Exhibit 23(h)(8)
FORM OF PARTICIPATION AGREEMENT
AMONG
[INSURANCE COMPANY],
PROFUNDS,
AND
PROFUND ADVISORS LLC
THIS AGREEMENT, dated as of the ___ day of , 2002 by and among
__________________ (the "Company"), a [insert state] life insurance company, on
its own behalf and on behalf of each segregated asset account of the Company set
forth on Schedule A hereto, as may be amended from time to time (each account
hereinafter referred to as the "Account"), ProFunds (the "Fund"), a Delaware
business trust, and ProFund Advisors LLC (the "Adviser"), a Maryland limited
liability company.
WHEREAS, the Fund engages in business as an open-end management investment
company and is available to act as the investment vehicle for separate accounts
established for variable life insurance and variable annuity contracts to be
offered by insurance companies which have entered into participation agreements
with the Fund ("Participating Insurance Companies");
WHEREAS, the shares of beneficial interest of the Fund are divided into
several series of shares, each designated a "Portfolio" and representing the
interest in a particular managed portfolio of securities and other assets;
WHEREAS, the Fund is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act"),
and shares of the Portfolios are registered under the Securities Act of 1933, as
amended (the "1933 Act");
WHEREAS, the Adviser, which serves as investment adviser to the Fund, is
duly registered as an investment adviser under the federal Investment Advisers
Act of 1940, as amended;
WHEREAS, the Company has issued or will issue certain variable life
insurance and/or variable annuity contracts supported wholly or partially by the
Account (the "Contracts"), and said Contracts are listed in Schedule A hereto,
as it may be amended from time to time by mutual written agreement;
WHEREAS, the Account is duly established and maintained as a segregated
asset account, duly established by the Company, on the date shown for such
Account on Schedule A hereto, to set aside and invest assets attributable to the
aforesaid Contracts; and
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WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares in the Portfolios listed in
Schedule A hereto, as it may be amended from time to time by mutual written
agreement (the "Designated Portfolios"), on behalf of the Account to fund the
aforesaid Contracts;
NOW, THEREFORE, in consideration of their mutual promises, the Company, the
Fund and the Adviser agree as follows:
ARTICLE I. Sale of Fund Shares
1.1 Subject to Article X hereof, and the terms set forth in the
registration statement, as amended from time to time, the Fund agrees to make
available to the Company for purchase on behalf of the Account, shares of the
Designated Portfolios, such purchases to be effected at net asset value in
accordance with Section 1.3 of this Agreement. Notwithstanding the foregoing,
(i) Portfolios (other than those listed on Schedule A) in existence now or that
may be established in the future will be made available to the Company only as
the Fund may so provide, and (ii) the Board of Trustees of the Fund (the
"Board") may suspend or terminate the offering of shares of any Designated
Portfolio or class thereof, if such action is required by law or by regulatory
authorities having jurisdiction or if, in the sole discretion of the Board
acting in good faith and in light of its fiduciary duties under federal and any
applicable state laws, suspension or termination is necessary in the best
interests of the shareholders of such Designated Portfolio. The Fund reserves
the right, upon prior written notice to the Company (given at the earliest
practicable time), to take all actions, including but not limited to, the
dissolution, reorganization, liquidation, merger or sale of all assets of the
Fund or any Portfolio upon the sole authorization of the Board of Trustees,
acting in good faith.
1.2 The Fund shall redeem, at the Company's request, any full or
fractional Designated Portfolio shares held by the Company on behalf of the
Account, such redemptions to be effected at net asset value in accordance with
Section 1.3 of this Agreement. Notwithstanding the foregoing, (i) the Company
shall not redeem Fund shares attributable to Contract owners except in the
circumstances permitted in Section 10.3 of this Agreement, and (ii) the Fund may
delay redemption of Fund shares of any Designated Portfolio to the extent
permitted by the 1940 Act, and any rules, regulations or orders thereunder.
1.3 Purchase and Redemption Procedures
(a) The Fund hereby appoints the Company as an agent of the Fund
for the limited purpose of receiving and accepting purchase and redemption
requests on behalf of the Account (but not with respect to any Fund shares that
may be held in the general account of the Company) for shares of those
Designated Portfolios made available hereunder, based on allocations of amounts
to the Account or subaccounts thereof under the Contracts and other transactions
relating to the Contracts or the Account. Receipt and acceptance of any such
request (or relevant transactional information therefor) on any day the New York
Stock Exchange is open for trading and on which a Designated Portfolio
calculates its net asset value (a "Business Day") pursuant to the rules of the
Securities and Exchange Commission ("SEC") by the Company as such limited agent
of the Fund prior to the time that the Fund ordinarily calculates its net asset
value as described from time to time in the Fund's prospectus (which as of the
date of execution of this Agreement is 4:00 p.m. Eastern Time) shall constitute
receipt and acceptance
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by the Designated Portfolio on that same Business Day. To facilitate the
Designated Portfolios' daily trading practices, the Company shall provide the
Fund with daily net aggregate trade and other information relating to the
Designated Portfolios at times specified by the Fund prior to the close of
business on each Business Day with respect to which the Company shall hold the
Fund and the Adviser harmless from any liability and shall reimburse the Fund
and the Adviser for any loss resulting from reliance on such information.
(b) The Company shall pay for shares of each Designated
Portfolio on the Business Day following the Company's receipt and acceptance, in
its capacity as limited agent of the Fund, of a purchase request for such
shares. Payment for Designated Portfolio shares shall be made in federal funds
transmitted to the Fund or other designated person by wire to be received by
2:00 p.m. Eastern Time on the Business Day following Company's receipt and
acceptance, in its capacity as limited agent of the Fund, of the purchase
request for Designated Portfolio shares (unless the Fund determines and so
advises the Company that sufficient proceeds are available from redemption of
shares of other Designated Portfolios effected pursuant to redemption requests
tendered by the Company on behalf of the Account). If federal funds are not
received on time, such funds will be invested, and Designated Portfolio shares
purchased thereby will be issued, as soon as practicable and the Company shall
promptly, upon the Fund's request, reimburse the Fund for any charges, costs,
fees, interest or other expenses incurred by the Fund in connection with any
advances to, or borrowing or overdrafts by, the Fund, or any similar expenses
incurred by the Fund, as a result of portfolio transactions effected by the Fund
based upon such purchase request. Upon receipt of federal funds so wired, such
funds shall cease to be the responsibility of the Company and shall become the
responsibility of the Fund.
