AMENDED AND RESTATED PARTICIPATION AGREEMENT
Exhibit
(8) (w)
AMENDED AND RESTATED PARTICIPATION AGREEMENT
THIS AGREEMENT, dated as of the 1st day of May, 2008 by and among ANNUITY INVESTORS LIFE
INSURANCE COMPANY (the “Company”), an Ohio life insurance company, on its own behalf and on
behalf of each segregated asset account of the Company set forth on Schedule A hereto as may
be amended from time to time (each separate account hereinafter referred to as the “Account”),
DWS VARIABLE SERIES I, DWS VARIABLE SERIES II and DWS INVESTMENTS VIT FUNDS (individually, a
“Fund”), each a Massachusetts business trust created under a Declaration of Trust, as amended,
DWS XXXXXXX DISTRIBUTORS, INC. (the “Underwriter”), a Delaware corporation, and DEUTSCHE
INVESTMENT MANAGEMENT AMERICAS INC., a Delaware corporation (the “Adviser”). The parties agree
that a single document is being used for ease of administration and that this Agreement shall
be treated as if it were a separate agreement with respect to each Fund, and each series
thereof, that is a party hereto, severally and not jointly, as if such entity had entered into
a separate agreement naming only itself as a party. Without limiting the foregoing, no Fund,
or series thereof, shall have any liability under this Agreement for the obligations of any
other Fund, or series thereof.
WHEREAS, the Fund engages in business as an open-end management investment company and is
or will be available to act as the investment vehicle for separate accounts established for
variable life insurance and variable annuity contracts (the “Variable Insurance Products”) to
be offered by insurance companies which have entered into participation agreements with the
Fund and Underwriter (“Participating Insurance Companies”);
WHEREAS, the beneficial interest in the Fund is divided into several series of shares of
beneficial interest without par value, and, with respect to certain series, classes thereof
(“Shares”), and additional series of Shares, and classes thereof, may be established, each
such series of Shares designated a “Portfolio” and representing the interest in a particular
managed portfolio of securities and other assets;
WHEREAS, the Fund has obtained an order from the Securities and Exchange Commission (the
“SEC”) granting Participating Insurance Companies and variable annuity and variable life
insurance separate accounts exemptions from the provisions of sections 9(a), 13(a), 15(a), and
15(b) of the Investment Company Act of 1940, as amended (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 Fund to be sold
to and held by variable annuity and variable life insurance separate accounts of both
affiliated and unaffiliated life insurance companies (the “Mixed and Shared Funding Exemptive
Order”);
WHEREAS, the Fund is registered as an open-end management investment company under the
1940 Act and Shares of the Portfolios are registered under the Securities Act of 1933, as
amended (the “1933 Act”);
WHEREAS, the Adviser, which serves as investment adviser to the Fund, is duly registered as
an investment adviser under the Investment Advisers Act of 1940, as amended, and any applicable
state securities laws;
WHEREAS, the Company has issued or will issue certain variable life insurance and/or variable
annuity contracts supported wholly or partially by the Account (the “Contracts”), and said
Contracts are listed in Schedule A hereto, as it may be amended from time to time by mutual written
agreement;
WHEREAS, the Account is duly established and maintained as a segregated asset account,
established by resolution of the Board of Directors of the Company, on the date shown for such
Account on Schedule A hereto, to set aside and invest assets attributable to the aforesaid
Contracts;
WHEREAS, the Underwriter, which serves as distributor to the Fund, is registered as a
broker dealer with the SEC under the Securities Exchange Act of 1934, as amended (the “1934
Act”), and is a member in good standing of the Financial Industry Regulatory Authority
(“FINRA”); and
WHEREAS, to the extent permitted by applicable insurance laws and regulations, the Company
intends to purchase shares in the Portfolios, and classes thereof, listed in Schedule B hereto, as
it may be amended from time to time by mutual written agreement (the “Designated Portfolios”) on
behalf of the Account to fund the aforesaid Contracts, and the Underwriter is authorized to sell
such Shares to the Account at net asset value;
NOW, THEREFORE, in consideration of their mutual promises, the Company, the Fund, the Adviser
and the Underwriter agree as follows:
ARTICLE I. Sale of Fund Shares
1.1. The Fund has granted to the Underwriter exclusive authority to distribute the Fund’s
Shares, and has agreed to instruct, and has so instructed, the Underwriter to make available to the
Company for purchase, on behalf of the Account, Fund Shares of those Designated Portfolios selected
by the Underwriter. Pursuant to such authority and instructions, and subject to Article X hereof,
the Underwriter agrees to make available to the Company for purchase on behalf of the Account,
Shares of those Designated Portfolios listed on Schedule B to this Agreement, such purchases to be
effected at net asset value in accordance with Section 1.3 of this Agreement. Notwithstanding the
foregoing, (i) Fund series (other than those listed on Schedule B) in existence now or that may be
established in the future will be made available to the Company only as the Underwriter may so
provide, and (ii) the Board of Trustees of the Fund (the “Board”) may refuse to sell shares of any
Designated Portfolio to any person, or suspend or terminate the offering of Fund Shares of any
Designated Portfolio or class thereof, if such action is required by law or by regulatory
authorities having jurisdiction or if, in the sole discretion of the Board acting in good faith and
in light of its fiduciary duties under federal and any applicable state laws, suspension or
termination is in the best interests of the shareholders of such Designated Portfolio.
1.2. The Fund shall redeem, at the Company’s request, any full or fractional Designated
Portfolio Shares held by the Company on behalf of the Account, such redemptions to
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be effected at net asset value in accordance with Section 1.3 of this Agreement. Notwithstanding
the foregoing, (i) the Company shall not redeem Fund Shares attributable to Contract owners except
in the circumstances permitted in Section 10.3 of this Agreement, and (ii) the Fund may suspend the
right of redemption or postpone the date of payment or satisfaction upon redemption of Fund Shares
of any Designated Portfolio to the extent permitted by the 1940 Act, any rules, regulations or
orders thereunder.
1.3. Purchase and Redemption Procedures
(a) The Fund hereby appoints the Company as an agent of the Fund for the limited purpose of
receiving purchase and redemption requests on behalf of the Account (but not with respect to any
Fund Shares that may be held in the general account of the Company) for Shares of those Designated
Portfolios made available hereunder, based on allocations of amounts to the Account or subaccounts
thereof under the Contracts and other transactions relating to the Contracts or the Account.
Receipt of any such request (or relevant transactional information therefore) on any day the New
York Stock Exchange is open for trading and on which the Fund calculates its net asset value
pursuant to the rules of the SEC (a “Business Day”) by the Company as such limited agent of the
Fund prior to the time that the Fund calculates its net asset value as described from time to time
in the Fund Prospectus (which as of the date of execution of this Agreement is 4:00 p.m. Eastern
Time) shall constitute receipt by the Fund on that same Business Day, provided that the Fund
receives notice of such request by 9:30 a.m. Eastern Time on the next following Business Day.
(b) The Company shall pay for Shares of each Designated Portfolio on the same day that it
notifies the Fund of a purchase request for such Shares. Payment for Designated Portfolio Shares
shall be made in federal funds transmitted to the Fund by wire to be received by the Fund by 12:00
p.m. Eastern Time on the same Business Day the Fund is notified of the purchase request for
Designated Portfolio Shares pursuant to Section 1.3(a) (unless the Fund determines and so advises
the Company that sufficient proceeds are available from redemption of Shares of other Designated
Portfolios effected pursuant to redemption requests tendered by the Company on behalf of the
Account). If federal funds are not received on time, such funds will be invested, and Designated
Portfolio Shares purchased thereby will be issued, as soon as practicable and the Company shall
promptly, upon the Fund’s request, reimburse the Fund for any charges, costs, fees, interest or
other expenses incurred by the Fund in connection with any advances to, or borrowing or overdrafts
by, the Fund, or any similar expenses incurred by the Fund, as a result of portfolio transactions
effected by the Fund based upon such purchase request. Upon receipt of federal funds so wired, such
funds shall cease to be the responsibility of the Company and shall become the responsibility of
the Fund.
(c) The Fund will redeem Designated Portfolio Shares requested on behalf of the Account, and
make payment therefore, in accordance with the provisions of the then current registration
statement of the Fund. Payment for Designated Portfolio Shares redeemed by the Account or the
Company normally shall be made in federal funds transmitted by wire to the Company or any other
designated person on the same Business Day that the Fund is properly notified of the redemption
order for such Shares pursuant to Section 1.3(a) (unless redemption proceeds are to be applied to
the purchase of Shares of other Designated Portfolios in accordance with Section 1.3(b) of this
Agreement). The Fund shall not bear any responsibility whatsoever
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for the proper disbursement or crediting of redemption proceeds by the Company, the Company alone
shall be responsible for such action.
(d) Any purchase or redemption request for Designated Portfolio Shares held or to be
held in the Company’s general account shall be effected at the net asset value per share next
determined after the Fund’s receipt of such request, provided that, in the case of a purchase
request, payment for Fund Shares so requested is received by the Fund in federal funds prior to
close of business for determination of such value, as defined from time to time in the Fund
Prospectus.
1.4. The Fund shall use its best efforts to make the net asset value per share for each
Designated Portfolio available to the Company by 6:30 p.m. Eastern Time each Business Day, and in
any event, as soon as reasonably practicable after the net asset value per share for such
Designated Portfolio is calculated, and shall calculate such net asset value in accordance with the
Fund’s Prospectus. 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 promptly upon discovery by
the Fund. A material error in the calculation of net asset value per share shall be corrected in
accordance with the procedures for correcting net asset value errors adopted by the Fund’s Board of
Trustees and in effect at the time of the error. The Fund represents and warrants that its
procedures for correcting net asset value errors, including determinations of materiality,
currently comply, and will continue to comply, with the 1940 Act and generally industry-wide
accepted SEC staff interpretations concerning pricing errors in effect at the time of an error.
