FUND PARTICIPATION AGREEMENT
THIS AGREEMENT, made and entered into this day of October 1999 (the "Agreement")
by and among American Skandia Life Assurance Corporation, organized under the
laws of the State of Connecticut (the "Insurance Company"), on behalf of itself
and each separate account of the Insurance Company named in Schedule A to this
Agreement, as may be amended from time to time (each separate account referred
to as the "Separate Account" and collectively as the "Separate Accounts");
INVESCO Variable Investment Funds, Inc., an open-end management investment
company organized under the laws of the State of Maryland (the "Investment
Company"); INVESCO Funds Group, Inc. a corporation organized under the laws of
the State of Delaware and investment adviser to the Investment Company (the
"Adviser"); and INVESCO Distributors, Inc., a corporation organized under the
laws of the State of Delaware and principal underwriter/distributor of the
Investment Company.
WHEREAS, the Investment Company engages in business as an open-end diversified,
management investment company and was established for the purpose of serving as
the investment vehicle for separate accounts established for variable life
insurance contracts and variable annuity contracts to be offered by insurance
companies which have entered into participation agreements substantially similar
to this Agreement (the "Participating Insurance Companies"), and
WHEREAS, beneficial interests in the Investment Company are divided into several
series of shares, each representing the interest in a particular managed
portfolio of securities and other assets (each, a "Fund" and collectively, the
"Funds"); and
WHEREAS, the Insurance Company, as depositor, has established the Separate
Accounts to serve as investment vehicles for certain variable annuity contracts
and variable life insurance policies and funding agreements offered by the
Insurance Company set forth on Schedule A (the "Contracts"); and
WHEREAS, the Separate Accounts are duly organized, validly existing segregated
asset accounts, established by resolutions of the Board of Directors of the
Insurance Company under the insurance laws of the State of Connecticut, to set
aside and invest assets attributable to the Contracts; and
WHEREAS, to the extent permitted by applicable insurance laws and regulations,
the Insurance Company intends to purchase shares of the Funds named in Schedule
B, as such schedule may be amended from time to time (the "Designated Funds") on
behalf of the Separate Accounts to fund the Contracts; and
WHEREAS, the Distributor is authorized to sell such shares of the Funds to unit
investment trusts such as the Separate Accounts at net asset value.
NOW, THEREFORE, in consideration of their mutual promises, the Insurance
Company, the Investment Company, the Adviser and the Distributor agree as
follows:
ARTICLE I - SALE OF FUND SHARES
1.1 The Distributor agrees to sell to the Insurance Company those shares of
the Designated Funds which the Insurance Company orders on behalf of
each Separate Account, executing such orders on a daily basis at the
net asset value (and with no sales charges) next computed after receipt
and acceptance by the Investment Company or its designee of the order
for the shares of the Investment Company. For purposes of this Section
1.1, the Insurance Company will be the designee of the Investment
Company for receipt of such orders from each Separate Account and
receipt by such designee will constitute receipt by the Investment
Company; provided that the Investment Company receives notice of such
order by 11:00 a.m. Eastern Time on the next following business day.
"Business Day" will mean any day on which the New York Stock Exchange
is open for trading and on which the Investment Company calculates its
net asset value pursuant to the rules of the Securities and Exchange
Commission (the "Commission"). If the Investment Company does not
receive actual notice of such purchase order before 11:00 a.m. Eastern
Time on the Business Day next following Insurance Company's acceptance
of such order on behalf of each Separate Account, such order will be
executed at the net asset value next calculated by the Investment
Company or its designee pursuant to the rules of the Commission.
Payment will be made in federal funds transmitted by wire to the
Investment Company's account as designated by the Investment Company in
writing from time to time, on the same Business Day the Investment
Company receives notice of the purchase order from the Insurance
Company. The Investment Company may net the notice of redemptions it
receives from the Insurance Company under Section 1.3 of this Agreement
against the notice of purchases it receives from the Insurance Company
under this Section 1.1.
1.2 The Insurance Company will pay for Designated Fund shares on the next
Business Day after an order to purchase Designated Fund shares is made
in accordance with Section 1.1. Payment will be made in federal funds
transmitted by wire. Upon receipt by the Investment Company of the
payment, such funds shall cease to be the responsibility of the
Insurance Company and shall become the responsibility of the Investment
Company.
1.3 The Investment Company agrees to redeem for cash, upon the Insurance
Company's request, any full or fractional shares of the Investment
Company held by the Insurance Company, executing such requests on a
daily basis at the net asset value next computed after receipt and
acceptance by the Investment Company or its agent of the request for
redemption. For purposes of this Section 1.3, the Insurance Company
will be the designee of the Investment Company for receipt of requests
for redemption from each Separate Account and receipt by such designee
will constitute receipt by the Investment Company; provided the
Investment Company receives notice of such requests for redemption by
11:00 a.m. Eastern Time on the next following Business Day. If the
Investment Company does not receive actual notice of such redemption
order before 11:00 a.m. Eastern Time on the Business Day next following
Insurance Company's acceptance of such order on behalf of each Separate
Account, such order will be executed at the net asset value next
calculated by the Investment Company or its designee pursuant to the
rules of the Commission. Payment will be made in federal funds
transmitted by wire to the Insurance Company's account as designated by
the Insurance Company in writing from time to time, on the same
Business Day the Investment Company receives notice of the redemption
order from the Insurance Company. After consulting with the Insurance
Company, the Investment Company reserves the right to delay payment of
redemption proceeds, but in no event may such payment be delayed longer
than the period permitted under Section 22(e) of the Investment Company
Act of 1940 (the "1940 Act"). The Investment Company will not bear any
responsibility whatsoever for the proper disbursement or crediting of
redemption proceeds; the Insurance Company alone will be responsible
for such action. If notification of redemption is received after 11:00
Eastern Time, payment for redeemed shares will be made on the next
following Business Day. The Investment Company may net the notice of
purchases it receives from the Insurance Company under Section 1.1 of
this Agreement against the notice of redemptions it receives from the
Insurance Company under this Section 1.3.
1.4 The Investment Company agrees to make shares of the Designated Funds
available continuously for purchase at the applicable net asset value
per share by Participating Insurance Companies and their separate
accounts on those days on which the Investment Company calculates the
net asset value of each Fund pursuant to rules of the Commission;
provided, however, that the Board of Directors of the Investment
Company (the "Directors") 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 is, 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, necessary in the best interests of the
shareholders of such Fund.
1.5 The Investment Company and the Distributor agree that shares of the
Investment Company will be sold only to Participating Insurance
Companies and their separate accounts, qualified pension and retirement
plans or such other persons as are permitted under applicable
provisions of the Internal Revenue Code of 1986, as amended, (the
"Code"), and regulations promulgated thereunder, the sale to which will
not impair the tax treatment currently afforded the Contracts. No
shares of any Fund will be sold directly to the general public.
1.6 The Investment Company will not sell Fund shares to any insurance
company or separate account unless an agreement containing provisions
substantially the same as Articles I, III, V, and VII and Section 2.8
of Article II of this Agreement are in effect to govern such sales.
1.7 The Insurance Company agrees to purchase and redeem the shares of the
Designated Funds offered by the then current prospectus of the
Investment Company in accordance with the provisions of such
prospectus.
1.8 Issuance and transfer of the Investment Company's shares will be by
book entry only. Stock certificates will not be issued to the Insurance
Company or to any Separate Account. Purchase and redemption orders for
Fund shares will be recorded in an appropriate title for each Separate
Account or the appropriate sub-account of each Separate Account.
1.9 The Investment Company will furnish same day notice (by facsimile) to
the Insurance Company of the declaration of any income, dividends or
capital gain distributions payable on each Designated Fund's shares.
The Insurance Company hereby elects to receive all such dividends and
distributions as are payable on the Fund shares in the form of
additional shares of that Fund at the ex-dividend date net asset
values. The Insurance Company reserves the right to revoke this
election and to receive all such dividends and distributions in cash.
The Investment Company will notify the Insurance Company of the number
of shares so issued as payment of such dividends and distributions.