(c) Payment for Designated Portfolio 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 such shares (unless redemption
proceeds are to be applied to the purchase of shares of other Designated
Portfolio in accordance with Section 1.3(b) of this Agreement), except that the
Fund reserves the right to redeem Designated Portfolio shares in assets other
than cash and to delay payment of redemption proceeds to the extent permitted
under Section 22(e) of the 1940 Act and any Rules thereunder, and in accordance
with the procedures and policies of the Fund as described in the then current
prospectus. The Fund shall not bear any responsibility whatsoever for the proper
disbursement or crediting of redemption proceeds by the Company, the Company
alone shall be responsible for such action.
(d) Any purchase or redemption request for Designated Portfolio
shares held or to be held in the Company's general account shall be effected at
the net asset value per share next determined after the Fund's receipt and
acceptance 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's prospectus.
1.4 The Fund shall use its best efforts to make the net asset value per
share for each Designated Portfolio available to the Company by 6:30 p.m.
Eastern Time each Business Day, and in any event, as soon as reasonably
practicable after the net asset value per share for such Designated
Portfolio is calculated, and shall calculate such net asset value in
accordance with the Fund's prospectus. Neither the Fund, any Designated
Portfolio, the Adviser, nor any of their
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affiliates shall be liable for any information provided to the Company pursuant
to this Agreement, or any loss resulting from such information, if such
information is based on incorrect information supplied by the Company or any
other Participating Insurance Company to the Fund or the Adviser.
1.5 The Fund shall furnish notice (by wire or telephone followed by
written confirmation) to the Company as soon as reasonably practicable of any
income dividends or capital gain distributions payable on any Designated
Portfolio shares. The Company, on its behalf and on behalf of the Account,
hereby elects to receive all such dividends and distributions as are payable on
any Designated Portfolio shares in the form of additional shares of that
Designated Portfolio. The Company reserves the right, on its behalf and on
behalf of the Account, to revoke this election and to receive all such dividends
and capital gain distributions in cash. The Fund shall notify the Company
promptly of the number of Designated Portfolio shares so issued as payment of
such dividends and distributions.
1.6 Issuance and transfer of Fund shares shall be by book entry only.
Share certificates will not be issued to the Company or the Account. Purchase
and redemption orders for Fund shares shall be recorded in an appropriate ledger
for the Account or the appropriate subaccount of the Account.
1.7 (a) The parties hereto acknowledge that the arrangement
contemplated by this Agreement is not exclusive; the Fund's shares may be sold
to other insurance companies (subject to Section 2.2 hereof) and the cash value
of the Contracts may be invested in other investment companies, provided,
however, that until this Agreement is terminated pursuant to Article X, the
Company shall promote the Designated Portfolios on the same basis as other
funding vehicles available under the Contracts. Funding vehicles other than
those listed on Schedule A to this Agreement may be available for the investment
of the cash value of the Contracts, provided, however, (i) any such vehicle or
series thereof, has investment objectives or policies that are substantially
different from the investment objectives and policies of the Designated
Portfolios available hereunder; (ii) the Company gives the Fund and the Adviser
45 days written notice of its intention to make such other investment vehicle
available as a funding vehicle for the Contracts; and (iii) unless such other
investment company was available as a funding vehicle for the Contracts prior to
the date of this Agreement and the Company has so informed the Fund and the
Adviser prior to their signing this Agreement, the Fund or Adviser consents in
writing to the use of such other vehicle, such consent not to be unreasonably
withheld.
(b) The Company shall not, without prior notice to the Adviser
(unless otherwise required by applicable law), take any action to operate the
Account as a management investment company under the 1940 Act.
(c) The Company shall not, without prior notice to the Adviser
(unless otherwise required by applicable law), induce Contract owners to change
or modify the Fund or change the Fund's investment adviser.
(d) The Company shall not, without prior notice to the Fund,
induce Contract owners to vote on any matter submitted for consideration by the
shareholders of the Fund in a manner other than as recommended by the Board.
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1.8 The Company acknowledges that, pursuant to Form 24F-2, the Fund is
not required to pay fees to the SEC for registration of its shares under the
1933 Act with respect to its shares issued to an Account that is a unit
investment trust that offers interests that are registered under the 1933 Act
and on which a registration fee has been or will be paid to the SEC (a
"Registered Account"). The Company agrees to provide the Fund each year within
60 days of the end of the Fund's fiscal year, or when reasonably requested by
the Fund, information as to the number of shares purchased by a Registered
Account and any other Account the interests of which are not registered under
the 0000 Xxx. The Company acknowledges that the Fund intends to rely on the
information so provided and represents and warrants that such information shall
be accurate.
ARTICLE II. Representations and WarrantiesThe Company represents and warrants
that the Contracts (a) are, or prior to issuance will be, registered under the
1933 Act, or (b) are not registered because they are properly exempt from
registration under the 1933 Act or will be offered exclusively in transactions
that are properly exempt from registration under the 1933 Act. The Company
further represents and warrants that the Contracts will be issued and sold in
compliance in all material respects with all applicable federal securities and
state securities and insurance laws and that the sale of the Contracts shall
comply in all material respects with state insurance suitability requirements.
The Company further represents and warrants that it is an insurance company duly
organized and in good standing under applicable law, that it has legally and
validly established the Account prior to any issuance or sale thereof as a
segregated asset account under [insert state] insurance laws, and that it (a)
has registered or, prior to any issuance or sale of the Contracts, will register
the Account as a unit investment trust in accordance with the provisions of the
1940 Act to serve as a segregated investment account for the Contracts, or
alternatively (b) has not registered the Account in proper reliance upon an
exclusion from registration under the 1940 Act. The Company shall register and
qualify the Contracts or interests therein as securities in accordance with the
laws of the various states only if and to the extent deemed advisable by the
Company.
