exempt therefrom); and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, LIFE COMPANY intends to purchase Shares in one or more of the Funds
on behalf of the Accounts to fund the Contracts; and
WHEREAS, UNDERWRITER is a broker-dealer registered with the SEC under the
Securities Exchange Act of 1934 ("1934 Act") and a member in good standing of
the National Association of Securities Dealers, Inc. ("NASD"); and
WHEREAS, ADVISER is duly registered as an investment adviser under the
Investment Advisers Act of 1940, as amended, and any applicable state securities
laws; and
NOW, THEREFORE, in consideration of the mutual benefits and promises
contained herein, the Parties hereto agree as follows:
Section 1. Available Funds
1.1 Availability.
PREMIUM FUND will make full and fractional Shares of each Fund available to
LIFE COMPANY for purchase and redemption at net asset value and with no sales
charges, subject to the terms and conditions of this Agreement. The Board of
Directors of PREMIUM FUND may refuse to sell Shares of any Fund to any person,
or suspend or terminate the offering of Shares of any Fund if such action is
required by law or by regulatory authorities having jurisdiction or if, in the
sole discretion of the Directors acting in good faith and in light of their
fiduciary duties under federal and any applicable state laws, such action is
necessary in the best interests of the shareholders of such Fund, including
owners, annuitants and beneficiaries under Contracts (collectively "Contract
owners"), as defined herein.
1.2 Addition, Deletion or Modification of Funds.
The Parties hereto may agree, from time to time, to add other Funds to
provide additional funding media for the Contracts, or to delete, combine, or
modify existing Funds, by amending Schedule A hereto. Upon such amendment to
Schedule A, any applicable reference to a Fund, PREMIUM FUND, or its Shares
herein shall include a reference to any such additional Fund. Schedule A, as
amended from time to time, is incorporated herein by reference and is a part
hereof.
1.3 No Sales to the General Public.
PREMIUM FUND represents and warrants that no Shares of any Fund have been
or will be sold to the general public or to any one else for any purpose or
under any circumstances that would preclude LIFE COMPANY from offering, selling,
or administering any Contract as a tax-deferred annuity or life insurance
policy.
Section 2. Processing Transactions
2.1 Timely Pricing and Orders.
(a) PREMIUM FUND or its designated agent will use its best efforts to
provide LIFE COMPANY with the net asset value per Share for each Fund by 5:30
p.m. Central Time on each Business Day. As used herein, "Business Day" shall
mean any day on which (i) the New York Stock Exchange is open for regular
trading, and (ii) PREMIUM FUND calculates the Fund's net asset value, pursuant
to the rules of the SEC.
(b) LIFE COMPANY will use the data provided by PREMIUM FUND each Business
Day pursuant to paragraph (a) immediately above to calculate Account unit values
and to process transactions that receive that same Business Day's Account unit
values. LIFE COMPANY will place corresponding orders to purchase or redeem
Shares with PREMIUM FUND by 9:00 a.m. Central Time the following Business Day;
provided, however, that PREMIUM FUND shall provide additional time to LIFE
COMPANY in the event that PREMIUM FUND is unable to meet the 5:30 p.m. time
stated in paragraph (a) immediately above. Such additional time shall be equal
to the additional time that PREMIUM FUND takes to make the net asset values
available to LIFE COMPANY.
(c) With respect to payment of the purchase price by LIFE COMPANY and of
redemption proceeds by PREMIUM FUND, LIFE COMPANY and PREMIUM FUND shall net
purchase and redemption orders for each Account with respect to each Fund and
shall transmit one net payment per Fund per Account in accordance with Section
2.2, below.
(d) If PREMIUM FUND provides materially incorrect Share net asset value
information, LIFE COMPANY shall be entitled to an adjustment to the number of
Shares purchased or redeemed to reflect the correct net asset value per Share.
Further, PREMIUM FUND and ADVISER will take such other steps as may be necessary
to reimburse and make LIFE COMPANY, its Accounts, and its Contract owners whole
for any loss due to such pricing error. In addition, ADVISER shall reimburse
LIFE COMPANY for LIFE COMPANY's reprocessing costs in the amount of $3.00 per
Contract affected by $10 or more. To the extent that an overstatement of net
asset value per share is detected quickly and LIFE COMPANY has not mailed
redemption checks to Contract owners, LIFE COMPANY and ADVISER agree to examine
the extent of the error to determine the feasibility of reprocessing such
redemption transaction (for purposes of reimbursing the Fund to the extent of
any such overpayment). Any material error in the calculation or reporting of net
asset value per Share, dividend or capital gain information shall be reported
promptly upon discovery to LIFE COMPANY.
2.2 Timely Payments.
LIFE COMPANY will wire payment for net purchases to a custodial account
designated by PREMIUM FUND by 2:00 p.m. Central Time on the same day as the
order for Shares is placed. PREMIUM FUND will wire payment for net redemptions
to an account designated by LIFE COMPANY by 2:00 p.m. Central Time on the same
day as the Order is placed.
2.3 Applicable Price.
(a) Share purchase payments and redemption orders that result from purchase
payments, premium payments, surrenders and other transactions under Contracts
(collectively, "Contract transactions") and that LIFE COMPANY receives prior to
the close of regular trading on the New York Stock Exchange on a Business Day
will be executed at the net asset values of the appropriate Funds next computed
after receipt by PREMIUM FUND or its designated agent of the orders. For
purposes of this Section 2.3(a), LIFE COMPANY shall be the designated agent of
PREMIUM FUND for receipt of orders relating to Contract transactions on each
Business Day and receipt by such designated agent shall constitute receipt by
PREMIUM FUND; provided that PREMIUM FUND receives notice of such orders by 9:00
a.m. Central Time on the next following Business Day or such later time as
computed in accordance with Section 2.1(b) hereof.
(b) All other Share purchases and redemptions by LIFE COMPANY will be
effected at the net asset values of the appropriate Funds next computed after
receipt by PREMIUM FUND or its designated agent of the order therefor.
2.4 Dividends and Distributions.
PREMIUM FUND will furnish notice by wire or telephone (followed by written
confirmation) on or prior to the payment date to LIFE COMPANY of any income
dividends or capital gain distributions payable on the Shares of any Fund. LIFE
COMPANY hereby elects to reinvest all dividends and capital gains distributions
in additional Shares of the corresponding Fund at the ex-dividend date net asset
values until LIFE COMPANY otherwise notifies PREMIUM FUND in writing, it being
agreed by the Parties that the ex-dividend date and the payment date with
respect to any dividend or distribution will be the same Business Day. LIFE
COMPANY reserves the right to revoke this election and to receive all such
income dividends and capital gain distributions in cash.
2.5 Book Entry.
Issuance and transfer of PREMIUM FUND Shares will be by book entry only.
Stock certificates will not be issued to LIFE COMPANY. Shares ordered from
PREMIUM FUND will be recorded in an appropriate title for LIFE COMPANY, on
behalf of its Account.
Section 3. Costs and Expenses
3.1 General.
Except as otherwise specifically provided in Schedule B, attached hereto
and made a part hereof, each Party will bear, or arrange for others to bear, all
expenses incident to its performance under this Agreement.
3.2 Parties To Cooperate.
Each Party agrees to cooperate with the others, as applicable, in arranging
to print, mail and/or deliver, in a timely manner, combined or coordinated
prospectuses or other materials of PREMIUM FUND and the Accounts.
Section 4. Legal Compliance
4.1 Tax Laws.
(a) PREMIUM FUND and ADVISER each represent and warrant that each Fund has
elected to be qualified as a regulated investment company ("RIC") under
Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"), and
that each Fund will qualify and maintain its qualification as a RIC. PREMIUM
FUND or ADVISER will notify LIFE COMPANY immediately upon having a reasonable
basis for believing that a Fund has ceased to so qualify or that it might not so
qualify in the future.