1.10 The Investment Company will make the net asset value per share for each
Designated Fund available to the Insurance Company via electronic means
on a daily basis as soon as reasonably practical after the net asset
value per share is calculated and will use its best efforts to make
such net asset value per share available by 6:00 p.m., Eastern Time,
each Business Day. If the Investment Company provides the Insurance
Company materially incorrect net asset value per share information (as
determined under SEC guidelines), the Insurance Company shall be
entitled to an adjustment to the number of shares purchased or redeemed
to reflect the correct net asset value per share. Any material error in
the calculation or reporting of net asset value per share, dividend or
capital gain information shall be reported to the Insurance Company
upon discovery by the Investment Company.
ARTICLE II - REPRESENTATIONS AND WARRANTIES
2.1 The Insurance Company represents and warrants that the Contracts are or
will be registered under the Securities Act of 1933 (the "1933 Act"),
or are exempt from registration thereunder, and that the Contracts will
be issued and sold in compliance with all applicable federal and state
laws. The Insurance Company further represents and warrants that: (i)
it is an insurance company duly organized and in good standing under
applicable law; (ii) it has legally and validly established each
Separate Account as a separate account under Section 38a-433 of the
General Statutes of Connecticut; (iii) each Separate Account is or will
be registered as a unit investment trust in accordance with the
provisions of the 1940 Act to serve as a segregated investment account
for the Contracts, or is exempt from registration thereunder; and (iv)
it will maintain such registration for so long as any Contracts are
outstanding. The Insurance Company will amend each registration
statement under the 1933 Act for the Contracts and the registration
statement under the 1940 Act for the Separate Account from time to time
as required in order to effect the continuous offering of the Contracts
or as may otherwise be required by applicable law. The Insurance
Company will register and qualify the Contracts for sale in accordance
with the securities laws of the various states only if, and to the
extent, deemed necessary by the Insurance Company.
2.2 Subject to the Investment Company's representations in Article III, the
Insurance Company represents that the Contracts are currently and at
the time of issuance will be treated as annuity contracts and/or life
insurance policies (as applicable) under applicable provisions of the
Code, and that it will make every effort to maintain such treatment and
that it will notify the Investment Company and the Distributor
immediately upon having a reasonable basis for believing that the
Contracts have ceased to be so treated or that they might not be so
treated in the future.
2.3 The Insurance Company represents and warrants to the Investment
Company, the Adviser, and the Distributor that its has a Year 2000
compliance program in existence and that each reasonably intends to be
Year 2000 compliant so as to be able perform all of the services and/or
obligations contemplated by or under this Agreement without
interruption. The Insurance Company shall immediately notify the
Investment Company, the Adviser, and the Distributor if it determines
that it will be unable perform all of the services and/or obligations
contemplated by or under this Agreement in a manner that is Year 2000
compliant.
2.4 The Insurance Company represents and warrants that it will not purchase
shares of the Designated Fund(s) with assets derived from tax-qualified
retirement plans except, indirectly, through Contracts purchased in
connection with such plans.
2.5 The Investment Company represents and warrants that shares of the
Designated Fund(s) sold pursuant to this Agreement will be registered
under the 1933 Act and duly authorized for issuance in accordance with
applicable law and that the Investment Company is and will remain
registered as an open-end diversified, management investment company
under the 1940 Act for as long as such shares of the Designated Fund(s)
are sold. The Investment Company will 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. The
Investment Company will register and qualify the shares of the
Designated Fund(s) for sale in accordance with the laws of the various
states only if and to the extent deemed advisable by the Investment
Company or the Distributor.
2.6 The Investment Company represents that it will use its best efforts to
comply with any applicable state insurance laws or regulations as they
may apply to the investment objectives, policies and restrictions of
the Funds, to the extent specifically requested in writing by the
Insurance Company. If the Investment Company cannot comply with such
state insurance laws or regulations, it will so notify the Insurance
Company in writing. The Investment Company makes no other
representation as to whether any aspect of its operations (including,
but not limited to, fees and expenses, and investment policies)
complies with the insurance laws or regulations of any state. The
Insurance Company represents that it will use its best efforts to
notify the Investment Company of any restrictions imposed by state
insurance laws that may become applicable to the Investment Company as
a result of the Separate Accounts' investments therein. The Investment
Company and the Adviser agree that they will furnish the information
required by state insurance laws to assist the Insurance Company in
obtaining the authority needed to issue the Contracts in various
states.
2.7 The Investment Company represents and warrants that, to the extent that
it decides to finance distribution expenses pursuant to Rule 12b-1
under the 1940 Act, the Investment Company undertakes to have the
Directors, a majority of whom are not "interested" persons of the
Investment Company, formulate and approve any plan under Rule 12b-1 to
finance distribution expenses. The Investment Company shall notify the
Insurance Company immediately upon determining to finance distribution
expenses pursuant to Rule 12b-1.
2.8 The Investment Company represents that it is lawfully organized and
validly existing under the laws of the State of Maryland and that it
does and will comply in all material respects with applicable
provisions of the 1940 Act.
2.9 The Investment Company 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
the Investment Company are and continue to be at all times covered by a
blanket fidelity bond or similar coverage for the benefit of the
Investment Company 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.
2.10 The Adviser represents and warrants that: (i) it is duly registered as
an investment adviser under the Investment Advisers Act of 1940, as
amended, and will remain duly registered under all applicable federal
and state securities laws; and (ii) it will perform its obligations for
the Investment Company in accordance in all material respects with the
laws of the State of Delaware and any applicable state and federal
securities laws.
2.11 The Distributor represents and warrants that it: (i) is registered as a
broker-dealer under the Securities and Exchange Act of 1934, as amended
(the "1934 Act") and will remain duly registered under all applicable
federal and state securities laws; (ii) is a member in good standing of
the National Association of Securities Dealers, Inc. ("NASD"); (iii)
serves as principal underwriter/distributor of the Investment Company;
and (iv) will perform its obligations for the Investment Company in
accordance in all material respects with the laws of the State of
Delaware and any applicable state and federal securities laws.
2.12 The Investment Company, the Adviser and the Distributor represent and
warrant to the Insurance Company that each has a Year 2000 compliance
program in existence and that each reasonably intends to be Year 2000
compliant so as to be able to perform all of the services and/or
obligations contemplated by or under this Agreement without
interruption. The Investment Company, the Adviser, and the Distributor
shall immediately notify the Insurance Company if it determines that it
will be unable to perform all of the services and/or obligations
contemplated by or under this Agreement in a manner that is Year 2000
compliant.
ARTICLE III - FUND COMPLIANCE
3.1 The Investment Company, the Adviser and the Distributor acknowledge
that any failure (whether intentional or in good faith or otherwise) to
comply with the requirements of Subchapter M of the Code or the
diversification requirements of Section 817(h) of the Code may result
in the Contracts not being treated as variable contracts for federal
income tax purposes, which would have adverse tax consequences for
Contract owners and could also adversely affect the Insurance Company's
corporate tax liability. The Investment Company, the Adviser and the
Distributor further acknowledge that any such failure may result in
costs and expenses being incurred by the Insurance Company in obtaining
whatever regulatory authorizations are required to substitute shares of
another investment company for those of the failed Fund as well as fees
and expenses of legal counsel and other advisors to the Insurance
Company and any federal income taxes, interest or tax penalties
incurred by the Insurance Company in connection with any such failure.
3.2 The Investment Company represents and warrants that it is currently
qualified as a Regulated Investment Company under Subchapter M of the
Code, and that it will maintain such qualification (under Subchapter M
or any successor or similar provision) and that it will notify the
Insurance Company immediately upon having a reasonable basis for
believing that it has ceased to so qualify or that it might not so
qualify in the future.
3.3 The Investment Company represents that it will at all times invest
money from the Contracts in such a manner as to ensure that the
Contracts will be treated as variable contracts under the Code and the
regulations issued thereunder; including, but not limited to, that the
Investment Company will at all times comply with Section 817(h) of the
Code and Treasury Regulation 1.817-5, as amended from time to time,
relating to the diversification requirements for variable annuity,
endowment, or life insurance contracts, and with Section 817(d) of the
Code, relating to the definition of a variable contract, and any
amendments or other modifications to such Section or Regulation. The
Investment Company will notify the Insurance Company immediately upon
having a reasonable basis for believing that the Investment Company or
a Fund thereunder has ceased to comply with the diversification
requirements or that the Investment Company or Fund might not comply
with the diversification requirements in the future. In the event of a
breach of this representation by the Investment Company, it will take
all reasonable steps to adequately diversify the Investment Company so
as to achieve compliance within the grace period afforded by Treasury
Regulation 1.817-5.