2.2 The Fund represents and warrants (a) that Designated Portfolios
shares sold pursuant to this Agreement shall be registered under the 1933 Act,
duly authorized for issuance and sold in compliance with applicable state and
federal securities laws, (b) that the Fund is and shall remain registered under
the 1940 Act, (c) that shares of the Designated Portfolios will be sold only to
Participating Insurance Companies and their separate accounts or to persons or
plans that communicate to the Fund that they qualify to purchase shares of the
Designated Portfolios under Section 817(h) of the Internal Revenue Code of 1986,
as amended (the "Code"), and the regulations thereunder without impairing the
ability of the Account to consider the portfolio investments of the Designated
Portfolios as constituting investments of the Account for purposes of Section
817(h) ("Qualified Persons"), and (d) shares of the Designated Portfolios will
not be sold directly to the general public. The Fund shall amend the
registration statement for its shares under the 1933 Act and the 1940 Act from
time to time as required in order to effect the continuous offering of its
shares. The Fund shall register and qualify the shares for sale in accordance
with the laws of the various states only if and to the extent deemed advisable
by the Fund.
2.3 The Company represents and warrants that it and each Account are,
and will continue to be, Qualified Persons.
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2.4 The Fund makes no representations as to whether any aspect of its
operations, including, but not limited to, investment policies, fees and
expenses, complies with the insurance and other applicable laws of the various
states.
2.5 The Fund 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 0000 Xxx.
2.6 The Adviser represents and warrants that it is registered as an
investment adviser with the SEC.
2.7 The Fund and the Adviser represent and warrant that all of their
trustees/directors, officers, employees, and other individuals or entities
dealing with the money and/or securities of the Fund are and shall continue to
be at all times covered by a blanket fidelity bond or similar coverage for the
benefit of the Fund in an amount not less than the minimum coverage as required
currently by Rule 17g-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.
2.8 The Company represents and warrants that all of its directors,
officers, employees, and other individuals/entities employed or controlled by
the Company dealing with the money and/or securities of the Account are covered
by a blanket fidelity bond or similar coverage for the benefit of the Account,
in an amount not less than $5 million. The aforesaid bond includes coverage for
larceny and embezzlement and is issued by a reputable bonding company. The
Company agrees to hold for the benefit of the Fund and to pay to the Fund any
amounts lost from larceny, embezzlement or other events covered by the aforesaid
bond to the extent such amounts properly belong to the Fund pursuant to the
terms of this Agreement. The Company agrees to make all reasonable efforts to
see that this bond or another bond containing these provisions is always in
effect, and agrees to notify the Fund and the Adviser in the event that such
coverage no longer applies.
2.9 The Company represents and warrants that it shall comply with any
applicable privacy and notice provisions of 15 U.S.C. Sections 6801-6827 and any
applicable regulations promulgated thereunder (including but not limited to 17
C.F.R. Part 248) as they may be amended.
2.10 The Company represents and warrants that it has in place an
anti-money laundering program ("AML program") that does now and will continue to
comply with applicable laws and regulations, including the relevant provisions
of the USA PATRIOT Act (Pub. L. No. 107-56 (2001)) and the regulations issued
thereunder.
ARTICLE III. Prospectuses and Proxy Statements; Voting3.1 The Fund or its agent
shall provide the Company with as many copies of the Fund's current prospectus
or, to the extent permitted, the Fund's profiles as the Company may reasonably
request. The Company shall bear the expense of printing copies of the current
prospectus and profiles for the Contracts that will be distributed to existing
Contract owners, and the Company shall bear the expense of printing copies of
the Fund's prospectus and profiles that are used in connection with offering the
Contracts issued by the Company. If requested by the Company in lieu thereof,
the Fund shall provide such documentation (including a final copy of the current
prospectus set in type or in
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camera ready format or in electronic format at the Fund's expense) and other
assistance as is reasonably necessary in order for the Company once each year
(or more frequently if the prospectus for the Fund is amended) to have the
prospectus for the Contracts and the Fund's prospectus or profile printed
together in one document (such printing to be at the Company's expense).
3.2 The Fund's prospectus shall state that the current Statement of
Additional Information ("SAI") for the Fund is available, and the Fund, at its
expense, shall provide a reasonable number of copies of such SAI free of charge
to the Company for itself and for any owner of a Contract with Contract value
allocated to a Designated Portfolio who requests such SAI.
3.3 The Fund shall provide the Company with information regarding the
Fund's expenses, which information may include a table of fees and related
narrative disclosure for use in any prospectus or other descriptive document
relating to a Contract. The Company agrees that it will use such information in
the form provided. The Company shall provide prior written notice of any
proposed modification of such information, which notice will describe in detail
the manner in which the Company proposes to modify the information, and agrees
that it may not modify such information in any way without the prior consent of
the Fund.
3.4 The Fund, at its expense, shall provide the Company with copies of
its proxy material, reports to shareholders, and other communications to
shareholders in such quantity as the Company shall reasonably require for
distributing to Contract owners. If requested by the Company in lieu thereof,
the Fund shall provide such material, reports or other communications in "camera
ready" format on diskette.
3.5 The Company shall:
(i) solicit voting instructions from Contract owners;
(ii) vote the Fund shares in accordance with
instructions received from Contract owners in that
Account; and
(iii) vote Fund shares for which no instructions have
been received in the same proportion as Fund shares
of such Designated Portfolio held by an Account for
which instructions have been received,
so long as and to the extent that the SEC continues to interpret the 1940 Act to
require pass-through voting privileges for variable contract owners or to the
extent otherwise required by law. The Company will vote Fund shares held in any
segregated asset account in the same proportion as Fund shares of such
Designated Portfolio for which voting instructions have been received from
Contract owners, to the extent permitted by law.
3.6 Participating Insurance Companies shall be responsible for assuring
that each of their separate accounts participating in a Designated Portfolio
calculates voting privileges as required by the Mixed and Shared Funding
Exemptive Order (See Section 7.1) and consistent with any reasonable standards
that the Fund may adopt and provide in writing.
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ARTICLE IV. Sales Material and Information
4.1 The Company shall furnish, or shall cause to be furnished, to the
Fund or its designee, each piece of sales literature or other promotional
material that the Company develops and in which the Fund (or a Designated
Portfolio thereof) or the Adviser is named. No such material shall be used until
approved by the Fund or its designee, and the Fund will use its best efforts for
it or its designee to review such sales literature or promotional material
within ten Business Days after receipt of such material. The Fund or its
designee reserves the right to reasonably object to the continued use of any
such sales literature or other promotional material in which the Fund (or a
Designated Portfolio thereof) or the Adviser is named, and no such material
shall be used if the Fund or its designee so objects.
