SHAREHOLDER SERVICES AGREEMENT
THIS SHAREHOLDER SERVICES AGREEMENT is made and entered into as of
January __, 2002 by and between The American Life Insurance Company of New York
(the "Company"), SAFECO Securities Inc. ("Distributor"), SAFECO Resource Series
Trust, a business trust organized under the laws of Delaware ("Trust"), and
SAFECO Asset Management Company ("Adviser").
WHEREAS, the Company offers to the public certain group and individual
variable annuity and variable life insurance contracts (the "Contracts"); and
WHEREAS, the Company wishes to make available as investment options
under the Contracts shares of the portfolios listed in EXHIBIT A (the
"Portfolios"), each of which is a series of the Trust (the "Trust"), which is an
open-end management company registered under the Investment Company Act of 1940
and shares of the Portfolios are registered under the Securities Act of 1933, as
amended; and
WHEREAS, on the terms and conditions hereinafter set forth, Distributor
desires to make shares of the Portfolios available as investment options under
the Contracts and to retain the Company to perform certain administrative
services on behalf of the Portfolios, and the Company is willing and able to
furnish such services;
NOW, THEREFORE, the Company, Distributor, Trust, and Adviser agree as
follows:
1. TRANSACTIONS IN THE PORTFOLIOS. Subject to the terms and conditions
of this Agreement, Distributor will cause the Trust to make shares of the
Portfolios available to be purchased, exchanged, or redeemed, by or on behalf of
the Accounts (defined in SECTION 7(A) below) through a single account per
Portfolio at the net asset value applicable to each order. The Portfolios'
shares shall be purchased and redeemed on a net basis in such quantity and at
such time as determined by the Company to satisfy the requirements of the
Contracts for which the Portfolios serve as underlying investment media.
Dividends and capital gains distributions will be automatically reinvested in
full and fractional shares of the Portfolios.
2. ADMINISTRATIVE SERVICES. The Company agrees to provide all
administrative services for the Contract owners, including but not limited to
those services specified in EXHIBIT B (the "Administrative Services"). Neither
Distributor nor the Trust shall be required to provide Administrative Services
for the benefit of Contract owners. The Company agrees that it will maintain and
preserve all records as required by law to be maintained and preserved in
connection with providing the Administrative Services, and will otherwise comply
with all laws, rules and regulations applicable to the marketing of the
Contracts and the provision of the Administrative Services. Upon request, the
Company will provide Distributor or its representatives reasonable
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information regarding the quality of the Administrative Services being
provided and its compliance with the terms of this Agreement.
3. TIMING OF TRANSACTIONS. Distributor hereby appoints the Company as
agent for the Portfolios for the limited purpose of accepting purchase and
redemption orders for Portfolio shares from the Contract owners. On each day the
New York Stock Exchange (the "Exchange") is open for business (each, a "Business
Day"), the Company may receive instructions from the Contract owners for the
purchase or redemption of shares of the Portfolios ("Orders"). Orders received
and accepted by the Company prior to the close of regular trading on the
Exchange (the "Close of Trading") on any given Business Day (currently, 4:00
p.m. Eastern time) and transmitted to the Portfolios' transfer agent by 10:00
p.m. Eastern time on such Business Day will be executed at the net asset value
determined as of the Close of Trading on such Business Day. Any Orders received
by the Company on such day but after the Close of Trading, and all Orders that
are transmitted to the Portfolios' transfer agent after 10:00 p.m. Eastern time
on such Business Day, will be executed at the net asset value determined as of
the Close of Trading on the next Business Day following the day of receipt of
such Order. The day as of which an Order is executed by the Portfolios' transfer
agent pursuant to the provisions set forth above is referred to herein as the
"Trade Date". All orders are subject to acceptance or rejection by Distributor
or the Portfolios in the sole discretion of either of them.
4. PROCESSING OF TRANSACTIONS.
(a) If transactions in Portfolio shares are to be settled directly
with the Portfolios' transfer agent, the following provisions shall apply:
(1) By 6:30 p.m. Eastern time on each Business Day, Distributor
(or one of its affiliates) will provide to the Company, via a medium of
transmission mutually acceptable to the Company and Distributor, the
Portfolios' net asset value, dividend and capital gain information and, in
the case of income funds, the daily accrual for interest rate factor (mil
rate), determined at the Close of Trading. In the event of an error in the
computation of the Portfolio's net asset value per share ("NAV") or any
dividend or capital gain distribution, the Adviser shall immediately notify
the Company as soon as possible after discovery of any material error.