3.4 The Adviser agrees to provide the Insurance Company with a certificate
or statement indicating compliance by each Fund of the Investment
Company with Section 817(h) of the Code, such certificate or statement
to be sent to the Insurance Company no later than thirty (30) days
following the end of each calendar quarter.
ARTICLE IV - PROSPECTUS AND PROXY STATEMENTS; VOTING
4.1 The Investment Company or the Distributor will provide the Insurance
Company with as many copies of the current Investment Company
prospectus and any supplements thereto for the Designated Fund(s) as
the Insurance Company may reasonably request, at the Investment
Company's or Distributor's expense, for distribution to Contract owners
at the time of Contract fulfillment and confirmation. To the extent
that the Designated Fund(s) are one or more of several Funds of the
Investment Company, the Investment Company shall bear the cost of
providing the Insurance Company only with disclosure related to the
Designated Fund(s). The Investment Company will provide as many copies
of said prospectus as necessary for distribution, at the Investment
Company's or Distributor's expense, to existing Contract owners. The
Investment Company will provide the copies of said prospectus to the
Insurance Company or to its mailing agent. The Insurance Company will
distribute the prospectus to existing Contract owners and will xxxx the
Investment Company or the Distributor for the reasonable cost of such
distribution. If requested by the Insurance Company, in lieu thereof,
the Investment Company or the Distributor will provide such
documentation, including a final copy of a current prospectus set in
type at the Investment Company's or the Distributor's expense, and
other assistance as is reasonably necessary in order for the Insurance
Company at least annually (or more frequently if the Investment Company
prospectus is amended more frequently) to have the new prospectus for
the Contracts and the Investment Company's new prospectus printed
together, in which case the Investment Company or the Distributor
agrees to pay its proportionate share of reasonable expenses directly
related to the required disclosure of information concerning the
Investment Company. The Investment Company or the Distributor will,
upon request, provide the Insurance Company with a copy of the
Investment Company's prospectus through electronic means to facilitate
the Insurance Company's efforts to provide Investment Company
prospectuses via electronic delivery, in which case the Investment
Company or the Distributor agrees to pay its proportionate share of
reasonable expenses related to the required disclosure of information
concerning the Investment Company.
4.2 The Investment Company's prospectus will state that the Statement of
Additional Information (the "SAI") for the Investment Company is
available from the Distributor or, in the Investment Company's
discretion, the Prospectus shall state that such statement is available
from the Investment Company.
4.3 The Investment Company, at its expense, will provide the Insurance
Company or its mailing agent with copies of its proxy material, if any,
reports to shareholders/Contract owners and other communications to
shareholders/ Contract owners in such quantity as the Insurance Company
will reasonably require. The Insurance Company will distribute this
proxy material, reports and other communications to existing Contract
owners and will xxxx the Investment Company for the reasonable cost of
such distribution.
4.4 If and to the extent required by law, the Insurance Company will:
(a) solicit voting instructions from Contract owners;
(b) vote the shares of the Designated Funds held in the Separate
Account in accordance with instructions received from Contract
owners; and
(c) vote shares of the Designated Funds held in the Separate Account
for which no timely instructions have been received, in the same
proportion as shares of such Designated Fund for which
instructions have been received from the Insurance Company's
Contract owners,
so long as and to the extent that the Commission continues to interpret
the 1940 Act to require pass-through voting privileges for variable
Contract owners. The Insurance Company reserves the right to vote
Investment Company shares held in any segregated asset account in its
own right, to the extent permitted by law. The Insurance Company will
be responsible for assuring that the Separate Accounts participating in
the Investment Company calculates voting privileges in a manner
consistent with all legal requirements, including the Proxy Voting
Procedures set forth in Schedule C and the Mixed and Shared Funding
Order, as described in Section 7.1.
4.5 The Investment Company will comply with all provisions of the 1940 Act
requiring voting by shareholders, and in particular, the Investment
Company either will provide for annual meetings (except insofar as the
Commission may interpret Section 16 of the 1940 Act not to require such
meetings) or, as the Investment Company currently intends, to comply
with Section 16(c) of the 1940 Act (although the Investment Company is
not one of the trusts described in Section 16(c) of the 0000 Xxx) as
well as with Sections 16(a) and, if and when applicable, 16(b) of the
1940 Act. Further, the Investment Company will act in accordance with
the Commission's interpretation of the requirements of Section 16(a)
with respect to periodic elections of directors and with whatever rules
the Commission may promulgate with respect thereto.
ARTICLE V - SALES MATERIAL AND INFORMATION
5.1 The Insurance Company will furnish, or will cause to be furnished, to
the Investment Company or the Distributor, each piece of sales
literature or other promotional material in which the Investment
Company, the Adviser or the Distributor is named, at least ten (10)
business days prior to its use. No such material will be used if the
Investment Company or the Distributor reasonably objects to such use
within five (5) business days after receipt of such material.
5.2 The Insurance Company will not give any information or make any
representations or statements on behalf of the Investment Company or
concerning the Investment Company in connection with the sale of the
Contracts other than the information or representations contained in
the registration statement, prospectus or SAI for Investment Company
shares, as such registration statement, prospectus and SAI may be
amended or supplemented from time to time, or in reports or proxy
statements for the Investment Company, or in published reports for the
Investment Company which are in the public domain or approved by the
Investment Company, the Adviser or the Distributor for distribution, or
in sales literature or other material provided by the Investment
Company, the Adviser or the Distributor, except with permission of the
Investment Company, the Adviser or the Distributor. The Investment
Company, the Adviser or the Distributor agree to respond to any request
for approval on a prompt and timely basis.
5.3 The Investment Company, the Adviser or the Distributor will furnish, or
will cause to be furnished, to the Insurance Company or its designee,
each piece of sales literature or other promotional material in which
the Insurance Company or its separate account is named, at least ten
(10) business days prior to its use. No such material will be used if
the Insurance Company reasonably objects to such use within five (5)
business days after receipt of such material.
5.4 The Investment Company, the Adviser or the Distributor will not give
any information or make any representations or statements on behalf of
the Insurance Company or concerning the Insurance Company, each
Separate Account, or the Contracts other than the information or
representations contained in a registration statement, prospectus or
SAI for the Contracts, as such registration statement, prospectus and
SAI may be amended or supplemented from time to time, or in published
reports for each Separate Account or the Contracts which are in the
public domain or approved by the Insurance Company for distribution to
Contract owners, or in sales literature or other material provided by
the Insurance Company, except with permission of the Insurance Company.
The Insurance Company agrees to respond to any request for approval on
a prompt and timely basis.
5.5 The Investment Company will provide to the Insurance Company at least
one complete copy of all registration statements, prospectuses, SAIs,
reports, proxy statements, sales literature and other promotional
materials, applications for exemptions, requests for no-action letters,
and all amendments to any of the above, that relate to the Investment
Company or its shares, within a reasonable time after filing of each
such document with the Commission or the NASD.
5.6 The Insurance Company will provide to the Investment Company at least
one complete copy of all definitive prospectuses, definitive SAI,
reports, solicitations for voting instructions, sales literature and
other promotional materials, applications for exemptions, requests for
no action letters, and all amendments to any of the above, that relate
to the Contracts or each Separate Account, contemporaneously with the
filing of each such document with the Commission or the NASD (Except
that with respect to post-effective amendments to such prospectuses and
SAIs and sales literature and promotional material, only those
prospectuses and SAIs and sales literature and promotional material
that relate to or refer to the Investment Company or one or more of the
Designated Funds will be provided.) In addition, the Insurance Company
will provide to the Investment Company at least one complete copy of
(i) a registration statement that relates to the Contracts or each
Separate Account, containing representative and relevant disclosure
concerning the Investment Company; and (ii) any post-effective
amendments to any registration statements relating to the Contracts or
such Separate Account that refer to or relate to the Investment
Company.
5.7 For purposes of this Article V, 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, (i.e., 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, registration
statements, prospectuses, SAIs, shareholder reports, and proxy
materials and any other material constituting sales literature or
advertising under the NASD Conduct Rules, the 1933 Act or the 1940 Act.