(b) PREMIUM FUND and ADVISER represent and warrant that each Fund of
PREMIUM FUND does and will meet the diversification requirements of Section 817
(h)(1) of the Code and Treas. Reg. 1.817-5, relating to the diversification
requirements for variable annuity, endowment, or life insurance contracts, as
they may be amended from time to time (and any revenue rulings, revenue
procedures, notices, and other published announcements of the Internal Revenue
Service interpreting these sections), as if those requirements applied directly
to each such Fund. The PREMIUM FUND shall furnish or cause to be furnished at
least annually to LIFE COMPANY a statement signed by [_________________]
certifying that each Fund has continuously met the diversification requirements
of Section 817(h) for the preceding year. PREMIUM FUND and ADVISER each
represent and warrant that no other life insurance companies utilizing PREMIUM
FUND ("Participating Insurance Company") will purchase shares in any Fund for
any purpose or under any circumstances that would preclude LIFE COMPANY from
"looking through" to the investments of each Fund in which it invests, pursuant
to the "look through" rules found in Treasury Regulation 1.817-5. PREMIUM FUND
will notify LIFE COMPANY immediately upon having a reasonable basis for
believing that a Fund has ceased to so comply or that a Fund might not so comply
in the future. In the event of a breach of this Section 4.1(b) by PREMIUM FUND,
it will take all reasonable steps to adequately diversify each Fund so as to
achieve compliance within the grace period afforded by Section 1.817-5 of the
regulations under the Code.
(c) LIFE COMPANY represents and warrants that the Contracts currently are
and will be annuity contracts or life insurance contracts under applicable
provisions of the Code and that it will use its best efforts to maintain such
status; LIFE COMPANY will notify PREMIUM FUND immediately upon having a
reasonable basis for believing that any of the Contracts have ceased to be so
treated or that they might not be treated as such in the future.
4.2 Insurance and Certain Other Laws.
(a) PREMIUM FUND will use its best efforts to comply with any applicable
state insurance laws or regulations, to the extent specifically requested in
writing by LIFE COMPANY, including, the furnishing of information not otherwise
available to LIFE COMPANY that is required by state insurance law to enable LIFE
COMPANY to obtain the authority needed to issue the Contracts in any applicable
state.
(b) LIFE COMPANY represents and warrants that (i) it is an insurance
company duly organized, validly existing and in good standing under the laws of
its state of organization and has full corporate power, authority and legal
right to execute, deliver and perform its duties and comply with its obligations
under this Agreement, (ii) it has legally and validly established each Account
as a segregated asset account under the insurance laws of its state of
organization, and (iii) the Contracts comply in all material respects with all
other applicable federal and state laws and regulations.
(c) PREMIUM FUND represents and warrants that it is a corporation duly
organized, validly existing, and in good standing under the laws of the State of
Delaware and has full power, authority, and legal right to execute, deliver, and
perform its duties and comply with its obligations under this Agreement.
(d) ADVISER represents and warrants that it is a Delaware corporation duly
organized, validly existing, and in good standing under the laws of the State of
Delaware and has full power, authority, and legal right to execute, deliver, and
perform its duties and comply with its obligations under this Agreement.
(e) ADVISER represents and warrants that PREMIUM FUND's principal
underwriter is a member in good standing of the NASD and is registered as a
broker-dealer with the SEC. PREMIUM FUND and ADVISER represent that PREMIUM FUND
and the principal underwriter will sell and distribute the Shares in accordance
in all material respects with all applicable state and federal securities laws,
including without limitation the 1933 Act, the 1934 Act, and the 0000 Xxx.
4.3 Securities Laws.
(a) LIFE COMPANY represents and warrants that (i) interests under each
Account pursuant to the Contracts will be registered under the 1933 Act to the
extent required by the 1933 Act, (ii) the Contracts will be duly authorized for
issuance and sold in compliance with all applicable federal and state laws,
including, without limitation, the 1933 Act, the 1934 Act, the 1940 Act and the
law(s) of LIFE COMPANY's state of organization and domicile, (iii) each Account
is and will remain registered under the 1940 Act, to the extent required by the
1940 Act, (iv) each Account does and will comply in all material respects with
the requirements of the 1940 Act and the rules thereunder, to the extent
required, (v) each Account's 1933 Act registration statement relating to the
Contracts, together with any amendments thereto, will at all times comply in all
material respects with the requirements of the 1933 Act and the rules
thereunder, (vi) LIFE COMPANY will amend the registration statements for its
Contracts under the 1933 Act and for its Accounts under the 1940 Act from time
to time as required to effect the continuous offering of its Contracts or as may
otherwise be required by applicable law, and (vii) each prospectus, statement of
additional information, and supplements thereto (collectively "Prospectus")
describing the Contract and prepared by LIFE COMPANY ("Contract Prospectus")
will at all times comply in all material respects with the requirements of the
1933 Act and the rules thereunder.
(b) PREMIUM FUND represents and warrants that (i) Shares sold pursuant to
this Agreement will be registered under the 1933 Act to the extent required by
the 1933 Act and duly authorized for issuance and sold in compliance with
__________ law and all applicable federal and state laws, (ii) PREMIUM FUND is
and will remain registered under the 1940 Act to the extent required by the 1940
Act, (iii) PREMIUM FUND will amend the registration statement for its Shares
under the 1933 Act and itself under the 1940 Act from time to time as required
to effect the continuous offering of its Shares, (iv) PREMIUM FUND does and will
comply in all material respects with the requirements of the 1940 Act and the
rules thereunder, (v) PREMIUM FUND's 1933 Act registration statement, together
with any amendments thereto, will at all times comply in all material respects
with the requirements of the 1933 Act and rules thereunder, and (vi) each
Prospectus describing a Fund and prepared by PREMIUM FUND or ADVISER ("Fund
Prospectus") will at all times comply in all material respects with the
requirements of the 1933 Act and the rules thereunder.
(c) PREMIUM FUND will at its expense register and qualify the Shares for
sale in accordance with the laws of any state or other jurisdiction if and to
the extent reasonably deemed advisable by PREMIUM FUND.
(d) PREMIUM FUND currently does not intend to make any payments to finance
distribution expenses pursuant to Rule 12b-1 under the 1940 Act or otherwise,
although it reserves the right to make such payments in the future. To the
extent that it decides to finance distribution expenses pursuant to Rule 12b-1,
PREMIUM FUND undertakes to have its Board of Directors, a majority of whom are
not "interested" persons of the Fund, formulate and approve any plan under Rule
12b-1 to finance distribution expenses.
(e) PREMIUM FUND represents and warrants that all of its directors,
officers, employees, investment advisers, and other individuals/entities having
access to the funds and/or securities of a Fund are and continue to be at all
times covered by a blanket fidelity bond or similar coverage for the benefit of
a Fund in an amount not less than the minimal coverage as required currently by
Rule 17g-(1) of the 1940 Act or related provisions as may be promulgated from
time to time. The aforesaid bond includes coverage for larceny and embezzlement
and is issued by a reputable bonding company.
(f) ADVISER represents and warrants that the investment advisory or
management fees paid by PREMIUM FUND are and will be legitimate and not
excessive and are derived from an advisory contract which does not result in a
breach of fiduciary duty. ADVISER further represents and warrants that it shall
perform its obligations for PREMIUM FUND (including without limitation managing
the assets of each Fund) in compliance with applicable federal and state laws.
4.4 Notice of Certain Proceedings and Other Circumstances.
(a) PREMIUM FUND or ADVISER will immediately notify LIFE COMPANY of (i) the
issuance by any court or regulatory body of any stop order, cease and desist
order, or other similar order with respect to PREMIUM FUND's registration
statement under the 1933 Act or Fund Prospectus, (ii) any request by the SEC for
any amendment to such registration statement or Fund Prospectus that may affect
the offering of Shares of PREMIUM FUND, (iii) the initiation of any proceedings
for that purpose or for any other purpose relating to the registration or
offering of PREMIUM FUND's Shares, or (iv) any other action or circumstances
that may prevent the lawful offer or sale of Shares of any Fund in any state or
jurisdiction, including, without limitation, any circumstances in which (a) such
Shares are not registered and, in all material respects, issued and sold in
accordance with applicable federal and state law, or (b) such law precludes the
use of such Shares as an underlying investment medium of the Contracts issued or
to be issued by LIFE COMPANY. PREMIUM FUND and ADVISER will make every
reasonable effort to prevent the issuance, with respect to any Fund, of any such
stop order, cease and desist order or similar order and, if any such order is
issued, to obtain the lifting thereof at the earliest possible time.
