EXHIBIT 99.9(9)(b)
M Fund Inc. Participation Agreement with Pacific
Mutual Life Insurance Company
M FUND, INC.
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PARTICIPATION AGREEMENT
WITH
PACIFIC MUTUAL LIFE INSURANCE COMPANY
THIS AGREEMENT, made and entered into this 1st day of October 1996, by
and among M FUND, INC., a corporation organized and existing under the laws of
the State of Maryland (the "Fund"), M FINANCIAL INVESTMENT ADVISERS, INC., a
corporation organized and existing under the laws of the State of Colorado (the
"Adviser"), M LIFE INSURANCE COMPANY, a life insurance company organized and
existing under the laws of the State of California and PACIFIC MUTUAL LIFE
INSURANCE COMPANY, a life insurance company organized and existing under the
laws of the State of California (the "Company"), on its own behalf and on behalf
of each separate account of the Company identified herein.
WHEREAS, the Fund is a series-type mutual fund offering shares of
beneficial interest (the "Fund shares") consisting of one or more series
("Series") of shares ("Series shares"), each such Series share representing an
interest in a particular managed portfolio of securities and other assets; and
WHEREAS, the Fund was established for the purpose of serving as an
investment vehicle for insurance company separate accounts supporting variable
annuity contracts and variable life insurance policies to be offered by
insurance companies; and
WHEREAS, the Company desires that the Fund serve as an investment
vehicle for certain separate account(s) of the Company;
WHEREAS, the Adviser is duly registered as an investment adviser
pursuant to the Investment Advisers Act of 1940.
NOW, THEREFORE, in consideration of their mutual promises, the Fund, the
Adviser, and the Company agree as follows:
ARTICLE I. Additional Definitions
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1.1. "Account" -- each separate account of the Company described
more specifically in Schedule 1 to this Agreement (as may be amended from time
to time).
1.2. "Business Day" -- each day that the Fund is open for business
as provided in the Fund Prospectus.
1.3. "Code" -- the Internal Revenue Code of 1986, as amended.
1.4. "Contracts" -- the class or classes of variable annuity contracts
and variable life insurance policies issued by the Company and described more
specifically on Schedule 2 to this Agreement (as may be amended from time to
time).
1.5. "Contract Owners" -- the owners of the Contracts, as distinguished
from all Product Owners.
1.6. "NASD" -- National Association of Securities Dealers, Inc.
1.7. "Participating Account" -- a separate account investing all or a
portion of its assets in the Fund, including the Account.
1.8. "Participating Insurance Company" -- any insurance company
investing in the Fund on its behalf or on behalf of a Participating Account,
including the Company.
1.9. "Products" -- variable annuity contracts and variable life
insurance policies supported by Participating Accounts investing assets
attributable thereto in the Fund, including the Contracts.
1.10. "Product Owners" -- owners of Products, including Contract Owners.
1.11. "Prospectus" -- with respect to the Fund shares or a class of
Contracts or interests in the Contracts or Accounts, each version of the
definitive prospectus therefor or supplement thereto filed with the SEC pursuant
to Rule 497 under the 1933 Act. With respect to any provision of this Agreement
requiring a party to take action in accordance with a Prospectus, such reference
thereto shall be deemed to be to the version last so filed prior to the taking
of such action. For purposes of Section 4.6 and Article VIII, the term
"Prospectus" shall include any statement of additional information incorporated
therein.
1.12. "Registration Statement" -- with respect to the Fund shares or a
class of Contracts or interests in the Contracts or Accounts, the registration
statement filed with the SEC to register the securities issued thereby under the
1933 Act, or the most recently filed amendment thereto, in either case in the
form in which it was declared or became effective. The Contracts Registration
Statement (if any) is described more specifically on Schedule 2 to this
Agreement. The Fund Registration Statement was filed on Form N-1A (File No. 33-
95472).
1.13. "1940 Act Registration Statement" -- with respect to the Fund or
the Account, the registration statement filed with the SEC to register such
person as an investment company under the 1940 Act, or the most recently filed
amendment thereto. The Account 1940 Act Registration Statement (if any) is
described more specifically on Schedule 2 to this Agreement. The Fund 1940 Act
Registration Statement was filed on Form N-1A (File No. 811-9082).
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1.14. "Statement of Additional Information" -- with respect to the
Fund or a class of Contracts, each version of the definitive statement of
additional information or supplement thereto filed with the SEC pursuant to Rule
497 under the 0000 Xxx.
1.15. "SEC" -- the Securities and Exchange Commission.
1.16. "1933 Act" -- the Securities Act of 1933, as amended.
1.17. "1940 Act" -- the Investment Company Act of 1940, as amended.
ARTICLE II. Sale of Fund Shares
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2.1. The Fund shall make shares of those Series listed on Schedule
3 to this Agreement available for purchase by the Company on its own behalf or
on behalf of the Account, such purchases to be effected at net asset value in
accordance with Section 2.3 of this Agreement. Notwithstanding the foregoing,
(i) Fund Series in existence now or that may be established in the future and
not listed on Schedule 3 will be made available to the Company only as the
Adviser may so provide, and (ii) the Board of Directors of the Fund (the "Fund
Board") may suspend or terminate the offering of Fund shares of any Series or
class thereof, if such action is required by law or by regulatory authorities
having jurisdiction or if, in the sole discretion of the Fund Board acting in
good faith and in light of its fiduciary duties under federal and any applicable
state laws, suspension or termination is necessary or in the best interests of
the shareholders of any Series (it being understood that "shareholders" for this
purpose shall mean Product Owners).
2.2. The Fund shall redeem, at the Company's request, any full or
fractional shares of the Fund held by the Company on behalf of the Account, such
redemptions to be effected at net asset value in accordance with Section 2.3 of
this Agreement. Notwithstanding the foregoing, the Fund may delay redemption of
Fund shares of any Series to the extent permitted by the 1940 Act or any rules,
regulations or orders thereunder.
2.3. Purchase and Redemption Procedures
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(a) The Fund hereby appoints the Company as an agent of
the Fund for the limited purpose of receiving purchase and redemption
requests for shares of the Fund based on allocations of amounts to the
Account or subaccounts thereof under the Contracts and other transactions
arising out of the Contracts. Receipt of any such request (or relevant
transactional information therefor) on any Business Day by the Company as
such limited agent of the Fund prior to the Fund's close of business as
defined from time to time in the Fund Prospectus (which as of the date of
execution of this Agreement is 4 p.m. Eastern Time) shall constitute
receipt by the Fund on that same Business Day,
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provided that the Fund receives notice of such request by 10:00 a.m.
Eastern Time on the next following Business Day.
(b) The Company shall pay for shares of each Series on the
same day that it notifies the Fund of a purchase request for such shares.