1.5. The Fund shall furnish notice (by wire or telephone followed by written confirmation) to
the Company as soon as reasonably practicable of any income dividends or capital gain distributions
payable on any Designated Portfolio Shares. The Company, on its behalf and on behalf of the
Account, hereby elects to receive all such dividends and distributions as are payable on any
Designated Portfolio Shares in the form of additional Shares of that Designated Portfolio. The
Company reserves the right, on its behalf and on behalf of the Account, to revoke this election and
to receive all such dividends and capital gain distributions in cash. The Fund shall notify the
Company of the number of Designated Portfolio Shares so issued as payment of such dividends and
distributions.
1.6. Issuance and transfer of Fund Shares shall be by book entry only. Stock certificates will
not be issued to the Company or the Account. Purchase and redemption orders for Fund Shares shall
be recorded in an appropriate ledger for the Account or the appropriate subaccount of the Account.
1.7. The parties hereto acknowledge that the arrangement contemplated by this Agreement is not
exclusive; the Fund’s Shares may be sold to other insurance companies (subject to Section 1.8
hereof) and to certain qualified retirement plans, and the cash value of the Contracts may be
invested in other investment companies.
1.8. The Underwriter and the Fund shall sell Fund Shares only to Participating Insurance
Companies and their separate accounts and to persons or plans (“Qualified Persons”) that qualify to
purchase Shares of the Fund under Section 817(h) of the Internal Revenue Code of 1986, as amended
(the “Code”), and the regulations thereunder without impairing the ability of the Account to
consider the portfolio investments of the Fund as constituting investments of the Account for the
purpose of satisfying the diversification requirements of Section 817(h). The
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Underwriter and the Fund shall not sell Fund Shares to any insurance company or separate account
unless an agreement complying with Article VI of this Agreement is in effect to govern such sales.
The Company hereby represents and warrants that it and the Account are Qualified Persons. The Fund
reserves the right to cease offering Shares of any Designated Portfolio in the discretion of the
Fund.
ARTICLE II. Representations, Warranties and Covenants
2.1. The Company represents and warrants that the Contracts (a) are or, prior to
issuance, will be registered under the 1933 Act or, alternatively (b) are not registered because
they are properly exempt from registration under the 1933 Act or will be offered exclusively in
transactions that are properly exempt from registration under the 1933 Act. The Company
further represents and warrants that the Contracts will be issued and sold in compliance in all
material respects with all applicable federal securities and state securities and insurance laws and
that the sale of the Contracts shall comply in all material respects with state insurance suitability
requirements. The Company further represents and warrants that it is an insurance company
duly organized and in good standing under applicable law, that it has legally and validly
established the Account prior to any issuance or sale thereof as a segregated asset account under
applicable insurance laws, and that it (a) has registered or, prior to any issuance or sale of the
Contracts, will register the Account as a unit investment trust in accordance with the provisions
of the 1940 Act to serve as a segregated investment account for the Contracts, or alternatively (b)
has not registered the Account in proper reliance upon an exclusion from registration under the
1940 Act. The Company shall register and qualify the Contracts or interests therein as securities
in accordance with the laws of the various states only if and to the extent deemed advisable by the
Company.
2.2. The Fund represents and warrants that Fund Shares sold pursuant to this Agreement shall
be registered under the 1933 Act, duly authorized for issuance and sold in compliance in all
material respects with all applicable federal and state securities laws and that the Fund is and
shall remain registered under the 0000 Xxx. The Fund shall 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 the shares of the Designated Portfolios. The Fund shall register and qualify
such Shares for sale in accordance with the laws of the various states only if and to the extent
deemed advisable by the Fund or the Underwriter after taking into consideration any state insurance
law requirements that the Company advises the Fund may be applicable.
2.3. The Fund makes no representations as to whether any aspect of its operations, including,
but not limited to, investment policies, fees and expenses, complies with the insurance and other
applicable laws of the various states, except that the Fund represents that the investment
policies, fees and expenses of the Designated Portfolios, are and shall at all times remain in
compliance with the insurance laws of the state of organization of the Company set forth on the
first page (the “State”) to the extent required to perform this Agreement. The Company will advise
the Fund in writing as to any requirements of State insurance law that affect the Designated
Portfolios, and the Fund will be deemed to be in compliance with this Section 2.3 so long as the
Fund complies with such advice of the Company.
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2.4. The Fund represents that it is a Massachusetts business trust duly organized and validly
existing under the laws of the Commonwealth of Massachusetts and that the Designated Portfolios do
and will comply in all material respects with all applicable provisions of the 1940 Act.
2.5. The Underwriter represents and warrants that it is a corporation duly organized and
validly existing under the laws of the State of Delaware and a member in good standing of FINRA and
is registered as a broker-dealer with the SEC. The Underwriter further represents that it will sell
and distribute the shares of the Designated Portfolios in accordance with any applicable state and
federal securities laws.
2.6. The Adviser represents and warrants that it is a corporation duly organized and validly
existing under the laws of the State of Delaware, that it is and shall remain duly registered as an
investment adviser under all applicable federal and state securities laws and that it shall perform
its obligations for the Fund in compliance in all material respects with any applicable state and
federal securities laws.
2.7. The Fund, the Adviser and the Underwriter represent and warrant that all of their
trustees, directors, officers, employees, investment advisers, and other individuals or entities
dealing with the money and/or securities of the Fund are and shall continue to be at all times
covered by a blanket fidelity bond or similar coverage for the benefit of the Fund in an amount not
less than the minimum coverage as required currently by Rule 17g-l of the 1940 Act or such related
provisions as may be promulgated from time to time. The aforesaid bond shall include coverage for
larceny and embezzlement and shall be issued by a reputable bonding company.
2.8. The Company represents and warrants that all of its directors, officers, employees,
investment advisers, and other individuals or entities employed or controlled by the Company
dealing with the money and/or securities of the Account are covered by a blanket fidelity bond or
similar coverage for the benefit of the Account, in an amount not less than the minimum amount of
the bond that the Accounts would be required to maintain if they were subject to Rule 17g-l under
the 1940 Act.. 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 Fund and to pay to the
Fund any amounts lost from larceny, embezzlement or other events covered by the aforesaid bond to
the extent such amounts properly belong to the Fund pursuant to the terms of 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 Fund and the Underwriter in the
event that such coverage no longer applies.
2.9. The Company represents and warrants that all shares of the Designated Portfolios
purchased by the Company will be purchased on behalf of one or more unmanaged separate accounts
that offer interests therein that are registered under the 1933 Act and upon which a registration
fee has been or will be paid or that are unregistered because the interests are exempt from
registration under the 1933 Act, and the Company acknowledges that the Fund intends to rely upon
this representation and warranty for purposes of calculating SEC registration fees payable with
respect to such Shares of the Designated Portfolios pursuant to Form 24F-2 or any similar form or
SEC registration fee calculation procedure that allows the Fund to exclude Shares so sold for
purposes of calculating its SEC registration fee. The Company will certify the amount of any Shares
of the Designated Portfolios purchased by the Company on behalf of any
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separate account offering interests not subject to registration under the 1933 Act. The Company
agrees to cooperate with the Fund on no less than an annual basis to certify as to its continuing
compliance with this representation and warranty.
2.10. The Company represents and warrants as follows:
1. The Company has in place an anti-money laundering program (“AML program”) that does now
and will continue to comply with applicable laws and regulations, including the relevant provisions
of the USA PATRIOT Act (Pub. L. No. 107-56 (2001)) and the regulations issued thereunder by the
U.S. Treasury Department and the rules of FINRA, as applicable.
2. The Company has in place — and has conducted due diligence pursuant to -policies,
procedures and internal controls reasonably designed (a) to verify the identity of the Contract
owners that invest in the Account, and (b) to identify those Contract owners’ sources of funds, and
have no reason to believe that any of the invested funds were derived from illegal activities.
3. The Company has, after undertaking reasonable inquiry, no information or knowledge that (a)
any Contract owner that invests in the Account, or (b) any person or entity controlling, controlled
by or under common control with such Contract owner is an individual or entity or in a country or
territory that is on an Office of Foreign Assets Control (“OFAC”) list or similar list of
sanctioned or prohibited persons maintained by a U.S. governmental or regulatory body.
The Company further agrees promptly to notify the Fund and the Underwriter should it become aware
of any change in the above representations and warranties.
The Company agrees to require any broker-dealer/insurance agency that distributes the Contracts to
have an AML Program in substantial compliance with the foregoing.
In addition, the Underwriter and the Fund hereby provide notice to the Company that the
Underwriter and/or the Fund reserve the right to make inquiries of and request additional
information from the Company regarding its AML program.
2.11. The Company will develop, implement and maintain policies and procedures
reasonably designed to prevent the use of the Accounts by persons engaged in short-term
trading or excessive trading, which policies and procedures shall be reasonably acceptable to
the Fund, the Adviser and the Underwriter. If the Company proposes to make material
modifications to such policies and procedures following their implementation, the Company
will notify the Fund, the Adviser and the Underwriter of such modifications, which shall be
reasonably acceptable to the Fund, the Adviser and the Underwriter.
