EXHIBIT 8(c)
FUND PARTICIPATION AGREEMENT
THIS AGREEMENT, made and entered into this 1st day of February 2005 (the
"Agreement") by and among Pruco Life Insurance Company of New Jersey, organized
under the laws of the State of New Jersey, Pruco Life Insurance Company,
organized under the laws of the State of Arizona (collectively, the "Company"),
on behalf of itself and each separate account of the 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"); Gartmore Variable Insurance Trust, an open-end management investment
company organized as a business trust under the laws of the Commonwealth of
Massachusetts (the "Trust"); Gartmore Global Asset Management Trust, a
corporation organized under the laws of the State of Delaware and investment
adviser to the Trust (the "Adviser"); and Gartmore Distribution Services, Inc.,
a corporation organized under the laws of the State of Delaware and principal
underwriter/distributor of the Trust (the "Distributor").
WHEREAS, the Trust 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"), except for those agreements
between the Trust and Nationwide Insurance or its affiliates, and
WHEREAS, beneficial interests in the Trust 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 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 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
Company under the insurance laws of the State of Connecticut, to set aside and
invest assets attributable to the Contracts; and
February 1, 2005 Page 1 of 27
WHEREAS, to the extent permitted by applicable insurance laws and regulations,
the 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 Designated
Funds to unit investment trusts such as the Separate Accounts at net asset
value.
NOW, THEREFORE, in consideration of their mutual promises, the Company, the
Trust, the Adviser and the Distributor agree as follows:
ARTICLE I - SALE OF FUND SHARES
1.1 The Distributor agrees to sell to the Company those shares of the
Designated Funds which the Company orders on behalf of each Separate
Account, executing such orders on a daily basis at the net asset value
next computed after receipt and acceptance by the Trust or its designee of
the order for the shares of the Trust. For purposes of this Section 1.1,
the Company will be the designee of the Trust solely for the purpose of
receiving such orders from each Separate Account and receipt by such
designee will constitute receipt by the Trust; provided that the Company
provides the Trust with a purchase order by 9:00 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 Trust
calculates its net asset value pursuant to the rules of the Securities and
Exchange Commission (the "Commission"). The Trust may net the redemption
requests it receives from the Company under Section 1.3 of this Agreement
against the purchase orders it receives from the Company under this
Section 1.1 for each Designated Fund.
1.2 The Company will transmit payment for shares of any Designated Fund
purchased by 2:00 p.m. Eastern Time on the same Business Day an order to
purchase shares of the Designated Fund is provided to the Trust in
accordance with Section 1.1. Payment will be made in federal funds
transmitted by wire. Upon receipt by the Trust of the payment, such funds
shall cease to be the responsibility of the Company and shall become the
responsibility of the Trust.
1.3 The Trust agrees to redeem, upon the Company's request, any full or
fractional shares of the Designated Funds held by the Company, executing
such requests on a daily basis at the net asset value next computed after
receipt and acceptance by the Trust or its designee of the request for
redemption. For purposes of this Section 1.3, the Company will be the
designee of the Trust solely for receipt of requests for redemption from
each Separate Account and receipt by such designee will constitute
February 1, 2005 Page 2 of 27
receipt by the Trust; provided that the Company provides the Trust with a
redemption request by 9:00 a.m. Eastern Time on the next following
Business Day. Payment will be made in federal funds transmitted by wire to
the Company's account as designated by the Company in writing from time to
time, by 2:00 p.m. Eastern Time on the same Business Day the Trust
receives notice of the redemption order from the Company. After consulting
with the Company, the Trust 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 Trust will not bear any responsibility
whatsoever for the proper disbursement or crediting of redemption
proceeds; the Company alone will be responsible for such action. If a
redemption request is received after 9:00 a.m. Eastern Time, such
redemption request will be considered to be received on the next following
Business Day and payment for redeemed shares will be made on the next
following Business Day.
1.4 Each purchase, redemption, and exchange order placed by the Company shall
be placed separately for each Designated Fund and shall not be netted with
respect to any Designated Funds. However, with respect to payment of the
purchase price by the Company and of redemption proceeds by the Trust, the
Company and the Trust shall net purchase and redemption orders received
under Section 1.1 and Section 1.3 of this Agreement, respectively, with
respect to each Designated Fund and shall transmit one net payment for all
Designated Funds.