(2) By 10:00 p.m. Eastern time on each Business Day, the Company
will provide to Distributor via a medium of transmission acceptable to
Distributor, including electronic transmission acceptable to Distributor, a
report stating whether the instructions received by the Company from Contract
owners by the Close of Trading on such Business Day resulted in the Accounts
being a net purchaser or net seller of shares of the Portfolios. As used in
this Agreement, the phrase "electronic transmission acceptable to
Distributor" includes the use of remote computer terminals located at the
premises of the Company, its agents or affiliates, which terminals may be
linked electronically to the computer system of Distributor, its agents or
affiliates (hereinafter, "Remote Computer Terminals").
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(3) Upon the timely receipt from the Company of the report
described in (2) above, the Portfolios' transfer agent will execute the
purchase or redemption transactions (as the case may be) at the net asset
value computed as of the Close of Trading on the Trade Date. Payment for net
purchase transactions shall be made by wire transfer to the applicable
Portfolio custodial account designated by the Portfolios on the Business Day
next following the Trade Date. Such wire transfers shall be initiated by the
Company's bank prior to 4:00 p.m. Eastern time and received by the Portfolios
prior to 6:00 p.m. Eastern time on the Business Day next following the Trade
Date ("T+1"). If payment for a purchase Order is not timely received, such
Order will be, at Distributor's option, either (i) executed at the net asset
value determined on the Trade Date, and the Company shall be responsible for
all costs to Distributor or the Portfolios resulting from such delay, or (ii)
executed at the net asset value next computed following receipt of payment.
Payments for net redemption transactions shall be made by wire transfer by
the Trust to the account(s) designated by the Company on T+1; PROVIDED,
HOWEVER, the Trust reserves the right to settle redemption transactions
within the time period set forth in the applicable Portfolio's then-current
prospectus. On any Business Day when the Federal Reserve Wire Transfer System
is closed, all communication and processing rules will be suspended for the
settlement of Orders. Orders will be settled on the next Business Day on
which the Federal Reserve Wire Transfer System is open and the original Trade
Date will apply.
5. PROSPECTUS AND PROXY MATERIALS.
(a) The Adviser or Distributor shall electronically provide in .pdf
format the Company with copies of the Trust's proxy materials, periodic fund
reports to shareholders and other materials that are required by law to be
sent to the Trust's shareholders. In addition, to the extent applicable,
Adviser or Distributor shall provide the Company with one current prospectus
and any amendment or supplements thereto (collectively the "prospectus") of
the Portfolios, in the form of "camera ready" copy or .pdf. to be used in
conjunction with the transactions contemplated by this Agreement. If
applicable state or federal law or regulations require that the Statement of
Additional Information ("SAI") for the Portfolio be distributed to all
Contractowners, then the Adviser or Distributor shall provide Company with
one copy of the Trust's SAI in the form of a "camera ready" copy or .pdf.
Trust shall bear the expense of providing the "camera ready" copy or .pdf of
the prospectus to the Company. Company shall bear the expense of adjusting or
changing the format to conform with any of its prospectuses and/or SAI. At
the Company's option and expense, the Company may cause the Trust's
prospectus and/or SAI to be printed separately and/or together in one
document with the prospectuses and/or SAI for other investment companies
and/or for the Contracts. Company shall be responsible for the cost of
printing Trust's prospectus and of distributing Trust's prospectus to
existing Contract owners. If the Company provides for pass-through voting by
the Contract owners, or if the Company determines that pass-through voting is
required by law, Adviser or Distributor will provide the Company with a
sufficient quantity of proxy materials for each, as directed by the Company.