Payment for Series shares shall be made in federal funds transmitted to the
Fund by wire to be received by the Fund by 11:00 a.m. Eastern Time on the
day the Fund is notified of the purchase request for Series shares (unless
the Fund determines and so advises the Company that sufficient proceeds are
available from redemption of shares of other Series 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
Series shares purchased thereby will be issued, as soon as practicable.
(c) Payment for Series shares redeemed by the Account or
the Company shall be made in federal funds transmitted by wire to the
Company or any other designated person on the next Business Day after the
Fund is properly notified of the redemption order of Series shares (unless
redemption proceeds are to be applied to the purchase of Fund shares of
other Series in accordance with Section 2.3(b) of this Agreement), except
that the Fund reserves the right to delay payment of redemption proceeds to
the extent permitted under Section 22(e) of the 0000 Xxx. The Fund shall
not bear any responsibility whatsoever for the proper disbursement or
crediting of redemption proceeds; the Company alone shall be responsible
for such action.
(d) Any purchase or redemption requests for Fund shares
that do not result directly from transactions relating to the Contracts or
the 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.
2.4. The Fund shall use its best efforts to calculate and make the
net asset value per share for each Series available to the Company by 6:00 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 Series is calculated,
and shall calculate such net asset value in accordance with the Fund Prospectus.
Neither the Fund, any Series, the Adviser, nor any of their affiliates shall be
liable for any information provided to the Company pursuant to this Agreement to
the extent such information is based on incorrect information supplied by the
Company or any other Participating Insurance Company or Qualified Person (as
defined in Section 2.8 of this Agreement) to the Fund or the Adviser.
2.5. The Fund shall furnish notice to the Company (by fax, or
telephone followed by written confirmation) as soon as reasonably practicable,
and no later than the same day, of any income dividends or capital gain
distributions payable on any Series shares. The Company, on
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its behalf and on behalf of the Account, hereby elects to receive all such
dividends and distributions as are payable on any Series shares in the form of
additional shares of that Series. 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 distributions in cash. The Fund shall notify the Company promptly
of the number of Series shares so issued as payment of such dividends and
distributions.
2.6. 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.
2.7. (a) The Company may withdraw the Account's investment
in the Fund or a Series of the Fund only: (i) as necessary to facilitate
Contract Owner requests; (ii) upon a determination by a majority of the
Fund Board, or a majority of disinterested Fund Board members, that an
irreconcilable material conflict exists among (x) the interests of all
Product Owners or (y) the interests of the Participating Insurance
Companies investing in the Fund; (iii) upon requisite vote of the Contract
Owners having an interest in the affected Series; (iv) as required by state
and/or federal laws or regulations or judicial or other legal precedent of
general implication; (v) upon sixty (60) days advance written notice; (vi)
from a Series, upon a change in the Portfolio Manager for that Series; or
(vii) as permitted by an order of the SEC pursuant to Section 26(b) of the
0000 Xxx.
(b) The Company shall not, without the prior written consent
of the Adviser (unless otherwise required by applicable law), solicit,
induce or encourage Contract Owners to change or modify the Fund or change
the Fund's investment adviser.
2.8. 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 and hold shares of the Fund under
Section 817(h) of the Code. The Fund shall not sell Fund shares to any insurance
company, separate account or Qualified Person unless an agreement containing
provisions substantially similar to Articles II, V, and VII of this Agreement is
in effect to govern such sales (to the extent required in order to comply with
the "Exemptive Order" referred to in Section 7.1 below).
ARTICLE III. Representations and Warranties
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3.1. The Company represents and warrants that: (i) the Company is
an insurance company duly organized, duly existing and in good standing under
California insurance law; (ii) the Account is (or will be prior to the purchase
by the Company of Fund shares for the Account) a validly existing separate
account, duly established and maintained in accordance with applicable law;
(iii) the Contracts will be issued in compliance in all material respects with
all
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applicable federal and state laws; (iv) the Contracts currently are and at
the time of issuance will be treated as annuity contracts or life insurance
policies (including modified endowment contracts), whichever is appropriate,
under applicable provisions of the Code; and (v) the Company and the Account
qualify (or will qualify prior to the purchase by the Company of Fund shares for
the Account) to purchase and hold shares of the Fund under Section 817(h) of the
Code.
3.2. The Fund represents and warrants that: (i) the Fund is a
corporation duly organized, validly existing and in good standing under Maryland
law; (ii) the Fund's 1940 Act Registration Statement has been filed with the SEC
in accordance with the provisions of the 1940 Act and the Fund is and shall
remain duly registered as an open-end management investment company thereunder;
(iii) the Fund Registration Statement has been declared effective by the SEC (or
will be declared effective before the sale by the Fund of its shares pursuant to
this Agreement); (iv) Fund shares sold pursuant to this Agreement have been duly
authorized for issuance in accordance with applicable law; (v) the Fund
currently qualifies as a "regulated investment company" under Subchapter M of
the Code and is and shall remain in compliance with Section 817(h) of the Code;
(vi) the Fund's investment policies are in material compliance with any
investment restrictions set forth on Schedule 4 to this Agreement; and (vii) the
Fund does and will comply in all material respects with the 1940 Act. The Fund,
however, makes no representation as to whether any aspect of its operations
(including, but not limited to, fees and expenses and investment policies)
otherwise complies with the insurance laws or regulations of any state.
3.3. The Adviser represents and warrants that it is and will remain
registered in all material respects as an investment adviser under federal and
all applicable state securities laws, and shall perform its obligations
hereunder in compliance in all material respects with any such applicable state
and federal laws. The Adviser represents that it will manage the Fund consistent
with the Fund's investment objectives, policies, and restrictions.
3.4. Each party represents that the execution and delivery of this
Agreement and the consummation of the transactions contemplated herein have been
duly authorized by all necessary corporate or trust action, as applicable, by
such party, and, when so executed and delivered, this Agreement will be the
valid and binding obligation of such party enforceable in accordance with its
terms.
3.5. The Fund represents and warrants that all of its directors,
officers, and employees 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
minimal coverage as required currently by Rule 17g-1 of the 1940 Act or related
provisions as may be promulgated from time to time. The aforesaid Bond shall
include coverage for larceny and embezzlement and shall be issued by a reputable
bonding company.
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3.6. The Company represents and warrants that all of its directors,
officers, and employees 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. The aforesaid Bond shall include coverage for larceny and
embezzlement and shall be issued by a reputable bonding company.
ARTICLE IV. Filings, Information and Expenses
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4.1. The Fund shall amend the Fund Registration Statement and the
Fund's 1940 Act Registration Statement from time to time as required in order to
effect the continuous offering of Fund shares and to maintain the Fund's
registration under the 1940 Act for so long as Fund shares are sold. The Fund
shall file, register, qualify and obtain approval of the Fund shares for sale
under state securities laws to the extent deemed advisable by the Adviser.