(b) LIFE COMPANY will immediately notify PREMIUM FUND of (i) the issuance
by any court or regulatory body of any stop order, cease and desist order, or
other similar order with respect to each Account's registration statement under
the 1933 Act relating to the Contracts or each Contract Prospectus, (ii) any
request by the SEC for any amendment to such registration statement or Contract
Prospectus that may affect the offering of Shares of PREMIUM FUND, (iii) the
initiation of any proceedings for that purpose or for any other purpose relating
to the registration or offering of each Account's interests pursuant to the
Contracts, or (iv) any other action or circumstances that may prevent the lawful
offer or sale of said interests in any state or jurisdiction, including, without
limitation, any circumstances in which said interests are not registered and, in
all material respects, issued and sold in accordance with applicable federal and
state law. LIFE COMPANY and UNDERWRITER will make every reasonable effort to
prevent the issuance of any such stop order, cease and desist order or similar
order and, if any such order is issued, to obtain the lifting thereof at the
earliest possible time.
(c) The LIFE COMPANY, UNDERWRITER, PREMIUM FUND AND ADVISER shall also each
promptly inform the other of the results of any examination by the SEC (or other
regulatory authorities) that relates to the Contracts, the PREMIUM FUND or its
Shares, and the party that was the subject of the examination shall provide the
other party with a copy of relevant portions of any "deficiency letter" or other
correspondence or written report regarding any such examination.
4.5 LIFE COMPANY To Provide Documents; Information About PREMIUM FUND.
(a) LIFE COMPANY will provide to PREMIUM FUND or its designated agent at
least one (1) complete copy of all SEC registration statements, Contract
Prospectuses, reports, any preliminary and final voting instruction solicitation
material, applications for exemptions, requests for no-action letters, and all
amendments to any of the above, that relate to each Account and the Contracts,
contemporaneously with the filing of such document with the SEC or other
regulatory authorities.
(b) LIFE COMPANY will provide to PREMIUM FUND or its designated agent at
least one (1) complete copy of each piece of sales literature or other
promotional material in which PREMIUM FUND or any of its affiliates is named, at
least three (3) Business Days prior to its dissemination, or such shorter period
as the Parties hereto may, from time to time, agree upon. Such material may be
used unless PREMIUM FUND or ADVISER objects within three (3) Business Days.
PREMIUM FUND hereby designates ADVISER as the entity to receive such sales
literature, until such time as PREMIUM FUND appoints another designated agent by
giving notice to LIFE COMPANY in the manner required by Section 9 hereof.
(c) Neither LIFE COMPANY nor UNDERWRITER will give any information or make
any representations or statements on behalf of or concerning PREMIUM FUND,
ADVISER, or their affiliates in connection with the sale of the Contracts other
than (i) the information or representations contained in the registration
statement, including the Fund Prospectuses contained therein, relating to
Shares, as such registration statement and Fund Prospectuses may be amended from
time to time; or (ii) in reports or proxy materials for PREMIUM FUND; or (iii)
in published reports for PREMIUM FUND that are in the public domain and approved
by PREMIUM FUND for distribution; or (iv) in sales literature or other
promotional material approved by PREMIUM FUND, except with the express written
permission of PREMIUM FUND, ADVISER, any company affiliated with ADVISER or
their respective designees. PREMIUM FUND and ADVISER each agrees to respond or
cause its designees to respond, to any request for approval on a prompt and
timely basis.
(d) LIFE COMPANY shall adopt and implement procedures reasonably designed
to ensure that information concerning PREMIUM FUND, ADVISER and their affiliates
that is intended for use only by brokers or agents selling the Contracts (i.e.,
information that is not intended for distribution to Contract owners) ("broker
only materials") is so used, and neither PREMIUM FUND, ADVISER, nor any of their
affiliates shall be liable for any losses, damages or expenses relating to the
improper use of such broker only materials except as otherwise provided herein.
(e) For the purposes of this Section 4.5, the phrase "sales literature or
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 messages, 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 any other material
constituting sales literature or advertising under the NASD rules, the 1933 Act
or the 0000 Xxx.
4.6 PREMIUM FUND To Provide Documents; Information About LIFE COMPANY.
(a) PREMIUM FUND will provide to LIFE COMPANY at least one (1) complete
copy of all SEC registration statements, Fund Prospectuses, reports, any
preliminary and final voting instruction solicitation material, applications for
exemptions, requests for no-action letters, and all amendments to any of the
above, that relate to PREMIUM FUND and the Shares of a Fund, contemporaneously
with the filing of such document with the SEC or other regulatory authorities.
(b) At least annually (or in the case of a Prospectus supplement, when that
supplement is issued) PREMIUM FUND will provide to LIFE COMPANY free of charge
with as many copies of the current Fund Prospectuses as LIFE COMPANY shall
reasonably require for distribution to current and prospective Contract owners.
PREMIUM FUND will provide such copies to LIFE COMPANY in a timely manner so as
to enable LIFE COMPANY or UNDERWRITER, as the case may be, to print and
distribute such materials within the time required by law to be furnished to
Contract owners. If requested by LIFE COMPANY in lieu thereof, PREMIUM FUND or
its designee shall provide such documentation (including a "camera ready" copy
of the Fund Prospectus as set in type or, at the request of LIFE COMPANY, as a
diskette in the form sent to the financial printer) and other assistance as is
reasonably necessary in order for the Parties hereto once each year (or more
frequently if a Fund Prospectus is supplemented or amended) to have the Contract
Prospectus and the Fund Prospectuses printed together in one document; the
expenses of such printing to be apportioned between (a) LIFE COMPANY and (b)
PREMIUM FUND or its designee in proportion to the number of pages of the
Contract and Fund Prospectuses, taking account of other relevant factors
affecting the expense of printing, such as covers, columns, graphs and charts.
The Fund Prospectus shall state that the statement of additional
information ("SAI") for the Shares is available from PREMIUM FUND or its
designee. PREMIUM FUND or its designee, at its expense, shall print and provide
such SAI to LIFE COMPANY for distribution to any current or prospective Contract
owner.
PREMIUM FUND or its designee shall provide LIFE COMPANY free of charge
copies of PREMIUM FUND's proxy materials, reports to shareholders and other
communications to shareholders in such quantity as LIFE COMPANY shall reasonably
require for distribution to Contract owners.
(c) PREMIUM FUND or ADVISER will provide to LIFE COMPANY or its designated
agent at least one (1) complete copy of each piece of sales literature or other
promotional material in which LIFE COMPANY, or any of its respective affiliates
is named, or that refers to the Contracts, at least three (3) Business Days
prior to its use or such shorter period as the Parties hereto may, from time to
time, agree upon. Such material may be used unless LIFE COMPANY objects within
three (3) Business Days. LIFE COMPANY shall receive all such sales literature
until such time as it appoints a designated agent by giving notice to PREMIUM
FUND in the manner required by Section 9 hereof.
(d) Neither PREMIUM FUND nor ADVISER, nor any of their affiliates will give
any information or make any representations or statements on behalf of or
concerning LIFE COMPANY, any Account, or the Contracts other than (i) the
information or representations contained in the registration statement,
including the Contract Prospectus contained therein, as such registration
statement and Contract Prospectus may be amended or supplemented from time to
time; or (ii) in published reports for the Account or the Contracts that are in
the public domain and approved by LIFE COMPANY for distribution; or (iii) in
sales literature or other promotional material approved by LIFE COMPANY or its
affiliates, except with the express written permission of LIFE COMPANY,
UNDERWRITER, or their respective designees. LIFE COMPANY and UNDERWRITER each
agrees to respond or cause their respective designees to respond, to any request
for approval on a prompt and timely basis.