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(b) The cost of preparing, printing and shipping of the prospectuses,
periodic fund reports and other materials of the Trust to the Company shall be
paid by the Trust or its agents or affiliates; PROVIDED, HOWEVER, that if at any
time Distributor or its agent reasonably deems the usage by the Company of such
items to be excessive, it may, prior to the delivery of any quantity of
materials in excess of what is deemed reasonable, request that the Company
demonstrate the reasonableness of such usage. If Distributor believes the
reasonableness of such usage has not been adequately demonstrated, it may
request that the party responsible for such excess usage pay the cost of
printing (including press time) and delivery of any excess copies of such
materials. Unless the Company agrees to make such payments, Distributor may
refuse to supply such additional materials and Distributor shall be deemed in
compliance with this SECTION 5 if it delivers to the Company at least the number
of prospectuses and other materials as may be required by the Trust under
applicable law.
(c) The cost of any distribution of prospectuses, proxy materials,
periodic fund reports and other materials of the Trust to the Contract owners
shall be paid by the Company and shall not be the responsibility of Adviser,
Distributor or the Trust.
6. COMPENSATION AND EXPENSES.
(a) The Accounts shall be the sole shareholder of Portfolio shares
purchased for the Contract owners pursuant to this Agreement (the "Record
Owner"). The Record Owner shall properly complete any applications or other
forms required by Distributor or the Issuer from time to time.
(b) Adviser acknowledges that it will derive a substantial savings
in administrative expenses, such as a reduction in expenses related to
postage, shareholder communications and recordkeeping, by virtue of the
electronic nature of the offering and having a single shareholder account per
Portfolio for the Accounts rather than having each Contract owner as a
shareholder. In consideration of the Administrative Services and performance
of all other obligations under this Agreement by the Company, Adviser will
pay the Company a fee (the "Administrative Services Fee") equal to __ basis
points (____%) per annum of the average aggregate amount invested by the
Company in shares of the Portfolios under this Agreement. The payments
received by the Company under this SECTION 6(b) are for administrative and
shareholder services only and do not constitute payment in any manner for
investment advisory services or for costs of distribution.
(c) For the purposes of computing the payments to the Company
contemplated by this SECTION 6, the average aggregate amount invested by the
Company on behalf of the Accounts in the Portfolios over a one month period
shall be computed by totaling the Company's aggregate investment (share net
asset value multiplied by total number of shares of the Portfolios held by the
Company) on each Business Day during the month and dividing by the total number
of Business Days during such month. Payment of such amounts by Adviser will not
increase the fees paid by Trust, the Portfolios or their shareholders.
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(d) Adviser will calculate the amount of the payments to be made
pursuant to this SECTION 6 at the end of each calendar quarter and will make
such payment to the Company within 30 days thereafter. The check for such
payments will be accompanied by a statement showing the calculation of the
amounts being paid by Adviser for the relevant months and such other supporting
data as may be reasonably requested by the Company and shall be mailed to:
The American Life Insurance Company of New York
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Phone No.: ▇▇▇-▇▇▇-▇▇▇▇
Fax No.: ▇▇▇-▇▇▇-▇▇▇▇
7. REPRESENTATIONS.
(a) The Company represents and warrants that (i) this Agreement has
been duly authorized by all necessary corporate action and, when executed and
delivered, shall constitute the legal, valid and binding obligation of the
Company, enforceable in accordance with its terms; (ii) it is an insurance
company duly organized and in good standing under applicable law, has
established The American Separate Account 5 (the "Account"), which is a duly
authorized and established separate account under New York Insurance law, and
has registered the Account as a unit investment trust under the Investment
Company Act of 1940 (the "1940 Act") to serve as an investment vehicle for the
Contracts; (iii) each Contract provides for the allocation of net amounts
received by the Company to an Account for investment in the shares of one or
more specified investment companies selected among those companies available
through the Account to act as underlying investment media; (iv) selection of a
particular investment company is made by the Contract owner under a particular
Contract, who may change such selection from time to time in accordance with the
terms of the applicable Contract; (v) the Contracts will be registered under the
Securities Act of 1933 unless an exemption from registration is available prior
and the activities of the Company contemplated by this Agreement comply in all
material respects with all provisions of federal and state securities laws
applicable to such activities; (vi) for purposes other than investment
diversification of the Portfolio under Section 817 of the Internal Revenue Code
of 1986 as amended ("the Code"), that the Contracts which are variable annuities
are currently and at the time of issuance will be treated as annuity contracts
under applicable provisions of the Code, including revenue rulings and
regulations issued by the Department of Treasury and/or the Internal Revenue
Service, and that it will make every effort to maintain such treatment and that
it will notify the Trust, Adviser and 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; and (vii) Company shall
maintain a blanket fidelity bond or similar coverage in an amount not less that
$2 million, including coverage for larceny and embezzlement, covering directors,
officers, and employees dealing with the money and/or securities of the Trust
and any amounts received under
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such bond that arise from the arrangements contemplated by the Agreement
shall be held by Company for the benefit of the Trust.
