PARTICIPATION AGREEMENT
AMONG
PIONEER VARIABLE CONTRACTS TRUST,
MINNESOTA LIFE INSURANCE COMPANY
PIONEER INVESTMENT MANAGEMENT, INC.
AND
PIONEER FUNDS DISTRIBUTOR, INC.
THIS AGREEMENT, made and entered into this July 1, 2010, by and among
PIONEER VARIABLE CONTRACTS TRUST, a Delaware business trust (the "Trust"),
MINNESOTA LIFE INSURANCE COMPANY, a Minnesota life insurance company (the
"Company") on its own behalf and on behalf of each of the segregated asset
accounts of the Company set forth in Schedule A hereto, as may be amended
from time to time (the "Accounts"), PIONEER INVESTMENT MANAGEMENT, INC., a
Delaware corporation ("PIM") and PIONEER FUNDS DISTRIBUTOR, INC. ("PFD"), a
corporation organized under the laws of The Commonwealth of Massachusetts.
PIM and PFD are members of the UniCredito Italiano banking group, register of
banking groups.
WHEREAS, the Trust is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940
Act"), and its shares are registered or will be registered under the
Securities Act of 1933, as amended (the "1933 Act");
WHEREAS, shares of beneficial interest of the Trust are divided into
several series and classes of shares, each series being designated a
"Portfolio" and representing an interest in a particular managed pool of
securities and other assets;
WHEREAS, the Trust is available to act as the investment vehicle for
separate accounts established for variable life insurance policies and/or
variable annuity contracts to be offered by insurance companies which have
entered into participation agreements with the Trust (the "Participating
Insurance Companies");
WHEREAS, the Trust has obtained an order from the Securities and
Exchange Commission (the "SEC"), dated July 9, 1997 (File No. 812-10494) (the
"Mixed and Shared Funding Exemptive Order") granting Participating Insurance
Companies and variable annuity and variable life insurance separate accounts
exemptions from the provisions of Sections 9(a), 13(a), 15(a) and 15(b) of
the 1940 Act and Rules 6e-2(b)(15) and 6e-3(T)(b)(15) thereunder, to the
extent necessary to permit shares of the Trust to be sold to and held by
variable annuity and variable life insurance companies that may or may not be
affiliated with one another and qualified pension and retirement plans
("Qualified Plans");
WHEREAS, PIM is duly registered as an investment adviser under the
Investment Advisers Act of 1940, as amended, and any applicable state
securities law, and is the Trust's investment adviser;
WHEREAS, the Company will issue certain variable annuity and/or variable
life insurance contracts (individually, the "Contract" or, collectively, the
"Contracts") which, if required by applicable law, will be registered under
the 1933 Act;
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WHEREAS, the Accounts are duly organized, validly existing segregated
asset accounts, established by resolution of the Board of Directors of the
Company, to set aside and invest assets attributable to the aforesaid
variable annuity and/or variable life insurance contracts that are allocated
to the Accounts (the Contracts and the Accounts covered by this Agreement,
and each corresponding Portfolio covered by this Agreement in which the
Accounts may invest, is specified in Schedule A attached hereto as may be
modified from time to time);
WHEREAS, the Company has registered or will register the Accounts as
unit investment trusts under the 1940 Act (unless exempt therefrom);
WHEREAS, the Portfolios offered by the Trust to the Company and the
Accounts are set forth on Schedule A attached hereto;
WHEREAS, PFD is registered as a broker-dealer with the Securities and
Exchange Commission (the "SEC") under the Securities Exchange Act of 1934, as
amended (hereinafter the "1934 Act"), and is a member in good standing of the
Financial Industry Regulatory Authority (the "FINRA") and is authorized to
sell shares of the Portfolios to unit investment trusts such as the Accounts;
WHEREAS, Securian Financial Services, Inc. ("Policy Underwriter"), the
underwriter for the variable annuity and the variable life policies, is
registered as a broker-dealer with the SEC under the 1934 Act and is a member
in good standing of FINRA; and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares in one or more of the
Portfolios specified in Schedule A attached hereto (the "Shares" on behalf of
the Accounts to fund the Contracts, and PFD intends to sell such Shares to
the Accounts at net asset value;
NOW, THEREFORE, in consideration of their mutual promises, the Trust,
PIM, PFD and the Company agree as follows:
ARTICLE I. SALE OF TRUST SHARES
1.1. PFD and the Company agree to provide pricing information, execute
orders and wire payments for purchases and redemptions of Fund shares as
set forth in this Article I until such time as they mutually agree to
utilize the National Securities Clearing Corporation ("NSCC"). Upon such
mutual agreement, PFD and the Company agree to provide pricing information,
execute orders and wire payments for purchases and redemptions of Fund
shares through NSCC and its subsidiary systems as set forth in Exhibit I.