5.8 The Investment Company, the Adviser and the Distributor hereby consent
to the Insurance Company's use of the names of the INVESCO, AMVESCAP
and INVESCO Funds Group, Inc. as well as the names of the Designated
Funds set forth in Schedule B of this Agreement, in connection with
marketing the Contracts, subject to the terms of Sections 5.1 of this
Agreement. Insurance Company acknowledges and agrees that Adviser and
Distributor and/or their affiliates own all right, title and interest
in an to the name INVESCO and the INVESCO open circle design, and
covenants not, at any time, to challenge the rights of Adviser and
Distributor and/or their affiliates to such name or design, or the
validity or distinctiveness thereof. The Investment Company, the
Adviser and the Distributor hereby consent to the use of any trademark,
trade name, service xxxx or logo used by the Investment Company, the
Adviser and the Distributor, subject to the Investment Company's, the
Adviser's and/or the Distributor's approval of such use and in
accordance with reasonable requirements of the Investment Company, the
Adviser or the Distributor. Such consent will terminate with the
termination of this Agreement. Adviser or Distributor may withdraw this
consent as to any particular use of any such name or identifying marks
at any time (i) upon Adviser's or Distributor's reasonable
determination that such use would have a material adverse effect on the
reputation or marketing efforts of Adviser, Distributor or such Funds
or (ii) if no investment company, or series or class of shares of any
investment company advised by Adviser or distributed by Distributor
continues to be offered through variable insurance contracts issued by
Insurance Company; provided however, that Adviser or Distributor may,
in eithers individual discretion, continue to use materials prepared or
printed prior to the withdrawal of such authorization. The Insurance
Company agrees and acknowledges that all use of any designation
comprised in whole or in part of the name, trademark, trade name,
service xxxx and logo under this Agreement shall inure to the benefit
of the Investment Company, Adviser and/or the Distributor.
5.9 The Investment Company, the Adviser, the Distributor and the Insurance
Company agree to adopt and implement procedures reasonably designed to
ensure that information concerning the Insurance Company, the
Investment Company, the Adviser or the Distributor, respectively, and
their respective affiliated companies, 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 or prospective Contract
owners) and is properly marked as "Not For Use With The Public" or "For
Broker-Dealer Use Only" and that such information is only so used.
ARTICLES VI - FEES, COSTS AND EXPENSES
6.1 The Investment Company will pay no fee or other compensation to the
Insurance Company under this Agreement, except subject to a plan
pursuant to Rule 12b-1 under the 1940 Act to finance distribution
expenses, in which case, subject to obtaining any required exemptive
orders or other regulatory approvals, the Investment Company or
Distributor may make payments to the Insurance Company or to the
underwriter for the Contracts if and in such amounts agreed to by the
Investment Company in writing. Each party, however, shall, in
accordance with the allocation of expenses specified in this Agreement,
reimburse other parties for expenses initially paid by one party but
allocated to another party. In addition, nothing herein shall prevent
the parties hereto from otherwise agreeing to perform, and arranging
for appropriate compensation for, other administrative services
provided to Contract owners relating to the Investment Company that are
not primarily intended to result in the sale of shares of the
Designated Funds.
6.2 All expenses incident to performance by the Investment Company of this
Agreement will be paid by the Investment Company or the Distributor to
the extent permitted by law. All shares of the Designated Funds will be
duly authorized for issuance and registered in accordance with
applicable federal law and, to the extent deemed advisable by the
Investment Company, in accordance with applicable state law, prior to
sale. The Investment Company will bear the expenses for the cost of
registration and qualification of the Investment Company's shares,
including without limitation, the preparation of and filing with the
SEC of Forms N-SAR and Rule 24f-2 Notices and payment of all applicable
registration or filing fees (if applicable) with respect to shares of
the Investment Company; preparation and filing of the Investment
Company's prospectus, SAI and registration statement, proxy materials
and reports; typesetting the Investment Company's prospectus;
typesetting and printing proxy materials and reports to Contract owners
(including the costs of printing an Investment Company prospectus that
constitutes an annual report); the preparation of all statements and
notices required by any federal or state law; all taxes on the issuance
or transfer of the Investment Company's shares; any expenses permitted
to be paid or assumed by the Investment Company pursuant to a plan, if
any, under Rule 12b-1 under the 1940 Act; and other costs associated
with preparation of prospectuses and SAIs for the Designated Funds in
electronic or typeset format.
6.3 The Insurance Company shall bear all expenses associated with the
registration, qualification, and filing of the Contracts under
applicable federal securities and state insurance laws; the cost of
preparing, printing, and distributing the Contracts' prospectus and
SAI; and the cost of printing and distributing annual individual
account statements for Contract owners are required by state law.
ARTICLE VII - MIXED & SHARED FUNDING RELIEF
7.1 The Investment Company represents and warrants that it has received an
order from the Commission granting Participating Insurance Companies
and variable annuity separate accounts and variable life insurance
separate accounts relief from the provisions of Sections 9(a), 13(a),
15(a), and 15(b) of 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 Investment Company to be sold to and held by variable annuity
separate accounts and variable life insurance separate accounts of both
affiliated and unaffiliated Participating Insurance Companies and
qualified pension and retirement plans outside of the separate account
context (the "Mixed and Shared Funding Order"). The parties to this
Agreement agree that the conditions or undertakings specified in the
Mixed and Shared Funding Order and that may be imposed on the Insurance
Company, the Investment Company and/or the Adviser by virtue of the
receipt of such order by the Commission, will be incorporated herein by
reference, and such parties agree to comply with such conditions and
undertakings to the extent applicable to each such party.
7.2 The Directors will monitor the Investment Company for the existence of
any material irreconcilable conflict among the interests of the
Contract owners of all separate accounts investing in the Investment
Company. A material irreconcilable conflict may arise for a variety of
reasons, including, but not limited to: (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 Fund are
being managed; (e) a difference in voting instructions given by
Participating Insurance Companies or by variable annuity and variable
life insurance Contract owners; or (f) a decision by an insurer to
disregard the voting instructions of Contract owners. The Directors
will promptly inform the Insurance Company if it determines that a
material irreconcilable conflict exists and the implications thereof. A
majority of the Directors will consist of persons who are not
"interested" persons of the Investment Company.
7.3 The Insurance Company will report any potential or existing conflicts
of which it is aware to the Directors. The Insurance Company agrees to
assist the Directors in carrying out its responsibilities under the
Mixed and Shared Funding Order by providing the Directors with all
information reasonably necessary for the Directors to consider any
issues raised. This includes, but is not limited to, an obligation by
the Insurance Company to inform the Directors whenever Contract owner
voting instructions are to be disregarded. The Directors will record in
its minutes, or other appropriate records, all reports received by it
and all action with regard to a conflict.
7.4 If it is determined by a majority of the Directors, or a majority of
the disinterested Directors of the Fund's Board, that a material
irreconcilable conflict exists, the Insurance Company and other
Participating Insurance Companies will, at their 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, up to and including:
(a) withdrawing the assets allocable to some or all of the Separate
Accounts from the Investment Company or any Fund and reinvesting such
assets in a different investment medium, including (but not limited to)
another Fund of the Investment Company, or submitting the question
whether such segregation should be submitted to a vote of all affected
Contract owners and, as appropriate, segregating the assets of any
appropriate group (i.e., variable annuity Contract owners or variable
life insurance 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 (b)
establishing a new registered management investment company or managed
separate account.
7.5 If a material irreconcilable conflict arises because of a decision by
the Insurance Company to disregard Contract owner voting instructions,
and such disregard of voting instructions could conflict with the
majority of Contract owner voting instructions, and the Insurance
Company's judgment represents a minority position or would preclude a
majority vote, the Insurance Company may be required, at the Investment
Company's election, to withdraw the affected sub-account of the
Separate Account's investment in the Investment Company and terminate
this Agreement with respect to such sub-account; provided, however,
that such withdrawal and termination will be limited to the extent
required by the foregoing material irreconcilable conflict as
determined by a majority of the disinterested Directors of the Fund's
Board. No charge or penalty will be imposed as a result of such
withdrawal. Any such withdrawal and termination must take place within
six (6) months after the Investment Company gives written notice to the
Insurance Company that this provision is being implemented. Until the
end of such six-month period the Adviser and Investment Company will,
to the extent permitted by law and any exemptive relief previously
granted to the Investment Company, continue to accept and implement
orders by the Insurance Company for the purchase (and redemption) of
shares of the Investment Company.