(b) Distributor represents that (i) this Agreement has been duly
authorized by all necessary corporate action and, when executed and delivered,
shall constitute the legal, valid and binding obligation of Distributor,
enforceable in accordance with its terms; and (ii) shares of the Portfolios will
be sold and distributed in accordance with all applicable federal and state
securities laws.
(c) Adviser represent that (i) this Agreement has been duly authorized
by all necessary corporate action and, when executed and delivered, shall
constitute the legal, valid and binding obligation of Adviser, enforceable in
accordance with its terms; (ii) the prospectus of each Portfolio complies in all
material respects with federal and state securities laws, and (iii) shares of
the Trust are registered and authorized for sale in accordance with all federal
and state securities laws.
8. ADDITIONAL COVENANTS AND AGREEMENTS.
(a) Each party shall comply with all provisions of federal and state
laws applicable to its respective activities under this Agreement. All
obligations of each party under this Agreement are subject to compliance with
applicable federal and state laws.
(b) Each party shall promptly notify the other party in the event that
it is, for any reason, unable to perform any of its obligations under this
Agreement.
(c) The Company covenants and agrees that all Orders accepted and
transmitted by it hereunder with respect to each Account on any Business Day
will be based upon instructions that it received from the Contract owners, in
proper form prior to the Close of Trading of the Exchange on that Business Day.
The Company shall time stamp all Orders or otherwise maintain records that will
enable the Company to demonstrate compliance with SECTION 8(C) hereof.
(d) The Company covenants and agrees that all Orders transmitted to the
Trust, whether by telephone, telecopy, or other electronic transmission
acceptable to Adviser and Distributor, shall be sent by or under the authority
and direction of a person designated by the Company as being duly authorized to
act on behalf of the owner of the Accounts. Adviser and Distributor shall be
entitled to rely on the existence of such authority and to assume that any
person transmitting Orders for the purchase, redemption or transfer of Portfolio
shares on behalf of the Company is "an appropriate person" as used in Sections
8-107 and 8-401 of the Uniform Commercial Code with respect to the transmission
of instructions regarding Portfolio shares on behalf of the owner of such
Portfolio shares. The Company shall maintain the confidentiality of all
passwords and security procedures issued, installed or otherwise put in place
with respect to the use of Remote Computer Terminals and assumes full
responsibility for the security therefor. The Company further agrees to
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be responsible for the accuracy, propriety and consequences of all data
transmitted to Adviser and Distributor by the Company by telephone, telecopy
or other electronic transmission acceptable to Adviser and Distributor.
(e) The Company agrees that, to the extent it is able to do so, it will
use its best efforts to give equal emphasis and promotion to shares of the
Portfolios as is given to other underlying investments of the Accounts, subject
to applicable Securities and Exchange Commission rules. In addition, the Company
shall not impose any fee, condition, or requirement for the use of the
Portfolios as investment options for the Contracts that operates to the specific
prejudice of the Portfolios VIS-A-VIS the other investment media made available
for the Contracts by the Company.
(f) The Company shall not, without the written consent of Adviser and
Distributor, make representations concerning the Trust or the shares of the
Portfolios except those contained in the then-current prospectus and in current
printed sales literature approved by Adviser, Distributor or the Trust.
(g) Advertising and sales literature with respect to the Trust or the
Portfolios prepared by the Company or its agents, if any, for use in marketing
shares of the Portfolios as underlying investment media to Contract owners shall
be submitted to Distributor for review and written approval before such material
is used.