4.2 The Company shall not give any information or make any
representations or statements on behalf of the Fund or concerning the Fund or
the Adviser in connection with the sale of the Contracts other than the
information or representations contained in the registration statement or
prospectus or SAI for the Fund shares, as such registration statement and
prospectus or SAI may be amended or supplemented from time to time, or in
reports or proxy statements for the Fund, or in sales literature or other
promotional material approved by the Fund or its designee, except with the
permission of the Fund or its designee.
4.3 The Fund and the Adviser, or their designee, shall furnish, or
cause to be furnished, to the Company, each piece of sales literature or other
promotional material that it develops and in which the Company, and/or its
Account, is named. No such material shall be used until approved by the Company,
and the Company will use its best efforts to review such sales literature or
promotional material within ten Business Days after receipt of such material.
The Company reserves the right to reasonably object to the continued use of any
such sales literature or other promotional material in which the Company and/or
its Account is named, and no such material shall be used if the Company so
objects.
4.4 The Fund shall not give any information or make any representations
on behalf of the Company or concerning the Company, the Account, or the
Contracts other than the information or representations contained in a
registration statement, prospectus (which shall include an offering memorandum,
if any, if the Contracts issued by the Company or interests therein are not
registered under the 1933 Act), or SAI for the Contracts, as such registration
statement, prospectus, or SAI may be amended or supplemented from time to time,
or in published reports for the Account which are in the public domain or
approved by the Company for distribution to Contract owners, or in sales
literature or other promotional material approved by the Company or its
designee, except with the permission of the Company.
4.5 The Fund will provide to the Company at least one complete copy of
all registration statements, prospectuses, SAIs, reports, proxy statements,
sales literature and other promotional materials, applications for exemptions,
requests for no-action letters, and all amendments to any of the above, that
relate to the Designated Portfolios or their shares, promptly after the filing
of such document(s) with the SEC or other regulatory authorities.
4.6 The Company will provide to the Fund at least one complete copy of
all registration statements, prospectuses (which shall include an offering
memorandum, if any, if the Contracts issued by the Company or interests therein
are not registered under the 1933 Act), SAIs, reports, solicitations for voting
instructions, sales literature and other promotional
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materials, applications for exemptions, requests for no-action letters, and all
amendments to any of the above, that relate to the Contracts or the Account,
promptly after the filing of such document(s) with the SEC or other regulatory
authorities. The Company shall provide to the Fund and the Adviser any
complaints received from the Contract owners pertaining to the Fund or a
Designated Portfolio.
4.7 The Fund will provide the Company with as much notice as is
reasonably practicable of any proxy solicitation for any Designated Portfolio,
and of any material change in the Fund's registration statement, particularly
any change resulting in a change to the registration statement or prospectus for
any Account. The Fund will work with the Company so as to enable the Company to
solicit proxies from Contract owners, or to make changes to its prospectus or
registration statement, in an orderly manner. The Fund will make reasonable
efforts to attempt to have changes affecting Contract prospectuses become
effective simultaneously with the annual updates for such prospectuses.
4.8 For purposes of this Article IV, the phrase "sales literature and
other promotional materials" includes, but is not limited to, any of the
following that refer to the Fund, any Designated Portfolio or any affiliate of
the Fund: advertisements (such as material published, or designed for use in, a
newspaper, magazine, or other periodical, radio, television, telephone or tape
recording, videotape display, signs or billboards, motion pictures, or other
public media), sales literature (i.e., any written communication distributed or
made generally available to customers or the public, including brochures,
circulars, reports, market letters, form letters, seminar texts, reprints or
excerpts of any other advertisement, sales literature, or published article),
educational or training materials or other communications distributed or made
generally available to some or all agents or employees, and registration
statements, prospectuses, SAIs, shareholder reports, proxy materials, and any
other communications distributed or made generally available with regard to the
Fund.
ARTICLE V. Fees and Expenses
5.1 The Fund shall pay no fee or other compensation to the Company
under this Agreement. Nothing herein shall prevent the parties hereto from
otherwise agreeing to perform and arranging for compensation for (i)
distribution and shareholder-related services under a plan adopted in accordance
with Rule 12b-1 under the 1940 Act, and (ii) services (including certain
shareholder-related services) that are not primarily intended to result in the
sale of shares of the Designated Portfolios, which are provided to Contract
owners relating to the Designated Portfolios.
5.2 All expenses incident to performance by the Fund under this
Agreement shall be paid by the Fund. The Fund shall see to it that all its
shares are registered and authorized for issuance in accordance with applicable
federal law and, if and to the extent deemed advisable by the Fund, in
accordance with applicable state laws prior to their sale. The Fund shall bear
the expenses for the cost of registration and qualification of the Fund's
shares, preparation and filing of the Fund's prospectus and registration
statement, proxy materials and reports, setting the prospectus in type, setting
in type and printing the proxy materials and reports to shareholders (including
the costs of printing a prospectus that constitutes an annual report), the
preparation of all statements and notices required by any federal or state law,
and all taxes on the issuance or transfer of the Fund's shares.
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5.3 The Company shall bear the expenses of distributing the Fund's
prospectus to owners of Contracts issued by the Company and of distributing the
Fund's proxy materials and reports to such Contract owners.
ARTICLE VI. Diversification and Qualification
6.1 Subject to Company's representations and warranties in Sections
2.1, 2.3 and 6.3, the Fund represents and warrants that it will invest its
assets in such a manner as to ensure that the Contracts will be treated as
annuity or life insurance contracts, whichever is appropriate, under the Code
and the regulations issued thereunder (or any successor provisions). Without
limiting the scope of the foregoing, each Designated Portfolio has complied and
will continue to comply with Section 817(h) of the Code and Treasury Regulation
Section1.817-5, and any Treasury interpretations thereof, relating to the
diversification requirements for variable annuity, endowment, or life insurance
contracts, and any amendments or other modifications or successor provisions to
such Section or Regulations. In the event of a breach of this Article VI by the
Fund, it will take all reasonable steps (a) to notify the Company of such breach
and (b) to adequately diversify the Fund so as to achieve compliance within the
grace period afforded by Treasury Regulation Section1.817-5.