4.2. Unless other arrangements are made, the Fund shall provide the
Company with: (i) a copy, in camera-ready form or otherwise suitable for
printing or duplication, of each Fund Prospectus and any supplement thereto and
each Fund Statement of Additional Information and any supplement thereto; and
(ii) copies of the Fund's proxy materials, reports to shareholders, and other
communications to shareholders in such quantity as the Company shall reasonably
require for distributing to Contract Owners.
4.3. The Company shall amend the Contracts Registration Statement
(if any) and the Account's 1940 Act Registration Statement (if any) from time to
time as required in order to effect the continuous offering of the Contracts or
as may otherwise be required by applicable law. The Company shall file,
register, qualify and obtain approval of the Contracts for sale to the extent
required by applicable insurance and securities laws of the various states.
4.4. The Company shall inform the Fund of any investment
restrictions imposed by state insurance law that may become applicable to the
Fund from time to time as a result of the Account's investment therein
(including, but not limited to, restrictions with respect to fees and expenses
and investment policies), other than those set forth on Schedule 4 to this
Agreement. Upon receipt of such information from the Company, the Fund shall
determine whether it is in the best interests of shareholders to comply with any
such restrictions. If the Fund determines that it is not in the best interests
of shareholders (it being understood that "shareholders" for this purpose shall
mean Product Owners), the Fund shall so inform the Company, and the Fund and the
Company shall discuss alternative accommodations in the circumstances. If the
Fund determines that it is in the best interests of shareholders to comply with
such restrictions, the Fund and the Company shall amend Schedule 4 to this
Agreement to reflect such restrictions.
4.5. The Company shall provide Contracts, Contracts and Fund
Prospectuses, Contracts and Fund Statements of Additional Information, reports,
solicitations for voting
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instructions including any related Fund proxy solicitation materials, and all
amendments or supplements to any of the foregoing, to Contract Owners and
prospective Contract Owners, all in accordance with the federal and any
applicable state securities laws.
4.6. All expenses incident to each party's performance under this
Agreement (including expenses expressly assumed by such party pursuant to this
Agreement) shall be paid by such party to the extent permitted by law.
(a) Expenses assumed by the Fund include, but are not limited
to, the costs of: (i) registration and qualification of the Fund shares
under the federal securities laws; (ii) preparation and filing with the SEC
of the Fund Prospectus, Fund Statement of Additional Information ("SAI"),
Fund Registration Statement, Fund proxy materials and shareholder reports,
and supplements thereto, and preparation of a camera-ready copy thereof;
(iii) preparation of all statements and notices required by any federal or
state securities law; (iv) printing and mailing to Contract Owners of all
Prospectuses, SAI's, proxy materials and reports, and supplements thereto,
required to be provided by the Fund to its shareholders; (v) all taxes on
the issuance or transfer of Fund shares; and (vi) any expenses permitted to
be paid or assumed by the Fund pursuant to a plan, if any, under Rule 12b-1
under the 1940 Act. The Fund otherwise shall pay no fee or other
compensation to the Company under this Agreement, unless the parties
otherwise agree, except that if the Fund or any Series adopts and
implements a plan pursuant to Rule 12b-1 under the 1940 Act to finance
distribution expenses, then payments may be made to the Company in
accordance with such plan. The Fund currently does not intend to make any
payments to finance distribution expenses pursuant to Rule 12b-1 under the
1940 Act or in contravention of such rule, although it may make payments
pursuant to Rule 12b-1 in the future. To the extent that it decides to
finance distribution expenses pursuant to Rule 12b-1, the Fund undertakes
to have a Board of Directors, a majority of whom are not interested persons
of the Fund, formulate and approve any plan under Rule 12b-1 to finance
distribution expenses.
(b) Expenses assumed by the Company include, but are not
limited to, the costs of: (i) registration and qualification of the
Contracts under the federal and any applicable state securities laws; (ii)
preparation and filing with the SEC of the Contracts Prospectus and
Contracts Registration Statement; and (iii) preparation and dissemination
of all statements and notices to Contract Owners required by any federal or
state insurance law other than those paid for by the Fund.
(c) Expenses assumed by the Adviser include, but are not
limited to the costs of printing the Fund Prospectuses and SAI's for use in
connection with the sale of the Contracts to prospective Contract owners.
4.7. Any piece of advertising or sales literature or other
promotional material prepared by the company in which the Fund is named and
which will be used by the Company
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shall be furnished by the Company to the Fund not less than 15 days prior to its
use. No such material shall be used if the Fund or its designee objects to such
use within fifteen days after receipt of such material, provided that it may be
used earlier than the end of such 15 day period if the Fund or its designee
consents in writing to its use. The Fund may delegate its rights and
responsibilities under this provision to the Adviser.
4.8. Any piece of advertising or sales literature or other
promotional material in which the Company or the Account is named and which will
be used by the Fund or the Adviser shall be furnished by the Fund or the
Adviser, as applicable, to the Company not less than 15 days prior to its use.
No such material shall be used if the Company or its designee objects to such
use within 15 days after receipt of such material, provided that it may be used
earlier than the end of such 15 day period if the Company or its designee
consents in writing to its use.
4.9. The Company shall not give any information or make any
representations or statements on behalf of the Fund or concerning the Fund to
the public (including current and prospective Contract owners) in connection
with the sale of the Contracts other than the information or representations
contained in the Fund Registration Statement or Fund Prospectus (as such
Registration Statement or Prospectus may be amended or supplemented from time to
time) or in reports or proxy statements for the Fund, or in sales literature or
other promotional material approved in accordance with Section 4.7 of this
Agreement, except with the prior written consent of the Fund.
4.10. The Fund and the Adviser 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 the Contracts Registration Statement or Contracts Prospectus (as such
Registration Statement or Prospectus may be amended or supplemented from time to
time) or in published reports of the Account which are in the public domain or
approved in writing by the Company for distribution to Contract Owners, or in
sales literature or other promotional material approved in accordance with
Section 4.8 of this Agreement except with the prior written consent of the
Company.
4.11. The Fund and the Company shall provide to the other upon
request at least one complete copy of all Registration Statements, Prospectuses,
Statements of Additional Information, periodic and other shareholder or Contract
Owner reports, proxy statements, solicitations of voting instructions, sales
literature and other promotional materials, applications for exemptions,
requests for no-action letters, and all amendments or supplements to any of the
above, that relate to the Fund, the Contracts or the Account, as the case may
be, promptly after the filing by or on behalf of such party of such document
with the SEC or other regulatory authorities.
4.12. Each party shall provide to the other upon request copies of
draft versions of any Registration Statements, Prospectuses, Statements of
Additional Information, periodic and other shareholder or Contract Owner
reports, proxy statements, solicitations for voting
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instructions, sales literature and other promotional materials, applications for
exemptions, requests for no-action letters, and all amendments or supplements to
any of the above, to the extent that the other party reasonably needs such
information for purposes of preparing a report or other filing to be filed with
or submitted to a regulatory agency. If a party requests any such information
before it has been filed, the other party will provide the requested information
if then available and in the version then available at the time of such request.