(e) ADVISER shall and shall cause its affiliates (including PREMIUM FUND's
principal underwriter) to adopt and implement procedures reasonably designed to
ensure that information concerning LIFE COMPANY, and its respective affiliates
that is intended for use only by brokers or agents selling the Contracts (i.e.,
information that is not intended for distribution to Contract owners) ("broker
only materials") is so used, and neither LIFE COMPANY, nor any of its respective
affiliates shall be liable for any losses, damages or expenses relating to the
improper use of such broker only materials except as otherwise provided herein.
(f) PREMIUM FUND and ADVISER will provide LIFE COMPANY with as much notice
as is reasonably practicable of any proxy solicitation for any Fund, and of any
material change in PREMIUM FUND's registration statement, particularly any
change that would result in a change to an Account's registration statement or
to a Contract Prospectus. PREMIUM FUND and ADVISER will cooperate with LIFE
COMPANY so as to enable LIFE COMPANY to solicit proxies from Contract owners or
to make changes to any Contract Prospectus or registration statement, in an
orderly manner. PREMIUM FUND and ADVISER will make reasonable efforts to attempt
to have changes affecting Contract prospectuses become effective simultaneously
with the annual updates for such Prospectuses.
(g) For purposes of this Section 4.6, the phrase "sales literature or 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 messages, 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 any other material constituting sales
literature or advertising under the NASD rules, the 1933 Act or the 1940 Act.
Section 5. Mixed and Shared Funding
5.1 General.
The SEC has granted an order to PREMIUM FUND exempting it from certain
provisions of the 1940 Act and rules thereunder so that PREMIUM FUND may be
available for investment by certain other entities, including, without
limitation, separate accounts funding variable annuity contracts or variable
life insurance contracts, separate accounts of insurance companies unaffiliated
with LIFE COMPANY, and trustees of qualified pension and retirement plans
(collectively, "Mixed and Shared Funding"). The Parties recognize that the SEC
has imposed terms and conditions for such orders that are substantially
identical to many of the provisions of this Section 5. Sections 5.2 through 5.8
below shall apply pursuant to such an exemptive order granted to PREMIUM FUND.
PREMIUM FUND hereby notifies LIFE COMPANY that, in the event that PREMIUM FUND
implements Mixed and Shared Funding, it may be appropriate to include in the
prospectus pursuant to which a Contract is offered disclosure regarding the
potential risks of Mixed and Shared Funding.
5.2 Disinterested Directors.
PREMIUM FUND agrees that its Board of Directors shall at all times consist
of directors a majority of whom (the "Disinterested Directors") are not
interested persons of PREMIUM FUND within the meaning of Section 2(a)(19) of the
1940 Act and the rules thereunder and as modified by any applicable orders of
the SEC, except that if this condition is not met by reason of the death,
disqualification, or bona fide resignation of any director, then the operation
of this condition shall be suspended (a) for a period of forty-five (45) days if
the vacancy or vacancies may be filled by the Board; (b) for a period of sixty
(60) days if a vote of shareholders is required to fill the vacancy or
vacancies; or (c) for such longer period as the SEC may prescribe by order upon
application.
5.3 Monitoring for Material Irreconcilable Conflicts.
PREMIUM FUND agrees that its Board of Directors, constituted with a
majority of disinterested trustees, will monitor for the existence of any
material irreconcilable conflict between the interests of the Contract owners in
all separate accounts of life insurance companies utilizing PREMIUM FUND
("Participating Insurance Companies"), including each Account, and participants
in all qualified retirement and pension plans investing in PREMIUM FUND
("Participating Plans"). LIFE COMPANY agrees to inform the Board of Directors of
PREMIUM FUND of the existence of or any potential for any such material
irreconcilable conflict of which it is aware. The Board shall have the sole
authority to determine if a material irreconcilable conflict exists, and such
determination shall be binding on LIFE COMPANY only if approved in the form of a
resolution by a majority of the Board, or a majority of the disinterested
directors of the Board. The Board will give prompt notice of any such
determination to LIFE COMPANY. The concept of a "material irreconcilable
conflict" is not defined by the 1940 Act or the rules thereunder, but the
Parties recognize that such a conflict may arise for a variety of reasons,
including, without limitation:
(a) an action by any state insurance or other 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 Fund are 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;
(f) a decision by a Participating Insurance Company, all separate accounts
of life insurance companies utilizing PREMIUM FUND, to disregard the voting
instructions of contract owners; or
(g) a decision by a Participating Plan, participants in all qualified
retirement and pension plans, to disregard the voting instructions of Plan
participants ("Participants").
Consistent with the SEC's requirements in connection with exemptive orders
of the type referred to in Section 5.1 hereof, LIFE COMPANY will assist the
Board of Directors in carrying out its responsibilities by providing the Board
of Directors with all information reasonably necessary for the Board of
Directors to consider any issue raised, including information as to a decision
by LIFE COMPANY to disregard voting instructions of Contract owners. LIFE
COMPANY's responsibilities in connection with the foregoing shall be carried out
with a view only to the interests of Contract owners.
5.4 Conflict Remedies.
(a) It is agreed that if it is determined by a majority of the members of
the Board of Directors or a majority of the Disinterested Directors that a
material irreconcilable conflict exists, LIFE COMPANY will, if it is a
Participating Insurance Company for which a material irreconcilable conflict is
relevant, at its own expense and to the extent reasonably practicable (as
determined by a majority of the Disinterested Directors), take whatever steps
are necessary to remedy or eliminate the material irreconcilable conflict, which
steps may include, but are not limited to:
(i) withdrawing the assets allocable to some or all of the Accounts
from PREMIUM FUND or any Fund and reinvesting such assets in a different
investment medium, including another Fund of PREMIUM FUND, 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 particular group (e.g., annuity Contract owners, life insurance
Contract owners or all Contract owners) that votes in favor of such
segregation, or offering to the affected Contract owners the option of
making such a change; and
(ii) establishing a new registered investment company of the type
defined as a "management company" in Section 4(3) of the 1940 Act or a new
separate account that is operated as a management company.
(b) If the material irreconcilable conflict arises because of LIFE
COMPANY's decision to disregard Contract owner voting instructions and that
decision represents a minority position or would preclude a majority vote, LIFE
COMPANY may be required, at PREMIUM FUND's election, to withdraw each Account's
investment in PREMIUM FUND or any Fund. No charge or penalty will be imposed as
a result of such withdrawal. Any such withdrawal must take place within six (6)
months after PREMIUM FUND gives notice to LIFE COMPANY that this provision is
being implemented, or such longer time as may be necessary to obtain appropriate
regulatory approvals to make such withdrawal, and until such withdrawal PREMIUM
FUND shall continue to accept and implement orders by LIFE COMPANY for the
purchase and redemption of Shares of PREMIUM FUND.
(c) If a material irreconcilable conflict arises because a particular state
insurance regulator's decision applicable to LIFE COMPANY conflicts with the
majority of other state regulators, then LIFE COMPANY will withdraw each
Account's investment in PREMIUM FUND within six (6) months after PREMIUM FUND's
Board of Directors informs LIFE COMPANY that it has determined that such
decision has created a material irreconcilable conflict, or such longer time as
may be necessary to obtain appropriate regulatory approvals to make such
withdrawal, and until such withdrawal PREMIUM FUND shall continue to accept and
implement orders by LIFE COMPANY for the purchase and redemption of Shares of
PREMIUM FUND. No charge or penalty will be imposed as a result of such
withdrawal.
(d) LIFE COMPANY agrees that any remedial action taken by it in
resolving any material irreconcilable conflict will be carried out at its
expense and with a view only to the interests of Contract owners.
(e) For purposes hereof, a majority of the Disinterested Directors will
determine whether or not any proposed action adequately remedies any material
irreconcilable conflict. In no event, however, will PREMIUM FUND or any of its
affiliates be required to establish a new funding medium for any Contracts. LIFE
COMPANY will not be required by the terms hereof to establish a new funding
medium for any Contracts if an offer to do so has been declined by vote of a
majority of Contract owners materially adversely affected by the material
irreconcilable conflict.