In addition to the foregoing, the Company will develop, implement and maintain procedures as
necessary or appropriate to further any specific policies and procedures of the Fund, the Adviser
or the Underwriter for one or more Designated Portfolios in regard to short-term trading or
excessive trading. The Company agrees to comply with the provisions of
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Schedule D attached hereto, which are designed to carry out the provisions of Rule 22c-2 of the
1940 Act.
The Company represents and warrants that it has reserved sufficient flexibility in the
Contracts that have been approved by the Ohio Department of Insurance after the effective date of
Rule 22c-2 under the 1940 Act to impose such limitations and restrictions on transfers and
purchases of the underlying investments for the Contracts, including specifically the Designated
Portfolios, as may be necessary to implement the policies and procedures referred in this Section
2.11.
The Company acknowledges that all orders accepted by the Company for the Accounts are subject
to the obligations of the Company in this Section 2.11, including the obligation to prevent the
use of the Accounts for short-term trading or excessive trading, and that the Fund, the Adviser or
the Underwriter may take such actions as it deems to be in the best interests of shareholders of
the Designated Portfolios to enforce such obligations and to otherwise prevent such trading in
shares of the Designated Portfolios, including, among other things, the right to revoke, reject or
cancel purchase orders for shares of the Designated Portfolios made by the Company. Any such
revocation, rejection or cancellation may be made in whole or in part, it being understood that
the Fund, the Adviser and the Underwriter are not required to isolate objectionable trades.
The Fund, the Adviser and the Underwriter shall not be responsible for any losses or costs
incurred by the Company, the Account or Account participants as a result of the revocation,
rejection or cancellation orders made by the Company in furtherance of the enforcement of their
policy to prevent short-term trading and excessive trading in shares of the Designated Portfolios.
2.12. The Company shall comply with any applicable privacy and notice provisions of 15
U.S.C. §§ 6801-6827 and any applicable regulations promulgated thereunder (including but not
limited to 17 C.F.R. Part 248) as they may be amended.
2.13. Neither the Fund, any Designated Portfolio, the Underwriter, nor any of their
affiliates shall be liable for any information provided to the Company pursuant to this Agreement
which information is based on incorrect information supplied by the Company to the Fund or the
Underwriter. The Company agrees that the Fund, the Underwriter and the Adviser shall bear no
responsibility for any act of any unaffiliated fund or the investment adviser or underwriter
thereof.
2.14. Each party represents and warrants that it has full power, authority, and legal right
to execute, deliver, and perform its duties and comply with its obligations under this Agreement.
ARTICLE III. Prospectuses and Proxy Statements; Voting
3.1. The Underwriter shall provide the Company with as many copies of the Fund’s current
prospectus (describing only the Designated Portfolios listed on Schedule B) as the Company may
reasonably request. If requested by the Company in lieu thereof, the Fund shall provide such
documentation (including a final copy of the new prospectus on computer diskette
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or other electronic means at the Fund’s expense) and other assistance as is reasonably necessary in
order for the Company once each year (or more frequently if the prospectus for a Designated
Portfolio is amended) to have the prospectus for the Contracts and the prospectus for the
Designated Portfolios printed together in one document. Expenses with respect to the foregoing
shall be borne as provided under Article V.
3.2. The Fund’s prospectus shall state that the current Statement of Additional Information
(“SAI”) for the Fund is available from the Fund and the Fund shall provide a copy of such SAI to
any owner of a Contract who requests such SAI and to the Company in such quantities as the Company
may reasonably request. Expenses with respect to the foregoing shall be borne as provided under
Article V.
3.3. The Fund shall provide the Company with copies of its proxy material, reports to
shareholders, and other communications to shareholders of the Designated Portfolios in such
quantity as the Company shall reasonably require for distributing to Contract owners. Expenses with
respect to the foregoing shall be borne as provided under Article V.
3.4. The Company shall:
(i) solicit voting instructions from Contract owners;
(ii) vote the shares of each Designated Portfolio in accordance with instructions
received from Contract owners; and
(iii) vote shares of each Designated Portfolio for which no instructions have been
received in the same proportion as fund shares of such Designated Portfolio for which instructions
have been received, so long as and to the extent that the SEC continues to interpret the 1940 Act
to require pass-through voting privileges for variable contract owners or to the extent otherwise
required by law. The Company reserves the right to vote shares of each Designated Portfolio held in
any segregated asset account in its own right, to the extent permitted by law.
3.5. The Fund reserves the right, upon prior written notice to the Company (given at the
earliest practicable time), to take all actions, including but not limited to, the dissolution,
termination, merger and sale of all assets of the Fund or any Designated Portfolio upon the sole
authorization of the Board, to the extent permitted by the laws of the Commonwealth of
Massachusetts and the 1940 Act.
3.6. Participating Insurance Companies shall be responsible for assuring that each of their
separate accounts participating in a Designated Portfolio calculates voting privileges as required
by the Mixed and Shared Funding Exemptive Order and consistent with any reasonable standards that
the Fund may adopt and provide in writing.
3.7. It is understood and agreed that, except with respect to information regarding the Fund,
the Underwriter, the Adviser or Designated Portfolios provided in writing by the Fund, the
Underwriter or the Adviser, none of the Fund, the Underwriter or the Adviser is responsible for the
content of the prospectus or statement of additional information for the Contracts.
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ARTICLE IV. Sales Material and Information
4.1. The Company shall furnish, or shall cause to be furnished, to the Fund or its designee,
each piece of sales literature or other promotional material that the Company develops or uses and
in which the Fund (or a Designated Portfolio thereof) or the Adviser or the Underwriter is named.
No such material shall be used until approved by the Fund or its designee, and the Fund will use
its best efforts for it or its designee to review such sales literature or promotional material
within ten Business Days after receipt of such material. The Fund or its designee reserves the
right to reasonably object to the continued use of any such sales literature or other promotional
material in which the Fund (or a Designated Portfolio thereof) or the Adviser or the Underwriter is
named, and no such material shall be used if the Fund or its designee so objects.
4.2. The Company shall not give any information or make any representations or statements on
behalf of the Fund or concerning the Fund in connection with the sale of the Contracts other than
the information or representations contained in the registration statement or prospectus or SAI for
the Fund Shares, as such registration statement and prospectus or SAI may be amended or
supplemented from time to time, in reports or proxy statements for the Fund, or in other material
that is in the public domain or approved by the Fund for distribution to its shareholders, or in
sales literature or other promotional material approved by the Fund or its designee or by the
Underwriter, except with the permission of the Fund or the Underwriter or the designee of either.
4.3. The Fund and the Underwriter, or their designee, shall furnish, or shall cause to be,
furnished, to the Company, each piece of sales literature or other promotional material that it
develops or uses and in which the Company, and/or its Account, is named. No such material shall be
used until approved by the Company, and the Company will use its best efforts to review such sales
literature or promotional material within ten Business Days after receipt of such material. The
Company reserves the right to reasonably object to the continued use of any such sales literature
or other promotional material in which the Company and/or its Account is named, and no such
material shall be used if the Company so objects.
4.4. The Fund and the Underwriter shall not give any information or make any representations
on behalf of the Company or concerning the Company, the Account, or the Contracts other than the
information or representations contained in a registration statement, prospectus (which shall
include an offering memorandum, if any, if the Contracts issued by the Company or interests therein
are not registered under the 1933 Act), or SAI for the Contracts, as such registration statement,
prospectus, or SAI may be amended or supplemented from time to time, or in published reports for
the Account which are in the public domain or approved by the Company for distribution to Contract
owners, or in sales literature or other promotional material approved by the Company or its
designee, except with the permission of the Company.
4.5. The Fund will provide to the Company at least one complete copy of any prospectuses and
SAIs, and all amendments to any of the above, that relate to the Designated Portfolio(s) reasonably
promptly after the filing of such document(s) with the SEC or FINRA or other regulatory
authorities. Upon request, the Fund will provide to the Company copies of SEC exemptive orders
and no-action letters and sales literature and other promotional material that relate to the
Designated Portfolios and to the performance of this Agreement by the parties.
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4.6. The Company will provide to the Fund at least one complete copy of any prospectuses
(which shall include an offering memorandum, if any, if the Contracts issued by the Company or
interests therein are not registered under the 0000 Xxx) and SAIs, and all amendments to any of the
above, that relate to the Contracts or the Account reasonably promptly after the filing of such
document(s) with the SEC or FINRA or other regulatory authorities. Upon request, the Company will
provide to the Fund copies of SEC exemptive orders and no-action letters, solicitations of voting
instructions and sales literature and other promotional material that relate to the Contracts or
the Account and the performance of this Agreement by the parties. Upon request, the Company shall
provide to the Fund and the Underwriter any complaints received from the Contract owners pertaining
to the Fund or the Designated Portfolios.
4.7. The Fund will provide the Company with as much notice as is reasonably practicable of any
proxy solicitation for any Designated Portfolio, and of any material change in the Fund’s
registration statement, particularly any change resulting in a change to the registration statement
or prospectus for any Account. The Fund will work with the Company so as to enable the Company to
solicit proxies from Contract owners, or to make changes to its prospectus or registration
statement, in an orderly manner. The Fund will make reasonable efforts to attempt to have changes
affecting Contract prospectuses become effective simultaneously with the annual updates for such
prospectuses.
