FUND PARTICIPATION AGREEMENT
THIS AGREEMENT, made as of the 7" day of August, 2002 by
and between XXXXXXXXX XXXXXX ADVISERS MANAGEMENT TRUST
("TRUST"), XXXXXXXXX XXXXXX MANAGEMENT INC. ("NB
MANAGEMENT"), a New York corporation, and THE UNION CENTRAL
LIFE INSURANCE COMPANY ("LIFE COMPANY"), a life insurance
company organized under the laws of the State of Ohio..
WHEREAS, TRUST is registered with the Securities and
Exchange Commission ("SEC") under the Investment Company Act
of 1940, as amended ("40 Act") as an open-end, diversified
management investment company; and
WHEREAS, TRUST is organized as a series fund comprised
of several portfolios ("Portfolios"), the currently available
of which are listed on Appendix A hereto; and
WHEREAS, TRUST was organized to act as the funding
vehicle for certain variable life insurance and/or variable
annuity contracts ("Variable Contracts") offered by life
insurance companies through separate accounts of such life
insurance companies ("Participating Insurance Companies") and
also offers its shares to certain qualified pension and
retirement plans; and
WHEREAS, TRUST has received an order from the SEC, dated
May 5,1995 (File No. 812-9164), granting Participating
Insurance Companies and their separate accounts exemptions
from the provisions of Sections 9(a), 13(a), 15(a) and 15(b)
of the '40 Act, and Rules 6e-2(b)(15) and 6e-3j)(b)(15)
thereunder, to the extent necessary to permit shares of the
Portfolios of the TRUST to be sold to and held by variable
annuity and variable life insurance separate accounts of both
affiliated and unaffiliated life insurance companies and
certain qualified pension and retirement plans (the "Order");
and
WHEREAS, LIFE COMPANY has established or will establish
one or more separate accounts ("Separate Accounts") to offer
Variable Contracts and is desirous of having TRUST as one of
the underlying funding vehicles for such Variable Contracts;
and
WHEREAS, NB MANAGEMENT is registered with the SEC as an
investment adviser under the Investment Advisers Act of 1940
and as a broker-dealer under the Securities Exchange Act of
1934, as amended; and
WHEREAS, NB MANAGEMENT is the investment manager and
administrator of the Portfolios of the Trust and distributor
of the shares of each Portfolio of TRUST; and
WHEREAS, to the extent permitted by applicable insurance
laws and regulations, LIFE COMPANY intends to purchase shares
of TRUST to fund the aforementioned Variable Contracts and
TRUST is authorized to sell such shares to LIFE COMPANY at
net asset value;
NOW, THEREFORE, in consideration of their mutual
promises, LIFE COMPANY, TRUST, and NB MANAGEMENT agree as
follows:
Article 1. SALE OF TRUST SHARES
1.1 TRUST agrees to make available to the Separate
Accounts of LIFE COMPANY as listed in Appendix B shares of
the selected Portfolios for investment of proceeds from
Variable Contracts allocated to the designated Separate
Accounts, such shares to be offered as provided in TRUST's
Prospectus.
1.2 TRUST agrees to sell to LIFE COMPANY those shares of
the selected Portfolios of TRUST which LIFE COMPANY orders,
executing such orders on a daily basis at the net asset value
next computed after receipt by TRUST or its designee of the
order for the shares of TRUST. For purposes of this Section
1.2, LIFE COMPANY shall be the designee of TRUST for receipt
of such orders from LIFE COMPANY and receipt by such designee
shall constitute receipt by TRUST; provided that TRUST
receives notice of such order by 9:30 a.m. New York Time on
the next following Business Day. "Business Day" shall mean
any day on which the New York Stock Exchange is open for
trading and on which TRUST calculates its net asset value
pursuant to the rules of the SEC.
1.3 TRUST agrees to redeem for cash, on LIFE COMPANY's
request, any full or fractional shares of TRUST held by LIFE
COMPANY, executing such requests on a daily basis at the net
asset value next computed after receipt by TRUST or its
designee of the request for redemption. For purposes of this
Section 1.3, LIFE COMPANY shall be the designee of TRUST for
receipt of requests for redemption from LIFE COMPANY and
receipt by such designee shall constitute receipt by TRUST;
provided that TRUST receives notice of such request for
redemption by 9:30 a.m. New York time on the next following
Business Day.
1.4 TRUST shall furnish, on or before the ex-dividend
date, notice to LIFE COMPANY of any income dividends or
capital gain distributions payable on the shares of any
Portfolio of TRUST. LIFE COMPANY hereby elects to receive all
such income dividends and capital gain distributions as are
payable on a Portfolio's shares in additional shares of the
Portfolio. TRUST
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shall notify LIFE COMPANY of the number of shares so issued
as payment of such dividends and distributions. LIFE COMPANY
reserves the right to revoke this election by written notice
to the Trust.
1.5 TRUST shall make the net asset value per share for
the selected Portfolio(s) available to LIFE COMPANY on a
daily basis as soon as reasonably practicable after the net
asset value per share is calculated but shall use its best
efforts to make such net asset value available by 6:30 p.m.