5.5 Notice to LIFE COMPANY.
PREMIUM FUND will promptly make known in writing to LIFE COMPANY the Board
of Directors' determination of the existence of a material irreconcilable
conflict, a description of the facts that give rise to such conflict and the
implications of such conflict.
5.6 Information Requested by Board of Directors.
LIFE COMPANY and PREMIUM FUND (or ADVISER) will at least annually submit to
the Board of Directors of PREMIUM FUND such reports, materials or data as the
Board of Directors may reasonably request so that the Board of Directors may
fully carry out the obligations imposed upon it by the provisions hereof or any
exemptive order granted by the SEC to permit Mixed and Shared Funding, and said
reports, materials and data will be submitted at any reasonable time deemed
appropriate by the Board of Directors. All reports received by the Board of
Directors of potential or existing conflicts, and all Board of Directors actions
with regard to determining the existence of a conflict, notifying Participating
Insurance Companies and Participating Plans of a conflict, and determining
whether any proposed action adequately remedies a conflict, will be properly
recorded in the minutes of the Board of Directors or other appropriate records,
and such minutes or other records will be made available to the SEC upon
request.
5.7 Compliance with SEC Rules.
If, at any time during which PREMIUM FUND is serving as an investment
medium for variable life insurance contracts, 1940 Act Rules 6e-3(T) or, if
applicable, 6e-2 are amended or Rule 6e-3 is adopted to provide exemptive relief
with respect to Mixed and Shared Funding, PREMIUM FUND agrees that it will
comply with the terms and conditions thereof and that the terms of this Section
5 shall be deemed modified if and only to the extent required in order also to
comply with the terms and conditions of such exemptive relief that is afforded
by any of said rules that are applicable.
5.8 Other Requirements.
PREMIUM FUND will require that each Participating Insurance Company and
Participating Plan enter into an agreement with PREMIUM FUND that contains in
substance the same provisions as are set forth in Sections 4.1(a), 4.1(b),
4.1(c), 4.3(a), 4.4(b), 4.5(a), 5, and 10 of this Agreement.
Section 6. Termination
6.1 Events of Termination.
Subject to Section 6.4 below, this Agreement will terminate as to a Fund:
(a) at the option of any Party, with or without cause with respect to the
Fund, upon 90 days' advance written notice to the other Parties, or, if later,
upon receipt of any required exemptive relief from the SEC, unless otherwise
agreed to in writing by the Parties; or
(b) at the option of Life Company or UNDERWRITER as to any Fund upon
written notice to the other Parties, to the extent that the Shares of that Fund
are not reasonably available to meet the requirements of the Contracts or are
not appropriate funding vehicles for the Contracts, as determined by Life
Company. Prompt notice of the election to terminate for such cause and an
explanation of such cause shall be furnished to PREMIUM FUND by Life Company; or
(c) at the option of PREMIUM FUND or ADVISER upon written notice to the
other Parties upon institution of formal proceedings against LIFE COMPANY or
UNDERWRITER by the NASD, the SEC, any state insurance regulator or any other
regulatory body regarding LIFE COMPANY's obligations under this Agreement or
related to the sale of the Contracts, the operation of each Account, or the
purchase of Shares, if, in each case, PREMIUM FUND reasonably determines that
such proceedings, or the facts on which such proceedings would be based, have a
material likelihood of imposing material adverse consequences on the Fund with
respect to which the Agreement is to be terminated; or
(d) at the option of LIFE COMPANY upon written notice to the other Parties
upon institution of formal proceedings against PREMIUM FUND or ADVISER by the
NASD, the SEC, or any state insurance regulator or any other regulatory body
regarding PREMIUM FUND's or ADVISER's obligations under this Agreement or
related to the operation or management of PREMIUM FUND or the purchase of
PREMIUM FUND Shares, if, in each case, LIFE COMPANY reasonably determines that
such proceedings, or the facts on which such proceedings would be based, have a
material likelihood of imposing material adverse consequences on LIFE COMPANY,
or the Subaccount corresponding to the Fund with respect to which the Agreement
is to be terminated; or
(e) at the option of LIFE COMPANY upon written notice to the other Parties
following receipt of any necessary regulatory approvals and/or the vote of the
Contract owners having an interest in the Accounts (or any subaccounts) to
substitute the shares of another investment company for the corresponding Fund's
Shares in accordance with the terms of the Contracts for which those Fund Shares
had been selected to serve as the underlying investment media.
(f) at the option of any Party in the event that (i) the Fund's Shares are
not registered and, in all material respects, issued and sold in accordance with
any applicable federal or state law, or (ii) such law precludes the use of such
Shares as an underlying investment medium of the Contracts issued or to be
issued by LIFE COMPANY; or
(g) upon termination of the corresponding Subaccount's investment in the
Fund pursuant to Section 5 hereof; or
(h) at the option of LIFE COMPANY if the Fund ceases to qualify as a RIC
under Subchapter M of the Code or under successor or similar provisions, or if
LIFE COMPANY reasonably believes that the Fund may fail to so qualify; or
(i) at the option of LIFE COMPANY if the Fund fails to comply with Section
817(h) of the Code or with successor or similar provisions, or if LIFE COMPANY
reasonably believes that the Fund may fail to so comply; or
(j) by either PREMIUM FUND or ADVISER by written notice to LIFE COMPANY, if
either one or both of PREMIUM FUND or ADVISER respectively, shall determine, in
their sole judgment exercised in good faith, that LIFE COMPANY has suffered a
material adverse change in its business, operations, financial condition, or
prospects since the date of this Agreement or is the subject of material adverse
publicity, if such change or publicity poses a material risk of damage to any
Fund; or
(k) by LIFE COMPANY or UNDERWRITER by written notice to PREMIUM FUND and
ADVISER, if LIFE COMPANY or UNDERWRITER shall determine, in its sole judgment
exercised in good faith, that PREMIUM FUND or ADVISER has suffered a material
adverse change in this business, operations, financial condition or prospects
since the date of this Agreement or is the subject of material adverse
publicity, if such change or publicity poses a material risk of damage to LIFE
COMPANY or UNDERWRITER or any Contract owners; or
(l) upon another Party's repeated material breach of any provision of this
Agreement by a Party not affiliated with the terminating party or isolated
material breach that is not cured within a reasonable time after notice thereof.
6.2 Notice Requirement for Termination.
No termination of this Agreement will be effective unless and until the
Party terminating this Agreement gives written notice to the other Parties to
this Agreement of its intent to terminate, and such notice shall set forth the
Fund(s), Contracts and, if applicable, the Account(s) as to which the Agreement
is to be terminated and the basis for such termination. Furthermore in the event
that any termination is based upon any provision of Sections 6.1 other than
Section 6.1(a), such written notice shall be given as soon as reasonably
possible, but in any event within ten days after the terminating Party learns of
the event causing termination to be required.
6.3 Funds To Remain Available.
Notwithstanding any termination of this Agreement, PREMIUM FUND will, at
the option of LIFE 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 will be permitted to reallocate investments in
the Fund (as in effect on such date), 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 6.3 will not apply to
any terminations under Section 5 and the effect of such terminations will be
governed by Section 5 of this Agreement. This Section 6.3, however, is qualified
and limited by Sections 6.5 and 7 below.
6.4 Survival of Warranties and Indemnifications.
All warranties and indemnifications will survive the termination of this
Agreement.
6.5 Continuance of Agreement for Certain Purposes.
If any Party terminates this Agreement with respect to any Fund, this
Agreement shall nevertheless continue in effect as to any Shares of that Fund
that are outstanding as of the date of such termination (the "Termination
Date"). This continuation shall extend to the date as of which an Account owns
no Shares of the affected Fund.