9. USE OF NAMES. Except as otherwise expressly provided for in this
Agreement, neither Adviser, Distributor nor any of its affiliates nor the
Portfolios shall use any trademark, trade name, service ▇▇▇▇ or logo of the
Company, or any variation of any such trademark, trade name, service ▇▇▇▇ or
logo, without the Company's prior written consent, the granting of which shall
be at the Company's sole option. Except as otherwise expressly provided for in
this Agreement, the Company shall not use any trademark, trade name, service
▇▇▇▇ or logo of the Trust, Adviser, Distributor, and their affiliates, or any
variation of any such trademarks, trade names, service marks, or logos, without
the prior written consent of either the Trust, Adviser or Distributor, as
appropriate, the granting of which shall be at the sole option of Adviser,
Distributor and/or the Trust.
10. PROXY VOTING.
(a) The Company shall provide pass-through voting privileges to all
Contract owners so long as the SEC continues to interpret the 1940 Act as
requiring such privileges. It shall be the responsibility of the Company to
assure that it and the separate accounts of the other Participating Companies
(as defined in SECTION 12(a) below) participating in any Portfolio calculate
voting privileges in a consistent manner.
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(b) The Company will electronically or otherwise distribute to Contract
owners all proxy material furnished by Adviser or Distributor and will vote
shares in accordance with instructions received from such Contract owners. The
Company shall vote Portfolio shares for which no voting instructions are
received in the same proportion as shares for which such instructions have been
received. The Company and its agents shall not oppose or interfere with the
solicitation of proxies for Portfolio shares held for such Contract owners. The
Company agrees that it will disregard Participant voting instructions only to
the extent it would be permitted to do so pursuant to Rule 6e-3(T)(b)(15)(iii)
under the 1940 Act if the Contracts were variable life insurance policies
subject to that rule.
11. INDEMNITY.
(a) Distributor agrees to indemnify and hold harmless the Company and
its officers, directors, employees, agents, affiliates and each person, if any,
who controls the Company within the meaning of the Securities Act of 1933
(collectively, the "Indemnified Parties" for purposes of this SECTION 11(a))
against any losses, claims, expenses, damages or liabilities (including amounts
paid in settlement thereof) or litigation expenses (including legal and other
expenses) (collectively, "Losses"), to which the Indemnified Parties may become
subject, insofar as such Losses result from a breach by Distributor of a
material provision of this Agreement. Distributor will reimburse any legal or
other expenses reasonably incurred by the Indemnified Parties in connection with
investigating or defending any such Losses. Distributor shall not be liable for
indemnification hereunder if such Losses are attributable to the negligence or
misconduct of the Company in performing its obligations under this Agreement.
(b) Adviser agrees to indemnify and hold harmless the Company and its
officers, directors, employees, agents, affiliates and each person, if any, who
controls the Company within the meaning of the Securities Act of 1933
(collectively, the "Indemnified Parties" for purposes of this SECTION 11(a))
against any losses, claims, expenses, damages or liabilities (including amounts
paid in settlement thereof) or litigation expenses (including legal and other
expenses) (collectively, "Losses"), to which the Indemnified Parties may become
subject, insofar as such Losses result from a breach by Adviser of a material
provision of this Agreement. Adviser will reimburse any legal or other expenses
reasonably incurred by the Indemnified Parties in connection with investigating
or defending any such Losses. Adviser shall not be liable for indemnification
hereunder if such Losses are attributable to the negligence or misconduct of the
Company in performing its obligations under this Agreement.
(c) The Company agrees to indemnify and hold harmless Adviser,
Distributor and the Trust, and their respective officers, directors, employees,
agents, affiliates and each person, if any, who controls Adviser, Issuer or
Distributor within the meaning of the Securities Act of 1933 (collectively, the
"Indemnified Parties" for purposes of this SECTION 11(b)) against any Losses to
which the Indemnified Parties may become subject, insofar as such Losses result
from a breach by the Company of a material provision of this Agreement or the
use by any person of the Remote Computer Terminals. The Company will reimburse
any legal or other expenses reasonably
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incurred by the Indemnified Parties in connection with investigating or
defending any such Losses. The Company shall not be liable for
indemnification hereunder if such Losses are attributable to the negligence
or misconduct of Adviser, Distributor or the Issuer in performing their
obligations under this Agreement.