New York time. If TRUST provides LIFE COMPANY with materially
incorrect share net asset value information through no fault
of LIFE COMPANY, LIFE COMPANY on behalf of the Separate
Accounts, shall be entitled to an adjustment to the number of
shares purchased or redeemed to reflect the correct share net
asset value. Any material error (determined in accordance
with SEC guidelines) in the calculation of net asset value
per share, dividend or capital gain information shall be
reported promptly upon discovery to LIFE COMPANY. In the
event of such material error, the Trust shall also be
responsible for any of LIFE COMPANY's administrative or other
costs or losses incurred in correcting Variable Contract
Owner accounts.
1.6 At the end of each Business Day, LIFE COMPANY shall
use the information described in Section 1.5 to calculate
Separate Account unit values for the day. Using these unit
values, LIFE COMPANY shall process each such business day's
Separate Account transactions based on requests and premiums
received by it by close of the New York Stock Exchange
(normally 4:00 p.m. New York time) to determine the net
dollar amount of TRUST shares which shall be purchased or
redeemed at that day's closing net asset value per share. The
net share purchase or redemption orders so determined shall
be transmitted to TRUST by LIFE COMPANY by 9:30 a.m. New York
Time on the Business Day next following LIFE COMPANY's
receipt of such requests and premiums in accordance with the
terms of Sections 1.2 and 1.3 hereof.
1.7 If LIFE COMPANY's order requests the net purchase of
TRUST shares, LIFE COMPANY shall pay for such purchase by
wiring federal funds to TRUST or its designated custodial
account on the day the order is actually transmitted by LIFE
COMPANY by 3:00 p.m. New York Time. If LIFE COMPANY's order
requests a net redemption resulting in a payment of
redemption proceeds to LIFE COMPANY, TRUST shall wire the
redemption proceeds to LIFE COMPANY on the day the order is
actually received by TRUST by 3:00 p.m. New York Time unless
doing so would require TRUST to dispose of portfolio
securities or otherwise incur additional costs, but in such
event, proceeds shall be wired to LIFE COMPANY within seven
days and TRUST shall notify the person designated in writing
by LIFE COMPANY as the recipient for such notice of such
delay by 3:00 p.m. New York Time the same business day that
LIFE
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COMPANY transmits the redemption order to TRUST. If LIFE
COMPANY's order requests the application of redemption
proceeds from the redemption of shares to the purchase of
shares of another fund administered or distributed by NB
MANAGEMENT, TRUST shall so apply such proceeds on the same
Business Day that LIFE COMPANY transmits such order to TRUST.
1.8 Notwithstanding Section 1.7, TRUST reserves the
right to suspend the. right of redemption or postpone the
date of payment or satisfaction upon redemption consistent
with Section 22(e) of the 40 Act and any rules thereunder.
1.9 TRUST agrees that all shares of the Portfolios of
TRUST will be sold only to Participating Insurance Companies
which have agreed to participate in TRUST to fund their
Separate Accounts and/or to certain qualified pension and
other retirement plans, all in accordance with the
requirements of Section 817(h) of the Internal Revenue Code
of 1986, as amended ("Code") and Treasury Regulation 1.817-5.
Shares of the Portfolios of TRUST will not be sold directly
to the general public.
1.10 TRUST may refuse to sell shares of any Portfolio to
any person, or suspend or terminate the offering of the
shares of any Portfolio if such action is required by law or
by regulatory authorities having jurisdiction or is, in the
sole discretion of the Board of Trustees of TRUST, acting in
good faith and in light of its fiduciary duties under federal
and any applicable state laws, deemed necessary and in the
best interests of the shareholders of such Portfolios.
Article II. REPRESENTATIONS AND WARRANTIES
2.1 LIFE COMPANY represents and warrants that it is an
insurance company duly organized and in good standing under
the laws of Ohio and that it has legally and validly
established each Separate Account as a segregated asset
account under such laws, and that Carillon Investments, Inc.,
the principal underwriter for the Variable Contracts, is
registered as a brokerdealer under the Securities Exchange
Act of 1934.
2.2 LIFE COMPANY represents and warrants that it has
registered or, prior to any issuance or sale of the Variable
Contracts, will register each Separate Account as a unit
investment trust ("UIT") in accordance with the provisions of
the '40 Act and cause each Separate Account to remain so
registered to serve as a segregated asset account for the
Variable Contracts, unless an exemption from registration is
available.
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2.3 LIFE COMPANY represents and warrants that the
Variable Contracts will be registered under the Securities
Act of 1933 (the '"33 Act") unless an exemption from
registration is available prior to any issuance or sale of
the Variable Contracts and that the Variable Contracts will
be issued and sold in compliance in all material respects
with all applicable federal and state laws and further that
the sale of the Variable Contracts shall comply in all
material respects with state insurance law suitability
requirements.
2.4 LIFE COMPANY represents and warrants that the
Variable Contracts are currently and at the time of issuance
will be treated as life insurance, endowment or annuity
contracts under applicable provisions of the Code, that it
will maintain such treatment and that it will notify TRUST
immediately upon having a reasonable basis for believing that
the Variable Contracts have ceased to be so treated or that
they might not be so treated in the future.