4.13. Each party hereto shall cooperate with the other party and
all appropriate governmental authorities (including without limitation the SEC,
the NASD and state insurance regulators) and shall permit each other and such
authorities reasonable access to its books and records in connection with any
investigation or inquiry relating to this Agreement or the transactions
contemplated hereby. However, such access shall not extend to attorney-client
privileged information.
4.14. The Company reserves the right to modify any of the Contracts
in any respect whatsoever. The Company reserves the right in its sole discretion
to suspend the sale of any of the Contracts, in whole or in part, or to accept
or reject any application for the sale of a Contract. The Company agrees to
notify the Fund and the Adviser promptly upon the occurrence of any event the
Company believes might necessitate a material modification or suspension.
4.15. For purposes of this Article IV, the phrase "sales literature
or other promotional material" includes, but is not limited to, any material
constituting sales literature or advertising under the NASD rules, the 1940 Act
or the 1933 Act.
ARTICLE V. Voting of Fund Shares
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5.1. With respect to any matter put to vote by the holders of Fund
shares or Series shares ("Voting Shares"), to the extent required by law
(including the Exemptive Order referred to in Section 7.1 below) the Company
shall:
(a) solicit voting instructions from Contract Owners to which
Voting Shares are attributable;
(b) vote Voting Shares of each Series attributable to Contract
Owners participating in an account in accordance with instructions or
proxies timely received from such Contract Owners;
(c) vote Voting Shares of each Series attributable to Contract
Owners participating in an account for which no instructions have been
received in the same proportion as Voting Shares of such Series from
Contract Owners participating in an account for which instructions have
been timely received; and
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(d) vote Voting Shares of each Series held by the Company on
behalf of the Account that are not attributable to Contract Owners in the
same proportion as Voting Shares of such Series from Contract Owners
participating in an account for which instructions have been timely
received;
(e) vote Voting Shares of each series held by the Company on
its behalf that are not attributable to Contract Owners in the same
proportions as Voting shares of such Series held by the Company's Accounts
in the aggregate.
provided, however, that if the SEC changes its interpretations of voting
privileges for variable contracts the Company may vote such shares in its own
right. The Company shall be responsible for assuring that voting privileges for
the Account are calculated in a manner consistent with the provisions set forth
above.
5.2. The Fund will comply with all provisions of the 1940 Act
requiring voting by shareholders, and in particular the Fund will either provide
for annual meetings or comply with Section 16(c) of the 1940 Act (although the
Fund is not one of the trusts described in Section 16(c) of that Act) as well as
with Sections 16(a) and, if and when applicable, 16(b). Further, the Fund will
act in accordance with the Securities and Exchange Commission's interpretation
of the requirements of Section 16(a) with respect to periodic elections of
trustees and with whatever rules the Commission may promulgate with respect
thereto.
ARTICLE VI. Compliance with Code
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6.1. The Fund shall comply with Section 817(h) of the Code, and all
regulations issued thereunder and shall notify the Company immediately upon
having a reasonable basis for believing that it has ceased to so qualify or that
it might not so qualify in the future.
6.2. The Fund shall maintain its qualification as a regulated
investment company (under Subchapter M of the Code or any successor or similar
provision), and shall notify the Company immediately upon having a reasonable
basis for believing that it has ceased to so qualify or that it might not so
qualify in the future.
6.3. The Company shall maintain the treatment of the Contracts as
annuity contracts or life insurance policies, whichever is appropriate, under
applicable provisions of the Code and shall notify the Fund and the Adviser
immediately upon having a reasonable basis for believing that the Contracts have
ceased to be so treated or that they might not be so treated in the future.
ARTICLE VII. Potential Conflicts
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7.1. The parties to this Agreement acknowledge that the Fund has
obtained (or will obtain) an order of exemption from the SEC (the "Exemptive
Order," File No. 812-9674) granting relief from various provisions of the 1940
Act and the rules thereunder to the extent necessary to permit Fund shares to be
sold to and held by variable annuity and variable life insurance separate
accounts of both affiliated and unaffiliated Participating Insurance Companies
and other Qualified Persons (as defined in Section 2.8). The Fund hereby
notifies the Company that Contracts Prospectus disclosure regarding potential
risks of such mixed and shared funding may be appropriate.
7.2. The Fund Board shall monitor the existence of any material
irreconcilable conflict between the interests of Product Owners. The Fund Board
shall promptly inform the Company if it determines that a material
irreconcilable conflict exists and the implications thereof.
7.3. (a) The Company shall report any potential or existing
conflicts promptly to the Fund Board, and in particular whenever Contract
Owner voting instructions are disregarded, and recognizes that it shall be
responsible for assisting the Fund Board in carrying out its
responsibilities in connection with the Exemptive Order. The Company
agrees to carry out such responsibilities with a view only to the interests
of Contract Owners.
(b) The Company shall at least annually submit to the Fund
Board such reports, materials or data as the Fund Board may reasonably
request so that the Fund Board and the Fund may fully carry out the
obligations imposed upon them by the conditions of the Exemptive Order, and
such reports, material and data shall be submitted more frequently if
deemed appropriate by the Fund Board.
7.4. If a majority of the Fund Board, or a majority of its
directors who are not "interested persons" as defined in the 1940 Act
("Disinterested Directors"), determines that a material irreconcilable conflict
exists with regard to Contract Owner investments in the Fund, the Fund Board
shall give prompt notice to all Participating Insurance Companies. If the Fund
Board determines that the Company is responsible in full or in part for causing
or creating said conflict, the Company (and other responsible Participating
Insurance Companies) shall at no cost and expense to the Fund, and to the extent
reasonably practicable (as determined by a majority of the Disinterested
Directors), take such action as is necessary to remedy or eliminate the
irreconcilable material conflict. Such necessary action may include, but shall
not be limited to:
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(a) Withdrawing the assets allocable to the Account from the
Fund or any Series thereof and reinvesting such assets in a different
investment medium, or submitting the question of whether such segregation
should be implemented to a vote of all affected Contract Owners and, as
appropriate, segregating the assets of any appropriate group (i.e., annuity
Contract Owners, life insurance Contract Owners, or other Product Owners)
that votes in favor of such segregation or offering to the affected
Contract Owners the option of making such a change; and
(b) Establishing a new registered management investment
company.
7.5. If a material irreconcilable conflict arises as a result of a
decision by the Company to disregard Contract Owner voting instructions and said
decision represents a minority position or would preclude a majority vote by all
Contract Owners having an interest in the Fund, the Company may be required, at
the Fund Board's election, to withdraw the Account's investment in the Fund 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 Directors. 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 Adviser and
Fund shall continue to accept and implement orders by the Company for the
purchase (and redemption) of shares of the Fund (subject to Section 2.1 above).
