INDEMNIFICATION AGREEMENT
BETWEEN
MASSACHUSETTS FINANCIAL SERVICES COMPANY
AND
THE UNION CENTRAL LIFE INSURANCE COMPANY
THIS AGREEMENT (the "Agreement") is made and entered into this 27th day of
October, 1995 by and between MASSACHUSETTS FINANCIAL SERVICES COMPANY, a
Delaware corporation ("MFS"), and THE UNION CENTRAL LIFE INSURANCE
COMPANY, an Ohio corporation (the "Company"), on its own behalf
and on behalf of the each of the
segregated asset accounts (the "Accounts") of the Company referenced in the
Participation Agreement (as defined below).
WHEREAS, MFS and the Company, on its own behalf and on behalf of the
Accounts, have entered into a Participation Agreement with MFS Variable
Insurance Trust, a Massachusetts business trust (the "Trust"),
dated as of the date hereof (the "Participation Agreement");
NOW, THEREFORE, in consideration of their mutual promises as set forth in
the Participation Agreement, MFS and the Company agree as follows:
ARTICLE I. DEFINITIONS
All capitalized terms not defined herein shall have the meanings as set
forth in the Participation Agreement.
ARTICLE II. APPLICABILITY
The indemnification provided by MFS under this Agreement shall relate
solely to certain losses, claims, damages, liabilities and expenses that may
arise in connection with the performance by the Trust or MFS of its obligations
and duties under the Participation Agreement.
ARTICLE III. INDEMNIFICATION
3.1. MFS agrees to indemnify and hold harmless the Company and each of its
directors, officers and each person, if any, who controls the Company within the
meaning of Section 15 of the 1933 Act and any agents or employees of the
foregoing (each an "Indemnified Party" or, collectively, the "Indemnified
Parties") against any and all losses, claims, damages, liabilities (including
amounts paid in settlement with the written consent of MFS) or expenses
(including reasonable counsel fees) to which an Indemnified Party may become
subject under any statute or regulation, at common law or otherwise, insofar as
such losses, claims, damages, liabilities or expenses (or actions in respect
thereof) or settlements are related to the sale or acquisition of the Shares or
the Policies and:
(a) 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 statement of additional information ("SAI") of the Trust or sales
literature for 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 therein or
necessary to make the statements therein not misleading, provided that this
Agreement to indemnify shall not apply as to any Indemnified Party if such
statement or omission or such alleged statement or omission was made in
reasonable reliance upon and in conformity with information furnished to the
Trust, MFS or the Underwriter by or on behalf of the Company for use in the
registration statement, prospectus, or SAI of the Trust or in sales literature
or other promotional material for the Trust (or any amendment or supplement) or
otherwise for use in connection with the sales of the Policies or Shares; or
(b) arise out of or as a result of material statements or representations (other
than statements or representations contained in the registration statement,
prospectus, SAI or sales literature or other promotional literature for the
Policies not supplied by the Trust, MFS, the Underwriter or their respective
designees or persons under their control and on which the Trust has reasonably
relied) or wrongful conduct of the Trust, MFS, the Underwriter or persons under
their control, with respect to the sale or distribution of the Policies or
Shares; or
(c) 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 literature covering the Policies, or any amendment thereof
or supplement thereto, or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statement
or statements therein not misleading, if such statement or omission was made in
reliance upon information furnished to the Company by or on behalf of the Trust;
or
(d) arise as a result of any material failure by the Trust or MFS to provide the
services and furnish the materials under the terms of the Participation
Agreement (including a failure, whether unintentional or in good faith
or otherwise, of the Trust to comply with the diversification requirements
specified in Article VI of the Participation Agreement); or
(e) arise out of or result from any material breach of any representation and/or
warranty made by MFS in the Participation Agreement or any other material breach
of the Participation Agreement by MFS; or
(f) arise out of or result from the materially incorrect or untimely calculation
or reporting by MFS of the daily net asset value per share or dividend or
capital gain distribution rate;
as limited by and in accordance with the provisions of this Article III.