2.5 LIFE COMPANY represents and warrants that it shall
deliver such prospectuses, statements of additional
information, proxy statements and periodic reports of the
Trust as required to be delivered under applicable federal or
state law and interpretations of federal and state securities
regulators thereunder in connection with the offer, sale or
acquisition of the Variable Contracts.
2.6 TRUST represents and warrants that the Portfolio
shares offered and sold pursuant to this Agreement will be
registered under the '33 Act and sold in accordance with all
applicable federal and state laws, and TRUST shall be
registered under the '40 Act prior to and at the time of any
issuance or sale of such shares. TRUST shall amend its
registration statement under the '33 Act and the '40 Act from
time to time as required in order to effect the continuous
offering of its shares. TRUST shall register and qualify its
shares for sale in accordance with the laws of the various
states to the extent necessary to perform its obligations
under this Agreement.
2.7 TRUST represents and warrants that each Portfolio
currently complies, and will continue to comply with the
diversification requirements set forth in Section 817(h) of
the Code, and the rules and regulations thereunder, including
without limitation Treasury Regulation 1.817-5 (or any
successor or similar provisions), and will notify LIFE
COMPANY immediately upon having a reasonable basis for
believing any Portfolio has ceased to comply or might not so
comply and will immediately take all reasonable steps to
adequately diversify the Portfolio to achieve compliance
within the grace period afforded by Regulation 1.817-5.
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2.8 TRUST represents and warrants that each Portfolio
invested in by the Separate Account is currently qualified as
a "regulated investment company" under Subchapter M of the
Code, that it will maintain such qualification under
Subchapter M (or any successor or similar provisions) and
will notify LIFE COMPANY immediately upon having a reasonable
basis for believing any Portfolio has ceased to so qualify or
might not so qualify in the future.
2.9 LIFE COMPANY hereby consents to the use by TRUST of
the name and telephone number of LIFE COMPANY and to the
reference by TRUST to the relationship between LIFE COMPANY
and TRUST as part of an informational. page on TRUST'S site
on the World Wide Web portion of the Internet.
2.10 The Trust represents that to the extent that it
decides to finance distribution expenses pursuant to Rule
12b-I under the 1940 Act, it will have a board of trustees, a
majority of whom are not interested persons of the Trust, to
formulate and approve any plan under Rule 12b-I to finance
distribution expenses.
2.11 The Trust represents that the Trust's investment
policies, fees and expenses are and shall at all times remain
in compliance with the laws of the State of Delaware and the
Trust represents that its respective operations are and shall
at all times remain in material compliance with the laws of
the State of Delaware to the extent required to perform this
Agreement.
2.12 The Trust represents that it is lawfully organized
and validly existing under the laws of the State of Delaware
and that it does and will comply in all material respects
with the 1940 Act.
2.13 NB Management represents and warrants that it is a
member in good standing of the NASD and is registered as a
broker-dealer with the SEC. NB Management further represents
that it will sell and distribute the Trust's share in
accordance with the laws of the State of Delaware and any
applicable state and federal securities law.
2.14 The Trust represents and warrants that its
directors, officers, employees dealing with the money and/or
securities of the Trust are and shall continue to be at all
times covered by a blanket fidelity bond or similar coverage
for the benefit of the Trust in an amount not less than the
minimum coverage as required by Rule 17g-(I) under the 1940
Act or related provisions as may be promulgated from time to
time. The aforesaid blanket fidelity bond shall include
coverage for larceny and embezzlement and shall be issued by
a reputable bonding company.
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2.15 NB Management represents and warrants that it is
registered as an investment adviser and shall remain duly
registered under all applicable federal and state securities
laws and that it shall perform its obligations for the Trust
in compliance in all material respects with the laws of the
State of Delaware and any applicable state and federal
securities laws.
2.16 Each party represents and warrants that the
execution and delivery of this Agreement and the consummation
of the transactions contemplated herein have been duly
authorized by all necessary corporate, partnership or trust
action, as applicable, by such party, and, when so executed
and delivered, this Agreement will be the valid and binding
obligation of such party enforceable in accordance with its
terms.
Article III. PROSPECTUS AND PROXY STATEMENTS
3.1 TRUST shall prepare and be responsible for filing
with the SEC and any state regulators requiring such filing
all shareholder reports, notices, proxy materials (or similar
materials such as voting instruction solicitation materials),
prospectuses and statements of additional information of
TRUST. TRUST shall bear the costs of registration and
qualification of shares of the Portfolios, preparation and
filing of the documents listed in this Section 3.1 and all
taxes to which an issuer is subject on the issuance and
transfer of its shares.
3.2 TRUST will bear the printing costs (or duplicating
costs with respect to the statement of additional
information) and mailing costs associated with the delivery
of the following TRUST (or individual Portfolio) documents,
and any supplements thereto, to existing Variable Contract
owners of LIFE COMPANY (regardless of whether such documents
are printed together with, or separate from, the documents
for other trusts in the Variable Contracts):
(i) prospectuses and statements of additional
information;
(ii) annual and semi-annual reports; and
(iii) proxy materials (including, but not limited
to, the proxy cards, notice and statement, as
well as the costs associated with tabulating
votes).