No charge or penalty will be imposed as a result of such withdrawal.
7.6. 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
Directors. Until the end of the foregoing six month period, the Adviser and Fund
shall continue to accept and implement orders by the Company for the purchase
(and redemption) of shares of the Fund (subject to Section 2.1 above).
7.7. For purposes of this Article, a majority of the Disinterested
Directors shall determine whether or not any proposed action adequately remedies
any irreconcilable material conflict, but in no event shall the Fund be required
to bear the expense of establishing a new funding medium for any Contract. The
Company shall not be required by this Article to establish a new funding medium
for any Contract if an offer to do so has been declined by vote of a majority of
the Contract Owners materially adversely affected by the irreconcilable material
conflict. In the event that the Board determines that any proposed action does
not adequately remedy any irreconcilable material conflict, then the Company
will withdraw the Account's investment in the Fund and terminate this Agreement
within six (6) months after the Board
-13-
informs the Company in writing of the foregoing determination, provided,
however, that such withdrawal and termination shall be limited to the extent
required by any such material irreconcilable conflict as determined by a
majority of the Disinterested Directors.
7.8. If and to the extent that Rule 6e-2 and Rule 6e-3(T) are
amended, or Rule 6e-3 is adopted, to provide exemptive relief from any
provisions of the 1940 Act or the rules promulgated thereunder with respect to
mixed and shared funding on terms and conditions materially different from those
contained in the Exemptive Order, then (a) the Fund and/or the Company, as
appropriate, shall take such steps as may be necessary to comply with Rules 6e-2
and 6e-3(T), as amended, or Rule 6e-3, as adopted, as applicable, to the extent
such rules are applicable, and (b) Sections 7.2 through 7.7 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. The Company shall indemnify
------------------------------
and hold harmless the Fund, the Adviser and each person who controls the Fund or
the Adviser within the meaning of such terms under the 1933 Act (but not any
Participating Insurance Companies or Qualified Plans) and any officer, trustee,
director, employee or agent of the foregoing, against any and all losses,
claims, damages or liabilities, joint or several (including any investigative,
legal and other expenses reasonably incurred in connection with, and any amounts
paid with the written consent of the Company in settlement of, any action, suit
or proceeding or any claim asserted), to which they or any of them may become
subject under any statute or regulation, at common law or otherwise, insofar as
such losses, claims, damages or liabilities are related to the sale or
acquisition of the Fund's shares or the Contracts and:
(a) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the Contracts
Registration Statement, Contracts Prospectus, sales literature or other
promotional material for the Contracts or the Contracts themselves (or any
amendment or supplement to any of the foregoing), or 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 in light
of the circumstances in which they were made; provided that this obligation
to indemnify shall not apply if such statement or omission or such alleged
statement or alleged omission was made in reliance upon and in conformity
with information furnished in writing to the Company by or on behalf of the
Fund or Adviser for use in the Contracts Registration Statement, Contracts
Prospectus or in the Contracts or sales literature or promotional material
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
-14-
(b) arise out of any untrue statement or alleged untrue
statement of a material fact contained in the Fund Registration Statement,
Fund Prospectus or sales literature or other promotional material of the
Fund (or any amendment or supplement to any of the foregoing), 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 in light of the circumstances in which they were made, if such
statement or omission was made in reliance upon and in conformity with
information furnished in writing to the Fund or the Adviser by or on behalf
of the Company; or
(c) arise out of or are based upon any wrongful conduct of
the Company or persons under its control (or subject to its authorization)
with respect to the sale or distribution of the Contracts or Fund shares;
or
(d) arise as a result of any failure by the Company to
provide the services and furnish the materials or to make any payments as
required under this Agreement; or
(e) arise out of any material breach by the Company of this
Agreement.
This indemnification will be in addition to any liability that the Company
may otherwise have; provided, however, that no party shall be entitled to
indemnification if such loss, claim, damage or liability is due to the wilful
misfeasance, bad faith, gross negligence or reckless disregard of duty by the
party seeking indemnification.
8.2. Indemnification by the Fund. The Fund shall indemnify and hold
---------------------------
harmless the Company and each person who controls the Company within the meaning
of such terms under the 1933 Act and any officer, director, employee or agent of
the foregoing, against any and all losses, claims, damages or liabilities, joint
or several (including any investigative, legal and other expenses reasonably
incurred in connection with, and any amounts paid with the written consent of
the Fund in settlement of, any action, suit or proceeding or any claim
asserted), to which they or any of them may become subject under any statute or
regulation, at common law or otherwise, insofar as such losses, claims, damages
or liabilities are related to the sale or acquisition of the Fund's shares or
the Contracts and:
(a) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the Fund Registration
Statement, Fund Prospectus or sales literature or other promotional
material of the Fund (or any amendment or supplement to any of the
foregoing), or 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 in light of the circumstances in which
they were made; provided that this obligation to indemnify shall not apply
if such statement or omission or alleged statement or alleged omission was
made in reliance upon and in conformity with information furnished in
writing to the Fund by or on behalf of the Company for use in the Fund
Registration Statement, Fund Prospectus or sales literature
-15-
or promotional material for the Fund (or any amendment or supplement to any
of the foregoing); or
(b) arise out of any untrue statement or alleged untrue statement of
a material fact contained in the Contracts Registration Statement,
Contracts Prospectus or sales literature or other promotional material for
the Contracts (or any amendment or supplement to any of the foregoing), 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 in light of the circumstances in which they were made, if such
statement or omission was made in reliance upon information furnished in
writing by or on behalf of the Fund to the Company; or
(c) arise out of or are based upon wrongful conduct of the Fund or
persons under its control (or subject to its authorization) with respect to
the sale of Fund shares; or
(d) arise as a result of any failure by the Fund to provide the
services and furnish the materials required under the terms of this
Agreement; or
(e) arise out of any material breach by the Fund of this Agreement
(including any breach of Article VI of this Agreement).
This indemnification will be in addition to any liability that the Fund may
otherwise have; provided, however, that no party shall be entitled to
indemnification if such loss, claim, damage or liability is due to the willful
misfeasance, bad faith, gross negligence or reckless disregard of duty by the
party seeking indemnification.