(d) Promptly after receipt by an indemnified party hereunder of notice
of the commencement of action, such indemnified party will, if a claim in
respect thereof is to be made against the indemnifying party hereunder, notify
the indemnifying party of the commencement thereof; but the omission so to
notify the indemnifying party will not relieve it from any liability which it
may have to any indemnified party otherwise than under this SECTION 11. In case
any such action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein and, to the extent that it may wish to, assume
the defense thereof, with counsel satisfactory to such indemnified party, and
after notice from the indemnifying party to such indemnified party of its
election to assume the defense thereof, the indemnifying party will not be
liable to such indemnified party under this SECTION 11 for any legal or other
expenses subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation.
(e) If the indemnifying party assumes the defense of any such action,
the indemnifying party shall not, without the prior written consent of the
indemnified parties in such action, settle or compromise the liability of the
indemnified parties in such action, or permit a default or consent to the entry
of any judgment in respect thereof, unless in connection with such settlement,
compromise or consent, each indemnified party receives from such claimant an
unconditional release from all liability in respect of such claim.
12. POTENTIAL CONFLICTS
(a) The Company has received a copy of an application for exemptive
relief, as amended, filed by the Trust with the SEC and the order issued by the
SEC in response thereto (the "Shared Funding Exemptive Order") dated January 17,
1996 (File No. 812-9658). The Company has reviewed the conditions to the
requested relief set forth in such application for exemptive relief. As set
forth in such application, the Board of Directors of the Trust (the "Board")
will monitor the Trust for the existence of any material irreconcilable conflict
between the interests of the contract owners of all separate accounts
("Participating Companies") investing in funds of the Trust. An irreconcilable
material conflict may arise for a variety of reasons, including: (i) an action
by any state insurance regulatory authority; (ii) 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
actions by insurance, tax or securities regulatory authorities; (iii) an
administrative or judicial decision in any relevant proceeding; (iv) the manner
in which the investments of any portfolio are being managed; (v) a difference in
voting instructions given by variable annuity contract owners and variable life
insurance contract owners or by contract owners
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of different Participating Companies or (vi) a decision by an insurer to
disregard the voting instructions of contract owners. The Board shall
promptly inform the Company if it determines that an irreconcilable material
conflict exists and the implications thereof.
(b) The Company will report any potential or existing conflicts of
which it is aware to the Board. The Company will assist the Board in carrying
out its responsibilities under the Shared Funding Exemptive Order by providing
the Board with all information reasonably necessary for the Board to consider
any issues raised. This includes, but is not limited to, an obligation by the
Company to inform the Board whenever Contract owner voting instructions are
disregarded.
(c) If a majority of the Board, or a majority of its disinterested
Board members, determines that a material irreconcilable conflict exists with
regard to contract owner investments in a Portfolio, the Board shall give prompt
notice to all Participating Companies. If the Board determines that the Company
is responsible for causing or creating said conflict, the Company shall at its
sole cost and expense, and to the extent reasonably practicable (as determined
by a majority of the disinterested Board members), take such action as is
necessary to remedy or eliminate the irreconcilable material conflict. Such
necessary action may include but shall not be limited to:
(i) withdrawing the assets allocable to the Accounts from
the Portfolio and reinvesting such assets in a
different investment medium or submitting the
question of whether such segregation should be
implemented to a vote of all affected contract owners
and as appropriate, segregating the assets of any
appropriate group (i.e., annuity contract owners,
life insurance contract owners, or variable contract
owners of one or more Participating Companies) that
votes in favor of such segregation, or offering to
the affected contract owners the option of making
such a change; and/or
(ii) establishing a new registered management investment
company or managed separate account.
(d) If a material irreconcilable conflict arises as a result of a
decision by the Company to disregard its Contract owner voting instructions and
said decision represents a minority position or would preclude a majority vote
by all of its contract owners having an interest in the Issuer, the Company at
its sole cost, may be required, at the Board's election, to withdraw an
Account's investment in the Trust and terminate this Agreement; provided,
however, that such withdrawal and termination shall be limited to the extent
required by the foregoing material irreconcilable conflict as determined by a
majority of the disinterested members of the Board.