6.2 The Fund represents and warrants that each Designated Portfolio is
or will be qualified as a Regulated Investment Company under Subchapter M of the
Code, and that it will make every effort to maintain such qualification (under
Subchapter M or any successor or similar provisions) and that it will notify the
Company immediately upon having a reasonable basis for believing that a
Designated Portfolio has ceased to so qualify or that it might not so qualify in
the future.
6.3 The Company represents and warrants that the Contracts are
currently, and at the time of issuance shall be, treated as life insurance or
annuity contracts under applicable provisions of the Code, and that it will make
every effort to maintain such treatment, and that it will notify the Fund and
the Adviser immediately upon having a reasonable basis for believing the
Contracts have ceased to be so treated or that they might not be so treated in
the future. The Company agrees that any prospectus offering a contract that is a
"modified endowment contract" as that term is defined in Section 7702A of the
Code (or any successor or similar provision), shall identify such contract as a
modified endowment contract. In addition, the Company represents and warrants
that each of its Accounts is a "segregated asset account" and that interests in
the Accounts are offered exclusively through the purchase of or transfer into a
"variable contract" within the meaning of such terms under Section 817 of the
Code and the regulations thereunder. The Company will use every effort to
continue to meet such definitional requirements, and it will notify the Fund and
the Adviser immediately upon having a reasonable basis for believing that such
requirements have ceased to be met or that they might not be met in the future.
ARTICLE VII. Potential Conflicts
7.1 The Fund represents and warrants that it may rely on an order that
was granted by the SEC in Variable Insurance Funds, et al. (File No.:
812-10694), Investment Company Act Rel. No. 23594 (Dec. 10, 1998) granting
Participating Insurance Companies and variable annuity separate accounts and
variable life insurance separate accounts relief from the provisions of Sections
9(a), 13(a), 15(a), and 15(b) of the 1940 Act and Rules 6e-2(b)(15) and
6e-3(T)(b)(15) thereunder, to the extent necessary to permit shares of the
Designated Portfolios to be sold to and
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held by variable annuity separate accounts and variable life insurance separate
accounts of both affiliated and unaffiliated Participating Insurance Companies,
qualified pension and retirement plans outside of the separate account context,
and other permitted investors (the "Mixed and Shared Funding Order"). The
parties to this Agreement agree that the conditions or undertakings required by
the Mixed and Shared Funding Order that may be imposed on the Company, the Fund
and/or the Adviser by virtue of such order by the SEC: (i) shall apply only upon
the sale of shares of the Designated Portfolios to variable life insurance
separate accounts (and then only to the extent required under the 1940 Act);
(ii) will be incorporated herein by reference; and (iii) such parties agree to
comply with such conditions and undertakings to the extent applicable to each
such party notwithstanding any provision of this Agreement to the contrary.
7.2 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 provision of the
1940 Act or the rules promulgated thereunder with respect to mixed or shared
funding (as defined in the Mixed and Shared Funding Exemptive Order) on terms
and conditions materially different from those contained in the Mixed and Shared
Funding Exemptive Order, then (a) the Fund and/or the Participating Insurance
Companies, as appropriate, shall take such steps as may be necessary to comply
with Rules 6e-2 and 6e-3(T), as amended, and Rule 6e-3, as adopted, to the
extent such rules are applicable; and (b) Sections 3.5 and 3.6 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
8.1(a). The Company agrees to indemnify and hold harmless the Fund
(which shall include the Designated Portfolios) and the Adviser and each of its
trustees/directors and officers, and each person, if any, who controls the Fund
or Adviser within the meaning of Section 15 of the 1933 Act or who is under
common control with the Adviser (collectively, the "Indemnified Parties" for
purposes of this Section 8.1) against any and all losses, claims, damages,
liabilities (including amounts paid in settlement with the written consent of
the Company) or 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:
(i) arise out of or are based upon any untrue statement or
alleged untrue statements of any material fact contained in
the registration statement, prospectus (which shall include
a written description of a Contract that is not registered
under the 1933 Act), or SAI for the Contracts or contained
in the Contracts or sales literature for the Contracts (or
any amendment or supplement to any of the foregoing), or
arise out of or are based upon the omission or the alleged
omission to state therein a material fact required to be
stated therein or necessary to make the statements therein
not misleading, provided that this agreement to indemnify
shall not apply as to any Indemnified Party if such
statement or omission or such alleged statement or omission
was made in reliance upon and in conformity with information
furnished to the Company by or on behalf of the Fund for use
in the registration statement, prospectus or SAI for the
Contracts or in the
11
Contracts or sales literature (or any amendment or
supplement) or otherwise for use in connection with the sale
of the Contracts or Fund shares; or
(ii) arise out of or as a result of statements or
representations (other than statements or representations
contained in the registration statement, prospectus, SAI, or
sales literature of the Fund not supplied by the Company or
persons under its control) or wrongful conduct of the
Company or its agents or persons under the Company's
authorization or control, with respect to the sale or
distribution of the Contracts or Fund shares; or
(iii) arise out of any untrue statement or alleged untrue
statement of a material fact contained in a registration
statement, prospectus, SAI, or sales literature of the Fund
or any amendment thereof or supplement thereto or the
omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the
statements therein not misleading if such a statement or
omission was made in reliance upon information furnished to
the Fund by or on behalf of the Company; or
(iv) arise as a result of any material failure by the
Company to provide the services and furnish the materials
under the terms of this Agreement (including a failure,
whether unintentional or in good faith or otherwise, to
comply with the qualification requirements specified in
Article VI of this Agreement); or
(v) arise out of or result from any material breach of any
representation and/or warranty made by the Company in this
Agreement or arise out of or result from any other material
breach of this Agreement by the Company; or
(vi) arise as a result of the provision by the Company to
the Fund of insufficient or incorrect information regarding
the purchase or redemption of shares, or the failure of the
Company to provide such information or payment for shares in
accordance with the deadlines stated in Section 1.3; or
(vii) arise out of information provided to the Company
pursuant to this Agreement, or to any other Participating
Insurance Company pursuant to another participation
agreement, which information is based on incorrect
information supplied by the Company to the Fund or the
Adviser.
as limited by and in accordance with the provisions of Sections 8.1(b) and
8.1(c) hereof.