4.8. For purposes of this Article IV, the phrase “sales literature and other promotional
materials” includes, but is not limited to, any of the following that refer to the Fund or any
affiliate of the Fund: advertisements (such as material published, or designed for use in, a
newspaper, magazine, or other periodical, radio, television, internet website (or other electronic
media), telephone or tape recording, videotape display, signs or billboards, motion pictures, or
other public media), sales literature (i.e., any written communication distributed or made generally
available to customers or the public, including brochures, circulars, reports, market letters, form
letters, seminar texts, reprints or excerpts of any other advertisement, sales literature, or
published article), educational or training materials or other communications distributed or made
generally available to some or all agents or employees, and registration statements, prospectuses,
SAIs, shareholder reports, proxy materials, and any other communications distributed or made
generally available with regard to the Fund.
ARTICLE V. Fees and Expenses
5.1. Except as specifically provided in Section 5.4 of this Agreement related to Class B or
Class B2 shares, the Fund, the Adviser and the Underwriter shall pay no fee or other compensation
to the Company under this Agreement, although the parties hereto will bear certain expenses in
accordance with Schedule C and other provisions of this Agreement.
5.2. All expenses incident to performance by the Fund under this Agreement shall be paid by
the Fund, except and as further provided in Schedule C. The cost of setting the Fund’s prospectus
in type, setting in type and printing the Fund’s proxy materials and reports to shareholders
(including the costs of printing a prospectus that constitutes an annual report), the preparation
of all statements and notices relating to the Fund required by any federal or state law, and all
taxes on the issuance or transfer of the Fund’s Shares shall be borne by the parties hereto as set
forth in Schedule C.
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5.3. The expenses of distributing the Fund’s prospectus to new and existing owners of
Contracts issued by the Company and of distributing the Fund’s proxy materials and reports to
Contract owners shall be borne by the parties hereto as set forth in Schedule C.
5.4. The provisions of this Section 5.4 apply to Class B Shares and, if applicable, Class B2
Shares. The Company agrees to provide distribution services (“Distribution Services”) for the Class
B Shares and, if applicable, Class B2 Shares of the Designated Portfolios including the following
types of services:
(1) Printing and mailing of Fund prospectuses, statements of additional information, any
supplements thereto and shareholder reports for prospective Contract owners.
(2) Developing, preparing, printing and mailing of Fund advertisements, sales literature and
other promotional materials describing and/or relating to the Fund and including materials intended
for use within the Company, or for broker-dealer only use or retail use.
(3) Holding seminars and sales meetings designed to promote the distribution of Fund Shares.
(4) Obtaining information and providing explanations to Contract owners regarding Fund
investment objectives and policies and other information about the Fund and its Portfolios,
including the performance of the Portfolios.
(5) Training sales personnel regarding the Fund.
(6) Compensating sales personnel and financial services firms in connection with the
allocation of cash values and premiums of the Contracts to the Fund.
(7) Personal service with respect to Fund Shares attributable to Contract accounts.
In consideration of the Company performing the Distribution Services and subject to the conditions
and limitations provided below, the Underwriter will make quarterly payments to the Company
pursuant to the Fund’s Master Distribution Plan for Class B Shares and, if applicable, for Class B2
Shares, as amended from time to time, at the annual rate of 0.25% of the average daily net asset
value of the Class B Shares and, if applicable, of the Class B2 Shares of each Designated Portfolio
held by the Company pursuant to this Agreement. The payments to the Company under the Master
Distribution Plan for Class B or Class B2 Shares, as applicable, pursuant to the foregoing may be
reduced or eliminated by action of the Board of Trustees of the Fund, effective upon notice to the
Company of such action.
The Company shall perform all record keeping services (the “Record Keeping Services”) with
respect to the Contracts, including, without limitation, the following:
(a) Maintaining separate records for each Contract owner , which shall reflect the Designated
Portfolio shares purchased and redeemed and Designated Portfolio share balances of such Contract
owners. The Company will maintain omnibus accounts with each Designated Portfolio on behalf of
Contract owners, and such accounts shall be in the name of the Company (or its nominee) as the
record owner of shares owned by such Contract owners.
(b) Disbursing or crediting to Contract owners all proceeds of redemptions of shares of the
Designated Portfolios and processing all dividends and other distributions reinvested in shares of
the Designated Portfolios.
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(c) Preparing and transmitting to Contract owners , as required by law, periodic statements
showing the total number of shares owned, purchases and redemptions of Designated Portfolio shares
and dividends and other distributions paid, and such other information as may be required, from
time to time, by Contract owners.
(d) Maintaining and preserving all records required by law to be maintained and preserved in
connection with providing the foregoing services for Contract owners.
(e) Generating written confirmations to Contract owners, to the extent required by law.
(f) Administering the distribution to existing Contract owners of Fund prospectuses, proxy
materials, periodic reports to shareholders and other materials that the Designated Portfolios
provide to their shareholders (the printing and distribution expense to be borne as set forth on
Schedule C).
(g) Aggregating and transmitting purchase and redemption orders to the Designated
Portfolios on behalf of the Contract owners:
In consideration of the Company performing the Record Keeping Services and subject to the
conditions and limitations provided below, the Fund agrees to pay the Company, quarterly, a record
keeping fee at the annual rate of 0.15 % of the average daily net assets of the Class B Shares and,
if applicable, of the Class B2 Shares of each Designated Portfolio held by the Company pursuant to
this Agreement. The Company represents and agrees that no charge imposed by it on Contract owners
is specifically intended or designed to compensate the Company for the Record Keeping Services.
Only the following classes and series of DWS INVESTMENTS VIT FUNDS pay a record keeping fee: the
Class B shares of DWS RREEF Real Estate Securities VIP and the Class B-2 shares of DWS Equity 500
index VIP. The payments to the Company for Record Keeping Services pursuant to the foregoing may be
reduced or eliminated by action of the Board of Trustees of the Fund, effective upon notice to the
Company of such action.
ARTICLE VI. Diversification and Qualification
6.1. The Fund will invest the assets of each Designated Portfolio in such a manner as to
ensure that the Contracts will be treated as annuity or life insurance contracts, whichever is
appropriate, under the Code and the regulations issued thereunder (or any successor provisions).
Without limiting the scope of the foregoing, the Fund will, with respect to each Designated
Portfolio, comply with Section 817(h) of the Code and Treasury Regulation §1.817-5, and any
Treasury interpretations thereof, relating to the diversification requirements for variable
annuity, endowment, or life insurance contracts, and any amendments or other modifications or
successor provisions to such Section or Regulations. In the event of a breach of this Article VI by
the Fund, it will take all reasonable steps (a) to notify the Company of such breach and (b) to
adequately diversify the affected Designated Portfolio so as to achieve compliance within the grace
period afforded by Treasury Regulation §1.817-5.
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6.2. The Fund represents that each Designated Portfolio is or will be qualified as a Regulated
Investment Company under Subchapter M of the Code, and that it will make every effort to maintain
such qualification (under Subchapter M or any successor or similar provisions) and that it will
notify the Company immediately upon having a reasonable basis for believing that a Designated
Portfolio has ceased to so qualify or that it might not so qualify in the future.
6.3. The Company represents that the Contracts are currently, and at the time of issuance
shall be, treated as life insurance or annuity insurance contracts, under applicable provisions of
the Code, and that it will make every reasonable effort to maintain such treatment, and that it
will notify the Fund and the Underwriter immediately upon having a reasonable basis for believing
the Contracts have ceased to be so treated or that they might not be so treated in the future. The
Company agrees that any prospectus offering a contract that is a “modified endowment contract” as
that term is defined in Section 7702A of the Code (or any successor or similar provision), shall
identify such contract as a modified endowment contract.
ARTICLE VII. Potential Conflicts
7.1. The Board will monitor the Fund for the existence of any material irreconcilable conflict
among the interests of the Contract owners of all separate accounts investing in the Fund. An
irreconcilable material conflict may arise for a variety of reasons, including: (a) an action by
any state insurance regulatory authority; (b) a change in applicable insurance laws or regulations;
(c) a tax ruling or provision of the Internal Revenue Code or the regulations thereunder; (d) any
other development relating to the tax treatment of insurers, Contract or policy owners or
beneficiaries of variable annuity contracts or variable life insurance policies; (e) the manner in
which the investments of any Designated Portfolio are being managed; (f) a difference in voting
instructions given by variable annuity contract holders, on the one hand, and variable life
insurance policy owners, on the other hand, or by the contract holders or policy owners of
different Participating Insurance Companies; or (g) a decision by a Participating Insurance Company
to disregard the voting instructions of its Contract owners. The Board shall promptly inform the
Company by written notice if it determines that an irreconcilable material conflict exists and the
implications thereof.
7.2. The Company and the Adviser 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 Mixed and 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. At least annually, and more frequently if deemed appropriate by the Board, the
Company shall submit to the Adviser, and the Adviser shall at least annually submit to the Board,
such reports, materials and data as the Board may reasonably request so that the Board may fully
carry out the obligations imposed upon it by the conditions contained in the Mixed and Shared
Funding Exemptive Order; and said reports, materials and data shall be submitted more frequently if
deemed appropriate by the Board. The responsibility to report such information and conflicts to the
Board will be carried out with a view only to the interests of the Contract owners.
7.3. If it is determined by a majority of the Board, or a majority of its disinterested
members, that a material irreconcilable conflict exists, the Company and other Participating
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Insurance Companies shall, at their expense and to the extent reasonably practicable (as determined
by a majority of the disinterested Board members), take whatever steps are necessary to remedy or
eliminate the irreconcilable material conflict, up to and including: (1) withdrawing the assets
allocable to some or all of the separate accounts from the Fund or any Designated Portfolio and
reinvesting such assets in a different investment medium, including (but not limited to) another
Designated Portfolio of the Fund, or submitting the question whether such segregation should be
implemented to a vote of all affected contract owners and, as appropriate, segregating the assets
of any appropriate group (i.e., annuity contract owners, life insurance contract owners, or
variable contract owners of one or more Participating Insurance Companies) that votes in favor of
such segregation, or offering to the affected contract owners the option of making such a change;
and (2) establishing a new registered management investment company or managed separate account.