(e) If a material irreconcilable conflict arises because a particular
state insurance regulator's decision applicable to the Company conflicts with
the majority of other state regulator's, the Company will withdraw the Separate
Account's investment in the Trust within such reasonable time period as the
Trust's Board of Trustees may establish after the Trust's Board of Trustees
informs the Company that it has determined that such decision has created a
material irreconcilable
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conflict, and until such withdrawal Adviser, Distributor and Trust shall
continue to accept and implement orders by Company for the purchase and
redemption of shares of the Portfolio.
(f) For the purpose of this SECTION 12, a majority of the disinterested
Board members shall determine whether or not any proposed action adequately
remedies any irreconcilable material conflict, but in no event will the Trust be
required to establish a new funding medium for any Contract. The Company shall
not be required by this SECTION 12 to establish a new funding medium for any
Contract if an offer to do so has been declined by vote of a majority of the
Contract owners materially adversely affected by the irreconcilable material
conflict.
(g) If an to the extent the SEC amends Rule 6e-2 and Rule 6e-3(T) or
adopts Rule 6e-3, or takes any other action, to provide exemptive relief from
any provision of the 1940 Act or the rules promulgated thereunder with respect
to mixed or shared funding (as defined in the Shared Funding Exemptive Order) on
terms and conditions materially different from those contained in the Shared
Funding Exemptive Order, then (a) the Trust and/or the Company, as appropriate,
shall take 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 ruled are applicable.
13. TERMINATION; WITHDRAWAL OF OFFERING. This Agreement may be
terminated by either party upon 180 days' prior written notice to the other
party. Notwithstanding the above, the Trust reserves the right, without prior
notice, to suspend sales of shares of any Portfolio, in whole or in part, or to
make a limited offering of shares of any of the Portfolios in the event that (A)
any regulatory body commences formal proceedings against the Company, Adviser,
Distributor, affiliates of Distributor, or the Trust, which proceedings
Distributor reasonably believes may have a material adverse impact on the
ability of Adviser, Distributor, the Trust or the Company to perform its
obligations under this Agreement or (B) in the judgment of Distributor,
declining to accept any additional instructions for the purchase or sale of
shares of any such Portfolio is warranted by market, economic or political
conditions. Notwithstanding the foregoing, this Agreement may be terminated
immediately (i) by any party as a result of any other breach of this Agreement
by another party, which breach is not cured within 30 days after receipt of
notice from the other party, or (ii) by any party upon a determination that
continuing to perform under this Agreement would, in the reasonable opinion of
the terminating party's counsel, violate any applicable federal or state law,
rule, regulation or judicial order. Termination of this Agreement shall not
affect the obligations of the parties to make payments under SECTION 4 for
Orders received by the Company prior to such termination and shall not affect
the Trust's obligation to maintain the Accounts as set forth by this Agreement.
Following termination, for so long as Company continues to own shares of any
Portfolio, Adviser or Distributor shall continue to pay the Administrative
Services payment to Company described in SECTION 6(b).
14. NON-EXCLUSIVITY. All parties acknowledge and agree that this
Agreement and the arrangement described herein are intended to be non-exclusive
and that each party is free to enter into similar agreements and arrangements
with other entities.
11
15. SURVIVAL. The provisions of SECTION 9 (Use of Names) and SECTION 11
(Indemnity) of this Agreement shall survive termination of this Agreement.
16. AMENDMENT. Neither this Agreement, nor any provision hereof, may be
amended, waived, discharged or terminated orally, but only by an instrument in
writing signed by all of the parties hereto.
17. NOTICES. All notices and other communications hereunder shall be
given or made in writing and shall be delivered personally, or sent by telex,
telecopier, express delivery or registered or certified mail, postage prepaid,
return receipt requested, to the party or parties to whom they are directed at
the following addresses, or at such other addresses as may be designated by
notice from such party to all other parties.
To the Company:
The American Life Insurance Company of New York
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (office number)
(▇▇▇) ▇▇▇-▇▇▇▇ (fax number)
Attention: General Counsel
To the Adviser, Issuer or Distributor:
Attn: Legal Department
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇
Any notice, demand or other communication given in a manner prescribed in this
SECTION 17 shall be deemed to have been delivered on receipt.