7.6 If a material irreconcilable conflict arises because a particular state
insurance regulator's decision applicable to the Insurance Company
conflicts with the majority of other state insurance regulators, then
the Insurance Company will withdraw the affected sub-account of the
Separate Account's investment in the Investment Company and terminate
this Agreement with respect to such sub-account; provided, however,
that such withdrawal and termination will be limited to the extent
required by the foregoing material irreconcilable conflict as
determined by a majority of the disinterested Directors of the Fund's
Board. No charge or penalty will be imposed as a result of such
withdrawal. Any such withdrawal and termination must take place within
six (6) months after the Investment Company gives written notice to the
Insurance Company that this provision is being implemented. Until the
end of such six-month period the Advisor and Investment Company will,
to the extent permitted by law and any exemptive relief previously
granted to the Investment Company, continue to accept and implement
orders by the Insurance Company for the purchase (and redemption) of
shares of the Investment Company.
7.7 For purposes of Sections 7.4 through 7.7 of this Agreement, a majority
of the disinterested members of the Directors will determine whether
any proposed action adequately remedies any material irreconcilable
conflict, but in no event, other than as specified in Section 7.4, will
the Investment Company be required to establish a new funding medium
for the Contracts. The Insurance Company will not be required by
Section 7.4 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 material irreconcilable conflict.
7.8 The Insurance Company will at least annually submit to the Directors
such reports, materials or data as the Directors may reasonably request
so that the Directors may fully carry out the duties imposed upon it as
delineated in the Mixed and Shared Funding Order, and said reports,
materials and data will be submitted more frequently if deemed
appropriate by the Directors.
7.9 If and to the extent that Rule 6e-2 and Rule 6e-3(T) are amended, or
Rule 6e-3(T) is adopted, to provide 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 Order) on
terms and conditions materially different from those contained in the
Mixed and Shared Funding Order, then: (a) the Investment Company and/or
the Participating Insurance Companies, as appropriate, will 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 4.4, 4.5, 7.1, 7.2, 7.3, 7.4, and 7.5 of
this Agreement will 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 Insurance Company
(a) The Insurance Company agrees to indemnify and hold harmless the
Investment Company, the Adviser, the Distributor, and each of the
Investment Company's or the Adviser's or the Distributor's
directors, officers, employees or agents and each person, if any,
who controls or is associated with the Investment Company, the
Adviser, the Distributor within the meaning of such terms under
the federal securities laws (collectively, the "Indemnified
Parties" for purposes of this Section 8.1) against any and all
losses, claims, damages, liabilities (including amounts paid in
settlement with the written consent of the Insurance Company) or
actions in respect thereof (including 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 expenses (or
litigations in respect thereof) or settlements:
(1) arise out of or are based upon any untrue statements or
alleged untrue statements of any material fact contained in
the registration statement, prospectus or SAI for 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 or
necessary to make such statements not misleading in light of
the circumstances in which they were made; provided that this
agreement to indemnify will not apply as to any Indemnified
Party if such statement or omission of such alleged statement
or omission was made in reliance upon and in conformity with
information furnished to the Insurance Company in writing by
or on behalf of the Investment Company, the Adviser, of the
Distributor for use in the registration statement, prospectus
or SAI for the Contracts or in the Contracts or sales
literature (or any amendment or supplement) or otherwise for
use in connection with the sale of the Contracts or
Investment Company shares; or
(2) arise out of or as a result of statements or representations
by or on behalf of the Insurance Company (other than
statements or representations contained in the Investment
Company registration statement, prospectus, SAI or sales
literature or other promotional material of the Investment
Company, or any amendment or supplement to the foregoing, not
supplied by the Insurance Company or persons under its
control) or wrongful conduct of the Insurance Company or
persons under its control, with respect to the sale or
distribution of the Contracts or Investment Company shares;
or
(3) arise out of untrue statement or alleged untrue statement of
a material fact contained in the Investment Company
registration statement, prospectus, SAI or sales literature
or other promotional material of the Investment Company (or
amendment or supplement) or the omission or alleged omission
to state therein a material fact required to be stated
therein or necessary to make such statements not misleading
in light of the circumstances in which they were made, if
such a statement or omission was made in reliance upon and in
conformity with information furnished to the Investment
Company by or on behalf of the Insurance Company or persons
under its control; or
(4) arise as a result of any failure by the Insurance Company to
provide the services and furnish the materials under the
terms of this Agreement; or
(5) arise out of any material breach of any representation and/or
warranty made by the Insurance Company in this Agreement or
arise out of or result from any other material breach by the
Insurance Company of this Agreement;
except to the extent provided in Sections 8.1(b) and 8.4
hereof. This indemnification will be in addition to any
liability that the Insurance Company otherwise may have.
(b) No party will be entitled to indemnification under Section 8.1(a)
if such loss, claim, damage, liability or litigation is due to the
willful misfeasance, bad faith, gross negligence, or reckless
disregard in the performance of such party's duties and
obligations under this Agreement.
(c) The Indemnified Parties promptly will notify the Insurance Company
of the commencement of any litigation, proceedings, complaints or
litigation by regulatory authorities against them in connection
with the issuance or sale of the Investment Company shares or the
Contracts or the operation of the Investment Company.
8.2 Indemnification by the Adviser & Distributor
(a) The Adviser and Distributor agree to indemnify and hold harmless
the Insurance Company and each of its directors, officers,
employees or agents and each person, if any, who controls or is
associated with the Insurance Company within the meaning of such
terms under the federal securities (collectively, the "Indemnified
Parties" for purposes of this Section 8.2) against any and all
losses, claims, damages, liabilities (including amounts paid in
settlement with the written consent of the Adviser and
Distributor) or litigation in respect thereof (including
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 expenses (or litigation in respect thereof) or
settlements:
(1) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in
the registration statement, prospectus or SAI for the
Investment Company or sales literature or other promotional
material of the Investment Company (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 or necessary to
make such statements not misleading in light of the
circumstances in which they were made; provided that this
agreement to indemnify will not apply as to any Indemnified
Party if such statement or omission of such alleged statement
or omission was made in reliance upon and in conformity with
information furnished in writing to the Adviser or Investment
Company by or on behalf of the Insurance Company for use in
the registration statement, prospectus or SAI for the
Investment Company or in sales literature of the Investment
Company (or any amendment or supplement thereto) or otherwise
for use in connection with the sale of the Contracts or
Investment Company shares; or
(2) arise out of or as a result of statements or representations
(other than statements or representations contained in the
Contracts or in the Contract or Investment Company
registration statements, prospectuses or statements of
additional information or sales literature or other
promotional material for the Contracts or of the Investment
Company, or any amendment or supplement to the foregoing, not
supplied by the Adviser or the Investment Company or persons
under the control of the Adviser or the Investment Company
respectively) or wrongful conduct of the Adviser or the
Investment Company or persons under the control of the
Adviser or the Investment Company respectively, with respect
to the sale or distribution of the Contracts or Investment
Company shares; or
(3) 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 or
supplement thereto), or the omission or alleged omission to
state therein a material fact required to be stated or
necessary to make such statement or statements not misleading
in light of the circumstances in which they were made, if
such statement or omission was made in reliance upon and in
conformity with information furnished to the Insurance
Company by or on behalf of the Adviser or the Investment
Company or persons under the control of the Adviser or the
Investment Company; or
(4) arise as a result of any failure by the Investment Company or
the Adviser to provide the services and furnish the materials
under the terms of this Agreement; or
(5) arise out of or result from any material breach of any
representation and/or warranty made by the Adviser or the
Investment Company in this Agreement, or arise out of or
result from any other material breach of this Agreement by
the Adviser or the Investment Company (including a failure,
whether intentional or in good faith or otherwise, to comply
with the requirements of Subchapter M of the Code specified
in Article III, Section 3.2 of this Agreement and the
diversification requirements specified in Article III,
Section 3.3 of this Agreement, as described more fully in
Section 8.5 below);
except to the extent provided in Sections 8.2(b) and 8.4
hereof. This indemnification will be in addition to any
liability that the Adviser or Distributor otherwise may have.