8.3. Indemnification by the Adviser. The Adviser shall indemnify
------------------------------
and hold harmless the Company and each person who controls the Company within
the meaning of such term under the 1933 Act and any officer, director, employee
or agent of the foregoing, against any and all losses, claims, damages or
liabilities, joint or several (including any investigative, legal and other
expenses reasonably incurred in connection with, and any amounts paid with the
written consent of the Adviser in settlement of, any action, suit or proceeding
or any claim asserted), to which they or any of them may become subject under
any statute or regulation, at common law or otherwise, insofar as such losses,
claims, damages or liabilities are related to the sale or acquisition of the
Fund's shares or the Contract and:
(a) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the Fund
Registration Statement, Fund Prospectus or sales literature or other
promotional material of the Fund (or any amendment or supplement to any of
the foregoing), or 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 in light of the circumstances in which
they were
-16-
made; provided that this obligation to indemnify shall not apply
if such statement or omission or alleged statement or alleged omission was
made in reliance upon and in conformity with information furnished in
writing by or on behalf of the Company to the Fund or the Adviser for use
in the Fund Registration Statement, Fund Prospectus or sales literature or
promotional material for the Fund (or any amendment or supplement to any of
the foregoing); or
(b) arise out of any untrue statement or alleged untrue
statement of a material fact contained in the Contracts Registration
Statement, Contracts Prospectus or sales literature or other promotional
material for the Contracts (or any amendment or supplement to any of the
foregoing), 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 in light of the circumstances in which they were
made, if such statement or omission was made in reliance upon information
furnished in writing by or on behalf of the Adviser to the Company; or
(c) arise out of or are based upon wrongful conduct of the
Fund or the Adviser with respect to the sale of Fund shares; or
(d) arise as a result of any failure by the Fund or the
Adviser to provide the services and furnish the materials required under
the terms of this Agreement; or
(e) arise out of any material breach by the Fund or the
Adviser of this Agreement (including any breach of Article VI of this
Agreement).
This indemnification will be in addition to any liability that the Adviser may
otherwise have; provided, however, that no party shall be entitled to
indemnification if such loss, claim, damage or liability is due to the willful
misfeasance, bad faith, gross negligence or reckless disregard of duty by the
party seeking indemnification.
-17-
8.4. Indemnification Procedures. After receipt by a party entitled
--------------------------
to indemnification ("indemnified party") under this Article VIII of notice of
the commencement of any action, if a claim in respect thereof is to be made by
the indemnified party against any person obligated to provide indemnification
under this Article VIII ("indemnifying party"), such indemnified party will
notify the indemnifying party in writing of the commencement thereof as soon as
practicable thereafter, provided that the omission to so notify the indemnifying
party will not relieve it from any liability under this Article VIII, except to
the extent that the omission results in a failure of actual notice to the
indemnifying party and such indemnifying party is damaged solely as a result of
the failure to give such notice. The indemnifying party, upon the request of the
indemnified party, shall retain counsel reasonably satisfactory to the
indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own counsel
and to participate in the defense of such proceeding, but the fees and expenses
of such counsel shall be at the expense of such indemnified party unless (i) the
indemnifying party and the indemnified party shall have mutually agreed to the
retention of such counsel or (ii) the named parties to any such proceeding
(including any impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between them.
The indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent but if settled with such consent or if
there be a final judgment against the indemnified party, the indemnifying party
agrees to indemnify the indemnified party from and against any loss or liability
by reason of such settlement or judgment.
The amount of any indemnification due the Company by the Adviser
that is not satisfied by the Adviser shall be satisfied by making adjustments to
one or more of the reinsurance treaties that exist between Pacific Mutual Life
Insurance Company and M Life Insurance Company. The manner in which such
adjustments are made shall be reasonably agreed to by Pacific Mutual Life
Insurance Company and M Life Insurance Company.
A successor by law of the parties to this Agreement shall be
entitled to the benefits of the indemnification contained in this Article VIII.
The indemnification provisions contained in this Article VIII shall survive any
termination of this Agreement.
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 State of Maryland,
without giving effect to the principles of conflicts of law.
9.2. This Agreement shall be subject to the provisions of the 1933
Act, 1940 Act and Securities Exchange Act of 1934, as amended, and the rules and
regulations and rulings
-18-
thereunder, including such exemptions from those statutes, rules and regulations
as the SEC may grant, and the terms hereof shall be limited, interpreted and
construed in accordance therewith.
ARTICLE X. Termination
-----------
10.1. This Agreement shall not terminate until the Fund is
dissolved, liquidated, or merged into another entity, or, as to any Series of
the Fund, the Account no longer invests in that Series. However, certain
obligations of, or restrictions on, the parties to this Agreement may terminate
as provided in Sections 10.2 and 10.3, and the Company may be required to redeem
shares pursuant to Section 10.4 or in the circumstances contemplated by Article
VII.
10.2. Termination of the Fund's Obligation to Sell. The obligation
--------------------------------------------
of the Fund to sell shares to the Company pursuant to Article II of this
Agreement shall terminate at the option of the Fund upon notice to the Company
as provided below:
(a) the Fund Board has terminated the offering of Fund shares
or Series shares pursuant to Section 2.1 of this Agreement; or
(b) upon institution of formal proceedings against the Company
by the NASD, the SEC, the insurance commission of any state or any other
regulatory body regarding the Company's duties under this Agreement or
related to the sale of the Contracts, the operation of the Account, the
administration of the Contracts or the purchase of Fund shares, or an
expected or anticipated ruling, judgment or outcome which would, in the
Fund's reasonable judgment, materially impair the Company's ability to meet
and perform the Company's obligations and duties hereunder; or
(c) in the event any of the Contracts or interests in the
Contracts or Account, as applicable, are not registered, issued or sold in
accordance with applicable federal and/or state law; or
(d) if the Fund or the Adviser, respectively, shall determine,
in their sole judgment exercised in good faith, that either (1) the Company
shall have suffered a material adverse change in its business or financial
condition since the date of this Agreement or (2) the Company shall have
been the subject of material adverse publicity which is likely to have a
material adverse impact upon the business and operations of either the Fund
or the Adviser; or
(e) upon the Company's assignment of this Agreement
(including, without limitation, any transfer of any Contract or the Account
to another insurance company pursuant to an assumption reinsurance
agreement) unless the Fund consents thereto; or
-19-
(f) upon termination pursuant to Section 10.1 or notice from
the Company pursuant to Section 10.3.
Termination of the Fund's obligation shall take effect immediately upon the
giving of such notice upon the occurrence of an event described in clauses (b)
or (c) above, and 10 (ten) days after the giving of such notice in all other
cases. In exercising its option to terminate its obligation to sell shares to
the Company, the Fund will continue to make Fund shares available to the extent
necessary to permit owners of Contracts in effect on the effective date of such
termination (hereinafter referred to as "Existing Contracts") to reallocate
investments in the Fund, redeem investments in the Fund and/or invest in the
Fund upon the making of additional purchase payments under the Existing
Contracts, unless the Existing Contracts are the basis for the termination. In
that case, the Fund may nonetheless elect to continue to make Fund shares
available for Existing Contracts and if it so elects, shall promptly notify the
Company whether the Fund is electing to make Fund shares available after
termination.