1.5 The Trust agrees to make shares of the Designated Funds available
indefinitely for purchase at the applicable net asset value per share by
Participating Insurance Companies and their separate accounts on those
days on which the Trust calculates the net asset value of each Designated
Fund pursuant to rules of the Commission; provided, however, that the
Board of Trustees of the Trust (the "Trustees") may refuse to sell shares
of any Designated Fund to any person, or suspend or terminate the offering
of shares of any Designated Fund if such action is required by law or by
regulatory authorities having jurisdiction or is, in the sole discretion
of the Trustees, 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 Designated Fund.
1.6 The Trust and the Distributor agree that shares of the Trust 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.
February 1, 2005 Page 3 of 27
1.7 The Trust will not sell Trust shares to any insurance company or separate
account unless an agreement containing provisions substantially the same
as those in Articles I, III, V, and VII and Section 2.8 of Article II of
this Agreement are in effect to govern such sales.
1.8 The Company agrees to purchase and redeem the shares of the Designated
Funds offered by the then current prospectus of the Trust in accordance
with the provisions of such prospectus.
1.9 Issuance and transfer of the shares of the Designated Funds will be by
book entry only. Stock certificates will not be issued to the Company or
to any Separate Account. Purchase and redemption orders for shares of the
Designated Funds will be recorded in an appropriate title for each
Separate Account or the appropriate sub-account of each Separate Account.
1.10 The Trust will furnish same day notice (by electronic means) to the
Company of the declaration of any income, dividends or capital gain
distributions payable on each Designated Fund's shares. The Company hereby
elects to receive all such income, 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 Company reserves the right
to revoke this election upon prior reasonable notice to the Trust and to
receive all such dividends and distributions in cash. The Trust will
notify the Company of the number of shares so issued as payment of such
dividends and distributions.
1.11 The Trust will make the net asset value per share for each Designated Fund
available to the 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 6:30 pm, Eastern Time, each Business Day. If the Trust provides the
Company materially incorrect net asset value per share information (as
determined under SEC guidelines), the Company and the Trust 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 Company upon discovery by the
Trust.
ARTICLE II - REPRESENTATIONS AND WARRANTIES
2.1 The 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
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
February 1, 2005 Page 4 of 27
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 Company will amend each
registration statement under the 1933 Act for the Contracts and the
registration statement under the 1940 Act for the Separate Accounts 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 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 Company.
2.2 Subject to the Trust's representations in Article III, the Company
represents and warrants 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 maintain such treatment and that it will notify the Trust 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 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.
2.4 The Trust 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 Trust 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 Trust 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 Trust 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 Trust or the
Distributor.
2.5 The Trust 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 Designated Funds,
to the extent specifically requested in writing by the Company and to the
extent that compliance with such laws will not materially interfere with
the Trust's daily operations and investment activities. If the Trust
cannot reasonably comply with such state insurance laws or regulations, it
will so notify the Company in writing. The Trust 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 Company represents
that it will use its best efforts to notify the Trust of any restrictions
imposed by state insurance laws that may
February 1, 2005 Page 5 of 27
become applicable to the Trust as a result of the Separate Accounts'
investments therein. The Trust and the Adviser agree that they will
furnish the information reasonably required by state insurance laws to
assist the Company in obtaining the authority needed to issue the
Contracts in various states.
2.6 The Trust represents and warrants that, to the extent that it decides to
finance distribution expenses pursuant to Rule 12b-1 under the 1940 Act,
the Trust undertakes to have the Trustees, a majority of whom are not
"interested" persons of the Trust, formulate and approve any plan under
Rule 12b-1 to finance distribution expenses. The Trust shall notify the
Company immediately upon determining to finance distribution expenses
pursuant to a plan adopted in accordance with Rule 12b-1 under the 0000
Xxx.
2.7 The Trust represents that it is lawfully organized and validly existing
under the laws of the Commonwealth of Massachusetts and that it does and
will comply in all material respects with applicable provisions of the
0000 Xxx.
2.8 The Trust represents and warrants that all of its trustees, officers,
employees, investment advisers, and other individuals/entities having
access to the funds and/or securities of the Trust are and continue to be
at all times covered by a blanket fidelity bond or similar coverage for
the benefit of the Trust in an amount not less than the 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.
2.9 The Company represents and warrants that all of its directors, officers,
employees, investment advisers, and other individuals/entities employed by
the Company dealing with the money and/or securities of the Separate
Accounts are covered by a blanket fidelity bond or similar coverage in an
amount not less than $5 million. The aforesaid bond includes coverage for
larceny and embezzlement and is issued by a reputable bonding company. The
Company agrees to hold for the benefit of the Trust and to pay to the
Trust any amounts lost from larceny, embezzlement or other events covered
by the aforesaid bond to the extent such amounts derive from activities
described in this Agreement. The Company agrees to make all reasonable
efforts to see that this bond or another bond containing these provisions
is always in effect, and agrees to notify the Trust in the event that such
coverage no longer applies.