8.1(b). The Company 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 its obligations or duties under this Agreement.
8.1(c). The Company shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Company in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on
12
any designated agent), but failure to notify the Company of any such claim shall
not relieve the 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, the Company shall be entitled to participate, at its own
expense, in the defense of such action. The Company also shall be entitled to
assume the defense thereof, with counsel satisfactory to the party named in the
action. After notice from the Company to such party of the Company's election to
assume the defense thereof, the Indemnified Party shall bear the fees and
expenses of any additional counsel retained by it, and the Company will not be
liable to such party under this Agreement for any legal or other expenses
subsequently incurred by such party independently in connection with the defense
thereof other than reasonable costs of investigation.
8.1(d). Each of the Fund and the Adviser will promptly notify the
Company of the commencement of any litigation or proceedings of which it has
knowledge against an Indemnified Party in connection with the issuance or sale
of the Fund shares or the Contracts or the operation of the Fund.
8.2 Indemnification by the Adviser
8.2(a). The Adviser agrees to indemnify and hold harmless the
Company and each of its directors and officers and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act
(collectively, the "Indemnified Parties" for purposes of this Section 8.2)
against any and all losses, claims, damages, liabilities (including amounts paid
in settlement with the written consent of the Adviser) 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:
(i) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in
the registration statement or prospectus or SAI or sales
literature of the Fund (or any amendment or supplement to
any of the foregoing), or arise out of or are based upon the
omission or the alleged omission to state therein a material
fact required to be stated therein or necessary to make the
statements therein not misleading, provided that this
agreement to indemnify shall not apply as to any Indemnified
Party if such statement or omission or such alleged
statement or omission was made in reliance upon and in
conformity with information furnished to the Adviser or Fund
by or on behalf of the Company for use in the registration
statement, prospectus or SAI for the Fund or in sales
literature (or any amendment or supplement) or otherwise for
use in connection with the sale of the Contracts or Fund
shares; or
(ii) arise out of or as a result of statements or
representations (other than statements or representations
contained in the registration statement, prospectus, SAI or
sales literature for the Contracts not supplied by the Fund
or the Adviser) or wrongful conduct of the Adviser with
respect to the sale or distribution of the Contracts or Fund
shares; or
13
(iii) arise out of any untrue statement or alleged untrue
statement of a material fact contained in a registration
statement, prospectus, SAI or sales literature covering the
Contracts, or any amendment thereof or supplement thereto,
or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to
make the statement or statements therein not misleading, if
such statement or omission was made in reliance upon
information furnished to the Company by or on behalf of the
Adviser; or
(iv) arise out of or result from any material breach of any
representation and/or warranty made by the Adviser in this
Agreement or arise out of or result from any other material
breach of this Agreement by the Adviser;
as limited by and in accordance with the provisions of Sections 8.2(b) and
8.2(c) hereof.
8.2(b). The Adviser 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 or such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations and duties under this Agreement or to
the Company or the Account, whichever is applicable.
8.2(c). The Adviser shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Adviser in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Adviser of any
such claim shall not relieve the Adviser 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 Party, the Adviser will be entitled to participate, at
its own expense, in the defense thereof. The Adviser also shall be entitled to
assume the defense thereof, with counsel satisfactory to the party named in the
action. After notice from the Adviser to such party of the Adviser's election to
assume the defense thereof, the Indemnified Party shall bear the fees and
expenses of any additional counsel retained by it, and the Adviser 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.
8.2(d). The Company agrees promptly to notify the Adviser of the
commencement of any litigation or proceedings of which it has knowledge against
an Indemnified Party in connection with the issuance or sale of the Contracts or
the operation of the Account.
14
8.3 Indemnification By the Fund
8.3(a). To the extent permitted by applicable law, the Fund agrees
to indemnify and hold harmless the Company and each of its directors and
officers and each person, if any, who controls the Company within the meaning of
Section 15 of the 1933 Act (collectively, the "Indemnified Parties" for purposes
of this Section 8.3) against any and all losses, claims, expenses, damages,
liabilities (including amounts paid in settlement with the written consent of
the Fund) or litigation (including legal and other expenses) to which the
Indemnified Parties may be required to pay or may become subject under any
statute or regulation, at common law or otherwise, insofar as such losses,
claims, expenses, damages, liabilities or expenses (or actions in respect
thereof) or settlements, are related to the operations of the Fund and:
(i) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in
the registration statement or prospectus or SAI or sales
literature of the Fund (or any amendment or supplement to
any of the foregoing), or arise out of or are based upon the
omission or the alleged omission to state therein a material
fact required to be stated therein or necessary to make the
statements therein not misleading, provided that this
agreement to indemnify shall not apply as to any Indemnified
Party if such statement or omission or such alleged
statement or omission was made in reliance upon and in
conformity with information furnished to the Adviser or Fund
by or on behalf of the Company for use in the registration
statement, prospectus or SAI for the Fund or in sales
literature (or any amendment or supplement) or otherwise for
use in connection with the sale of the Contracts or Fund
shares; or
(ii) arise as a result of any failure by the Fund to
provide the services and furnish the materials under the
terms of this Agreement (including a failure, whether
unintentional or in good faith or otherwise, to comply with
the diversification and other qualification requirements
specified in Article VI of this Agreement); or
(iii) arise out of or result from any material breach of any
representation and/or warranty made by the Fund in this
Agreement or arise out of or result from any other material
breach of this Agreement by the Fund;
as limited by and in accordance with the provisions of Sections 8.3(b) and
8.3(c) hereof.
8.3(b). The Fund 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
the Company, the Fund, the Adviser or the Account, whichever is applicable.
15
8.3(c). The Fund shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Fund in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Fund of any
such claim shall not relieve the Fund from any liability which it may have to
the Indemnified Party against whom such action is brought otherwise than on
account of this indemnification provision. In case any such action is brought
against the Indemnified Parties, the Fund will be entitled to participate, at
its own expense, in the defense thereof. The Fund also shall be entitled to
assume the defense thereof, with counsel satisfactory to the party named in the
action. After notice from the Fund to such party of the Fund's election to
assume the defense thereof, the Indemnified Party shall bear the fees and
expenses of any additional counsel retained by it, and the Fund will not be
liable to such party under this Agreement for any legal or other expenses
subsequently incurred by such party independently in connection with the defense
thereof other than reasonable costs of investigation.