(b) No party will be entitled to indemnification under Section 8.2(a)
if such loss, claim, damage, liability or litigation is due to the
willful misfeasance, bad faith, gross negligence, or reckless
disregard in the performance of such party's duties and
obligations under this Agreement.
(c) The Indemnified Parties will promptly notify the Adviser and the
Investment Company of the commencement of any litigation,
proceedings, complaints or litigation by regulatory authorities
against them in connection with the issuance or sale of the
Contracts or the operation of the Separate Account.
8.3 Indemnification by the Investment Company
(a) The Investment Company agrees to indemnify and hold harmless the
Insurance Company and each of its directors, officers, employees
or agents and each person, if any, who controls or is associated
with the Insurance Company within the meaning of such terms under
the federal securities (collectively, the "Indemnified Parties"
for purposes of this Section 8.3) against any and all losses,
claims, damages, liabilities (including amounts paid in settlement
with the written consent of the Investment Company) or litigation
in respect thereof (including 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 expenses (or litigation in
respect thereof) or settlements, are related to the operations of
the Investment Company and:
(1) arise as a result of any failure by the Investment Company to
provide the services and furnish the materials under the
terms of this Agreement; or
(2) arise out of or result from any material breach of any
representation and/or warranty made by the Investment Company
in this Agreement or arise out of or result from any other
material breach of this Agreement by the Investment Company
(including a failure, whether intentional or in good faith or
otherwise, to comply with the requirements of Subchapter M of
the Code specified in Article III, Section 3.2 of this
Agreement and the diversification requirements specified in
Article III, Section 3.3 of this Agreement as described more
fully in Section 8.5 below); or
(3) arise out of or result from the incorrect or untimely
calculation or reporting of daily net asset value per share
or dividend or capital gain distribution rate;
except to the extent provided in Sections 8.3(b) and 8.4
hereof. This indemnification will be in addition to any
liability that the Investment Company otherwise may have.
(b) No party will be entitled to indemnification under Section 8.3(a)
if such loss, claim, damage, liability or litigation is due to the
willful misfeasance, bad faith, gross negligence, or reckless
disregard in the performance of such party's duties and
obligations under this Agreement.
(c) The Indemnified Parties will promptly notify the Investment
Company of the commencement of any litigation, proceedings,
complaints or actions by regulatory authorities against them in
connection with the issuance or sale of the Contracts or the
operation of the Separate Account.
8.4 Indemnification Procedure
Any person obligated to provide indemnification under this Article VIII
("Indemnifying Party" for the purpose of this Section 8.4) will not be
liable under the indemnification provisions of this Article VIII with
respect to any claim made against a party entitled to indemnification
under this Article VIII ("Indemnified Party" for the purpose of this
Section 8.4) unless such Indemnified Party will have notified the
Indemnifying Party in writing within a reasonable time after the
summons or other first legal process giving information of the nature
of the claim will have been served upon such Indemnified Party (or
after such party will have received notice of such service on any
designated agent), but failure to notify the Indemnifying Party of any
such claim will not relieve the Indemnifying Party from any liability
which it may have to the Indemnified Party against whom such action is
brought otherwise than on account of the indemnification provision of
this Article VIII, except to the extent that the failure to notify
results in the failure of actual notice to the Indemnifying Party and
such Indemnifying Party is damaged solely as a result of failure to
give such notice. In case any such action is brought against the
Indemnified Party, the Indemnifying Party will be entitled to
participate, at its own expense, in the defense thereof. The
Indemnifying Party also will be entitled to assume the defense thereof,
with counsel satisfactory to the party named in the action. After
notice from the Indemnifying Party to the Indemnified Party of the
Indemnifying Party's election to assume the defense thereof, the
Indemnified Party will bear the fees and expenses of any additional
counsel retained by it, and the Indemnifying Party will not be liable
to such party under this Agreement for any legal or other expenses
subsequently incurred by such party independently in connection with
the defense thereof other than reasonable costs of investigation,
unless: (a) the Indemnifying Party and the Indemnified Party will have
mutually agreed to the retention of such counsel; or (b) the named
parties to any such proceeding (including any impleaded parties)
include both the Indemnifying Party and the Indemnified Party and
representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between
them. The Indemnifying Party will not be liable for any settlement of
any proceeding effected without its written consent but if settled with
such consent or if there is a final judgment for the plaintiff, the
Indemnifying Party agrees to indemnify the Indemnified Party from and
against any loss or liability by reason of such settlement or judgment.
A successor by law of the parties to this Agreement will be entitled to
the benefits of the indemnification contained in this Article VIII. The
indemnification provisions contained in this Article VIII will survive
any termination of this Agreement.
8.5 Indemnification for Failure to Comply with Diversification Requirements
The Investment Company and the Adviser acknowledge that any failure
(whether intentional or in good faith or otherwise) to comply with the
diversification requirements specified in Article III, Section 3.3 of
this Agreement may result in the Contracts not being treated as
variable contracts for federal income tax purposes, which would have
adverse tax consequences for Contract owners and could also adversely
affect the Insurance Company's corporate tax liability. Accordingly,
without in any way limiting the effect of Sections 8.2(a) and 8.3(a)
hereof and without in any way limiting or restricting any other
remedies available to the Insurance Company, the Investment Company,
the Adviser and the Distributor will pay on a joint and several basis
all costs associated with or arising out of any failure, or any
anticipated or reasonably foreseeable failure, of the Investment
Company or any Fund to comply with Section 3.3 of this Agreement,
including all costs associated with correcting or responding to any
such failure; such costs may include, but are not limited to, the costs
involved in creating, organizing, and registering a new investment
company as a funding medium for the Contracts and/or the costs of
obtaining whatever regulatory authorizations are required to substitute
shares of another investment company for those of the failed Investment
Company or Fund (including but not limited to an order pursuant to
Section 26(b) of the 1940 Act); fees and expenses of legal counsel and
other advisors to the Insurance Company and any federal income taxes or
tax penalties (or "toll charges" or exactments or amounts paid in
settlement) incurred by the Insurance Company in connection with any
such failure or anticipated or reasonably foreseeable failure. Such
indemnification and reimbursement obligation shall be in addition to
any other indemnification and reimbursement obligations of the
Investment Company, the Adviser and/or the Distributor under this
Agreement.
ARTICLE IX - APPLICABLE LAW
9.1 This Agreement will be construed and the provisions hereof interpreted
under and in accordance with the laws of the State of Delaware
9.2 This Agreement will 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 Commission may grant (including, but not limited to,
the Mixed and Shared Funding Order) and the terms hereof will be
interpreted and construed in accordance therewith.