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 to the Trust in
accordance in all material respects with the laws of the State of
Massachusetts and any applicable state and federal securities laws.
February 1, 2005 Page 6 of 27
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 Trust; and (iv) will
perform its obligations for the Trust in accordance in all material
respects with the laws of the State of Delaware and any applicable state
and federal securities laws.
ARTICLE III - FUND COMPLIANCE
3.1 The Trust, the Adviser and the Distributor acknowledge that any failure
(whether intentional or in good faith or otherwise) of any Designated Fund
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 Company's corporate tax
liability. The Trust, the Adviser and the Distributor further acknowledge
that any failure of any Designated Fund may result in costs and expenses
being incurred by the Company in obtaining whatever regulatory
authorizations are required to substitute shares of another investment
company for those of the failed Designated Fund or as well as fees and
expenses of legal counsel and other advisors to the Company and any
federal income taxes, interest or tax penalties incurred by the Company in
connection with any such failure of any Designated Fund.
3.2 The Trust represents and warrants that each Designated Fund is currently
qualified as a Regulated Investment Company under Subchapter M of the
Code, and the Trust will maintain such qualification (under Subchapter M
or any successor or similar provision) and that the Trust will notify the
Company immediately upon having a reasonable basis for believing that a
Designated Fund has ceased to so qualify or that such Designated Fund
might not so qualify in the future.
3.3 The Trust 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 each Designated Fund 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 Trust will notify the
Company immediately upon having a reasonable basis for believing that the
Trust or a Designated Fund thereunder has ceased to comply with the
diversification requirements or that the Trust or a Designated Fund
thereunder might
February 1, 2005 Page 7 of 27
not comply with the diversification requirements in the future. In the
event of a breach of this representation by the Trust, it will take all
reasonable steps to adequately diversify the affected Designated Fund so
as to achieve compliance within the grace period afforded by Treasury
Regulation 1.817-5.
ARTICLE IV - PROSPECTUS AND PROXY STATEMENTS; VOTING
4.1 The Trust or the Distributor will provide the Company with as many copies
of the current Trust prospectus and any supplements thereto for the
Designated Fund(s) as the Company may reasonably request for distribution
to Contract owners at the time of Contract fulfillment and confirmation.
The Trust will also provide as many copies of said prospectus as necessary
for distribution to existing Contract owners. The Trust will provide the
copies of said prospectus to the Company or to its mailing agent for
distribution. To the extent that the Designated Fund(s) are one or more of
several Funds of the Trust, the Trust is obligated to provide the Company
only with disclosure related to the Designated Fund(s). If requested by
the Company, in lieu thereof, the Trust or the Distributor will provide
such documentation, including a final copy of a current prospectus set in
type or camera-ready or electronic format, and other assistance as is
reasonably necessary in order for the Company at least annually (or more
frequently if the Trust prospectus is amended more frequently) to have the
new prospectus for the Contracts and the Trust's new prospectus printed
together. The Trust or the Distributor will, upon request, provide the
Company with a copy of the Trust's prospectus through electronic means to
facilitate the Company's efforts to provide Trust prospectuses via
electronic delivery.
4.2 The Trust's prospectus will state that the Statement of Additional
Information (the "SAI") for the Trust is available and will disclose how
investors can obtain the SAI.
4.3 The Trust, at its expense, will provide the Company or its mailing agent
with copies of its proxy material, if any, with respect to the Designated
Funds, reports to shareholders/Contract owners and other communications to
shareholders/ Contract owners in such quantity as the Company will
reasonably require. The Company will distribute this proxy material,
reports and other communications to existing Contract owners and will xxxx
the Trust for the reasonable cost of such distribution.
4.4 If and to the extent required by law, the 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
February 1, 2005 Page 8 of 27
(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 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 Company reserves the right to vote shares of the
Designated Funds held in any segregated asset account in its own right, to
the extent permitted by law. The Company will be responsible for assuring
that the Separate Accounts participating in the Trust calculate 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 Trust will comply with all provisions of the 1940 Act requiring voting
by shareholders.