3.2. In no event shall MFS be liable under the indemnification provisions
contained in this Agreement to any individual or entity, including, without
limitation, the Company, any Participating Insurance Company or any Policy
holder, with respect to any losses, claims, damages, liabilities or expenses
that arise out of or result from (i) a breach of any representation,
warranty, and/or covenant made by the Company under the Participation
Agreement or by any Participating Insurance Company under an agreement
containing substantially similar representations, warranties and covenants;
(ii) the failure by the
Company or any Participating Insurance Company to maintain its segregated asset
account (which invests in any Portfolio) as a legally and validly established
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 (iii) the failure by the Company or any Participating Insurance Company to
maintain its variable annuity and/or variable life insurance contracts (with
respect to which any Portfolio serves as an underlying funding vehicle) as life
insurance, endowment or annuity contracts under applicable provisions of the
Code.
3.3. MFS shall not be liable under this Agreement with respect to any losses,
claims, damages, liabilities or expenses to which an Indemnified Party would
otherwise be subject by reason of such Indemnified Party's willful misfeasance,
willful misconduct, or gross negligence in the performance of such Indemnified
Party's duties or by reason of such Indemnified Party's reckless disregard of
obligations and duties under this Agreement or the Participation Agreement.
3.4. Promptly after receipt by an Indemnified Party under this Section 3.4 of
commencement of an action, such Indemnified Party will, if a claim in respect
thereof is to be made against MFS under this section, notify MFS of the
commencement thereof; but the omission so to notify MFS will not relieve it from
any liability that it may have to any Indemnified Party otherwise than under
this section. In case any such action is brought against any Indemnified
Party, and it notified MFS of the commencement thereof, MFS will be
entitled to participate therein and, to the extent that it may wish,
assume the defense thereof, with counsel satisfactory to such
Indemnified Party. After notice from MFS of its intention to assume the
defense of an action, the Indemnified Party shall bear
the expenses of any additional counsel obtained by it, and MFS shall not be
liable to such Indemnified Party under this section for any legal or other
expenses subsequently incurred by such Indemnified Party in connection with the
defense thereof other than reasonable costs of investigation.
3.5. Each party hereto shall promptly notify the other parties to the
Participation Agreement of the commencement of any litigation or proceeding
against it or any of its respective officers, directors, trustees, employees or
1933 Act control persons in connection with this Agreement and the Participation
Agreement, the issuance or sale of the Policies, the operation of the Accounts,
or the sale or acquisition of Shares.
3.6. A successor by law of the parties to this Agreement and the Participation
Agreement shall be entitled to the benefits of the indemnification contained
herein. The indemnification provisions contained herein shall survive any
termination of this Agreement and the Participation Agreement.
ARTICLE IV. DURATION AND TERMINATION
This Agreement shall be effective upon execution and shall terminate with
respect to the Accounts, or one, some or all Portfolios, two years after the
date of termination of the Participation Agreement with respect to the
Accounts, or one, some or all Portfolios, in accordance with the
provisions of Article XI thereof.
ARTICLE V. CONFIDENTIALITY
Except as required by applicable law or pursuant to the written consent of
MFS, the Company shall treat as confidential the indemnification provided
pursuant to this Agreement, all information reasonably related to this
Agreement, and the existence of this Agreement.
This Article V shall survive the termination of this Agreement.
ARTICLE VI. MISCELLANEOUS
This Agreement shall be construed and the provisions hereof interpreted
under and in accordance with the laws of The Commonwealth of Massachusetts. This
Agreement may be executed simultaneously in one or more counterparts, each of
which taken together shall constitute one and the same instrument. The captions
in this Agreement are included for convenience of reference only. Any notice
required by this Agreement shall be sent to the persons so specified to receive
notice in the Participation Agreement.
IN WITNESS WHEREOF, both of the parties hereto have caused this Agreement
to be executed in its name and on its behalf by its duly authorized
representative and its seal to be hereunder affixed hereto as of the date
specified above.
MASSACHUSETTS FINANCIAL SERVICES COMPANY
By its authorized officer,
/s/ Xxxxxx X. Xxxxx
By: Xxxxxx X. Xxxxx
Senior Executive Vice President
THE UNION CENTRAL LIFE
INSURANCE COMPANY
By its authorized officer,
/s/ Xxxxxxxxx X. Xxxxxxx
By: Xxxxxxxxx X. Xxxxxxx
Title: Second Vice President