1.2 PFD agrees to sell to the Company those Shares which the Accounts
order in accordance with the terms of this Agreement (based on orders
placed by Contract owners or participants on that Business Day, as defined
below) and which are available for purchase by such Accounts. Each such
order will be executed on a daily basis at the net asset value next
computed after receipt by the Trust or its designee of the order for the
Shares. For purposes of this Section 1.2, the Company shall be the designee
of the Trust for receipt of such orders from Contract owners or
participants and receipt by such designee shall constitute receipt by the
Trust; provided that the Trust or its designee receives written
(or facsimile) notice of such orders by the time the Trust ordinarily
calculates its net asset value as described from time to time in the
Trust's prospectus (which as of the date of this Agreement is 4:00 p.m.
New York time on such Business Day. "Business Day" shall mean any day
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on which the New York Stock Exchange, Inc. (the "NYSE") is open for
trading and on which the Trust calculates its net asset value pursuant
to the rules of the SEC.
1.3. PFD agrees to make the Shares available for purchase at the
applicable net asset value per share by the Company and the Accounts on
those days on which the Trust calculates its net asset value in accordance
with the rules of the SEC. Notwithstanding the foregoing, the Board of
Trustees of the Trust (the "Board") may refuse to sell any Shares to the
Company and the Accounts, or suspend or terminate the offering of the
Shares to the Company and the Accounts if such action is required by law or
by regulatory authorities having jurisdiction over PIM, PFD or the Trust or
is, 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, in the
best interest of the Shareholders of such Portfolio.
1.4. The Trust and PFD will sell Trust shares only to Participating
Insurance Companies and Qualified Plans which have agreed to participate in
the Trust to fund their Separate Accounts and/or Qualified Plans all in
accordance with the requirement of Section 817(h) of the Internal Revenue
Code, as amended (the "Code") and the Treasury regulations thereunder. The
Company will not resell the Shares except to the Trust or its agents.
1.5. The Trust agrees, upon the Company's request, to redeem for cash,
any full or fractional Shares held by the Accounts (based on orders placed
by Contract owners on that Business Day). Each such redemption request
shall be executed on a daily basis at the net asset value next computed
after receipt by the Trust or its designee of the request for redemption.
For purposes of this Section 1.5, the Company shall be the designee of the
Trust for receipt of requests for redemption from Contract owners or
participants and receipt by such designee shall constitute receipt by the
Trust; provided that the Trust or its designee receives written (or
facsimile) notice of such request for redemption by the time the Trust
ordinarily calculates its net asset value as described from time to time in
the Trust's prospectus (which as of the date of this Agreement is 4:00 p.m.
New York time on such Business Day).
1.6. Each purchase, redemption and exchange order placed by the Company
shall be placed separately for each Portfolio and shall not be netted with
respect to any Portfolio. However, with respect to payment of the purchase
price by the Company and of redemption proceeds by the Trust, the Company
and the Trust shall net purchase and redemption orders with respect to each
Portfolio and shall transmit one net payment for all of the Portfolios in
accordance with Section 1.7 hereof.
1.7. In the event of net purchases, the Company shall pay for the
Shares by 11:00 a.m. New York time on the next Business Day after an order
to purchase the Shares is made in accordance with the provisions of Section
1.2. hereof. Company shall transmit all such payments in federal funds by
wire. If payment in federal funds for any purchase is not received or is
received by the Trust after 11:00 a.m. on such Business Day, the Company
shall promptly, upon the Trust's request, reimburse the Trust for any
charges, costs, fees, interest or other expenses incurred by the Trust in
connection with any advances to, or borrowings or overdrafts by, the Trust,
or any similar expenses (including the cost of and any loss incurred by the
Trust in unwinding any purchase of securities by the Trust) incurred by the
Trust as a result of portfolio transactions effected by the Trust based
upon such purchase request. In the event of net redemptions, the Trust
ordinarily shall pay and transmit the proceeds of redemptions of Shares by
11:00 a.m. New York time on the next Business Day after a redemption order
is received from the Company in accordance with Section 1.5. hereof,
although the Trust reserves the right to postpone the date of payment or
satisfaction upon redemption consistent with Section 22(e) of the 1940 Act
and any rules pomulgated thereunder. Payments for net redemptions shall be
in federal funds transmitted by wire.