ARTICLE V - SALES MATERIAL AND INFORMATION
5.1 The Company will furnish, or will cause to be furnished, to the Trust or
the Distributor, each piece of sales literature or other promotional
material in which the Trust, 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 Trust or the Distributor reasonably objects to such use within
five (5) business days after receipt of such material or to its continued
use.
5.2 The Company will not give any information or make any representations or
statements on behalf of the Trust or concerning the Trust in connection
with the sale of the Contracts other than the information or
representations contained in the registration statement, prospectus or SAI
for shares of the Designated Funds, as such registration statement,
prospectus and SAI may be amended or supplemented from time to time, or in
reports or proxy statements for the Designated Funds, or in published
reports for the Designated Funds which are in the public domain or
approved by the Trust, the Adviser or the Distributor for distribution, or
in sales literature or other material provided by the Trust, the Adviser
or the Distributor, except with permission of the Trust, the Adviser or
the Distributor. The Trust, the Adviser or the Distributor agree to
respond to any request for approval on a prompt and timely basis.
5.3 The Trust, the Adviser or the Distributor will furnish, or will cause to
be furnished, to the Company or its designee, each piece of sales
literature or other promotional material in which the 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 Company reasonably objects to
such use within five (5) business days after receipt of such material or
to its continued use.
February 1, 2005 Page 9 of 27
5.4 The Trust, the Adviser or the Distributor will not give any information or
make any representations or statements on behalf of the Company or
concerning the 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 Company for distribution to Contract
owners, or in sales literature or other material provided by the Company,
except with permission of the Company. The Company agrees to respond to
any request for approval on a prompt and timely basis.
5.5 The Trust will provide to the 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 Trust or shares of the Designated Funds,
within a reasonable time after filing of each such document with the
Commission or the NASD.
5.6 The Company will provide to the Trust 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
Trust or the Designated Funds will be provided.) In addition, the Company
will provide to the Trust 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 Trust or
the Designated Funds; 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 Trust or the Designated Funds.
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
February 1, 2005 Page 10 of 27
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 0000 Xxx.
5.8 The Trust, the Adviser and the Distributor hereby consent to the Company's
use of the names of the Gartmore Variable Insurance Trust, Gartmore Global
Asset Management Trust, Gartmore Global Partners and Gartmore Distribution
Services, 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 or 5.2 of this Agreement. The Trust,
the Adviser and the Distributor hereby consent to the use of any
trademark, trade name, service xxxx or logo used by the Trust, the Adviser
and the Distributor, subject to the Trust's, the Adviser's and/or the
Distributor's approval of such use and in accordance with reasonable
requirements of the Trust, the Adviser or the Distributor. Such consent
will terminate with the termination of this Agreement. The Company agrees
and acknowledges that either of the Trust, the Adviser or the Distributor
are the owner of the name, trademark, trade name, service xxxx and logo
and 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 Trust, Adviser and/or the Distributor.
5.9 The Trust, the Adviser, the Distributor and the Company agree to adopt and
implement procedures reasonably designed to ensure that information
concerning the Company, the Trust, 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 Each party shall, in accordance with the allocation of expenses specified
in this Agreement, reimburse the other party(ies) 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 (i) for distribution and
shareholder-related services under a plan adopted in accordance with Rule
12b-1 under the 1940 Act; and (ii) other services that are not primarily
intended to result in the sale of shares of the Designated Funds, which
are provided to Contract owners relating to the Designated Funds.
6.2 All expenses incident to performance by the Trust of this Agreement will
be paid by the Trust or the Distributor to the extent permitted by law.
All shares of the Designated Funds will be duly authorized
February 1, 2005 Page 11 of 27
for issuance and registered in accordance with applicable federal law and,
to the extent deemed advisable by the Trust, in accordance with applicable
state law, prior to sale. The Trust will bear the expenses for the cost of
registration and qualification of the Trust's shares, including without
limitation, the preparation of and filing with the SEC of Forms N-1A and
Rule 24f-2 Notices on behalf of the Trust and payment of all applicable
registration or filing fees (if applicable) with respect to shares of the
Trust; preparation and filing of the Trust's prospectus, SAI and
registration statement, proxy materials and reports; typesetting the
Trust's prospectus; typesetting and printing proxy materials and reports
to Contract owners (including the costs of printing a Trust 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 Trust's shares; any expenses permitted to be paid or
assumed by the Trust pursuant to a plan, if any, under Rule 12b-1 under
the 1940 Act; and other costs associated with preparation and printing of
prospectuses and SAIs for the Designated Funds in electronic or typeset
format for distribution to Contract Owners.