7.4. If a material irreconcilable conflict arises because of a decision by the Company to
disregard Contract owner voting instructions and that decision represents a minority position or
would preclude a majority vote, the Company may be required, at the Fund’s election, to withdraw
the affected Account’s investment in any Designated Portfolio and terminate this Agreement with
respect to such Account; 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. The Company will bear the cost of any remedial
action, including such withdrawal and termination. Any such withdrawal and termination must take
place within six (6) months after the Fund gives written notice that this provision is being
implemented, and until the end of that six month period the Fund shall continue to accept and
implement orders by the Company for the purchase (and redemption) of shares of such Designated
Portfolio.
7.5. 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
regulators, then the Company will withdraw the affected Account’s investment in the Fund and
terminate this Agreement with respect to such Account within six months after the Board informs the
Company in writing that it has determined that such decision has created an irreconcilable material
conflict; 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. Until the end of the foregoing six month period, the Fund shall
continue to accept and implement orders by the Company for the purchase (and redemption) of shares
of such Designated Portfolios.
7.6. For purposes of Sections 7.3 through 7.6 of this Agreement, a majority of the
disinterested members of the Board shall determine whether any proposed action adequately remedies
any irreconcilable material conflict, but in no event will the Fund be required to establish a new
funding medium for the Contracts. The Company shall not be required by Section 7.3 to establish a
new funding medium for the Contract if an offer to do so has been declined by vote of a majority of
Contract owners materially adversely affected by the irreconcilable material conflict. In the event
that the Board determines that any proposed action does not adequately remedy any irreconcilable
material conflict, then the Company will withdraw an Account’s investment in any Designated
Portfolio and terminate this Agreement within six (6) months after the Board informs the Company in
writing of the foregoing determination; provided, however, that such withdrawal and termination
shall be limited to the
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extent required by any such material irreconcilable conflict as determined by a majority of the
disinterested members of the Board.
7.7. If and to the extent the Mixed and Shared Funding Exemption Order or any amendment
thereto contains terms and conditions different from Sections 3.4, 3.6, 7.1, 7.2, 7.3, 7.4, and 7.5
of this Agreement, then the Fund and/or the Participating Insurance Companies, as appropriate,
shall take such steps as may be necessary to comply with the Mixed and Shared Funding Exemptive
Order, and Sections 3.4, 3.6, 7.1, 7.2, 7.3, 7.4 and 7.5 of this Agreement shall continue in effect
only to the extent that terms and conditions substantially identical to such Sections are contained
in the Mixed and Shared Funding Exemptive Order or any amendment thereto. If and to the extent that
Rule 6e-2 and Rule 6e-3(T) are amended, or Rule 6e-3 or any similar rule is adopted, 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 Mixed and Shared Funding Exemptive Order) on
terms and conditions materially different from those contained in the Mixed and Shared Funding
Exemptive Order, then (a) the Fund and/or the Participating Insurance Companies, as appropriate,
shall take such steps as may be necessary to comply with Rules 6e-2 and 6e-3(T), as amended, and
Rule 6e-3 or any similar rule, as adopted, to the extent such rules are applicable; and (b)
Sections 3.4, 3.6, 7.1., 7.2, 7.3, 7.4, and 7.5 of this Agreement shall continue in effect only to
the extent that terms and conditions substantially identical to such Sections are contained in such
Rule(s) as so amended or adopted.
ARTICLE VIII. Indemnification
8.1. Indemnification By the Company
(a) The Company agrees to indemnify and hold harmless the Fund, the Adviser and the
Underwriter and each of its trustees, directors and officers, and each person, if any, who controls
the Fund, the Adviser or Underwriter within the meaning of Section 15 of the 1933 Act or who is
under common control with the Underwriter (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 expenses (including to the extent
reasonable legal and other expenses), to which the Indemnified Parties 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
distribution of Designated Portfolio Shares or the Contracts; and:
(i) arise out of or are based upon any untrue statement or alleged untrue statement of
any material fact contained in the registration statement, prospectus (which shall include an
offering memorandum, if any), or SAI for the Contracts or sales literature for the Contracts (or
any amendment or supplement to any of the foregoing), or arise out of or are based upon the
omission or the alleged omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, provided that this agreement to indemnify
shall not apply as to any Indemnified Party if such statement or omission or such alleged statement
or omission was made in reliance upon and in conformity with information furnished in writing to
the Company by or on behalf of the Fund for use in the registration statement, prospectus, SAI for
the Contracts or sales literature for the Contracts (or any amendment or supplement to any of the
foregoing) or otherwise for use in connection with the sale of the Contracts or Fund Shares; or
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(ii) arise out of or as a result of statements or representations (other than statements
or representations contained in the registration statement, prospectus, SAI, or sales literature of
the Fund not supplied by the Company or persons under its control) or negligent, illegal or
fraudulent conduct of the Company or persons under the Company’s control with respect to the sale
or distribution of the Contracts or Designated Portfolio Shares; or
(iii) arise out of any untrue statement or alleged untrue statement of a material fact
contained in a registration statement, prospectus, SAI, or sales literature of the Fund 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 statements therein not
misleading if such a statement or omission was made in reliance upon information furnished in
writing to the Fund by or on behalf of the Company for use in the registration statement,
prospectus, SAI or sales literature of the Fund (or any amendment or supplement to any of the
foregoing) or otherwise for use in connection with the sale of the Contracts or the Designated
Portfolio Shares; or
(iv) arise out of or result from any material breach of any representation, warranty or
agreement made by the Company in this Agreement (including a failure, whether unintentional or in
good faith or otherwise, to comply with the qualification requirements specified in Article VI of
this Agreement);
as limited by and in accordance with the provisions of Sections 8.1(b), 8.1(c) and 8.1(d) hereof.
(b) The Company shall not be liable under this indemnification provision 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, bad faith, or gross negligence
in the performance of such Indemnified Party’s duties, or by reason of such Indemnified Party’s
reckless disregard of its obligations or duties either under this Agreement or to the Company, the
Fund, the Adviser, the Underwriter or the Account, whichever is applicable.
(c) The Company shall not be liable under this indemnification provision with respect to any
claim made against an Indemnified Party unless such Indemnified Party shall have notified the
Company in writing within a reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such Indemnified Party (or after
such Indemnified Party shall have received notice of such service on any designated agent), but
failure to notify the Company of any such claim shall not relieve the Company from any liability
that it may have to the Indemnified Party against whom such action is brought otherwise than on
account of this indemnification provision, except to the extent that the Company has been
materially prejudiced by such failure to give notice. In case any such action is brought against an
Indemnified Party, the Company shall be entitled to participate, at its own expense, in the defense
of such action. The Company also shall be entitled to assume the defense thereof, with counsel
satisfactory to the party named in the action, and to settle the claim at its own expense;
provided, however, that no such settlement shall, without the Indemnified Parties’ written consent,
include any factual stipulation referring to the Indemnified Parties or their conduct. After notice
from the Company to such party of the Company’s election to assume the defense thereof, the
Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and
the Company will not be liable to such party under this Agreement for
-17-
any legal or other expenses subsequently incurred by such party independently in connection with
the defense thereof other than reasonable costs of investigation, but, in case the Company does not
elect to assume the defense of any such suit, the Company will reimburse the Indemnified Parties in
such suit, for the reasonable fees and expenses of any counsel retained by them.
(d) The Indemnified Parties will promptly notify the Company of the commencement of
any litigation or proceedings against them in connection with the sale or distribution of the
Fund Shares or the Contracts or the operation of the Fund.
8.2. Indemnification by the Underwriter
(a) The Underwriter agrees to indemnify and hold harmless the Company and each of its
directors and officers and each person, if any, who controls the Company within the meaning of
Section 15 of the 1933 Act and who is under common control with the Company (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
Underwriter) or expenses (including to the extent reasonable legal and other expenses) to which the
Indemnified Parties 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 distribution of Shares of the Designated Portfolios or the
Contracts; and:
(i) arise out of or are based upon any untrue statement or alleged untrue statement of
any material fact contained in the registration statement or prospectus or SAI or sales literature
of the Fund (or any amendment or supplement to any of the foregoing), or arise out of or are based
upon the omission or the alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, provided that this agreement to
indemnify shall not apply as to any Indemnified Party if such statement or omission or such alleged
statement or omission was made in reliance upon and in conformity with information furnished in
writing to the Underwriter or Fund by or on behalf of the Company for use in the registration
statement, prospectus or SAI for the Fund or in sales literature for the Fund (or any amendment or
supplement to any of the foregoing) or otherwise for use in connection with the sale of the
Contracts or Fund Shares; or
(ii) arise out of or as a result of statements or representations (other than statements
or representations contained in the registration statement, prospectus, SAI or sales literature for
the Contracts not supplied by the Underwriter or persons under its control) or negligent, illegal
or fraudulent conduct of the Fund or Underwriter or persons under their control, with respect to
the sale or distribution of the Contracts or the Designated Portfolio Shares; or
(iii) arise out of any untrue statement or alleged untrue statement of a material fact
contained in a registration statement, prospectus, SAI or sales literature covering the Contracts,
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 in writing to the Company by or on behalf of the Fund or the Underwriter for
use in the registration statement, prospectus, SAI or
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sales literature covering the Contracts (or any amendment or supplement to any of the foregoing) or
otherwise for use in connection with the sale of the Contracts or Fund Shares; or
(iv) arise out of or result from any material breach of any representation, warranty or
agreement made by the Underwriter, the Adviser or the Fund in this Agreement (including a failure
of the Fund, whether unintentional or in good faith or otherwise, to comply with the
diversification and other qualification requirements specified in Article VI of this Agreement);
as limited by and in accordance with the provisions of Sections 8.2(b), 8.2(c) and 8.2(d) hereof.