10.3. As to the Company. The restrictions on the Company under
-----------------
Section 2.7(a) of this Agreement shall terminate at the option of the Company
upon 10 days' notice to the Fund:
(a) if shares of any Series are not reasonably available to
meet the requirements of the Contracts as determined by the Company, and
the Fund, after receiving written notice from the Company of such non-
availability, fails to make available a sufficient number of Fund shares to
meet the requirements of the Contracts within 10 days after receipt
thereof; or
(b) upon institution of formal proceedings against the Fund
by the NASD, the SEC or any state securities or insurance commission or any
other regulatory body; or
(c) if the Fund ceases to qualify as a regulated investment
company under Subchapter M of the Code, or under any successor or similar
provision, or if the Company reasonably believes the Fund may fail to so
qualify, and the Fund, upon written request, fails to provide reasonable
assurance that it will take action to cure or correct such failure; or
(d) if the Fund fails to meet the diversification
requirements specified in Section 817(h) of the Code and any regulations
thereunder, and the Fund, upon written request, fails to provide reasonable
assurance that it will take action to cure or correct such failure; or
(e) if the Fund informs the Company pursuant to Section 4.4
that the Fund will not comply with investment restrictions as requested by
the Company, and the Fund and the Company are unable to agree upon any
reasonable alternative accommodations; or
-20-
(f) upon receipt by the Company of any necessary regulatory
approvals and any necessary vote of the Contract Owners having an interest
in the Account (or any subaccount) to substitute the shares of another
investment company for the corresponding Series shares of the Fund in
accordance with the terms of the Contracts for which those Series shares
had been selected to serve as the underlying investment media. The Company
will give 30 days' prior written notice to the Fund of the date of any
proposed vote or other action taken to replace the Fund's shares; or
(g) upon a material breach of any provision of this Agreement
by either the Fund or the Adviser; or
(h) if the Company determines in its sole judgment exercised
in good faith, that either the Fund or the Adviser has suffered a material
adverse change in its business, operations, or financial conditions since
the date of this Agreement or is the subject of material adverse publicity
which is likely to have a material adverse impact upon the business and
operations of the Company.
10.4. Company Required to Redeem. The parties understand and
--------------------------
acknowledge that it is essential for compliance with Section 817(h) of the Code
that the Contracts qualify as annuity contracts or life insurance policies, as
applicable, under the Code. Accordingly, if any of the Contracts cease to
qualify as annuity contracts or life insurance policies, as applicable, under
the Code, or if the Fund reasonably believes that any such Contracts may fail to
so qualify, the Fund shall have the right to require the Company to redeem
Shares attributable to such Contracts upon ten (10) days written notice to the
Company and the Company shall so redeem such Shares in order to ensure that the
Fund complies with the provisions of Section 817(h) of the Code applicable to
ownership of Fund Shares. Notice to the Company shall specify the period of time
the Company has to redeem the Shares or to make other arrangements satisfactory
to the Fund and its counsel, such period of time to be determined with reference
to the requirements of Section 817(h) of the Code. In addition, the Company may
be required to redeem Shares pursuant to action taken or request made by the
Fund Board in accordance with an order of the SEC as described in Article VII,
or other SEC rule, regulation or order that may be adopted after the date
hereof. The Company agrees to redeem Shares in such circumstances and to comply
with applicable terms and provisions.
-21-
ARTICLE XI. Applicability to New Accounts and New Contracts
-----------------------------------------------
The parties to this Agreement may amend the schedules to this
Agreement from time to time to reflect, as appropriate, changes in or relating
to the Contracts, or Series or funding vehicles thereof, additions of new
classes of Contracts to be issued by the Company and separate accounts therefor
investing in the Fund. The provisions of this Agreement shall be equally
applicable to each such class of Contracts, Series and Accounts, effective as of
the date of amendment of such Schedule, unless the context otherwise requires.
ARTICLE XII. Notice, Request or Consent
--------------------------
Any notice, request or consent to be provided pursuant to this
Agreement is to be made in writing and shall be given:
If to the Fund:
M Fund, Inc.
River Park Center
000 X.X. Xxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxx 00000
Attn: President
If to the Adviser:
M Financial Investment Advisers, Inc.
River Park Center
000 X.X. Xxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxx 00000
Attn: President
If to the Company:
Pacific Mutual Life Insurance Company
000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attn: Variable Regulatory Compliance
or at such other address as such party may from time to time specify in writing
to the other party. Each such notice, request or consent to a party shall be
sent by registered or certified United States mail with return receipt
requested, by overnight delivery with a nationally recognized courier or by
electronically transmitted facsimile, and shall be effective upon receipt or
three days after mailing.
-22-
ARTICLE XIII. Miscellaneous
-------------
13.1. 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.
13.2. This Agreement may be executed simultaneously in two or
more counterparts, each of which together shall constitute one and the same
instrument.
13.3. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby.
13.4. Subject to the requirement of legal process and regulatory
authority, each party hereto shall treat as if 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 until such time as it may
come into the public domain without the express written consent of the affected
party.
13.5. 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.
-23-
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed in its name and behalf by its duly authorized officer on the date
specified below.
PACIFIC MUTUAL LIFE INSURANCE COMPANY
(Company)
By: /s/ XXXXX X XXXXXXX
Name: Xxxxx X. Xxxxxxx
Title: President
By: /s/ XXXX X. XXXXXX
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
M FUND, INC.
(Fund)
By: /s/ XXXXXX X XXXXX
Name: Xxxxxx X. Xxxxx
Title: President
M FINANCIAL INVESTMENT ADVISERS, INC.
(Adviser)
By: /s/ XXXXXX X XXXXX
Name: Xxxxxx X. Xxxxx
Title: President
M LIFE INSURANCE COMPANY
By: /s/ XXXXXX X XXXXX
Name: Xxxxxx X. Xxxxx
Title: Senior VP
-24-
SCHEDULE 1
----------
Accounts of the Company
Investing in the Fund
Effective as of the date the Agreement was executed, the following separate
accounts of the Company are subject to the Agreement:
Name of Account and Date Established by SEC 1940 Act Type of Product
Subaccounts Board of Directors of the Registration Number Supported by Account
Company (if applicable)
==============================================================================================================
Pacific Select Exec May 12, 1988 811-05563 Variable Life Policies
--------------------------------------------------------------------------------------------------------------
Edinburgh Overseas
Equity Variable
Account
--------------------------------------------------------------------------------------------------------------
Xxxxxx Core Growth
Variable Account
--------------------------------------------------------------------------------------------------------------
Frontier Capital
Appreciation Variable
Account
--------------------------------------------------------------------------------------------------------------
Enhanced U.S. Equity
Variable Account
--------------------------------------------------------------------------------------------------------------
Pacific COLI
--------------------------------------------------------------------------------------------------------------
Edinburgh Overseas
Equity Variable
Account
--------------------------------------------------------------------------------------------------------------
Xxxxxx Core Growth
Variable Account
--------------------------------------------------------------------------------------------------------------
Frontier Capital
Appreciation Variable
Account
--------------------------------------------------------------------------------------------------------------
Enhanced U.S. Equity
Variable Account
==============================================================================================================
Schedule 2
----------
Classes of Contracts
Supported by Separate Accounts
Listed on Schedule 1
Effective as of the date the Agreement was executed, the following classes of
Contracts are subject to the Agreement:
Policy Marketing Name SEC 1933 Act Name of Supporting Annuity or Life
Registration Number Account
(if applicable)
======================================================================================================
Pacific Select Exec 33-21754 Pacific Select Exec Life
------------------------------------------------------------------------------------------------------
Pacific Select Choice 33-57908 Pacific Select Exec Life
------------------------------------------------------------------------------------------------------
Custom COLI Pacific COLI Life
=======================================================================================================
Effective as of the dates indicated below, the following classes of Contracts
are hereby added to this Schedule 2 and made subject to the Agreement:
Policy Marketing Name SEC 1933 Act Name of Supporting Annuity or Life
Registration Number Account
(if applicable)
=================================================================================================
Custom COLI Rider Eff. 33-N/A Pacific COLI Life
December 16, 1996
-------------------------------------------------------------------------------------------------
Pacific Select Estate 333-01717 Pacific Select EXEC Life
Preserver
-------------------------------------------------------------------------------------------------
Eff. February 10, 1997 33-
=================================================================================================
IN WITNESS WHEREOF, the Fund, the Adviser, and the Company hereby amend this
Schedule 2 in accordance with Article XI of the Agreement.