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1.8. Issuance and transfer of the Shares will be by book entry only.
Stock certificates will not be issued to the Company or the Accounts. The
Shares ordered from the Trust will be recorded in an appropriate title for
the Accounts or the appropriate subaccounts of the Accounts.
1.9. The Trust shall furnish notice (by wire or telephone, followed by
written confirmation) no later than 7:00 p.m. New York time on the
ex-dividend date to the Company of any dividends or capital gain
distributions payable on the Shares. The Company hereby elects to receive
all such dividends and distributions as are payable in cash or Shares on a
Portfolio's Shares in additional Shares of that Portfolio. The Trust shall
notify the Company by the end of the next following Business Day of the
number of Shares so issued as payment of such dividends and distributions.
1.10. The Trust or its custodian shall make the net asset value per
share for each Portfolio available to the Company on each Business Day as
soon as reasonably practical after the net asset value per share is
calculated and shall use its best efforts to make such net asset value per
share available by 6:00 p.m. New York time. In the event of an error in
the computation of a Portfolio's net asset value per share ("NAV") or any
dividend or capital gain distribution (each, a "pricing error"), PIM or the
Trust shall notify the Company as soon as possible after the discovery of
the error. Such notification may be verbal, but shall be confirmed
promptly in writing in accordance with Article XII of this Agreement. A
pricing error shall be corrected in accordance with the Trust's internal
policies and procedures. If an adjustment is necessary to correct a
material error that occurred through no fault of the Company and such
adjustment has caused Contract owners to receive less than the number of
Shares or redemption proceeds to which they are entitled, the number of
Shares of the applicable Account will be adjusted and the amount of any
underpayments will be paid by the Trust or PIM to the Company for crediting
of such amounts to the Contract owners' accounts. Upon notification by PIM
of any overpayment due to a material error, the Company shall promptly
remit to the Trust or PIM, as appropriate, any overpayment that has not
been paid to Contract owner; however, PIM acknowledges that the Company
does not intend to seek additional payments from any Contract owner who,
because of a pricing error, may have underpaid for units of interest
credited to his/her account. The costs of correcting such adjustments shall
be borne by the Trust or PIM unless the Company is at fault in which case
such costs shall be borne by the Company.
ARTICLE II. CERTAIN REPRESENTATIONS, WARRANTIES AND COVENANTS
2.1. The Company represents and warrants that the Contracts are or will
be registered under the 1933 Act or are exempt from or not subject to
registration thereunder, and that the Contracts will be issued, sold, and
distributed in compliance in all material respects with all applicable
state and federal laws, including without limitation the 1933 Act, the 1934
Act, and the 1940 Act. The Company further represents and warrants that it
(i) is an insurance company duly organized and in good standing under
applicable law; (ii) has legally and validly established each Account as a
segregated asset account under applicable law; (iii) has registered or,
prior to any issuance or sale of the Contracts, will register the Accounts
as unit investment trusts in accordance with the provisions of the 1940 Act
(unless exempt therefrom) to serve as segregated investment accounts for
the Contracts, and (iv) will maintain such registration for so long as any
Contracts are outstanding. The Company shall amend the registration
statements under the 1933 Act for the Contracts and the registration
statements under the 1940 Act for the Accounts 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 register
and qualify the Contracts for sales in accordance with the securities laws
of the various states only if and to the extent deemed necessary by the
Company. At the time the Company is required to deliver the Trust's
prospectus or statement of
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additional information to a purchaser of Shares in accordance with the
requirements of federal or state securities laws, the Company shall
distribute to such Contract purchasers the then current Trust prospectus,
as supplemented.
2.2. The Company represents and warrants that the Contracts are
currently and at the time of issuance will be treated as life insurance,
endowment or annuity contracts under applicable provisions of the Code,
that it will maintain such treatment and that it will notify the Trust or
PIM 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.