8.3(d). The Company agrees promptly to notify the Fund of the
commencement of any litigation or proceeding of which it has knowledge against
an Indemnified Party in connection with the Agreement, the issuance or sale of
the Contracts, the operation of the Account, or the sale or acquisition of
shares of the Fund.
8.3(e) The Adviser agrees promptly to notify the Fund of the
commencement of any litigation or proceeding of which it has knowledge against
it or any of its respective officers or directors in connection with the
Agreement, the issuance or sale of the Contracts, the operation of the Account,
or the sale or acquisition of shares of the Fund.
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.
9.2 This Agreement shall be subject to the provisions of the 1933, 1934
and 1940 Acts, and the rules and regulations and rulings thereunder, including
such exemptions from those statutes, rules and regulations as the SEC may grant
(including, but not limited to, the Mixed and Shared Funding Exemptive Order)
and the terms hereof shall be interpreted and construed in accordance therewith.
If, in the future, the Mixed and Shared Funding Exemptive Order should no longer
be necessary under applicable law, then Article VII shall no longer apply.
ARTICLE X. Termination
10.1 This Agreement shall continue in full force and effect until the
first to occur of:
(a) termination by any party, for any reason with respect to
some or all Designated Portfolios, by three (3) months
advance written notice delivered to the other parties; or
16
(b) termination by the Company by written notice to the Fund
and the Adviser based upon the Company's determination that
shares of the Fund are not reasonably available to meet the
requirements of the Contracts; or
(c) termination by the Company by written notice to the Fund
and the Adviser in the event any of the Designated
Portfolio's shares are not registered, issued or sold in
accordance with applicable state and/or federal law or such
law precludes the use of such shares as the underlying
investment media of the Contracts issued or to be issued by
the Company; or
(d) termination by the Fund or Adviser in the event that formal
administrative proceedings are instituted against the
Company by the NASD, the SEC, the Insurance Commissioner or
like official of any state or any other regulatory body
regarding the Company's duties under this Agreement or
related to the sale of the Contracts, the operation of any
Account, or the purchase of the Designated Portfolios'
shares; provided, however, that the Fund or Adviser
determines in its sole judgment exercised in good faith,
that any such administrative proceedings will have a
material adverse effect upon the ability of the Company to
perform its obligations under this Agreement; or
(e) termination by the Company in the event that formal
administrative proceedings are instituted against the Fund
or Adviser by the SEC or any state securities or insurance
department or any other regulatory body; provided, however,
that the Company determines in its sole judgment exercised
in good faith, that any such administrative proceedings
will have a material adverse effect upon the ability of the
Fund or Adviser to perform its obligations under this
Agreement; or
(f) termination by the Company by written notice to the Fund
and the Adviser with respect to any Designated Portfolio in
the event that such Portfolio ceases to qualify as a
Regulated Investment Company under Subchapter M or fails to
comply with the Section 817(h) diversification requirements
specified in Article VI hereof, or if the Company
reasonably believes that such Portfolio may fail to so
qualify or comply; or
(g) termination by the Fund or Adviser by written notice to the
Company in the event that the Contracts fail to meet the
qualifications specified in Section 6.3 hereof; or
(h) termination by either the Fund or the Adviser by written
notice to the Company, if either one or both of the Fund or
the Adviser respectively, shall determine, in their sole
judgment exercised in good faith, that the Company has
suffered a material adverse change in its business,
operations, financial condition, or prospects since the
date of this Agreement or is the subject of material
adverse publicity; or
(i) termination by the Company by written notice to the Fund
and the Adviser, if the Company shall determine, in its
sole judgment exercised in
17
good faith, that the Fund or the Adviser has suffered a
material adverse change in its business, operations,
financial condition or prospects since the date of this
Agreement or is the subject of material adverse publicity;
or
(j) termination by the Fund or the Adviser by written notice to
the Company, if the Company gives the Fund and the Adviser
the written notice specified in Section 1.7(a)(ii) hereof
and at the time such notice was given there was no notice
of termination outstanding under any other provision of
this Agreement; provided, however, any termination under
this Section 10.1(j) shall be effective forty-five days
after the notice specified in Section 1.7(a)(ii) was given;
or
(k) termination by the Adviser or Fund if the Board has decided
to (i) refuse to sell shares of any Designated Portfolio to
the Company and/or any of its Accounts; (ii) suspend or
terminate the offering of shares of any Designated
Portfolio; or (iii) dissolve, reorganize, liquidate, merge
or sell all assets of the Trust or any Designated
Portfolio, subject to the provisions of Section 1.1; or
(l) termination by the Company upon any substitution of the
shares of another investment company or series thereof for
shares of a Designated Portfolio of the Fund in accordance
with the terms of the Contracts, provided that the Company
has given at least 45 days prior written notice to the Fund
and Adviser of the date of substitution; or
(m) termination by any party in the event that the Board
determines that a material irreconcilable conflict exists
as provided in Article VII.
10.2 (a) Notwithstanding any termination of this Agreement, and
except as provided in Section 10.2(b), the Fund and the Adviser shall, at the
option of the Company, continue, until the one year anniversary from the date of
termination, and from year to year thereafter if deemed appropriate by the Fund
and the Adviser, to make available additional shares of the Fund pursuant to the
terms and conditions of this Agreement, for all Contracts in effect on the
effective date of termination of this Agreement (hereinafter referred to as
"Existing Contracts").
Specifically, based on instructions from the owners of the
Existing Contracts, the Accounts shall be permitted to reallocate investments in
the Designated Portfolios of the Fund and redeem investments in the Designated
Portfolios, and shall be permitted to invest in the Designated Portfolios in the
event that owners of the Existing Contracts make additional premium payments
under the Existing Contracts.
Company agrees, promptly after any termination of this
Agreement, to take all steps necessary to redeem the investment of the Accounts
in the Designated Portfolios within one year from the date of termination of the
Agreement as provided in Article X. Such steps shall include, but not be limited
to, obtaining an order pursuant to Section 26(c) of the 1940 Act to permit the
substitution of other securities for the shares of the Designated Portfolios.