M FUND, INC. PACIFIC MUTUAL LIFE INSURANCE COMPANY
By: /s/ XX XXXXXX
Name: Xxxxxx X. Xxxxxx
Title: Chairman & Chief Executive Officer
By: /s/ XXXXXX X XXXXX By: /s/ XXXXX X XXXXXXX
Name: Xxxxxx X. Xxxxx Name: Xxxxx X. Xxxxxxx
Title: President Title: President
M FINANCIAL INVESTMENT ADVISERS, INC. M LIFE INSURANCE COMPANY
By: /s/ XXXXXX X XXXXX By: /s/ XXXXXX X XXXXX
Name: Xxxxxx X. Xxxxx Name: Xxxxxx X. Xxxxx
Title: President Title: Senior VP
Schedule 3
----------
Fund Series and Other Funding
Vehicles Available Under
Each Class of Contracts
Effective as of the date the Agreement was executed, the following Fund Series
and other Funding Vehicles are available under the Contracts:
Contract Marketing Name Fund Series Other Funding Vehicles
==========================================================================================================
M Fund Edinburgh Overseas Equity Fund Pacific Select Fund, except Equity and
Bond and Income Portfolios
----------------------------------------------------------------------------------------------------------
M Fund Xxxxxx Core Growth Fund Pacific Select Fund, except Equity and
Bond and Income Portfolios
-----------------------------------------------------------------------------------------------------------
M Fund Frontier Capital Appreciation Pacific Select Fund, except Equity and
Fund Bond and Income Portfolios
----------------------------------------------------------------------------------------------------------
M Fund Enhanced U.S. Equity Fund Pacific Select Fund, except Equity and
Bond and Income Portfolios
==========================================================================================================
SCHEDULE 4
----------
Investment Restrictions
Applicable to the Fund
Effective as of the date the Agreement was executed, the following investment
restrictions are applicable to the Fund:
FOREIGN COUNTRY DIVERSIFICATION GUIDELINES to be followed by each portfolio of a
Separate Account are as follows:
A Portfolio will invest in the securities of issuers domiciled or primarily
traded in at least five foreign countries if the Portfolio has invested at least
80% of its net assets in foreign issuers. If the Portfolio has less than 20% of
its net assets in foreign issuers, then all of such investment may be in issuers
domiciled or primarily traded in one country. If the Portfolio has at least 20%
but less than 40% of its net assets in foreign issuers, then such investment
must be allocated to issuers domiciled or primarily traded in at least two
foreign countries. Similarly, if the Portfolio has at least 40% but less than
60% of its net assets invested in foreign issuers, such investment must be
allocated to at least three foreign countries. Foreign investments must be
allocated to at least four foreign countries if such investments comprise at
least 60% but less than 80% of the Portfolio's net assets. The Portfolio will
not invest more than 20% of its net assets in securities of issuers domiciled or
primarily traded in any one country, except that the Portfolio may invest up to
35% of its net assets in issuers domiciled or primarily traded in any one of the
following countries: Australia, Canada, France, Japan, the United Kingdom, or
Germany. The Portfolio is not subject to any limit upon investment in issuers
domiciled or primarily traded in the United States.
BORROWING GUIDELINES to be followed by each portfolio of a separate account are
as follows:
A Portfolio may leverage its assets by borrowing amounts equivalent to no more
than 10% of its total assets, except that a Portfolio may temporarily borrow up
to 25% of its total assets when such borrowing is necessary to meet fund
redemptions. For purposes of this limitation, entering into a reverse
repurchase agreement shall be considered a "borrowing".
DRAFT
AMENDMENT DATED MAY 1, 1997 TO
SCHEDULE 4 OF THE M FUND, INC. PARTICIPATION AGREEMENT WITH
PACIFIC MUTUAL LIFE INSURANCE COMPANY
Effective as of the date of this Amendment, pursuant to Bulletin 97-2 dated
March 7, 1997, ("Bulletin"), issued by the California Department of Insurance
("Department"), the M Fund Portfolios are exempt from the investment guidelines
and restrictions set forth in Section V, Hazardous Operations, of the Bulletin
in accordance with the exemptive provisions of Section VI, Non-Hazardous
Operations, of the Bulletin, so long as all Portfolios are registered under the
Investment Company Act of 1940. The Department has determined that a hazardous
condition shall not exist if such registration is maintained.
Should any Portfolio not maintain an effective registration, the Fund and the
Adviser agree to comply with such investment guidelines and restrictions as the
Commissioner of the Department may require under Bulletin Section V, in order to
deem the Portfolio's investment practices to be non-hazardous.
Notwithstanding the above, pursuant to Section VI of the Bulletin, in the event
the Commissioner determines that a hazardous condition exists as the result of
the Fund's investment practices, then Section 4.4 of this Agreement shall apply.
PACIFIC MUTUAL LIFE INSURANCE COMPANY
(Company)
By:______________________________ Date: _____________________
Name:
Title:
By:______________________________ Date: _____________________
Name:
Title:
M FUND, INC.
(Fund)
By:______________________________ Date: _____________________
Name:
Title:
By:______________________________ Date: _____________________
Name: Xxxxxx X. Xxxxx
Title: President
M FINANCIAL INVESTMENT ADVISER
(Adviser)
By:______________________________ Date: ____________________
Name: Xxxxxx X. Xxxxx
Title: President
M LIFE
By:______________________________ Date: ____________________
Name: Xxxxxx X. Xxxxx
Title: Senior Vice President