2.3. The Company represents and warrants that Policy Underwriter, the
underwriter for the individual variable annuity contracts and the variable
life policies, is a member in good standing of FINRA and is a registered
broker-dealer with the SEC. The Company represents and warrants that the
Company and Policy Underwriter will sell and distribute such contracts and
policies in accordance in all material respects with all applicable state
and federal securities laws, including without limitation the 1933 Act, the
1934 Act, and the 1940 Act and state insurance law suitability
requirements.
2.4. The Trust represents and warrants that the Shares sold pursuant to
this Agreement shall be registered under the 1933 Act, duly authorized for
issuance in compliance with the laws of Delaware and that the Trust is and
shall remain registered under the 1940 Act. The Trust 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 Trust shall register and qualify the Shares for sale in
accordance with the laws of the various states only if and to the extent
deemed necessary by the Trust.
2.5. The Trust represents that it is lawfully organized and validly
existing under the laws of the State of Delaware. The Trust further
represents that it has adopted a plan pursuant to Rule 12b-1 under the 1940
Act and imposes an asset-based charge to finance its distribution expenses
with respect to the Class II shares of certain of the Trust's Portfolios as
permitted by applicable law and regulation.
2.6. PFD represents and warrants that it is a member in good standing
of FINRA and is registered as a broker-dealer with the SEC. PFD represents
that it will sell and distribute the Shares in accordance in all material
respects with all applicable state and federal securities laws, including
without limitation the 1933 Act, the 1934 Act, and the 0000 Xxx.
2.7. PIM represents and warrants that it is and shall remain duly
registered as an investment adviser under the Investment Advisers Act of
1940, as amended.
2.8. No less frequently than annually, the Company shall submit to the
Board such reports, material or data as the Board may reasonably request so
that it may carry out fully the obligations imposed upon it by the
conditions contained in the Mixed and Shared Funding Exemptive Order
pursuant to which the SEC has granted exemptive relief to permit mixed and
shared funding.
2.9. The Trust and PIM represent and warrant that all of their
respective officers, employees, investment advisers, and other individuals
or entities dealing with the money and/or securities of the Trust are, and
shall continue to be at all times, covered by one or more blanket fidelity
bonds or similar coverage for the benefit of the Trust in an amount not
less than the minimal coverage required by Rule 17g-1 under the 1940 Act or
related provisions as may be promulgated from time to time. The aforesaid
bonds shall include coverage for larceny and embezzlement and shall be
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issued by a reputable bonding company. The Company represents and warrants
that all of its respective officers, employees, and other individuals or
entities employed or controlled by the Company dealing with the money
and/or securities of the Trust are, and shall continue to be at all times,
covered by a blanket fidelity bond or similar coverage in an amount deemed
appropriate by the Company. The aforesaid bond shall include coverage for
larceny and embezzlement and shall be issued by a reputable bonding
company. The Company agrees that any amounts received under such bond
relating to a claim arising under this Agreement will be held by the
Company for the benefit of the Trust. The Company agrees to make all
reasonable efforts to maintain such bond and agrees to notify the Trust and
PIM in writing in the event such coverage terminates.
2.10. The Company represents and warrants, for purposes other than
diversification under Section 817 of the Code, that the Contracts are
currently at the time of issuance and, assuming the Trust meets the
requirements of Article VI, will be treated as life insurance policies 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
Trust, PFD and PIM 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. In addition, the Company represents and warrants
that each Account is a "segregated asset account" and that interests in the
Account 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
Trust, PFD and PIM 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. The Company represents and warrants that it will not
purchase Trust shares with assets derived from tax-qualified retirement
plans except, indirectly, through Contracts purchased in connection with
such plans.
ARTICLE III. PROSPECTUS AND PROXY STATEMENTS; VOTING
3.1. At least annually, the Trust or its designee shall provide the
Company, free of charge, with as many copies of the current prospectus
(describing only the Portfolios listed in Schedule A hereto) for the Shares
as the Company may reasonably request for distribution to existing Contract
owners whose Contracts are funded by such Shares. The Trust or its
designee shall provide the Company, at the Company's expense, with as many
copies of the current prospectus for the Shares as the Company may
reasonably request for distribution to prospective purchasers of Contracts.