Section 7. Parties To Cooperate Respecting Termination
The Parties hereto agree to cooperate and give reasonable assistance to one
another in taking all necessary and appropriate steps for the purpose of
ensuring that an Account owns no Shares of a Fund six (6) months after the
Termination Date with respect thereto, or such later date as may be necessary to
obtain any required regulatory approval to effect such result. Such steps may
include combining the affected Account with another Account, substituting other
mutual fund shares for those of the affected Fund, or otherwise terminating
participation by the Contracts in such Fund. If LIFE COMPANY terminates the
Agreement with respect to any Fund for cause, PREMIUM FUND or ADVISER shall pay
the reasonable costs of obtaining all required regulatory approvals for LIFE
COMPANY to substitute the shares of another mutual fund for shares of the
affected Fund(s).
Section 8. Assignment
This Agreement may not be assigned by any Party, except with the written
consent of each other Party.
Section 9. Notices
Notices and communications required or permitted will be given by means
mutually acceptable to the Parties concerned. Each other notice or communication
required or permitted by this Agreement will be given to the following persons
at the following addresses and facsimile numbers, or such other persons,
addresses or facsimile numbers as the Party receiving such notices or
communications may subsequently direct in writing:
Delaware Group Premium Fund, Inc.
Delaware Investments
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000-0000
Attn: Xxxxxxx Xxxxxx, Assistant Product Manager
Allstate Life Insurance Company of New York
0000 Xxxxxxx Xxxx, Xxx. X0X
Xxxxxxxxxx, XX 00000
Attn: Xxxxx Xxxxxxxxx, Senior Vice President and Director
Allstate Life Financial Services, Inc.
0000 Xxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Attn: Xxxxx Xxxxxxxxx
Section 10. Voting Procedures
Subject to the cost allocation procedures set forth in Section 3 hereof,
LIFE COMPANY will distribute all proxy material furnished by PREMIUM FUND to
Contract owners to whom pass-through voting privileges are required to be
extended and will solicit voting instructions from Contract owners. LIFE COMPANY
will vote Shares in accordance with timely instructions received from Contract
owners. LIFE COMPANY will vote Shares that are (a) not attributable to Contract
owners to whom pass-through voting privileges are extended, or (b) attributable
to Contract owners, but for which no timely instructions have been received, in
the same proportion as Shares for which said instructions have been received
from Contract owners, so long as and to the extent that the SEC continues to
interpret the 1940 Act to require pass through voting privileges for Contract
owners. Neither LIFE COMPANY nor any of its affiliates will in any way recommend
action in connection with or oppose or interfere with the solicitation of
proxies by PREMIUM FUND for the Shares held for such Contract owners. For this
purpose, LIFE COMPANY'S making its own proxy solicitation with respect to the
same matter is not considered to be a recommendation for action in connection
with, or opposition to or interference with, PREMIUM FUND's solicitation, if
LIFE COMPANY does not delay or otherwise impede or interfere with PREMIUM FUND's
solicitation. LIFE COMPANY reserves the right to vote shares held in any Account
in its own right to the extent permitted by law. LIFE COMPANY shall be
responsible for assuring that each of its Accounts holding Shares calculates
voting privileges on matters relating to the Fund in a manner consistent with
that of other Participating Insurance Companies or in the manner required by the
Mixed and Shared Funding exemptive order obtained by PREMIUM FUND; provided,
however, that PREMIUM FUND or ADVISER shall provide LIFE COMPANY and each other
Participating Insurance Company with a written copy of the voting privilege
requirements under the Mixed and Shared Funding Exemptive Order and such other
assistance as may be necessary to facilitate coordination between LIFE COMPANY
and each other Participating Insurance Company in complying with such standards,
and provided further that LIFE COMPANY shall be free to vote Fund shares
attributable to any Account in any manner permitted by applicable law, to the
extent the Mixed and Shared Funding Exemptive Order is superseded by SEC
regulation or administrative practice (including no-action relief). PREMIUM FUND
will notify LIFE COMPANY of any changes of interpretations or amendments to
Mixed and Shared Funding exemptive order it has obtained. PREMIUM FUND will
comply with all provisions of the 1940 Act requiring voting by shareholders, and
in particular, PREMIUM FUND either will provide for annual meetings (except
insofar as the SEC may interpret Section 16 of the 1940 Act not to require such
meetings) or will comply with Section 16(c) of the 1940 Act (although PREMIUM
FUND is not one of the trusts described in Section 16(c) of that Act) as well as
with Sections 16(a) and, if and when applicable, 16(b). Further, PREMIUM FUND
will act in accordance with the SEC's interpretation of the requirements of
Section 16(a) with respect to periodic elections of directors and with whatever
rules the SEC may promulgate with respect thereto.
Section 11. Foreign Tax Credits
PREMIUM FUND agrees to consult in advance with LIFE COMPANY concerning any
decision to elect or not to elect pursuant to Section 853 of the Code to pass
through the benefit of any foreign tax credits to its shareholders.
Section 12. Indemnification
12.1 Of PREMIUM FUND and ADVISER by LIFE COMPANY and UNDERWRITER.
(a) Except to the extent provided in Sections 12.1(b) and 12.1(c), below,
LIFE COMPANY and UNDERWRITER agree to indemnify and hold harmless PREMIUM FUND,
ADVISER, their affiliates, and each person, if any, who controls PREMIUM FUND,
ADVISER, or their affiliates within the meaning of Section 15 of the 1933 Act
and each of their respective directors and officers, (collectively, the
"Indemnified Parties" for purposes of this Section 12.1) against any and all
losses, claims, damages, liabilities (including amounts paid in settlement with
the written consent of LIFE COMPANY and UNDERWRITER which consent shall not be
unreasonably withheld) or actions in respect thereof (including, to the extent
reasonable, 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 actions are related to
the sale, holding, or acquisition of PREMIUM FUND 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 any Account's 1933 Act
registration statement, any Contract Prospectus, the Contracts, or sales
literature or advertising 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 to LIFE COMPANY, UNDERWRITER, or an affiliate or designee
thereof, by or on behalf of PREMIUM FUND or ADVISER, or any of their
respective affiliates, for use in any Account's 1933 Act registration
statement, any Contract Prospectus, the Contracts, or sales literature or
advertising (or any amendment or supplement to any of the foregoing) or
otherwise for use in connection with the sale of Contracts or Shares; or
(ii) arise out of or as a result of any other statements or
representations (other than statements or representations contained in
PREMIUM FUND's 1933 Act registration statement, any Fund Prospectus, sales
literature or advertising, or any amendment or supplement to any of the
foregoing, not supplied for use therein by or on behalf of LIFE COMPANY,
UNDERWRITER or their respective affiliates) made by, or the negligent,
illegal or fraudulent conduct of, LIFE COMPANY, UNDERWRITER or their
respective affiliates or persons under their control in connection with the
sale or distribution of the Contracts or Shares; or
(iii) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in PREMIUM FUND's 1933 Act
registration statement, Fund Prospectus, sales literature or advertising of
PREMIUM FUND, or any amendment or supplement to any of the foregoing, 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 and in
conformity with information furnished to PREMIUM FUND, ADVISER or their
affiliates by or on behalf of LIFE COMPANY, UNDERWRITER or their respective
affiliates; or
(iv) arise as a result of any failure by LIFE COMPANY or UNDERWRITER
to perform the obligations, provide the services and furnish the materials
required of them under the terms of this Agreement, or any material breach
of any representation and/or warranty made by LIFE COMPANY or UNDERWRITER
in this Agreement or arise out of or result from any other material breach
of this Agreement by LIFE COMPANY or UNDERWRITER.
(b) Neither LIFE COMPANY nor UNDERWRITER shall be liable under this Section
12.1 with respect to any losses, claims, damages, liabilities or actions to
which an Indemnified Party would otherwise be subject by reason of willful
misfeasance, bad faith, or gross negligence in the performance by that
Indemnified Party of its duties or by reason of that Indemnified Party's
reckless disregard of obligations or duties (i) under this Agreement, or (ii) to
ADVISER, PREMIUM FUND, or PREMIUM FUND shareholders (including, without
limitation, Contract owners that beneficially own Shares of any Fund).