(b) The Underwriter shall not be liable under this indemnification provision 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, bad faith, or gross
negligence in the performance of such Indemnified Party’s duties, or by reason of such Indemnified
Party’s reckless disregard of its obligations or duties either under this Agreement or to the
Company, the Fund, the Adviser, the Underwriter or the Account, whichever is applicable.
(c) The Underwriter shall not be liable under this indemnification provision with respect to
any claim made against an Indemnified Party unless such Indemnified Party shall have notified the
Underwriter in writing within a reasonable time after the summons or other first legal process
giving information of the nature of the claim shall have been served upon such Indemnified Party
(or after such Indemnified Party shall have received notice of such service on any designated
agent), but failure to notify the Underwriter of any such claim shall not relieve the Underwriter
from any liability which it may have to the Indemnified Party against whom such action is brought
otherwise than on account of this indemnification provision, except to the extent that the
Underwriter has been materially prejudiced by such failure to give notice. In case any such action
is brought against the Indemnified Party, the Underwriter will be entitled to participate, at its
own expense, in the defense thereof. The Underwriter also shall be entitled to assume the defense
thereof, with counsel satisfactory to the party named in the action, and to settle the claim at its
own expense; provided, however, that no such settlement shall, without the Indemnified Parties’
written consent, include any factual stipulation referring to the Indemnified Parties or their
conduct. After notice from the Underwriter to such party of the Underwriter’s election to assume
the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional
counsel retained by it, and the Underwriter 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, but, in case the Underwriter
does not elect to assume the defense of any such suit, the Underwriter will reimburse the
Indemnified Parties in such suit, for the reasonable fees and expenses of any counsel retained by
them.
(d) The Indemnified Parties will promptly notify the Underwriter of the commencement of
any litigation or proceedings against them in connection with the sale or distribution of the
Contracts or the operation of the Account.
8.3 Indemnification By the Fund
(a) The Fund agrees to indemnify and hold harmless the Company and each of its directors
and officers and each person, if any, who controls the Company within the
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meaning of Section 15 of the 1933 Act or who is under common control with the Company
(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 Fund) or expenses (including to the extent reasonable legal and other expenses) to
which the Indemnified Parties may be required to pay or 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 distribution of
Shares of the Designated Portfolios; and:
(i) arise out of or result from any material breach of any representation, warranty or
agreement made by the Fund in this Agreement (including a failure, whether unintentional or in good
faith or otherwise, to comply with the diversification and other qualification requirements
specified in Article VI of this Agreement);
as limited by and in accordance with the provisions of Sections 8.3(b), 8.3(c) and 8.3(d) hereof.
(b) The Fund shall not be liable under this indemnification provision 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, bad faith, or gross negligence
in the performance of such Indemnified Party’s duties, or by reason of such Indemnified Party’s
reckless disregard of its obligations or duties either under this Agreement or to the Company, the
Fund, the Adviser, the Underwriter or the Account, whichever is applicable.
(c) The Fund shall not be liable under this indemnification provision with respect to any
claim made against an Indemnified Party unless such Indemnified Party shall have notified the Fund
in writing within a reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such Indemnified Party (or after
such Indemnified Party shall have received notice of such service on any designated agent), but
failure to notify the Fund of any such claim shall not relieve the Fund from any liability which it
may have to the Indemnified Party against whom such action is brought otherwise than on account of
this indemnification provision, except to the extent the Fund has been materially prejudiced by
such failure to give notice. In case any such action is brought against the Indemnified Parties,
the Fund will be entitled to participate, at its own expense, in the defense thereof. The Fund also
shall be entitled to assume the defense thereof, with counsel satisfactory to the party named in
the action, and to settle the claim at its own expense; provided, however, that no such settlement
shall, without the Indemnified Parties’ written consent include any factual stipulation referring
to the Indemnified Parties or their conduct. After notice from the Fund to such party of the Fund’s
election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of
any additional counsel retained by it, and the Fund 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, but, in case the
Fund does not elect to assume the defense of any such suit, the Fund will reimburse the Indemnified
Parties in such suit, for the reasonable fees and expenses of any counsel retained by them.
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(d) The Indemnified Parties will promptly notify the Fund of the commencement of
any litigation or proceeding against them in connection with the sale or distribution of the
Contracts or the operation of the Account.
ARTICLE IX. Applicable Law
9.1. This Agreement shall be construed and the provisions hereof interpreted under and in
accordance with the laws of the Commonwealth of Massachusetts.
9.2. This Agreement shall be subject to the applicable provisions of the 1933, 1934 and 1940
Acts, and the rules and regulations and rulings thereunder, including such exemptions from those
statutes, rules and regulations as the SEC may grant (including, but not limited to, any Mixed and
Shared Funding Exemptive Order) and the terms hereof shall be interpreted and construed in
accordance therewith. If, in the future, the Mixed and Shared Funding Exemptive Order should no
longer be necessary under applicable law, then Article VII shall no longer apply.
ARTICLE X. Termination
10.1. This Agreement shall continue in full force and effect until the first to occur
of:
(a) termination by any party, for any reason with respect to some or all Designated
Portfolios, by three (3) months advance written notice delivered to the other parties; or
(b) termination by the Company by written notice to the Fund, the Adviser and the Underwriter
based upon the Company’s reasonable and good faith determination that Shares of any Designated
Portfolio are not reasonably available to meet the requirements of the Contracts; or
(c) termination by the Company by written notice to the Fund, the Adviser and the Underwriter
in the event any of the Designated Portfolio’s Shares are not registered, issued or sold in
accordance with applicable state and/or federal securities laws or such law precludes the use of
such Shares as the underlying investment media of the Contracts issued or to be issued by the
Company; or
(d) termination by the Fund, the Adviser or Underwriter in the event that formal
administrative proceedings are instituted against the Company or any affiliate of the Company by
FINRA, the SEC, the Insurance Commissioner or like official 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 operation of any Account, or the purchase or sale of the Fund’s Shares; provided, however, that
the Fund, the Adviser or Underwriter determines in its sole judgment exercised in good faith, that
any such administrative proceedings, or the facts on which such proceedings would be based, have a
material likelihood of imposing material adverse consequences on any Designated Portfolio or will
have a material adverse effect upon the ability of the Company to perform its obligations under
this Agreement; or
(e) termination by the Company in the event that formal administrative proceedings are
instituted against the Fund, the Adviser or Underwriter or any affiliate of any of
-21-
them by FINRA, the SEC, or any state securities or insurance department or any other regulatory
body; provided, however, that the Company determines in its sole judgment exercised in good faith,
that any such administrative proceedings, or the facts on which such proceedings would be based,
have a material likelihood of imposing material adverse consequences on the Company or any Account
or will have a material adverse effect upon the ability of the Fund, the Underwriter or the Adviser
to perform its obligations under this Agreement; or
(f) termination by the Company by written notice to the Fund, the Adviser and the Underwriter
with respect to any Designated Portfolio in the event that such Portfolio ceases to qualify as a
Regulated Investment Company under Subchapter M or fails to comply with the Section 817(h)
diversification requirements specified in Article VI hereof, or if the Company reasonably believes
that such Designated Portfolio may fail to so qualify or comply; or
(g) termination by the Fund, the Adviser or Underwriter by written notice to the Company in
the event that the Contracts fail to meet the qualifications specified in Article VI hereof; or
(h) termination by any of the Fund, the Adviser or the Underwriter by written notice to
the Company, if any of the Fund, the Adviser or the Underwriter respectively, shall determine, in
their sole judgment exercised in good faith, that the Company has suffered a material adverse
change in its business, operations, financial condition, insurance company rating or prospects
since the date of this Agreement or is the subject of material adverse publicity, and that material
adverse change or publicity will have a material effect on the Company’s ability to perform its
obligations under this Agreement; or
(i) termination by the Company by written notice to the Fund, the Adviser and the
Underwriter, if the Company shall determine, in its sole judgment exercised in good faith, that the
Fund, the Adviser or the Underwriter has suffered a material adverse change in its business,
operations, financial condition or prospects since the date of this Agreement or is the subject of
material adverse publicity, and that material adverse change or publicity will have a material
effect on the Fund’s or the Underwriter’s or the Adviser’s ability to perform its obligation under
this Agreement; or
(j) termination by the Company upon any substitution of the Shares of another investment
company or series thereof for Shares of a Designated Portfolio of the Fund in accordance with the
terms of the Contracts, provided that the Company has given at least 45 days prior written notice
to the Fund and Underwriter of the date of substitution; or
(k) termination by any party in the event that the Fund’s Board of Trustees determines
that a material irreconcilable conflict exists as provided in Article VII; or
(1) at the option of the Company, as one party, or the Fund, the Adviser and the
Underwriter, as one party, upon the other party’s material breach of any provision of this
Agreement upon 30 days’ written notice and the opportunity to cure within such notice period; or
(m) at the option of the Fund or the Adviser in the event the Contracts are not treated
as life insurance or annuity contracts under applicable provisions of the Code; or
-22-
(n) upon assignment of this Agreement unless made with the written consent of all
parties to this Agreement, such consent not being unreasonably withheld.