LIFE COMPANY will submit any bills for printing,
duplicating and/or mailing costs, relating to the TRUST
documents described above, to TRUST for reimbursement by
TRUST. LIFE COMPANY shall monitor such costs and shall use
its best efforts to control these
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costs. LIFE COMPANY will provide TRUST on a semi-annual
basis, or more frequently as reasonably requested by TRUST,
with a current tabulation of the number of existing Variable
Contract owners of LIFE COMPANY whose Variable Contract
values are invested in TRUST.
This tabulation will be sent to TRUST in the form of a letter
signed by a duly authorized officer of LIFE COMPANY attesting
to the accuracy of the information contained in the letter.
If requested by LIFE COMPANY, the TRUST shall provide such
documentation (including a final copy of the TRUST's
prospectus as set in type or in camera-ready copy and/or in
pdf file format) and other assistance as is reasonably
necessary in order for LIFE COMPANY to print together in one
document the current prospectus for the Variable Contracts
issued by LIFE COMPANY and the current prospectus for the
TRUST. Should LIFE COMPANY wish to print any of these
documents in a format different from that provided by TRUST,
LIFE COMPANY shall provide Trust with sixty (60) days' prior
written notice and LIFE COMPANY shall bear the cost
associated with any format change.
3.3 TRUST will provide, at its expense, LIFE COMPANY
with the following TRUST (or individual Portfolio) documents,
and any supplements thereto, with respect to prospective
Variable Contract owners of LIFE COMPANY:
(i) camera-ready copy of the current prospectus
for printing by the LIFE COMPANY, and/or pdf
file format of the prospectus;
(ii) a copy of the statement of additional
information suitable for duplication;
(iii) camera-ready copy of proxy material suitable
for printing; and
(iv) camera-ready copy of the annual and
semi-annual reports for printing by the LIFE
COMPANY, and/or pdf file format thereof.
3.4 TRUST will provide LIFE COMPANY with at least one
complete copy of all prospectuses, statements of additional
information, annual and semi-annual reports, proxy
statements, exemptive applications and all amendments or
supplements to any of the above that relate to the Portfolios
promptly after the filing of each such document with the SEC
or other regulatory authority. LIFE COMPANY will provide
TRUST with at least one complete copy of all prospectuses,
statements of additional information, annual and semi-annual
reports, proxy statements, exemptive applications and all
amendments or supplements to any of the above that
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relate to a Separate Account promptly after the filing of
each such document with the SEC or other regulatory
authority.
Article IV. SALES MATERIALS; PRIVACY
4.1 LIFE COMPANY will furnish, or will cause to be
furnished, to TRUST and NB MANAGEMENT, each piece of sales
literature or other promotional material in which TRUST or NB
MANAGEMENT is named, at least five (5) Business Days prior to
its intended use. No such material will be used if TRUST or
NB MANAGEMENT objects to its use in writing within five (5)
Business Days after receipt of such material.
4.2 TRUST and NB MANAGEMENT will furnish, or will cause
to be furnished, to LIFE COMPANY, each piece of sales
literature or other promotional material in which LIFE
COMPANY or its Separate Accounts are named, at least five (5)
Business Days prior to its intended use. No such material
will be used if LIFE COMPANY objects to its use in writing
within five (5) Business Days after receipt of such material.
4.3 TRUST and its affiliates and agents shall not give
any information or make any representations on behalf of LIFE
COMPANY or concerning LIFE COMPANY, the Separate Accounts, or
the Variable Contracts issued by LIFE COMPANY, other than the
information or representations contained in a registration
statement or prospectus for such Variable Contracts, as such
registration statement and prospectus may be amended or
supplemented from time to time, or in reports of the Separate
Accounts or reports prepared for distribution to owners of
such Variable Contracts, or in sales literature or other
promotional material approved by LIFE COMPANY or its
designee, except with the written permission of LIFE COMPANY.
4.4 LIFE COMPANY and its affiliates and agents shall not
give any information or make any representations on behalf of
TRUST or concerning TRUST other than the information or
representations contained in a registration statement or
prospectus for TRUST, as such registration statement and
prospectus may be amended or supplemented from time to time,
or in sales literature or other promotional material approved
by TRUST or its designee, except with the written permission
of TRUST.
4.5 For purposes of this Agreement, the phrase "sales
literature or other promotional material" or words of similar
import include, without limitation, advertisements (such as
material published, or designed for use, in a newspaper,
magazine or other periodical, radio, television,
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telephone or tape recording, videotape display, signs or
billboards, motion pictures or other public media), sales
literature (such as any written communication distributed or
made generally available to customers or the public,
including brochures, circulars, research reports, market
letters, form letters, seminar texts, or reprints or excerpts
of any other advertisement, sales literature, or published
article), educational or training materials or other
communications distributed or made generally available to
some or all agents or employees, registration statements,
prospectuses, statements of additional information,
shareholder reports and proxy materials, and any other
material constituting sales literature or advertising under
National Association of Securities Dealers, Inc. rules, the
'40 Act or the '33 Act.