6.3 The 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 Trust 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 Trust 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"). If and to the extent that
the Trust engages in Mixed and Shared funding as contemplated by the Mixed
and Shared Funding Order, this Article VII shall apply. To that end, 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 Company, the Trust 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.
February 1, 2005 Page 12 of 27
7.2 The Trustees will monitor the Trust for the existence of any material
irreconcilable conflict among the interests of the Contract owners of all
separate accounts investing in the Trust. 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 variable annuity contract owners, variable life
insurance contract owners, and trustees of qualified pension or retirement
plans; (f) a decision by a Participating Insurance Company to disregard
the voting instructions of Contract owners; or (g) if applicable, a
decision by a qualified pension or retirement plan to disregard the voting
instructions of plan participants. The Trustees will promptly inform the
Company if it determines that a material irreconcilable conflict exists
and the implications thereof. A majority of the Trustees will consist of
persons who are not "interested" persons of the Trust.
7.3 The Company will promptly report any potential or existing conflicts of
which it is aware to the Trustees. The Company agrees to assist the
Trustees in carrying out their responsibilities under the Mixed and Shared
Funding Order by promptly providing the Trustees with all information
reasonably necessary for the Trustees to consider any issues raised. This
includes, but is not limited to, an obligation by the Company to inform
the Trustees whenever Contract owner voting instructions are disregarded.
The Board 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 Trustees, or a majority of the
disinterested Trustees of the Board, that a material irreconcilable
conflict exists, the Company and other Participating Insurance Companies
will, at their expense and to the extent reasonably practicable (as
determined by a majority of the disinterested Trustees), 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 relevant Fund and
reinvesting such assets in a different investment medium, including
another Fund, or in the case of insurance company participants, submitting
the question as to whether such segregation should be implemented by 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
February 1, 2005 Page 13 of 27
option of making such a change; and (b) establishing a new registered
management investment company or managed separate account.
7.5 If the Company's disregard of voting instructions could conflict with the
majority of Contract owner voting instructions, and the Company's judgment
represents a minority position or would preclude a majority vote, the
Company may be required, at the Trust's election, to withdraw the Separate
Account's investment in the Trust and terminate this Agreement with
respect to such Separate Account, and 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 written notice is given that this
provision is being implemented subject to applicable law but in any event
consistent with the terms of the Mixed and Shared Funding Order. Until
such withdrawal and termination is implemented, the Distributor and the
Trust shall continue to accept and implement orders by the Company for the
purchase and redemption of shares of the Trust.
7.6 If a particular state insurance regulator's decision applicable to the
Company conflicts with the majority of other state insurance regulators,
then the Company will withdraw the Separate Account's investment in the
Trust and terminate this Agreement with respect to such Separate Account,
subject to applicable law but in any event consistent with the terms of
the Mixed and Shared Funding Order. Until such withdrawal and termination
is implemented, the Distributor and the Trust shall continue to accept and
implement orders by the Company for the purchase and redemption of shares
of the Trust. Such withdrawal and termination shall be limited to the
extent required by the foregoing material irreconcilable conflict as
determined by a majority of the disinterested Trustees.
7.7 For purposes of Sections 7.4 through 7.7 of this Agreement, a majority of
the disinterested Trustees will determine whether any proposed action
adequately remedies any material irreconcilable conflict, but in no event
will the Trust be required to establish a new funding medium for the
Contracts. The 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 materially adversely
affected by the material irreconcilable conflict.
7.8 The Company will at least annually submit to the Trustees such reports,
materials, or data as the Trustees may reasonably request so that the
Trustees may fully carry out the duties imposed upon the Trustees by the
Mixed and Shared Funding Order, and said reports, materials and data will
be submitted more frequently if deemed appropriate by the Trustees.
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
February 1, 2005 Page 14 of 27
different from those contained in the Mixed and Shared Funding Order, the
Trust and/or the Company, 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.