If requested by the Company in lieu thereof, the Trust or its designee
shall provide such documentation (including a "camera ready" copy of the
new prospectus as set in type or, at the request of the Company, as a
diskette in the form sent to the financial printer) and other assistance as
is reasonably necessary in order for the parties hereto once each year (or
more frequently if the prospectus for the Shares is supplemented or
amended) to have the prospectus for the Contracts and the prospectus for
the Shares printed together in one document; the expenses of such printing
to be apportioned between (a) the Company and (b) the Trust or its designee
in proportion to the number of pages of the Contract and Shares'
prospectuses, taking account of other relevant factors affecting the
expense of printing, such as covers, columns, graphs and charts; the Trust
or its designee to bear the cost of printing the Trust's prospectus portion
of such document for distribution to owners of existing Contracts funded by
the Shares and the Company to bear the expenses of printing the portion of
such document relating to the Accounts; provided, however, that the Company
shall bear all printing expenses of such combined documents where used for
distribution to prospective purchasers or to owners of existing Contracts
not funded by the Shares. In the event that the Company requests that the
Trust or its designee provides the Trust's prospectus in a "camera ready,"
diskette format or other mutually agreed upon format, the Trust shall be
responsible for providing the prospectus in the format in which it or PIM
is accustomed to formatting prospectuses
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and shall bear the expense of providing the prospectus in such format
(e.g., typesetting expenses), and the Company shall bear the expense of
adjusting or changing the format to conform with any of its prospectuses,
subject to PIM's approval which shall not be unreasonably withheld.
Notwithstanding the foregoing, the Trust shall also provide the Company, at
the Trust's expense, no less frequently than annually, copies of the
Portfolios prospectuses in PDF format for use on the Company's and/or
affiliated producer's websites.
3.2. The prospectus for the Shares shall state that the statement of
additional information for the Shares is available from the Trust or its
designee. The Trust or its designee, at its expense, shall print and
provide such statement of additional information to the Company (or a
master of such statement suitable for duplication by the Company) for
distribution to any owner of a Contract funded by the Shares. The Trust
shall also provide such statement of additional information to the Company
in a mutually agreed upon electronic format. The Trust or its designee, at
the Company's expense, shall print and provide such statement to the
Company (or a master of such statement suitable for duplication by the
Company) for distribution to a prospective purchaser who requests such
statement or to an owner of a Contract not funded by the Shares.
3.3. The Trust or its designee shall provide the Company free of charge,
if and to the extent applicable to the Shares, copies of the Trust's proxy
materials, reports to Shareholders and other communications to Shareholders
in such quantity as the Company shall reasonably require for distribution
to Contract owners. The cost of distributing such documents shall be borne
by the Trust or its designee.
3.4 The Trust or PIM will provide the Company with as much notice as is
reasonably practicable of any proxy solicitation for any Portfolio, and of
any material change in the Trust's registration statement, particularly any
change resulting in change to the registration statement or prospectus or
statement of additional information for any Account. The Trust and PIM
will cooperate with the Company so as to enable the Company to solicit
proxies from Contract owners or to make changes to its prospectus,
statement of additional information or registration statement, in an
orderly manner. The Trust and PIM will make reasonable efforts to attempt
to have changes affecting Contract prospectuses become effective
simultaneously with the annual updates for such prospectuses.
3.5. The Trust hereby notifies the Company that it may be appropriate
to include in the prospectus pursuant to which a Contract is offered
disclosure regarding the potential risks of mixed and shared funding.
3.6. If and to the extent required by law, the Company shall:
(a) solicit voting instructions from Contract owners;
(b) vote the Shares in accordance with instructions received from
Contract owners; and
(c) vote the Shares for which no instructions have been received
in the same proportion as the Shares of such Portfolio for which
instructions have been received from Contract owners;
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.
The Company will in no way recommend action in connection with or oppose or
interfere with the solicitation of proxies for the Shares held for such
Contract owners. The Company reserves the right to vote shares held in any
segregated asset
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account in its own right, to the extent permitted by law. Participating
Insurance Companies shall be responsible for assuring that each of their
separate accounts holding Shares calculates voting privileges in the manner
required by the Mixed and Shared Funding Exemptive Order. The Trust and
PIM will notify the Company of any changes of interpretations or amendments
to the Mixed and Shared Funding Exemptive Order.