4.6 Subject to law and regulatory authority, each party
hereto shall treat as confidential all information pertaining
to the owners of the Variable 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 until such time
as it may come into the public domain without the express
written consent of the affected party. Each party hereto
shall be solely responsible for the compliance of their
officers, directors, employees, agents, independent
contractors, and any affiliated and non-affiliated third
parties with all applicable privacy-related laws and
regulations including but not limited to the Xxxxx-Xxxxx-
Xxxxxx Act and Regulation S-P. The provisions of this Section
4.6 shall survive the termination of this Agreement.
Article V. POTENTIAL CONFLICTS
5.1 The Board of Trustees of TRUST (the "Board") will
monitor TRUST for the existence of any material
irreconcilable conflict between the interests of the Variable
Contract owners of Participating Insurance Company Separate
Accounts investing in the TRUST. A material irreconcilable
conflict may arise for a variety of reasons, including: (a)
state insurance regulatory authority action; (b) a change in
applicable federal or state insurance, tax, or securities
laws or regulations, or a public ruling, private letter
ruling, or any similar action by insurance, tax, or
securities regulatory authorities; (c) an administrative or
judicial decision in any relevant proceeding; (d) the manner
in which the investments of the TRUST are being managed; (e)
a difference in voting instructions given by variable annuity
and variable life insurance contract owners or by contract
owners of different Participating Insurance Companies; or (f)
a decision by a Participating Insurance Company to disregard
voting instructions of Variable Contract owners.
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5.2 LIFE COMPANY will report any potential or existing
conflicts to the Board. LIFE COMPANY will be responsible for
assisting the Board in carrying out its responsibilities
under the Conditions set forth in the notice issued by the
SEC for the TRUST on April 12, 1995 (the "Notice")
(Investment Company Act Release No. 21003), , by providing
the Board with all information reasonably necessary for it to
consider any issues raised. This responsibility includes, but
is not limited to, an obligation by LIFE COMPANY to inform
the Board whenever Variable Contract owner voting
instructions are disregarded by LIFE COMPANY. These
responsibilities will be carried out with a view only to the
interests of the Variable Contract owners.
5.3 If a majority of the Board or a majority of its
disinterested trustees determines that a material
irreconcilable conflict exists, affecting the LIFE COMPANY,
LIFE COMPANY, at its expense and to the extent reasonably
practicable (as determined by a majority of disinterested
trustees), will take any steps necessary to remedy or
eliminate the irreconcilable material conflict, including:
(a) withdrawing the assets allocable to some or all of the
Separate Accounts from the TRUST or any Portfolio thereof and
reinvesting those assets in a different investment medium,
which may include another Portfolio of TRUST or another
investment company or submitting the question as to whether
such segregation should be implemented to a vote of all
affected Variable Contract owners and, as appropriate,
segregating the assets of any appropriate group (i.e.,
Variable Contract owners of one or more Participating
Insurance Companies) that votes in favor of such segregation,
or offering to the affected Variable Contract owners the
option of making such a change; and (b) establishing a new
registered management investment company or managed separate
account. If a material irreconcilable conflict arises because
of LIFE COMPANY's decision to disregard Variable Contract
owner voting instructions, and that decision represents a
minority position or would preclude a majority vote, LIFE
COMPANY may be required, at the election of the TRUST, to
withdraw its Separate Account's investment in the TRUST, and
no charge or penalty will be imposed as a result of such
withdrawal. The responsibility to take such remedial action
shall be carried out with a view only to the interests of the
Variable Contract owners.
For the purposes of this Section 5.3, a majority of the
disinterested members of the Board shall determine whether or
not any proposed action adequately remedies any material
irreconcilable conflict, but in no event will the TRUST or NB
MANAGEMENT (or any other investment adviser of the TRUST) be
required to establish a new funding medium for any Variable
Contract. Further, LIFE COMPANY shall not be required by this
Section 5.3 to establish a new funding medium for any
Variable Contract if any offer to do so has been declined by
a vote of a majority of Variable Contract owners materially
affected by the irreconcilable material conflict.
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5.4 The Board's determination of the existence of a
material irreconcilable conflict and its implications shall
be made known promptly and in writing to LIFE COMPANY.
5.5 No less than annually, LIFE COMPANY shall submit to
the Board such reports, materials or data as the Board may
reasonably request so that the Board may fully carry out the
obligations imposed upon it by these Conditions. Such
reports, materials, and data shall be submitted more
frequently if deemed appropriate by the Board.
Article VI. VOTING
6.1 LIFE COMPANY will provide pass-through voting
privileges to all Variable Contract owners so long as the SEC
continues to interpret the '40 Act as requiring pass-through
voting privileges for Variable Contract owners. Accordingly,
LIFE COMPANY, where applicable, will vote shares of TRUST
held in its Separate Accounts in a manner consistent with
voting instructions timely received from its Variable
Contract owners. LIFE COMPANY will be responsible for
assuring that each of its Separate Accounts that participates
in TRUST calculates voting privileges as follows. LIFE
COMPANY shall vote shares for which it has not received
timely voting instructions, as well as shares it owns, in the
same proportion as it votes those shares for which it has
received voting instructions.