ARTICLE VIII - INDEMNIFICATION
8.1 INDEMNIFICATION BY THE COMPANY
(a) The Company agrees to indemnify and hold harmless the Trust, the
Adviser, the Distributor, and each of the Trust'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 Trust,
the Adviser or 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 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 litigation 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 Company by or on behalf of the
Trust, the Adviser, or 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 Trust shares ; or
(2) arise out of or as a result of statements or representations
by or on behalf of the Company (other than statements or
representations contained in the Trust registration statement,
prospectus, SAI or sales literature or other promotional
material of the Trust, or any amendment or supplement to the
foregoing, not supplied by the Company or persons under its
control) or wrongful conduct of the Company or persons under
its control, with respect to the sale or distribution of the
Contracts or Trust shares ; or
(3) arise out of any untrue statement or alleged untrue statement
of a material fact contained in the Trust registration
statement, prospectus, SAI or sales literature or other
promotional material of the Trust (or any amendment or
supplement thereto) 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
February 1, 2005 Page 15 of 27
reliance upon and in conformity with information furnished to
the Trust by or on behalf of the Company or persons under its
control; or
(4) arise as a result of any failure by the Company to provide the
services, furnish the materials or to make any payments under
the terms of this Agreement; or
(5) arise out of any material breach of any representation and/or
warranty made by the Company in this Agreement or arise out of
or result from any other material breach by the 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
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 Company of the
commencement of any litigation, proceedings, complaints or
litigation by regulatory authorities against them in connection with
the issuance or sale of shares of the Designated Funds or the
Contracts or the operation of the Trust.
8.2 INDEMNIFICATION BY THE ADVISER & DISTRIBUTOR
(a) The Adviser and Distributor agree to indemnify and hold harmless the
Company and each of its directors, officers, employees or agents and
each person, if any, who controls or is associated with the Company
within the meaning of such terms under the federal securities laws
(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 Trust or
sales literature or other promotional material generated or
approved by the Adviser or the Distributor on behalf of the
Trust (or any amendment or supplement to any of the
foregoing), or arise out of or are based upon the omission or
the alleged omission to state therein a material fact required
to be stated 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 Adviser or
Trust by or on behalf of the Company for use in the
registration statement, prospectus or SAI for the Trust or in
sales literature generated or approved by the Adviser or the
Distributor on behalf of the
February 1, 2005 Page 16 of 27
Trust (or any amendment or supplement thereto) or otherwise
for use in connection with the sale of the Contracts or Trust
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 Trust registration statements,
prospectuses or statements of additional information or sales
literature or other promotional material for the Contracts or
of the Trust, or any amendment or supplement to the foregoing,
not supplied by the Adviser or the Distributor or persons
under the control of the Adviser or the Distributor
respectively) or wrongful conduct of the Adviser or the
Distributor or persons under the control of the Adviser or the
Distributor respectively, with respect to the sale or
distribution of the Contracts or Trust 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 Company by or on
behalf of the Adviser or the Distributor or persons under the
control of the Adviser or the Distributor; or
(4) arise as a result of any failure by the Adviser or the
Distributor 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
Distributor in this Agreement, or arise out of or result from
any other material breach of this Agreement by the Adviser or
the Distributor (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
Distributor 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 TRUST
(a) The Trust agrees to indemnify and hold harmless the Company and each
of its directors, officers, employees or agents and each person, if
any, who controls or is associated with the
February 1, 2005 Page 17 of 27
Company within the meaning of such terms under the federal
securities laws (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 Trust), 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 Trust
and:
(1) arise as a result of any failure by the Trust 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 Trust in this
Agreement or arise out of or result from any other material
breach of this Agreement by the Trust (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 materially incorrect or
untimely calculation or reporting of daily net asset value per
share or dividend or capital gain distribution;
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
Trust 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) In no event shall the Trust be liable under the indemnification
provisions contained in this Agreement to any individual or entity,
including without limitation, the Company, or any Contract owner,
with respect to any losses, claims, damages, liabilities or expenses
that arise out of or result from the failure by the Company to
maintain its segregated asset account under applicable state law and
as a duly registered unit investment trust under the provisions of
the 1940 Act (unless exempt therefrom) or, subject to compliance by
the Designated Funds with the diversification requirements specified
in Article III, the failure by the Company to maintain its Contracts
(with respect to which any Designated Fund serves as an underlying
funding vehicle) as life insurance, endowment or annuity contracts
under applicable provisions of the Code.
February 1, 2005 Page 18 of 27
(d) The Indemnified Parties will promptly notify the Trust 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) if such Indemnified Party has failed to notify 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
February 1, 2005 Page 19 of 27
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 Trust and the Adviser acknowledge that if a Designated Fund(s) fails
(whether intentionally or in good faith or otherwise) to comply with the
diversification requirements specified in Article III, Section 3.3 of this
Agreement, the Contracts consequently may not be treated as variable
contracts for federal income tax purposes, which would have adverse tax
consequences for Contract owners and could also adversely affect the
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
Company, the Trust, 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 any Designated
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 Designated Fund (including but not limited
to an order pursuant to Section 26(b) of the 1940 Act); reasonable fees
and expenses of legal counsel and other advisors to the Company and any
federal income taxes or tax penalties (or "toll charges" or exactments or
amounts paid in settlement) reasonably incurred by the 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
Trust, 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.