(c) Neither LIFE COMPANY nor UNDERWRITER shall be liable under this Section
12.1 with respect to any action against an Indemnified Party unless PREMIUM FUND
or ADVISER shall have notified LIFE COMPANY and UNDERWRITER in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the action 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 and
UNDERWRITER of any such action shall not relieve LIFE COMPANY and UNDERWRITER
from any liability which they may have to the Indemnified Party against whom
such action is brought otherwise than on account of this Section 12.1. Except as
otherwise provided herein, in case any such action is brought against an
Indemnified Party, LIFE COMPANY and UNDERWRITER shall be entitled to
participate, at their own expense, in the defense of such action. Unless the
Indemnified Party releases LIFE COMPANY and UNDERWRITER from any further
obligation to it under this Section 12.1, LIFE COMPANY and UNDERWRITER also
shall be entitled to assume the defense thereof, with counsel approved by each
Indemnified Party named in the action, which approval shall not be unreasonably
withheld. After notice from LIFE COMPANY or UNDERWRITER to such Indemnified
Party of LIFE COMPANY's or UNDERWRITER's election to assume the defense thereof,
the Indemnified Party will cooperate fully with LIFE COMPANY and UNDERWRITER and
shall bear the fees and expenses of any additional counsel retained by it, and
neither LIFE COMPANY nor UNDERWRITER will be liable to such Indemnified Party
under this Agreement for any legal or other expenses subsequently incurred by
such Indemnified Party independently in connection with the defense thereof,
other than reasonable costs of investigation.
12.2 Of LIFE COMPANY and UNDERWRITER by PREMIUM FUND and ADVISER.
(a) Except to the extent provided in Sections 12.2(c) and 12.2(d), below,
PREMIUM FUND and ADVISER agree to indemnify and hold harmless LIFE COMPANY,
UNDERWRITER, their respective affiliates, and each person, if any, who controls
LIFE COMPANY, UNDERWRITER or their respective affiliates within the meaning of
Section 15 of the 1933 Act and each of their respective directors and officers,
(collectively, the "Indemnified Parties" for purposes of this Section 12.2)
against any and all losses, claims, damages, liabilities (including amounts paid
in settlement with the written consent of PREMIUM FUND OR ADVISER which consent
shall not be unreasonably withheld) or actions in respect thereof (including, to
the extent reasonable, legal and other expenses), to which the Indemnified
Parties or Contract owners may become subject under any statute, regulation, at
common law, or otherwise, insofar as such losses, claims, damages, liabilities
or actions are related to the sale, holding or acquisition of the 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 PREMIUM FUND's 1933 Act
registration statement, any Fund Prospectus or sales literature or
advertising of PREMIUM FUND (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 PREMIUM
FUND or its affiliates by or on behalf of LIFE COMPANY, UNDERWRITER or
their respective affiliates for use in PREMIUM FUND's 1933 Act registration
statement, any Fund Prospectus, or in sales literature or advertising or
otherwise for use in connection with the sale of Contracts or Shares; or
(any amendment or supplement to any of the foregoing)
(ii) arise out of or as a result of any other statements or
representations (other than statements or representations contained in any
Account's 1933 Act registration statement, any Contract Prospectus, sales
literature or advertising for the Contracts, or any amendment or supplement
to any of the foregoing, not supplied for use therein by or on behalf of
PREMIUM FUND, ADVISER or their affiliates) made by, or the negligent,
illegal or fraudulent conduct of, PREMIUM FUND, ADVISER or their respective
affiliates or persons under their control in connection with the sale or
distribution of Contracts or Shares; or
(iii) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any Account's 1933 Act
registration statement, any Contract Prospectus, sales literature or
advertising covering the Contracts, or any amendment or supplement to any
of the foregoing, 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 was made
in reliance upon and in conformity with information furnished to LIFE
COMPANY, UNDERWRITER or their respective affiliates by or on behalf of
PREMIUM FUND, or ADVISER or their respective affiliates; or
(iv) arise as a result of any failure by PREMIUM FUND or ADVISER to
perform the obligations, provide the services and furnish the materials
required of each under the terms of this Agreement, or any material breach
of any representation and/or warranty made by PREMIUM FUND or ADVISER in
this Agreement or arise out of or result from any other material breach of
this Agreement by PREMIUM FUND or ADVISER.
(b) Except to the extent provided in Sections 12.2(c) and 12.2(d) hereof,
PREMIUM FUND and ADVISER each agree to indemnify and hold harmless the
Indemnified Parties from and against any and all losses, claims, damages,
liabilities (including amounts paid in settlement thereof with, the written
consent of PREMIUM FUND and/or ADVISER) or actions in respect thereof
(including, to the extent reasonable, legal and other expenses) to which the
Indemnified Parties may become subject directly or indirectly under any statute,
at common law or otherwise, insofar as such losses, claims, damages, liabilities
or actions directly or indirectly result from or arise out of the failure of any
Fund to operate as a regulated investment company in compliance with (i)
Subchapter M of the Code and regulations thereunder, or (ii) Section 817(h) of
the Code and regulations thereunder, including, without limitation, any income
taxes and related penalties, rescission charges, liability under state law to
Contract owners asserting liability against LIFE COMPANY pursuant to the
Contracts, the costs of any ruling and closing agreement or other settlement
with the IRS, and the cost of any substitution by LIFE COMPANY of Shares of
another investment company or portfolio for those of any adversely affected Fund
as a funding medium for each Account that LIFE COMPANY reasonably deems
necessary or appropriate as a result of the noncompliance.
(c) Neither PREMIUM FUND nor ADVISER shall be liable under this Section
12.2 with respect to any losses, claims, damages, liabilities or actions to
which an Indemnified Party would otherwise be subject by reason of willful
misfeasance, bad faith, or gross negligence in the performance by that
Indemnified Party of its duties or by reason of such Indemnified Party's
reckless disregard of its obligations and duties (i) under this Agreement, or
(ii) to LIFE COMPANY, UNDERWRITER, each Account or Contract owners.
(d) Neither PREMIUM FUND nor ADVISER shall be liable under this Section
12.2 with respect to any action against an Indemnified Party unless the
Indemnified Party shall have notified PREMIUM FUND and/or ADVISER in writing
within a reasonable time after the summons or other first legal process giving
information of the nature of the action 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 PREMIUM FUND or
ADVISER of any such action shall not relieve PREMIUM FUND or ADVISER from any
liability which it may have to the Indemnified Party against whom such action is
brought otherwise than on account of this Section 12.2. Except as otherwise
provided herein, in case any such action is brought against an Indemnified
Party, PREMIUM FUND and/or ADVISER will be entitled to participate, at its own
expense, in the defense of such action. Unless the Indemnified Party releases
ADVISER and PREMIUM FUND from any further obligation to it under this Section
12.2, PREMIUM FUND and/or ADVISER also shall be entitled to assume the defense
thereof, with counsel approved by each Indemnified Party named in the action,
which approval shall not be unreasonably withheld. After notice from PREMIUM
FUND and/or ADVISER to such Indemnified Party of PREMIUM FUND's or ADVISER's
election to assume the defense thereof, the Indemnified Party will cooperate
fully with PREMIUM FUND and ADVISER and shall bear the fees and expenses of any
additional counsel retained by it, and PREMIUM FUND and ADVISER will not be
liable to such Indemnified Party under this Agreement for any legal or other
expenses subsequently incurred by such Indemnified Party independently in
connection with the defense thereof, other than reasonable costs of
investigation.
12.3 Effect of Notice.
Any notice given by the indemnifying Party to an Indemnified Party referred
to in Sections 12.1(c) or 12.2(d) above of participation in or control of any
action by the indemnifying Party will in no event be deemed to be an admission
by the indemnifying Party of liability, culpability or responsibility, and the
indemnifying Party will remain free to contest liability with respect to the
claim among the Parties or otherwise.
12.4 Successors.
A successor by law of any Party shall be entitled to the benefits of the
indemnification contained in this Section 12.
Section 13. Applicable Law
This Agreement will be construed and the provisions hereof interpreted
under and in accordance with New York law, without regard for that state's
principles of conflict of laws.
Section 14. Execution in Counterparts
This Agreement may be executed simultaneously in two or more counterparts,
each of which taken together will constitute one and the same instrument.