6.2 If and to the extent Rule 6e-2 and Rule 6e-3(T) are
amended, or Rule 6e-3 is adopted, to provide exemptive relief
from any provision of the '40 Act or the rules thereunder
with respect to mixed and shared funding on terms and
conditions materially different from any exemptions granted
in the Order, then TRUST and/or LIFE COMPANY, as appropriate,
shall take such steps as may be necessary to comply with Rule
6e-2 and Rule 6e-3(T), as amended, and Rule 6e-3, as adopted,
to the extent such Rules are applicable.
Article VII. INDEMNIFICATION
7.1 Indemnification by LIFE COMPANY. LIFE COMPANY agrees to
indemnify and hold harmless TRUST and NB MANAGEMENT and each
of their Trustees, directors, officers, employees and agents
and each person, if any, who controls TRUST or NB MANAGEMENT
within the meaning of Section 15 of the '33 Act
(collectively, the "Indemnified Parties" for purposes of this
Article VII) against any and all losses, claims, damages,
liabilities (including amounts paid in settlement with the
written consent of LIFE COMPANY, which consent shall not
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be unreasonably withheld) or litigation (including legal and
other expenses), to which the Indemnified Parties may become
subject under any statute, regulation, at common law or
otherwise, insofar as such losses, claims, damages,
liabilities or expenses (or actions in respect thereof) or
settlements:
(a) arise out of or are based upon any untrue
statements or alleged untrue statements of any
material fact contained in the Registration
Statement, prospectus, or sales literature for
the Variable Contracts or contained in the
Variable 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 to LIFE
COMPANY by or on behalf of TRUST for use in the
registration statement, prospectus or sales
literature for the Variable Contracts or in the
Variable Contracts (or any amendment or
supplement) or otherwise for use in connection
with the sale of the Variable Contracts or TRUST
shares; or
(b) arise out of or as a result of statements or
representations (other than statements or representations
contained in the registration statement, prospectus or sales
literature of TRUST not supplied by LIFE COMPANY, or persons
under its control) or wrongful conduct of LIFE COMPANY or any
of its directors, officers, employees or agents, with respect
to the sale or distribution of the Variable Contracts or
TRUST shares; or
(c) arise out of any untrue statement or alleged
untrue statement of a material fact contained in
a registration statement, prospectus, or sales
literature of TRUST 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
statement or omission or such alleged statement
or omission was made in reliance upon and in
conformity with information furnished to TRUST
for inclusion therein by or on behalf of LIFE
COMPANY; or
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(d) arise as a result of any failure by LIFE COMPANY
to substantially provide the services and furnish
the materials under the terms of this Agreement;
or
(e) arise out of or result from any material breach
of any representation and/or warranty made by
LIFE COMPANY in this Agreement or arise out of
or result from any other material breach of this
Agreement by LIFE COMPANY.
7.2 LIFE COMPANY shall not be liable under this
indemnification provision with respect to any losses, claims,
damages, liabilities or litigation incurred or assessed
against an Indemnified Party as such may arise from 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 obligations or duties under this Agreement or to
TRUST, whichever is applicable.
7.3 LIFE 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 LIFE 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 LIFE COMPANY
of any such claim shall not relieve LIFE COMPANY 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. In case any such action is brought
against an Indemnified Party, LIFE COMPANY shall be entitled
to participate at its own expense in the defense of such
action. LIFE COMPANY also shall be entitled to assume the
defense thereof, with counsel reasonably satisfactory to the
party named in the action. After notice from LIFE COMPANY to
such party of LIFE 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 LIFE
COMPANY 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.
7.4 Indemnification by NB MANAGEMENT. NB MANAGEMENT
agrees to indemnify and hold harmless LIFE COMPANY and each
of its directors, officers, employees, and agents and each
person, if any, who controls LIFE COMPANY within the meaning
of Section 15 of the '33 Act (collectively, the "Indemnified
Parties" for the purposes of this Article VII) against
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any and all losses, claims, damages, liabilities (including
amounts paid in settlement with the written consent of NB
MANAGEMENT which consent shall not be unreasonably withheld)
or litigation (including 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:
(a) arise out of or are based upon any untrue
statement or alleged untrue statement of any
material fact contained in the registration
statement, prospectus or sales literature of
TRUST (or any amendment or supplement to any
of the foregoing), or arise out of or are based
upon the omission or the alleged omission to
state therein a material fact required to be
stated therein or necessary to make the
statements therein not misleading, provided
that this agreement to indemnify shall not
apply as to any Indemnified Party if such
statement or omission or such alleged statement
or omission was made in reliance upon and in
conformity with information furnished to NB
MANAGEMENT or TRUST by or on behalf of LIFE
COMPANY for use in the registration statement
or prospectus for TRUST or in sales literature
(or any amendment or supplement) or otherwise
for use in connection with the sale of the
Variable Contracts or TRUST shares; or
(b) arise out of or as a result of statements or
representations (other than statements or
representations contained in the registration
statement, prospectus or sales literature for
the Variable Contracts not supplied by NB
MANAGEMENT or persons under its control) or
wrongful conduct of TRUST or NB MANAGEMENT or
persons under their control, with respect to
the sale or distribution of the Variable
Contracts or TRUST shares; or
(c) arise out of any untrue statement or alleged
untrue statement of a material fact contained
in a registration statement, prospectus, or
sales literature covering the Variable 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 statements
therein not misleading, if such statement or
omission or such alleged statement or omission
was made in reliance upon and in conformity with
information
15
furnished to LIFE COMPANY for inclusion therein
by or on behalf of TRUST; or
(d) arise as a result of (i) a failure by TRUST to
substantially provide the services and furnish
the materials under the terms of this Agreement;
or (ii) a failure by a Portfolio(s) invested in
by the Separate Account to comply with the
diversification requirements of Section 817(h)
of the Code; or (iii) a failure by a Portfolio(s)
invested in by the Separate Account to qualify as
a "regulated investment company" under Subchapter
M of the Code; or
(e) arise out of or result from any material breach
of any representation and/or warranty made by NB
MANAGEMENT or TRUST in this Agreement or arise
out of or result from any other material breach
of this Agreement by NB MANAGEMENT or TRUST.