February 1, 2005 Page 20 of 27
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 Designated 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 Company, upon written notice to the other
parties, with respect to any Designated Fund if shares of the
Designated Fund are not reasonably available to meet the
requirements of the Contracts as determined in good faith by the
Company; or
(c) at the option of the 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 Company; or
(d) at the option of the Trust upon institution of formal proceedings
against the Company by the NASD, the Commission, the insurance
commission of any state or any other regulatory body regarding the
Company's duties under this Agreement or related to the sale of the
Contracts, the administration of the Contracts, the operation of the
Separate Account, or the purchase of Trust shares, provided that the
Trust determines in its reasonable judgment that any such proceeding
would have a material adverse effect on the Company's ability to
perform its obligations under this Agreement; or
(e) at the option of the Company upon institution of formal proceedings
against the Trust, the Adviser or the Distributor by the NASD, the
Commission or any state securities or insurance commission or any
other regulatory body regarding the Trust's, the Advisor's or the
Distributor's duties under this Agreement, or related to the
purchase, redemption or distribution of Trust shares, provided that
the Company determines in its reasonable judgment that any such
proceeding would have a material adverse effect on the Trust's, the
Adviser's or the Distributor's ability to perform its obligations
under this Agreement; or
(f) at the option of the Company, if any Designated Fund ceases to
qualify as a Regulated Investment Company under Subchapter M of the
Code, or under any successor or similar provision, or if the Company
reasonably believes that any Designated Fund may fail to so qualify;
or
February 1, 2005 Page 21 of 27
(g) subject to the Company's compliance with Article II, at the option
of the Company, with respect to any Designated Fund, if the
Designated Fund fails to meet the diversification requirements
specified in Section 3.3 hereof or if the Company reasonably
believes any Designated Fund 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 Company, if the Company determines in its sole
judgment exercised in good faith that either the Trust, 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 Company or the Contracts (including the sale
thereof); or
(j) at the option of the Trust, the Adviser or the Distributor, if the
Trust, the Adviser or the Distributor respectively, determines in
its sole judgment exercised in good faith that the 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
Trust, the Adviser or the Distributor; or
(k) at the option of the Company or the Trust 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 Designated Fund's shares in accordance with
the terms of the Contracts for which those Designated Fund shares
had been selected to serve as the underlying portfolio. The Company
will give sixty (60) days' prior written notice to the Trust of the
date of any proposed vote or other action taken to replace shares of
the Designated Fund or of the filing of any required regulatory
approval(s); or
(1) at the option of the Company or the Trust upon a determination by a
majority of the Trust Board, or a majority of the disinterested
Trustees, 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 Trust as set forth in Article
VII of this Agreement; or
(m) subject to the Trust's compliance with Article III, at the option of
the Trust in the event any of the Contracts are not issued or sold
in accordance with applicable federal and/or state law, or will not
be treated as annuity contracts, life insurance policies and/or
variable contracts (as
February 1, 2005 Page 22 of 27
applicable) under applicable provisions of the Code, or in the event
any representation or warranty of the Company in Section 2.1 is no
longer true. 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(ies). 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 Trust, the Adviser
and the Distributor will, at the option of the Company, continue to make
available additional shares of the Trust 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.
February 1, 2005 Page 23 of 27
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 Company:
Pruco Life Insurance Company of New Jersey
Pruco Life Insurance Company
Xxx Xxxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attn: Xxxxxxx Xxxxxx, Senior Vice President
If to the Trust:
Gartmore Variable Insurance Trust
0000 Xxxxx Xxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attn:
If to the Adviser:
Gartmore Global Asset Management Trust
0000 Xxxxx Xxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attn:
If to the Distributor:
Gartmore Distribution Services, Inc.
0000 Xxxxx Xxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attn:
February 1, 2005 Page 24 of 27
ARTICLE XII - MISCELLANEOUS
12.1 All persons dealing with the Trust must look solely to the property of the
Trust or the Designated Funds for the enforcement of any claims against
the Trust or the Designated Funds as neither the trustees, officers,
agents or shareholders assume any personal liability for obligations
entered into on behalf of the Trust or the Designated Funds.