ARTICLE X - TERMINATION
10.1 This Agreement will terminate automatically in the event of its
assignment, unless made with the written consent of each party, or:
(a) at the option of any party, with or without cause, with respect to
one, some or all of the Funds, upon six (6) month's advance
written notice to the other parties or, if later, upon receipt of
any required exemptive relief or orders from the SEC, unless
otherwise agreed in a separate written agreement among the
parties; or
(b) at the option of the Insurance Company, upon written notice to the
other parties, with respect to any Fund if shares of the Fund are
not reasonably available to meet the requirements of the Contracts
as determined in good faith by the Insurance Company; or
(c) at the option of the Insurance Company, upon written notice to the
other parties, with respect to any Fund in the event any of the
Fund'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 shares as the underlying investment media of the
Contracts issued or to be issued by Insurance Company; or
(d) at the option of the Investment Company upon institution of formal
proceedings against the Insurance Company by the NASD, the
Commission, the insurance commission of any state or any other
regulatory body regarding the Insurance Company's duties under
this Agreement or related to the sale of the Contracts, the
administration of the Contracts, the operation of the Separate
Account, or the purchase of the Investment Company shares,
provided that the Investment Company determines in its sole
judgment that any such proceeding would have a material adverse
effect on the Insurance Company's ability to perform its
obligations under this Agreement; or
(e) at the option of the Insurance Company upon institution of formal
proceedings against Investment Company, the Adviser or the
Distributor by the NASD, the Commission or any state securities or
insurance commission or any other regulatory body, provided that
the Insurance Company determines in its sole judgment that any
such proceeding would have a material adverse effect on the
Investment Company's, the Adviser's or the Distributor's ability
to perform its obligations under this Agreement; or
(f) at the option of the Insurance Company, if the Investment Company
ceases to qualify as a Regulated Investment Company under
Subchapter M of the Code, or under any successor or similar
provision, or if the Insurance Company reasonably believes that
the Investment Company may fail to so qualify; or
(g) at the option of the Insurance Company, with respect to any Fund,
if the Investment Company fails to meet the diversification
requirements specified in Section 3.3 hereof or if the Insurance
Company reasonably believes the Investment Company may fail to
meet such requirements; or
(h) at the option of any party to this Agreement, upon another party's
material breach of any provision of this Agreement; or
(i) at the option of the Insurance Company, if the Insurance Company
determines in its sole judgment exercised in good faith that
either the Investment Company, the Adviser or the Distributor has
suffered a material adverse change in its business, operations or
financial condition since the date of this Agreement or is the
subject of material adverse publicity which is likely to have a
material adverse impact upon the business and operations of the
Insurance Company or the Contracts (including the sale thereof);
or
(j) at the option of the Investment Company, the Adviser or the
Distributor, if the Investment Company, the Adviser or the
Distributor respectively, determines in its sole judgment
exercised in good faith that the Insurance Company has suffered a
material adverse change in its business, operations or financial
condition since the date of this Agreement or is the subject of
material adverse publicity which is likely to have a material
adverse impact upon the business and operations of the Investment
Company, the Adviser or the Distributor; or
(k) at the option of the Insurance Company or the Investment Company
upon receipt of any necessary regulatory approvals and/or the vote
of the Contract owners having an interest in the Separate Account
(or any sub-account) to substitute the shares of another
investment company for the corresponding Fund's shares of the
Investment Company in accordance with the terms of the Contracts
for which those Fund shares had been selected to serve as the
underlying portfolio. The Insurance Company will give sixty (60)
days' prior written notice to the Investment Company of the date
of any proposed vote or other action taken to replace the
Investment Company's shares or of the filing of any required
regulatory approval(s); or (1) at the option of the Insurance
Company or the Investment Company upon a determination by a
majority of the Investment Company Board, or a majority of the
disinterested Directors, that a material irreconcilable conflict
exists among the interests of:
(1) all Contract owners of variable insurance products of all separate
accounts; or (2) the interests of the Participating Insurance
Companies investing in the Investment Company as set forth in
Article VII of this Agreement; or
(m) subject to the Investment Company's compliance with Article III,
at the option of the Investment Company in the event any of the
Contracts are not issued or sold in accordance with applicable
federal and/or state law. Termination will be effective
immediately upon such occurrence without notice.
10.2 Notice Requirement
(a) In the event that any termination of this Agreement is based upon
the provisions of Article VII, such prior written notice will be
given in advance of the effective date of termination as required
by such provisions.
(b) In the event that a party to this Agreement terminates the
Agreement based upon the provisions of Sections 10.1(b)-(h),
prompt written notice of the election to terminate this Agreement
for cause shall be furnished by the party terminating the
Agreement to the non-terminating party. The Agreement shall be
terminated effective upon receipt of such notice by the
non-terminating party(ies).
(c) In the event that a party to this Agreement terminates the
Agreement based upon the provisions of Sections 10.1(i) or (j),
prior written notice of the election to terminate this Agreement
for cause shall be furnished by the party terminating the
Agreement to the non-terminating party(ies). Such prior written
notice shall be given by the party terminating this Agreement to
the non-terminating party(ies) at least sixty (60) days before the
effective date of termination.
10.3 Effect of Termination
Notwithstanding any termination of this Agreement, the Investment
Company, the Adviser and the Distributor will, at the option of the
Insurance Company, continue to make available additional shares of the
Investment Company 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
Designated Funds (as in effect on such date), redeem investments in the
Designated Funds and/or invest in the Designated Funds upon the making
of additional purchase payments under the Existing Contracts. The
parties agree that this Section 10.3 will not apply to any terminations
under Article VII and the effect of such Article VII terminations will
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 to indemnify other parties will survive
and not be affected by any termination of this Agreement. In addition,
with respect to Existing Contracts, all provisions of this Agreement
also will survive and not be affected by any termination of this
Agreement.
ARTICLE XI - NOTICES
Any notice will be deemed duly given when sent by certified mail, return receipt
requested, to the other party at the address of such party set forth below or at
such other address as such party may from time to time specify in writing to the
other parties. All notices will be deemed given three (3) business days after
the date received or rejected by the addressee:
If to the Insurance Company:
---------------------------
American Skandia Life Assurance Corporation
0 Xxxxxxxxx Xxxxx
X.X. Xxx 000
Xxxxxxx, Xxxxxxxxxxx 00000-0000
Attn: Xx. Xxxxxx X. Xxxxxxx
If to the Fund:
--------------
INVESCO Variable Investment Funds, Inc.
0000 X. Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000-0000
Attn: Xx. Xxxxxx X. Xxxxxx
If to the Adviser:
-----------------
INVESCO Funds Group, Inc.
0000 X. Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000-0000
Attn: Xx. Xxxxxx X. Xxxxxx
If to the Distributor:
---------------------
INVESCO Distributors, Inc.
0000 X. Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000-0000
Attn: Xx. Xxxxxx X. Xxxxxx]
ARTICLE XII - MISCELLANEOUS
12.1 All persons dealing with the Investment Company must look solely to the
property of the Investment Company for the enforcement of any claims
against the Investment Company as neither the Directors, officers,
agents or shareholders assume any personal liability for obligations
entered into on behalf of the Investment Company.
12.2 The Investment Company, the Adviser and the Distributor acknowledge
that the identities of the customers of the Insurance Company or any of
its affiliates (collectively the "Protected Parties" for purposes of
this Section 12.2), information maintained regarding those customers,
and all computer programs and procedures developed by the Protected
Parties or any of their employees or agents in connection with the
Insurance Company's performance of its duties under this Agreement are
the valuable property of the Protected Parties. The Investment Company,
the Adviser and the Distributor agree that if they come into possession
of any list or compilation of the identities of or other information
about the Protected Parties' customers, or any other property of the
Protected Parties, other than such information as may be independently
developed or compiled by the Investment Company, the Adviser and the
Distributor from information supplied to them by the Protected Parties'
customers who also maintain accounts directly with the Investment
Company, the Adviser and the Distributor, the Investment Company, the
Adviser and the Distributor 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 the Insurance
Company' s prior written consent; or (b) as required by law or judicial
process. The Investment Company and the Adviser acknowledge that any
breach of the agreements in this Section 12.2 would result in immediate
and irreparable harm to the Protected Parties for which there would be
no adequate remedy at law and agree that in the event of such a breach,
the Protected 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.
12.3 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.
12.4 This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together will constitute one and the
same instrument.
12.5 If any provision of this Agreement will be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the
Agreement will not be affected thereby.
12.6 This Agreement will not be assigned by any party hereto without the
prior written consent of all the parties.
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 law.
12.8 The parties to this Agreement acknowledge and agree that this Agreement
shall not be exclusive in any respect.
12.9 Each party to this Agreement will cooperate with each other party and
all appropriate governmental authorities (including without limitation
the Commission, the NASD and state insurance regulators) and will
permit each other and 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.
12.10 Each party represents that the execution and delivery of this Agreement
and the consummation of the transactions contemplated herein have been
duly authorized by all necessary corporate action, as applicable, by
such party and when so executed and delivered this Agreement will be
the valid and binding obligation of such party enforceable in
accordance with its terms.
12.11 The parties to this Agreement may amend the schedules to this Agreement
from time to time to reflect changes in or relating to the Contracts,
the Separate Accounts or the Funds of the Investment Company or other
applicable terms of this Agreement.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed in its name and behalf by its duly authorized representative and its
seal to be hereunder affixed hereto as of the date specified below.
AMERICAN SKANDIA I.IFE ASSURANCE
CORPORATION
By: ______________________________
Xxxxxx X. Xxxxxxx
Deputy Chief Executive Officer and President
INVESCO VARIABLE INVESTMENT FUNDS, INC.
By: ______________________________
Xxxxxx X. Xxxxxx
Treasurer
INVESCO FUNDS GROUP, INC.
By: ______________________________
Xxxx X. Xxxxx
Senior Vice President
INVESCO DISTRIBUTORS, INC.