10.2. Notwithstanding any termination of this Agreement, the Fund and the Underwriter shall,
at the option of the Company, continue, for a one year period from the date of termination and from
year to year thereafter if deemed appropriate by the Fund and the Adviser, to make available
additional Shares of a Designated Portfolio 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”), unless the Underwriter elects to compel a substitution of
other securities for the Shares of the Designated Portfolios. Specifically, the owners of the
Existing Contracts may be permitted to reallocate investments in the Designated Portfolios, redeem
investments in the Designated Portfolios and/or invest in the Designated Portfolios upon the making
of additional purchase payments under the Existing Contracts (subject to any such election by the
Underwriter). The parties agree that this Section 10.2 shall not apply to any terminations under
Article VII and the effect of such Article VII terminations shall be governed by Article VII of
this Agreement. The parties further agree that this Section 10.2 shall not apply to any
terminations under Section 10.1(d), (g) or (m) of this Agreement.
10.3. The Company shall not redeem Fund Shares attributable to the Contracts (as opposed to
Fund Shares attributable to the Company’s assets held in the Account) except (i) as necessary to
implement Contract owner initiated or approved transactions, (ii) as required by state and/or
federal laws or regulations or judicial or other legal precedent of general application
(hereinafter referred to as a “Legally Required Redemption”), (iii) as permitted by an order of the
SEC pursuant to Section 26(c) of the 1940 Act, but only if a substitution of other securities for
the Shares of the Designated Portfolios is consistent with the terms of the Contracts, or (iv) as
permitted under the terms of the Contract. Upon request, the Company will promptly furnish to the
Fund and the Underwriter reasonable assurance that any redemption pursuant to clause (ii) above is
a Legally Required Redemption. Furthermore, except in cases where permitted under the terms of the
Contracts, the Company shall not prevent Contract owners from allocating payments to a Designated
Portfolio that is otherwise available under the Contracts without first giving the Fund or the
Underwriter 30 days notice of its intention to do so.
10.4. In the event of termination of this Agreement, (i) so long as Shares of the Fund are
made available to Existing Contracts pursuant to Section 10.2, the provisions of this Agreement
shall continue as to Existing Contracts; and (ii) each party’s obligations under Article VIII
related to indemnification and under Section 12.1 of Article XII related to confidentiality shall
survive termination regardless of whether Shares continue to be offered to Existing Contracts.
10.5. Upon any substitution of the shares of another investment company or series thereof for
Shares of a Designated Portfolio in accordance with the terms of the Contracts, the Fund, the
Underwriter and the Adviser shall cooperate with the Company in connection with such substitution.
In the event the Shares of any Designated Portfolio are not registered, issued or sold in
accordance with applicable state or federal law, including applicable tax law, or such law
precludes the use of such Shares as the underlying investment media of the Contracts issued or to
be issued by the Company and if the Company reasonably determines that, as a result, it is
necessary to effect such a substitution of the shares of another investment company or series
-23-
thereof for such Shares, the Fund, the Underwriter or the Adviser shall reimburse the Company for
the expense of effecting the substitution (including any expenses incurred in obtaining an SEC
order or conducting a Contract owner vote).
ARTICLE
XI. Notices
Any notice shall be sufficiently given when sent by registered or certified mail or overnight
mail through a nationally-recognized delivery service 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 party.
If to the Fund:
DWS Variable Series I
DWS Variable Series II
DWS Investments VIT Funds
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000-0000
Attn.: Secretary
DWS Variable Series II
DWS Investments VIT Funds
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000-0000
Attn.: Secretary
If to the Company:
Annuity Investors Life Insurance Company
000 Xxxx Xxxxxx
Xxxxxxxxxx XX 00000
Attn: General Counsel
000 Xxxx Xxxxxx
Xxxxxxxxxx XX 00000
Attn: General Counsel
If to Underwriter:
DWS Xxxxxxx Distributors, Inc.
000 Xxxxx Xxxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attn.: Secretary
000 Xxxxx Xxxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attn.: Secretary
If to the Adviser:
Deutsche Investment Management Americas Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn.: Legal Department (U.S. Retail Division)
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn.: Legal Department (U.S. Retail Division)
-24-
ARTICLE XII. Miscellaneous
12.1. Subject to the requirements of legal process and regulatory authority, each party hereto
shall treat as confidential the names and addresses of the owners of the Contracts and all
information reasonably identified as confidential in writing by any other party hereto and, except
as permitted by this Agreement, shall not disclose, disseminate or utilize such names and addresses
and other confidential information without the express written consent of the affected party until
such time as such information has come into the public domain.
12.2. 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.
12.3. This Agreement may be executed simultaneously in two or more counterparts, each of which
taken together shall constitute one and the same instrument.
12.4. This Agreement incorporates the entire understanding and agreement among the parties
hereto, and supersedes any and all prior understandings and agreements between the parties hereto
with respect to the subject matter hereof.
12.5. If any provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of the Agreement shall not be affected thereby.
12.6. Each party hereto shall cooperate with each other party and all appropriate governmental
authorities (including without limitation the SEC, FINRA, and state insurance regulators) and shall
permit 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.
Notwithstanding the generality of the foregoing, each party hereto further agrees to furnish the
State Insurance Commissioner with any information or reports in connection with services provided
under this Agreement which such Commissioner may request in order to ascertain whether the variable
annuity operations of the Company are being conducted in a manner consistent with the State
variable annuity laws and regulations and any other applicable law or regulations.
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 laws.
12.8. This Agreement or any of the rights and obligations hereunder may not be assigned
by any party without the prior written consent of all parties hereto.
12.9. The Company shall furnish, or shall cause to be furnished, to the Fund or its
designee upon request copies of the following reports:
(a) the Company’s annual statement (prepared under statutory accounting principles) and
annual report (prepared under generally accepted accounting principles) filed with any state or
federal regulatory body or otherwise made available to the public, as soon as practicable and in
any event within 90 days after the end of each fiscal year; and
-25-
(b) any registration statement (without exhibits) and financial reports of the Company
filed with the Securities and Exchange Commission or any state insurance regulatory, as soon as
practicable after the filing thereof.
12.10. All persons are expressly put on notice of the Fund’s Agreement and Declaration of
Trust and all amendments thereto, all of which are on file with the Secretary of the Commonwealth
of Massachusetts, and the limitation of shareholder and trustee liability contained therein. This
Agreement has been executed by and on behalf of the Fund by its representatives as such
representatives and not individually, and the obligations of the Fund with respect to a Designated
Portfolio hereunder are not binding upon any of the trustees, officers or shareholders of the Fund
individually, but are binding upon only the assets and property of such Designated Portfolio. All
parties dealing with the Fund with respect to a Designated Portfolio shall look solely to the
assets of such Designated Portfolio for the enforcement of any claims against the Fund hereunder.
12.11. The Company is expressly put on notice that prospectus disclosure regarding the
potential risks of mixed and shared funding may be appropriate.
-26-
IN WITNESS WHEREOF, each of the parties hereto has 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 first above written.
| COMPANY: | ANNUITY INVESTORS LIFE INSURANCE COMPANY |
|||
| By: | /s/ Xxxxxxxxx X. Xxxxxxx | |||
| Name: | Xxxxxxxxx X. Xxxxxxx | |||
| Title: | Vice President | |||
| FUND: | DWS VARIABLE SERIES I |
|||
| By: | /s/ Xxxxxxx Xxxxx | |||
| Name: | XXXXXXX XXXXX | |||
| Title: | PRESIDENT | |||
| DWS VARIABLE SERIES II |
||||
| By: | /s/ Xxxxxxx Xxxxx | |||
| Name: | XXXXXXX XXXXX | |||
| Title: | PRESIDENT | |||
| DWS INVESTMENTS VIT FUNDS |
||||
| By: | /s/ Xxxxxxx Xxxxx | |||
| Name: | XXXXXXX XXXXX | |||
| Title: | PRESIDENT | |||
-27-
| UNDERWRITER: | DWS XXXXXXX DISTRIBUTORS, INC. |
|||
| By: | /s/ Xxxxxxx Xxxxx | |||
| Name: | XXXXXXX XXXXX | |||
| Title: | CHIEF OPERATING OFFICER | |||
| By: | /s/ Xxxxxx X. Xxxxxxx | |||
| Name: | XXXXXX X. XXXXXXX | |||
| Title: | MANAGING DIRECTOR | |||
| ADVISER: | DEUTSCHE INVESTMENT MANAGEMENT AMERICAS INC. |
|||
| By: | /s/ Xxxxxxx Xxxxx | |||
| Name: | XXXXXXX XXXXX | |||
| Title: | CHIEF OPERATING OFFICER | |||
| By: | /s/ Xxxx X. Xxxxxx | |||
| Name: | XXXX X. XXXXXX | |||
| Title: | Director & Counsel | |||
-28-
SCHEDULE A
Name of Separate Account and Date Established by Board of Directors
Annuity Investors Variable Account A May 26, 1995
Annuity Investors Variable Account B December 19, 1996
Annuity Investors Variable Account C November 7, 2001
Annuity Investors Variable Account B December 19, 1996
Annuity Investors Variable Account C November 7, 2001
Contracts
Funded by Annuity Investors Variable Account A
The Commodore Americus
The Commodore Nauticus
The Commodore Nauticus
Contracts Funded by Annuity Investors Variable Account B
The Commodore Advantage
The Commodore Independence
The Commodore Spirit
The Commodore Independence
The Commodore Spirit
Contracts Funded by Annuity Investors Variable Account C
The Commodore Helmsman
The Commodore Majesty
The Commodore Majesty
Access 100
Contributor Plus
Flex(b)
TotalGroup
Transition20
Contributor Plus
Flex(b)
TotalGroup
Transition20
-29-
SCHEDULE B
DESIGNATED PORTFOLIOS
AND CLASSES THEREOF
DESIGNATED PORTFOLIOS
AND CLASSES THEREOF
| Designated Portfolios. | Share Class | |||
A.