18. SUCCESSORS AND ASSIGNS. This Agreement may not be assigned without
the written consent of all parties to the Agreement at the time of such
assignment. This Agreement shall be binding upon and inure to the benefit all
parties hereto and their respective permitted successors and assigns.
19. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one agreement, and
any party hereto may execute this Agreement by signing any such counterpart.
20. SEVERABILITY. In case any one or more of the provisions contained
in this Agreement should be invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of
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the remaining provisions contained herein shall not in any way be affected or
impaired thereby.
21. ENTIRE AGREEMENT. This Agreement, including the attachments hereto,
constitutes the entire agreement between the parties with respect to the matters
dealt with herein, and supersedes all previous agreements, written or oral, with
respect to such matters.
22. HEADINGS. The headings used in this Agreement are for purposes of
reference only and shall not limit or define the meaning of the provisions of
this Agreement.
23. GOVERNING LAW. This Agreement will be construed and the provisions
herein interpreted under and in accordance with Washington law, without regard
for that state's principles of conflict of laws.
24. Limitation on Liability of Trustees. This Agreement has been
executed on behalf of the Trustee by the undersigned officer of the Trust in
his/her capacity as an officer of the Trust. The obligations of this Agreement
that pertain to the Trust shall be binding only upon the assets and property of
the Trust and shall not be binding upon any individual Trustee, officer,
shareholder of the Trust or its Portfolios. This provision shall not affect the
obligations or liabilities of the Adviser or Distributor.
13
If the foregoing correctly sets forth our understanding, please
indicate your agreement to and acceptance thereof by signing below, whereupon
this Agreement shall become a binding agreement between us as of the latest date
indicated.
SAFECO Securities, Inc.
By:
-----------------------------------
Name:
----------------------------------
Title:
---------------------------------
Date:
----------------------------------
SAFECO Resource Series Trust
By:
-----------------------------------
Name:
----------------------------------
Title:
---------------------------------
Date:
----------------------------------
SAFECO Asset Management Company
By:
-----------------------------------
Name:
----------------------------------
Title:
---------------------------------
Date:
----------------------------------
We agree to and accept the terms of the foregoing Agreement.
THE AMERICAN LIFE INSURANCE
COMPANY OF NEW YORK
By:
-----------------------------------
Name:
----------------------------------
Title:
---------------------------------
Date:
----------------------------------
14
EXHIBIT A
PORTFOLIOS
SAFECO RST Equity Portfolio
SAFECO RST Growth Opportunities Portfolio
SAFECO RST Northwest Portfolio
SAFECO RST Bond Portfolio
SAFECO RST Small Company Value Portfolio
SAFECO RST Money Market Portfolio
15
EXHIBIT B
ADMINISTRATIVE SERVICES
Pursuant to the Agreement to which this is attached, the Company shall perform
all administrative and shareholder services required or requested under the
Contracts with respect to the Contract owners, including, but not limited to,
the following:
1. Maintain separate records for each Contract owner, which records
shall reflect the shares purchased and redeemed and share balances of such
Contract owners. The Company will maintain a single master account with each
Portfolio on behalf of the Contract owners and such account shall be in the name
of the Company (or its nominee) as the record owner of shares owned by the
Contract owners.
2. Disburse or credit to the Contract owners all proceeds of
redemptions of shares of the Portfolios and all dividends and other
distributions not reinvested in shares of the Portfolios.
3. Prepare and transmit to the Contract owners, as required by law or
the Contracts, periodic statements showing the total number of shares owned by
the Contract owners as of the statement closing date, purchases and redemptions
of Portfolio shares by the Contract owners during the period covered by the
statement and the dividends and other distributions paid during the statement
period (whether paid in cash or reinvested in Portfolio shares), and such other
information as may be required, from time to time, by the Contracts.
4. Transmit purchase and redemption orders to the Portfolios on behalf
of the Contract owners in accordance with the procedures set forth in SECTION 4
to the Agreement.
5. Distribute to the Contract owners copies of the Portfolios'
prospectus, proxy materials, periodic fund reports to shareholders and other
materials that the Portfolios are required by law or otherwise to provide to
their shareholders or prospective shareholders.
6. Maintain and preserve all records as required by law to be
maintained and preserved in connection with providing the Administrative
Services for the Contracts.
B-1