7.5 NB MANAGEMENT shall not be liable under this
indemnification provision with respect to any losses, claims,
damages, liabilities or litigation 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 obligations and duties under this Agreement or
to LIFE COMPANY.
7.6 NB MANAGEMENT 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 NB MANAGEMENT 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 NB MANAGEMENT
of any such claim shall not relieve NB MANAGEMENT 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. In case any such action is brought
against the Indemnified Parties, NB MANAGEMENT shall be
entitled to participate at its own expense in the defense
thereof. NB MANAGEMENT also shall be entitled to assume the
defense thereof, with counsel reasonably satisfactory to the
party named in the action. After notice from NB MANAGEMENT to
such party of NB MANAGEMENT's election to assume the defense
thereof, the Indemnified Party shall bear the fees and
expenses of any additional counsel retained by it, and NB
MANAGEMENT will not be liable to such party under this
16
Agreement 17*or any legal or other expenses subsequently
incurred by such party independently in connection with the
defense thereof other than reasonable costs of investigation.
7.7 The provision of this Article VII shall survive the
termination of this Agreement.
Article VIII. TERM; TERMINATION
8.1 This Agreement shall be effective as of the date
hereof and shall continue in
8.2 This Agreement shall terminate in accordance with
the following provisions:
(a) At the option of LIFE COMPANY or TRUST at any
time from the date hereof upon 90 days' notice, unless a
shorter time is agreed to by the parties;
(b) At the option of LIFE COMPANY, if TRUST shares
are not reasonably available to meet the requirements of the
Variable Contracts as determined by LIFE COMPANY. Prompt
notice of election to terminate shall be furnished by LIFE
COMPANY, said termination to be effective ten days after
receipt of notice unless TRUST makes available a sufficient
number of shares to reasonably meet the requirements of the
Variable Contracts within said ten-day period;
(c) At the option of LIFE COMPANY, upon the
institution of formal proceedings against TRUST or NB
MANAGEMENT by the SEC, the National Association of Securities
Dealers, Inc., or any other regulatory body, the expected or
anticipated ruling, judgment or outcome of which would, in
LIFE COMPANY's reasonable judgment, materially impair TRUST's
or NB MANAGEMENT's ability to meet and perform their
respective obligations and duties hereunder. Prompt notice of
election to terminate shall be furnished by LIFE COMPANY with
said termination to be effective upon receipt of notice;
(d) At the option of TRUST, upon the institution of
formal proceedings against LIFE COMPANY by the SEC, the
National Association of Securities Dealers, Inc., or any
other regulatory body, the expected or anticipated
17
ruling, judgment or outcome of which would, in TRUST's
reasonable judgment, materially impair LIFE COMPANY's ability
to meet and perform its obligations and duties hereunder.
Prompt notice of election to terminate shall be furnished by
TRUST with said termination to be effective upon receipt of
notice;
(e) At the option of LIFE COMPANY, in the event
TRUST's shares are not registered, issued or sold in
accordance with applicable state or federal law, or such law
precludes the use of such shares as the underlying investment
medium of Variable Contracts issued or to be issued by LIFE
COMPANY. Termination shall be effective immediately upon
notice to TRUST;
At the option of TRUST if the Variable Contracts cease to
qualify as annuity contracts or life insurance contracts, as
applicable, under the Code, or if TRUST reasonably believes
that the Variable Contracts may fail to so qualify.
Termination shall be effective upon receipt of notice by LIFE
COMPANY;
(g) At the option of LIFE COMPANY, upon TRUST's
breach of any material provision of this
Agreement, which breach has not been cured to the
satisfaction of LIFE COMPANY within ten days
after written notice of such breach is delivered
to TRUST;
(h) At the option of TRUST, upon LIFE COMPANY's
breach of any material provision of this
Agreement, which breach has not been cured to the
satisfaction of TRUST within ten days after
written notice of such breach is delivered to
LIFE COMPANY;
(i) At the option of TRUST, if the Variable Contracts
are not registered, issued or sold in accordance
with applicable federal and/or state law.