Section 15. Severability
If any provision of this Agreement is held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement will not
be affected thereby.
Section 16. Rights Cumulative
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, that the Parties are entitled to under federal and state
laws.
Section 17. Headings
The Table of Contents and headings used in this Agreement are for purposes
of reference only and shall not limit or define the meaning of the provisions of
this Agreement.
Section 18. Confidentiality
PREMIUM FUND and ADVISER acknowledge that the identities of the customers
of LIFE COMPANY or any of its affiliates (collectively, the "LIFE COMPANY
Protected Parties" for purposes of this Section 18), information maintained
regarding those customers, and all computer programs and procedures or other
information developed by the LIFE COMPANY Protected Parties or any of their
respective employees or agents in connection with LIFE COMPANY's performance of
its duties under this Agreement are the valuable property of the LIFE COMPANY
Protected Parties. PREMIUM FUND and ADVISER agree that if they come into
possession of any list or compilation of the identities of or other information
about the LIFE COMPANY Protected Parties' customers, or any other information or
property of the LIFE COMPANY Protected Parties, other than such information as
may be independently developed or compiled by PREMIUM FUND or ADVISER from
information supplied to them by the LIFE COMPANY Protected Parties' customers
who also maintain accounts directly with PREMIUM FUND, PREMIUM FUND will hold
such information or property in confidence and refrain from using, disclosing or
distributing any of such information or other property except: (a) with LIFE
COMPANY's prior written consent; or (b) as required by law or judicial process.
LIFE COMPANY and UNDERWRITER acknowledge that the identities of the customers of
PREMIUM FUND or any of its affiliates (collectively, the "PREMIUM FUND Protected
Parties" for purposes of this Section 18), information maintained regarding
those customers, and all computer programs and procedures or other information
developed by the PREMIUM FUND Protected Parties or any of their respective
employees or agents in connection with PREMIUM FUND's performance of its duties
under this Agreement are the valuable property of the PREMIUM FUND Protected
Parties. LIFE COMPANY and UNDERWRITER agree that if they come into possession of
any list or compilation of the identities of or other information about the
PREMIUM FUND Protected Parties' customers or any other information or property
of the PREMIUM FUND Protected Parties, other than such information as may be
independently developed or compiled by LIFE COMPANY or UNDERWRITER from
information supplied to them by the PREMIUM FUND Protected Parties' customers
who also maintain accounts directly with LIFE COMPANY or UNDERWRITER, LIFE
COMPANY and UNDERWRITER will hold such information or property in confidence and
refrain from using, disclosing or distributing any of such information or other
property except: (a) with PREMIUM FUND's prior written consent; or (b) as
required by law or judicial process. Each party acknowledges that any breach of
the agreements in this Section 18 would result in immediate and irreparable harm
to the other parties for which there would be no adequate remedy at law and
agree that in the event of such a breach, the other parties will be entitled to
equitable relief by way of temporary and permanent injunctions, as well as such
other relief as any court of competent jurisdiction deems appropriate.
Section 19. Collateral Agreements
PREMIUM FUND and ADVISER agree that if PREMIUM FUND or ADVISER (or any of
their affiliates) enters into any arrangement whereby another Participating
Insurance Company, as compared with LIFE COMPANY under this Agreement and any
collateral agreements and understandings, (a) bears materially fewer expenses,
(b) has materially fewer obligations, (c) receives materially higher rates of
revenues or fees from PREMIUM FUND, the Fund Underwriter and/or ADVISER, or any
of their affiliates, or (d) otherwise is treated materially more favorably in
any respect, to provide the same to LIFE COMPANY, Underwriter, and their
respective affiliates.
Section 20. Trademarks and Names
(a) Neither LIFE COMPANY nor UNDERWRITER or any of their respective
affiliates, shall use any designation consistency in whole or in part of the
names or marks "_______________________" or any trademark, trade name, service
xxxx or logo of PREMIUM FUND, ADVISER or any of their respective affiliates, or
any variation of any such trademark, trade name, service xxxx or logo, without
PREMIUM FUND's or ADVISER's prior written consent. Upon termination of this
Agreement for any reason, LIFE COMPANY and UNDERWRITER shall cease all use of
any such name or xxxx as soon as reasonably practicable.
(b) Neither PREMIUM FUND nor ADVISER, nor any of their affiliates, shall
use any designation consistency in whole or in part of the names or marks
"Allstate Life Insurance Company of New York" or any trademark, trade name,
service xxxx or logo relating to LIFE COMPANY, UNDERWRITER or any of their
respective affiliates or any variation of any such trademark, trade name,
service xxxx or logo without the prior written consent of LIFE COMPANY or
UNDERWRITER. Upon termination of this Agreement for any reason, PREMIUM FUND and
ADVISER shall cease all use of any such name or xxxx as soon as reasonably
practicable.
Section 21. Parties to Cooperate
Each Party to this Agreement will cooperate with each other Party and all
appropriate governmental authorities (including, without limitation, the SEC,
the NASD and state insurance regulators) and will permit each other and such
authorities reasonable access to its books and records (including copies
thereof) in connection with any investigation or inquiry relating to this
Agreement or the transactions contemplated hereby.
Section 22. Amendments
No provision of this Agreement may be amended or modified in any manner
except by a written agreement executed by all Parties hereto.
Section 23. Waivers
No waiver of, or failure to enforce, any provision of this Agreement by any
Party shall result in any a waiver of any other violation of that or any other
provision of this Agreement.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed in their names and on their behalf by and through their duly authorized
officers signing below.
DELAWARE GROUP PREMIUM FUND, INC.
Attest: ________________________ By:
Name: _______________ Name: ________________
Title _______________ Title: __________
DELAWARE INVESTMENTS
Attest: ________________________ By:
Name: _______________ Name: ________________
Title _______________ Title: __________
ALLSTATE LIFE INSURANCE COMPANY OF
NEW YORK, on behalf of itself and
its separate accounts
Attest: ________________________ By:
Name: ________________________ Name:
Title: ________________________ Title:
ALLSTATE LIFE FINANCIAL SERVICES,INC.
Attest: ________________________ By:
Name: ________________________ Name:
Title: ________________________ Title:
SCHEDULE A
FUNDS AVAILABLE UNDER THE CONTRACTS
Delaware GP Small Cap Value Series
Delaware GP Trend Series
SEPARATE ACCOUNTS UTILIZING THE FUNDS
Allstate Life of New York Separate Account A
CONTRACTS FUNDED BY THE SEPARATE ACCOUNTS
NYLU446
Schedule B
EXPENSE ALLOCATIONS
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Life Company PREMIUM FUND / ADVISER
preparing and filing the Account's registration statement preparing and filing the Fund's registration statement
text composition, printing, and mailing of Contract text composition, printing, and mailing of Fund
Prospectuses and supplements Prospectuses and supplements (Adviser or its
affiliates to bear costs related to
materials sent to prospective Contract
owners or existing Contract owners that
do not own Fund Shares)
text composition and printing Contract SAIs text composition and printing Fund
SAIs mailing and distributing Contract SAIs to Contract mailing and distributing
Fund SAIs to Contract owners owners upon request by Contract owners upon request
by Contract owners
text composition, printing, mailing, and distributing text composition, printing, mailing, and distributing
annual and semi-annual reports for Accounts annual and semi-annual reports for Funds (Adviser or
its affiliates to bear costs related
to materials sent to prospective Contract
owners or existing Contract owners that
do not own Fund Shares)
text composition, printing, mailing, distributing, and text composition,
printing, mailing, distributing and tabulation of proxy statements and voting
instruction tabulation of proxy statements and voting instruction solicitation
materials to participants with respect to solicitation materials to participants
with respect to proxies solicited by LIFE COMPANY proxies solicited by PREMIUM
FUND
preparation, printing and distributing sales material and advertising relating
to the Funds (but not including any Fund Prospectus, SAI, or report), insofar as
such materials relate to the Contracts and filing such materials with and
obtaining approval from, the SEC, the NASD, any state insurance regulatory
authority, and any other appropriate regulatory authority, to the extent
required
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