|
DWS Variable Series II DWS Global Thematic VIP |
Class A | ||
C.
|
DWS Investments VIT Funds DWS Equity 500 Index VIP DWS Small Cap Index VIP |
Class A Class A |
||
-30-
SCHEDULE C
EXPENSES
EXPENSES
| PARTY | ||||
| RESPONSIBLE | ||||
| ITEM | FUNCTION | FOR EXPENSE | ||
FUND PROSPECTUS |
||||
Update
|
Typesetting | Fund | ||
New Sales:
|
Printing Distribution |
Company Company |
||
Existing Owners:
|
Printing Distribution |
Fund Fund |
||
STATEMENTS OF ADDITIONAL INFORMATION |
Same as Prospectus | |||
PROXY MATERIALS OF THE FUND |
Typesetting Printing Distribution |
Fund Fund Fund |
||
ANNUAL REPORTS AND OTHER COMMUNICATIONS WITH SHAREHOLDERS OF THE FUND |
||||
All
|
Typesetting | Fund | ||
Marketing1
|
Printing Distribution |
Company Company |
||
Existing Owners:
|
Printing Distribution |
Fund Fund |
||
OPERATIONS OF FUND
|
All operations and related expenses, including the cost of registration and qualification of the Fund’s shares, preparation and filing of the Fund’s prospectus and registration statement, proxy materials and reports, the preparation of all statements and notices required by any federal or state law and all taxes on the issuance of the Fund’s shares, and all costs of management of the business affairs of the Fund. | Fund |
| 1 | Solely as it relates to the contracts listed on Schedule A, as it is attached to the same Agreement as this Schedule C. |
-31-
SCHEDULE D
RULE 22C-2 PROVISIONS
RULE 22C-2 PROVISIONS
1. Agreement to Provide Information. Company agrees to provide the Fund or its designee, upon
written request, the taxpayer identification number (“TIN”), the Individual/International Taxpayer
Identification Number (“ITIN”), or other government-issued identifier (“GII”) and the Contract
owner number or participant account number associated with the Shareholder, if known, of any or all
Shareholder(s) of the account, and the amount, date and transaction type (purchase, redemption,
transfer, or exchange) of every purchase, redemption, transfer, or exchange of Shares held through
an account maintained by the Company during the period covered by the request. Unless otherwise
specifically requested by the Fund, the Company shall only be required to provide information
relating to Shareholder-Initiated Transfer Purchases or Shareholder-Initiated Transfer Redemptions.
2. Period Covered by Request. Requests must set forth a specific period, not to exceed 90 days
from the date of the request, for which transaction information is sought. The Fund may request
transaction information older than 90 days from the date of the request as it deems necessary to
investigate compliance with policies established by the Fund for the purpose of eliminating or
reducing any dilution of the value of the outstanding shares issued by the Fund.
3. Form and Timing of Response.
(a) Company agrees to provide, promptly upon request of the Fund or its designee, the
requested information specified in paragraph 1 above. If requested by the Fund or its
designee, Company agrees to use best efforts to determine promptly whether any specific
person about whom it has received the identification and transaction information specified
in paragraph 1 is itself a financial intermediary (“indirect intermediary”) and, upon
further request of the Fund or its designee, promptly either (i) provide (or arrange to
have provided) the information set forth in paragraph 1 for those shareholders who hold an
account with an indirect intermediary or (ii) restrict or prohibit the indirect
intermediary from purchasing, in nominee name on behalf of other persons, securities issued
by the Fund. Company additionally agrees to inform the Fund whether it plans to perform (i)
or (ii).
(b) Responses required by this paragraph must be communicated in writing and in a
format mutually agreed upon by the parties.
(c) To the extent practicable, the format for any transaction information
provided to the Fund should be consistent with the NSCC Standardized Data Reporting
Format
4. Limitations on Use of Information. The Fund agrees not to use the information received pursuant
to this Amendment for any purpose other than as necessary to comply with the provisions of Rule
22c-2 or to fulfill other regulatory or legal requirements
-32-
subject to the privacy provisions of Title V of the Xxxxx-Xxxxx-Xxxxxx Act (Public Law 106-102) and
comparable state laws.
5. Agreement to Restrict Trading. Company agrees to execute written instructions from the Fund to
restrict or prohibit further purchases or exchanges of Shares by a Shareholder that has been
identified by the Fund as having engaged in transactions of the Fund’s Shares (directly or
indirectly through the Company’s account) that violate policies established by the Fund for the
purpose of eliminating or reducing any dilution of the value of the outstanding Shares issued by
the Fund. Unless otherwise directed by the Fund, any such restrictions or prohibitions shall only
apply to Shareholder-Initiated Transfer Purchases or Shareholder-Initiated Transfer Redemptions
that are effected directly or indirectly through Company. Instructions must be received by Company
at the address set forth in this Agreement, or such other address that Company may communicate to
Fund in writing from time to time, including, if applicable, an e-mail and/or facsimile telephone
number:
6. Form of Instructions. Instructions must include the TIN, ITIN, or GII and the
specific individual Contract owner number or participant account number associated with the
Shareholder, if known, and the specific restriction(s) to be executed, including how long the
restriction(s) is(are) to remain in place. If the TIN, ITIN, GII or the specific individual
Contract owner number or participant account number associated with the Shareholder is not known,
the instructions must include an equivalent identifying number of the Shareholder(s) or account(s)
or other agreed upon information to which the instruction relates.
7. Timing of Response. Company agrees to execute instructions from the Fund to restrict or
prohibit trading as soon as reasonably practicable, but not later than five business days
after receipt of the instructions by the Company.
8. Confirmation by Company. Company must provide written confirmation to the Fund that instructions
from the Fund to restrict or prohibit trading have been executed. Company agrees to provide
confirmation as soon as reasonably practicable, but not later than ten business days after the
instructions have been executed.
9. Construction of the Agreement; Fund Participation Agreement. The parties have entered into a
Fund Participation Agreement between or among them for the purchase and redemption of shares of the
Funds by the Accounts in connection with the Contracts and this Schedule D is a part thereof. To
the extent the terms of this Schedule D conflict with the remainder of the terms of the Fund
Participation Agreement, the terms of this Schedule D shall control.
10. Definitions. As used in this Schedule D, the following terms shall have the following
meanings, unless a different meaning is clearly required by the contexts:
The term “Company” shall mean the Company as defined under the Fund Participation Agreement.
-33-
The term “Fund” shall mean the Fund and any Designated Portfolio as defined under the Fund
Participation Agreement and includes (i) an investment adviser to or administrator for the
Fund; (ii) the principal underwriter or distributor for the Fund; or (iii) the transfer
agent for the Fund. The term not does include any “excepted funds” as defined in SEC Rule
22c-2(b) under the Investment Company Act of 1940.*
The term “Shares” means the interests of Shareholders corresponding to the redeemable
securities of record issued by the Fund under the Investment Company Act of 1940 that are
held by the Company.
The term “Shareholder” means the owner of interests in a variable annuity or variable life
insurance contract issued by the Company (“Contract”), or a participant in an employee
benefit plan with a beneficial interest in a contract.
The term “Shareholder-Initiated Transfer Purchase” means a transaction that is initiated or
directed by a Shareholder that results in a transfer of assets within a Contract to a Fund,
but does not include transactions that are executed: (i) automatically pursuant to a
contractual or systematic program or enrollment such as transfer of assets within a Contract
to a Fund as a result of “dollar cost averaging” programs, insurance company approved asset
allocation programs, or automatic rebalancing programs; (ii) pursuant to a Contract death
benefit; (iii) one-time step-up in Contract value pursuant to a Contract death benefit; (iv)
allocation of assets to a Fund through a Contract as a result of payments such as loan
repayments, scheduled contributions, retirement plan salary reduction contributions, or
planned premium payments to the Contract; or (v) pre-arranged transfers at the conclusion of
a required free look period.
The term “Shareholder-Initiated Transfer Redemption” means a transaction that is initiated
or directed by a Shareholder that results in a transfer of assets within a Contract out of a
Fund, but does not include transactions that are executed: (i) automatically pursuant to a
contractual or systematic program or enrollments such as transfers of assets within a
Contract out of a Fund as a result of annuity payouts, loans, systematic withdrawal
programs, insurance company approved asset allocation programs and automatic rebalancing
programs; (ii) as a result of any deduction of charges or fees under a Contract; (iii)
within a Contract out of a Fund as a result of scheduled withdrawals or surrenders from a
Contract; or (iv) as a result of payment of a death benefit from a Contract.
The term “written” includes electronic writings and facsimile transmissions.
The term “purchase” does not include the automatic reinvestment of dividends.
The term “promptly” as used in paragraph 3(a) shall mean as soon as practicable but in no
event later than ten business days from the Company’s receipt of the request for information
from the Fund or its designee.
| * | As defined in SEC Rule 22c-2(b), the term “excepted fund” means any: (1) money market fund; (2) fund that issues securities that are listed on a national exchange; and (3) fund that |
-34-
| affirmatively permits short-term trading of its securities, if its prospectus clearly and prominently discloses that the fund permits short-term trading of its securities and that such trading may result in additional costs for the fund. |
-35-