By: ______________________________
Xxxxxx X. Xxxxxx
Senior Vice President
October 7, 1999
PARTICIPATION AGREEMENT
SCHEDULE A
The following Separate Accounts and Associated Contracts of American Skandia
Life Assurance Corporation are permitted in accordance with the provisions of
this Agreement to invest in Funds of the Investment Company shown in Schedule B:
NAME OF SEPARATE ACCOUNT:
American Skandia Life Assurance Corporation Variable Account B (Class 1
Sub-accounts)
CONTRACT(S):
American Skandia Advisor Plan (ASAPSM)
American Skandia Advisor Plan IISM (ASAPII)
American Skandia XTra CreditSM (ASXT)
American Skandia LifeVest(R) (ASL(R))
American Skandia ProtectorSM (AS ProSM)
Xxxxx Fargo Stagecoach Variable Annuity Plus
Xxxxx Fargo Stagecoach Extra Credit
Xxxxx Fargo Stagecoach Variable Annuity Flex
NAME OF SEPARATE ACCOUNT:
American Skandia Life Assurance Corporation Variable Account B (Class 2
Sub-accounts)
CONTRACT(S):
American Skandia Advisors Choice(R)2000 (Choice2000)
NAME OF SEPARATE ACCOUNT:
American Skandia Life Assurance Corporation Variable Account B (Class 3
Sub-accounts)
CONTRACT(S):
American Skandia Impact (AS ImpactSM)
NAME OF SEPARATE ACCOUNT:
American Skandia Life Assurance Corporation Separate Account Q
CONTRACT(S):
American Skandia AS(k) Group Variable Annuity
NAME OF SEPARATE ACCOUNT:
American Skandia Life Assurance Corporation Separate Account F
CONTRACT(S):
American Skandia Trophy (AS Trophy) Modified Single Premium Variable Life
Insurance
American Skandia Life Champion (AS Life Champion) Flexible Premium
Variable Life Insurance
PARTICIPATION AGREEMENT
SCHEDULE B
The Separate Account(s) shown on Schedule A may invest in the following Funds of
the Investment Company.
INVESCO VIF - Health Sciences Fund
INVESCO VIF - Technology Fund
INVESCO VIF - Financial Services Fund
INVESCO VIF - Telecommunications Fund
INVESCO VIF - Dynamics Fund
PARTICIPATION AGREEMENT
SCHEDULE C
PROXY VOTING PROCEDURES
The following is a list of procedures and corresponding responsibilities for the
handling of proxies and voting instructions relating to the Investment Company.
The defined terms herein shall have the meanings assigned in the Participation
Agreement except that the term "Insurance Company" shall also include the
department or third party assigned by the Insurance Company to perform the steps
delineated below.
1. The proxy proposals are given to the Insurance Company by the Investment
Company as early as possible before the date set by the Investment Company
for the shareholder meeting to enable the Insurance Company to consider and
prepare for the solicitation of voting instructions from owners of the
Contracts and to facilitate the establishment of tabulation procedures. At
this time the Investment Company will inform the Insurance Company of the
Record, Mailing and Meeting dates. This will be done verbally approximately
two months before meeting.
2. Promptly after the Record Date, the Insurance Company will perform a "tape
run", or other activity, which will generate the names, addresses and
number of units which are attributed to each contract owner/policyholder
(the "Customer") as of the Record Date. Allowance should be made for
account adjustments made after this date that could affect the status of
the Customers' accounts as of the Record Date.
Note: The number of proxy statements is determined by the activities
described in this Step #2. The Insurance Company will use its best efforts
to call in the number of Customers to the Investment Company, as soon as
possible, but no later than two weeks after the Record Date.
3. The Investment Company's Annual Report must be sent to each Customer by the
Insurance Company either before or together with the Customers' receipt of
voting, instruction solicitation material. The Investment Company will
provide the last Annual Report to the Insurance Company pursuant to the
terms of Section 6.2 of the Agreement to which this Schedule relates.
4. The text and format for the Voting Instruction Cards ("Cards" or "Card") is
provided to the Insurance Company by the Investment Company. The Insurance
Company, at its expense, shall produce and personalize the Voting
Instruction Cards. The Investment Company or its affiliate must approve the
Card before it is printed. Allow approximately 2-4 business days for
printing information on the Cards. Information commonly found on the Cards
includes:
|X| name (legal name as found on account registration)
|X| address
|X| Investment Company or account number
|X| coding to state number of units
|X| individual Card number for use in tracking and verification of votes
(already on Cards as printed by the Investment Company).
(This and related steps may occur later in the chronological process
due to possible uncertainties relating to the proposals.)
5. During this time, the Investment Company will develop, produce and pay for
the Notice of Proxy and the Proxy Statement (one document). Printed and
folded notices and statements will be sent to Insurance Company for
insertion into envelopes (envelopes and return envelopes are provided and
paid for by the Insurance Company). Contents of envelope sent to Customers
by the Insurance Company will include:
|X| Voting Instruction Card(s)
|X| one proxy notice and statement (one document)
|X| return envelope (postage pre-paid by Insurance Company) addressed to
the Insurance Company or its tabulation agent
|X| "urge buckslip" - optional, but recommended. (This is a small, single
sheet of paper that requests Customers to vote as quickly as possible
and that their vote is important. One copy will be supplied by the
Investment Company.)
|X| cover letter - optional, supplied by Insurance Company and reviewed and
approved in advance by the Investment Company
6. The above contents should be received by the Insurance Company
approximately 3-5 business days before mail date. Individual in charge at
Insurance Company reviews and approves the contents of the mailing package
to ensure correctness and completeness. Copy of this approval sent to the
Investment Company.
7. Package mailed by the Insurance Company.
* The Investment Company must allow at least a 15-day solicitation time to
the Insurance Company as the shareowner. (A 5-week period is recommended.)
Solicitation time is calculated as calendar days from (but NOT including,)
the meeting, counting backwards.
8. Collection and tabulation of Cards begins. Tabulation usually takes place
in another department or another vendor depending on process used. An often
used procedure is to sort Cards on arrival by proposal into vote categories
of all yes, no, or mixed replies, and to begin data entry.
Note: Postmarks are not generally needed. A need for postmark information
would be due to an insurance company's internal procedure and has not been
required by the Investment Company in the past.
9. Signatures on Card checked against legal name on account registration which
was printed on the Card. Note: For Example, if the account registration is
under "Xxxx X. Xxxxx, Trustee," then that is the exact legal name to be
printed on the Card and is the signature needed on the Card.
10. If Cards are mutilated, or for any reason are illegible or are not signed
properly, they are sent back to Customer with an explanatory letter and a
new Card and return envelope. The mutilated or illegible Card is
disregarded and considered to be NOT RECEIVED for purposes of vote
tabulation. Any Cards that have been "kicked out" (e.g. mutilated,
illegible) of the procedure are "hand verified," i.e., examined as to why
they did not complete the system. Any questions on those Cards are usually
remedied individually.
11. There are various control procedures used to ensure proper tabulation of
votes and accuracy of that tabulation. The most prevalent is to sort the
Cards as they first arrive into categories depending upon their vote; an
estimate of how the vote is progressing may then be calculated. If the
initial estimates and the actual vote do not coincide, then an internal
audit of that vote should occur. This may entail a recount.
12. The actual tabulation of votes is done in units which is then converted to
shares. (It is very important that the Investment Company receives the
tabulations stated in terms of a percentage and the number of SHARES.) The
Investment Company must review and approve tabulation format.
13. Final tabulation in shares is verbally given by the Insurance Company to
the Investment Company on the morning of the meeting not later than 10:00
a.m. Eastern time. The Investment Company may request an earlier deadline
if reasonable and if required to calculate the vote in time for the
meeting.
14. A Certification of Mailing and Authorization to Vote Shares will be
required from the Insurance Company as well as an original copy of the
final vote. The Investment Company will provide a standard form for each
Certification.
15. The Insurance Company will be required to box and archive the Cards
received from the Customers. In the event that any vote is challenged or if
otherwise necessary for legal, regulatory, or accounting purposes, the
Investment Company will be permitted reasonable access to such Cards.
16. All approvals and "signing-off' may be done orally, but must always be
followed up in writing.
October 7, 1999