The Fund or the Adviser may, in their discretion, permit the Accounts to
continue to invest in the
18
Designated Portfolios beyond such one year anniversary for an additional year
beginning on the first annual anniversary of the date of termination, and from
year to year thereafter; provided that the Fund or the Adviser agrees in writing
to permit the Accounts to continue to invest in the Designated Portfolios at the
beginning of any such year.
(b) In the event (i) the Agreement is terminated pursuant to
Sections 10.1(g) or 10.1(m), at the option of the Fund or the Adviser; or (ii)
the one year anniversary of the termination of the Agreement is reached or,
after waiver as provided in Section 10.2(a), such subsequent anniversary is
reached (each of (i) and (ii) referred to as a "triggering event" and the date
of termination as provided in (i) or the date of such anniversary as provided in
(ii) referred to as the "request date"), the parties agree that such triggering
event shall be considered as a request for immediate redemption of shares of the
Designated Portfolios held by the Accounts, received by the Fund as of the
request date, and the Fund agrees to process such redemption request in
accordance with the 1940 Act and the regulations thereunder and the Fund's
registration statement.
(c) The parties agree that this Section 10.2 shall not apply to
any terminations under Article VII and the effect of such Article VII
terminations shall be governed by Article VII of this Agreement. The parties
further agree that, to the extent that all or a portion of the assets of the
Accounts continue to be invested in the Fund or any Designated Portfolio of the
Fund, Articles I, II, VI, VII, VIII and IX will remain in effect after
termination.
10.3 The Company shall not redeem Fund shares attributable to the
Contracts (as opposed to Fund shares attributable to the Company's assets held
in the Account) except (i) as necessary to implement Contract owner initiated or
approved transactions, (ii) as required by state and/or federal laws or
regulations or judicial or other legal precedent of general application
(hereinafter referred to as a "Legally Required Redemption"), (iii) upon 45 days
prior written notice to the Fund and Adviser, as permitted by an order of the
SEC pursuant to Section 26(c) of the 1940 Act, but only if a substitution of
other securities for the shares of the Designated Portfolios is consistent with
the terms of the Contracts, or (iv) as permitted under the terms of the
Contract. Upon request, the Company will promptly furnish to the Fund and the
Adviser reasonable assurance that any redemption pursuant to clause (ii) above
is a Legally Required Redemption. Furthermore, except in cases where permitted
under the terms of the Contacts, the Company shall not prevent Contract owners
from allocating payments to a Portfolio that was otherwise available under the
Contracts without first giving the Fund or the Adviser 45 days notice of its
intention to do so.
10.4 Notwithstanding any termination of this Agreement, each party's
obligation under Article VIII to indemnify the other parties shall survive.
ARTICLE XI. Notices
Any notice shall be sufficiently given when sent by
registered or certified mail 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.
19
If to the Fund: ProFunds
c/o ProFund Advisors LLC
0000 Xxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxx, XX 00000
If to Adviser: ProFund Advisors LLC
0000 Xxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxx, XX 00000
If to the Company:
ARTICLE XII. Miscellaneous
12.1 All persons dealing with the Fund must look solely to the property
of the respective Designated Portfolios listed on Schedule A hereto as though
each such Designated Portfolio had separately contracted with the Company and
the Adviser for the enforcement of any claims against the Fund. The parties
agree that neither the Board, officers, agents or shareholders of the Fund
assume any personal liability or responsibility for obligations entered into by
or on behalf of the Fund.
12.2 Subject to the requirements of legal process and regulatory
authority, each party hereto shall treat as confidential the names and addresses
of the owners of the Contracts and all information reasonably identified as
confidential in writing by any other party hereto and, except as permitted by
this Agreement, shall not disclose, disseminate or utilize such names and
addresses and other confidential information without the express written consent
of the affected party until such time as such information has come into the
public domain.
12.3 The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions hereof or
otherwise affect their construction or effect.
12.4 This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
12.5 If any provision of this Agreement shall be held or made invalid by
a court decision, statute, rule or otherwise, the remainder of the Agreement
shall not be affected thereby.
12.6 Each party hereto shall cooperate with each other party and all
appropriate governmental authorities (including without limitation the SEC, the
NASD, and state insurance regulators) and shall permit such authorities
reasonable access to its books and records in connection with any investigation
or inquiry relating to this Agreement or the transactions contemplated hereby.
Notwithstanding the generality of the foregoing, each party hereto further
agrees to furnish the [insert state] Insurance Commissioner with any information
or reports in
20
connection with services provided under this Agreement which such Commissioner
may request in order to ascertain whether the variable insurance operations of
the Company are being conducted in a manner consistent with the [insert state]
insurance laws and regulations and any other applicable law or regulations.
12.7 The rights, remedies and obligations contained in this Agreement
are cumulative and are in addition to any and all rights, remedies, and
obligations, at law or in equity, which the parties hereto are entitled to under
state and federal laws.
12.8 This Agreement or any of the rights and obligations hereunder may
not be assigned by any party without the prior written consent of all parties
hereto; provided, however, that the Adviser may assign this Agreement or any
rights or obligations hereunder to any affiliate or company under common control
with the Adviser, if such assignee is duly licensed and registered to perform
services under this Agreement. The Company shall promptly notify the Fund and
the Adviser of any change in control of the Company.
12.9 The Company shall furnish, or shall cause to be furnished, to the
Fund or its designee copies of the following reports:
(a) the Company's annual statement (prepared under statutory
accounting principles) and annual report (prepared under
generally accepted accounting principles) filed with any
state or federal regulatory body or otherwise made
available to the public, as soon as practicable and in any
event within 90 days after the end of each fiscal year; and
(b) any registration statement (without exhibits) and financial
reports of the Company filed with the Securities and
Exchange Commission or any state insurance regulatory, as
soon as practicable after the filing thereof.
21
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed in its name and on its behalf by its duly authorized representative
and its seal to be hereunder affixed hereto as of the date specified below.
[Company]:
By its authorized officer
By:
------------------------
Title:
---------------------
Date:
----------------------
ProFunds
By its authorized officer
By:
------------------------
Title:
---------------------
Date:
----------------------
ProFund Advisors LLC
By its authorized officer
By:
------------------------
Title:
---------------------
Date:
----------------------
22
[Date]
SCHEDULE A
ACCOUNT(S) CONTRACT(S) DESIGNATED PORTFOLIO(S)
A-1