Termination shall be effective immediately upon
such occurrence without notice to LIFE COMPANY;
At the option of LIFE COMPANY in the event that
any Portfolio ceases to qualify as a Regulated
Investment Company under Subchapter M of the Code
or under any successor or similar provision, or
if LIFE COMPANY
18
reasonably believes that any Portfolio may fail
to so qualify. Termination shall be effective
immediately upon notice to the TRUST;
(k) At the option of LIFE COMPANY in the event that
any Portfolio fails to meet the diversification
requirements specified in Article 11 hereof or
if LIFE COMPANY reasonably believes that any
Portfolio may fail to meet such diversification
requirements. Termination shall be effective
immediately upon notice to the TRUST;
(l) In the event this Agreement is assigned without
the prior written consent of LIFE COMPANY, TRUST,
and NB MANAGEMENT, termination shall be effective
immediately upon such occurrence without notice.
(m) LIFE COMPANY shall have the right, upon at least
ninety (90) days' notice, to terminate the
Agreement as to a single Portfolio, without
terminating the entire Agreement.
8.3 Notwithstanding any termination of this Agreement
pursuant to Section 8.2 hereof, TRUST shall, at the option of
the LIFE COMPANY, continue to make available additional TRUST
shares, as provided below, for so long as LIFE COMPANY
desires pursuant to the terms and conditions of this
Agreement, for all Variable Contracts in effect on the
effective date of termination of this Agreement (hereinafter
referred to as "Existing Contracts"). Specifically, without
limitation, if LIFE COMPANY so elects to make additional
TRUST shares available, the owners of the Existing Contracts
or LIFE COMPANY, whichever shall have legal authority to do
so, shall be permitted to reallocate investments in TRUST,
redeem investments in TRUST and/or invest in TRUST upon the
payment of additional premiums under the Existing Contracts.
In the event of a termination of this Agreement pursuant to
Section 8.2 hereof, LIFE COMPANY, as promptly as is
practicable under the circumstances, shall notify TRUST and
NB MANAGEMENT whether LIFE COMPANY elects to continue to make
TRUST shares available after such termination. If TRUST
shares continue to be made available after such termination,
the provisions of this Agreement shall remain in effect.
8.4 Except as necessary to implement Variable Contract
owner initiated transactions, or as required by state
insurance laws or regulations, LIFE COMPANY shall not redeem
the shares attributable to the Variable Contracts (as opposed
to the shares attributable to LIFE COMPANY's assets held in
the Separate Accounts or invested directly), and LIFE COMPANY
shall not prevent
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Variable Contract owners from allocating payments to a
Portfolio that was otherwise available under the Variable
Contracts, until thirty (30) days after the LIFE COMPANY
shall have notified TRUST of its intention to do so.
Article IX. NOTICES
Any notice hereunder shall be given by registered or
certified mail return receipt requested to the other party at
the address of such party set forth below or at such other
address as such party may from time to time specify in
writing to the other party.
If to TRUST or NB MANAGEMENT:
Xxxxxxxxx Xxxxxx Management Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 10 15 8-0006
Attention: Xxxxx Xxxxxxxxx, Associate General Counsel
If to LIFE COMPANY:
The Union Central Life Insurance Company
0000 Xxxxxxxx Xxxx
Xxxxxxxxxx, Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx, Assistant Counsel
Notice shall be deemed given on the date of receipt by
the addressee as evidenced by the return receipt.
Article X. MISCELLANEOUS
10.1 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.
10.2 This Agreement may be executed simultaneously in
two or more counterparts, each of which taken together shall
constitute one and the same instrument.
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10.3 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.
10.4 This Agreement shall be construed and the
provisions hereof interpreted under and in accordance with
the laws of the State of New York. It shall also be subject
to the provisions of the federal securities laws and the
rules and regulations thereunder and to any orders of the SEC
granting exemptive relief therefrom and the conditions of
such orders.
10.5 The parties agree that the assets and liabilities
of each Portfolio are separate and distinct from the assets
and liabilities of each other Portfolio. No Portfolio shall
be liable or shall be charged for any debt, obligation or
liability of any other Portfolio. No Trustee, officer or
agent shall be personally liable for such debt, obligation or
liability of any Portfolio.
10.6 Each party shall cooperate with each other party
and all appropriate governmental authorities (including
without limitation the SEC, the National Association of
Securities Dealers, Inc. 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.
10.7 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.
10.8 No provision of this Agreement may be amended or
modified in any manner except by a written agreement properly
authorized and executed by TRUST, NB MANAGEMENT and the LIFE
COMPANY.
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IN WITNESS WHEREOF, the parties have caused their duly
authorized officers to execute this Fund Participation
Agreement as of the date and year first above written.
XXXXXXXXX XXXXXX XXXXXXXXX XXXXXX
ADVISERS MANAGEMENT TRUST MANAGEMENT INC.
By: /s/ Xxxxx X. Xxxxxxx By: /s/ Xxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxxx Name: Xxxx X. Xxxxxxx
Title: President Title: President
THE UNION CENTRAL LIFE
INSURANCE COMPANY
By: /s/ Xxxxxxx X. Xxxxxxxx
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President and Actuary
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APPENDIX A
AMT Guardian
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APPENDIX B
Carillon Account (Variable Annuity I and 11)
Carillon Life Account (Excel Choice VUL and Excel Choice
Executive Edge VUL)
24