12.2 The Trust, the Adviser and the Distributor acknowledge that the identities
of the customers of the 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 Company's performance of its duties under
this Agreement are the valuable property of the Protected Parties. The
Trust, 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 Trust, the Adviser and the
Distributor from information supplied to them by the Protected Parties'
customers who also maintain accounts directly with the Trust, the Adviser
and the Distributor, the Trust, 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 Company' s prior written consent; or (b) as required
by law or judicial process. The Trust 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.
February 1, 2005 Page 25 of 27
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 or trust action, as applicable,
by such party and when so executed and delivered this Agreement will be
the valid and binding obligation of such party enforceable in accordance
with its terms.
12.11 The Agreement may be amended by written instrument signed by all parties
to the Agreement. Notwithstanding the above, 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
Designated Funds of the Trust or other applicable terms of this Agreement.
February 1, 2005 Page 26 of 27
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.
PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY
PRUCO LIFE INSURANCE COMPANY
By: /s/ Xxxxxxx Xxxxxx
GARTMORE VARIABLE INSURANCE TRUST
By: /s/ Xxxxxx Xxxxxxx
GARTMORE GLOBAL ASSET MANAGEMENT TRUST
By: /s/ Xxxxxx Xxxxxxx
GARTMORE DISTRIBUTION SERVICES, INC.
By: /s/ Xxxxxx Xxxxxxx
February 1, 2005 Page 27 of 27
PARTICIPATION AGREEMENT
SCHEDULE A
The following Separate Accounts and Associated Contracts of the Company are
permitted in accordance with the provisions of this Agreement to invest in Funds
of the Trust shown in Schedule B:
NAME OF SEPARATE ACCOUNT:
Pruco Life Flexible Premium Variable Annuity Account
CONTRACT(S):
NAME OF SEPARATE ACCOUNT:
Pruco Life of New Jersey Flexible Premium Variable Annuity Account
CONTRACT(S):
NAME OF SEPARATE ACCOUNT:
CONTRACT(S):
February 1, 2005 Page 1 of 1
PARTICIPATION AGREEMENT
SCHEDULE B
The Separate Account(s) shown on Schedule A may invest in the following
Designated Funds of the Trust.
Gartmore GVIT Developing Markets Fund
February 1, 2005 Page 1 of 1
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 Trust. The defined
terms herein shall have the meanings assigned in the Participation Agreement
except that the term "Company" shall also include the department or third party
assigned by the Company to perform the steps delineated below.
1. The proxy proposals are given to the Company by the Trust as early as
possible before the date set by the Trust for the shareholder meeting to
enable the 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 Trust will inform
the 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 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 Company will use its best efforts to call
in the number of Customers to the Trust, as soon as possible, but no later
than two weeks after the Record Date.
3. The Trust's Annual Report must be sent to each Customer by the Company
either before or together with the Customers' receipt of voting,
instruction solicitation material. The Trust will provide the last Annual
Report to the 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 Company by the Trust. The Company, at its expense,
shall produce and personalize the Voting Instruction Cards. The Trust 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:
- name (legal name as found on account registration)
- address
- Trust or account number
- coding to state number of units
- individual Card number for use in tracking and verification of
votes (already on Cards as printed by the Trust).
(This and related steps may occur later in the chronological process due
to possible uncertainties relating to the proposals.)
5. During this time, the Trust 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 Company for insertion into
February 1, 2005 Page 1 of 1
envelopes (envelopes and return envelopes are provided and paid for by the
Company). Contents of envelope sent to Customers by the Company will
include:
- Voting Instruction Card(s)
- one proxy notice and statement (one document)
- return envelope (postage pre-paid by Company) addressed to the
Company or its tabulation agent
- "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 Trust.)
- cover letter - optional, supplied by Company and reviewed and
approved in advance by the Trust
6. The above contents should be received by the Company approximately 3-5
business days before mail date. Individual in charge at Company reviews
and approves the contents of the mailing package to ensure correctness and
completeness. Copy of this approval sent to the Trust.
7. Package mailed by the Company.
* The Trust must allow at least a 15-day solicitation time to the 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 Trust 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 Trust receives the tabulations
stated in terms of a percentage and the number of SHARES.) The Trust must
review and approve tabulation format.
February 1, 2005 Page 1 of 1
13. Final tabulation in shares is verbally given by the Company to the Trust
on the morning of the meeting not later than 10:00 a.m. Eastern time. The
Trust 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 Company as well as an original copy of the final vote.
The Trust will provide a standard form for each Certification.
15. The 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 Trust 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.
February 1, 2005 Page 1 of 1