ARTICLE IV. SALES MATERIAL AND INFORMATION
4.1. The Company shall furnish, or shall cause to be furnished, to PFD
or its designee, each piece of sales literature or other promotional
material in which the Trust, PIM, any other investment adviser to the
Trust, or any affiliate of PIM are named, at least five (5) Business Days
prior to its use. No such material shall be used if PFD or its designee
reasonably objects to such use within five (5) Business Days after receipt
of such material. PFD or its designee shall notify the Company within five
(5) Business Days of receipt of its approval or disapproval of such
materials.
4.2. The Company shall not make any representation on behalf of the
Trust, PIM, any other investment adviser to the Trust or any affiliate of
PIM and shall not give any information on behalf of the Trust, PIM, any
other investment adviser to the Trust, or any affiliate of PIM or
concerning the Trust or any other such entity in connection with the sale
of the Contracts other than the information contained in the registration
statement, prospectus or statement of additional information for the
Shares, as such registration statement, prospectus and statement of
additional information may be amended or supplemented from time to time,
or in reports or proxy statements for the Trust, or in sales literature or
other promotional material approved by the Trust, PIM, PFD or their
respective designees, except with the permission of the Trust, PIM or their
respective designees. The Trust, PIM, PFD or their respective designees
each agrees to respond to any request for approval on a prompt and timely
basis. The Company shall adopt and implement procedures reasonably
designed to ensure that information concerning the Trust, PIM, PFD or any
of their affiliates which is intended for use only by brokers or agents
selling the Contracts (i.e., information that is not intended for
distribution to Contract owners or prospective Contract owners) is so used,
and neither the Trust, PIM, PFD nor any of their affiliates shall be liable
for any losses, damages or expenses relating to the improper use of such
broker only materials.
4.3. PFD shall furnish, or shall cause to be furnished, to the Company
or its designee, each piece of sales literature or other promotional
material in which the Company and/or the Accounts is named, at least five
(5) Business Days prior to its use. No such material shall be used if the
Company or its designee reasonably objects to such use within five (5)
Business Days after receipt of such material. The Company shall notify PFD
within five (5) Business Days of receipt of its approval or disapproval of
such materials.
4.4. The Trust, PIM and PFD shall not give any information or make any
representations on behalf of the Company or concerning the Company, the
Accounts, or the Contracts in connection with the sale of the Contracts
other than the information or representations contained in a registration
statement, prospectus, or statement of additional information for the
Contracts, as such registration statement, prospectus and statement of
additional information may be amended or supplemented from time to time, or
in reports for the Accounts, or in sales literature or other promotional
material approved by the Company or its designee, except with the
permission of the Company. The Company or its designee agrees to respond
to any request for approval on a prompt and timely basis. The parties
hereto agree that this Section 4.4. is neither intended to designate nor
otherwise imply that PIM is an underwriter or distributor of the Contracts.
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4.5. The Company and the Trust shall provide, or shall cause to be
provided, to the other at least one complete copy of all registration
statements, prospectuses, statements of additional information, reports,
proxy statements, sales literature and other promotional materials, and all
amendments to any of the above, that relate to the Contracts, or to the
Trust or its Shares, prior to or contemporaneously with the filing of such
document with the SEC or other regulatory authorities.
4.6. For purpose of this Article IV and Article VIII, the phrase "sales
literature or other promotional material" includes but is not limited to
advertisements (such as material published, or designed for use in, a
newspaper, magazine, or other periodical, radio, television, telephone,
electronic messages or tape recording, videotape display, signs or
billboards, motion pictures, or other public media, including, for example,
on-line networks such as the Internet or other electronic media), and sales
literature (such as brochures, electronic messages, circulars, reprints or
excerpts or any other advertisement, sales literature, or published
articles), distributed or made generally available to customers or the
public, educational or training materials or communications distributed or
made generally available to some or all agents or employees, and
shareholder reports, proxy materials (including solicitations for voting
instructions) and any other material constituting sales literature or
advertising under the NASDR Conduct Rules, the 1933 Act or the 1940 Act.
However, such phrase "sales literature or other promotional material" shall
not include any material that simply lists the names of Portfolios of the
Trust in a list of investment options.
4.7. At the request of any party to this Agreement, each other party
will make available to the other party's independent auditors and/or
representative of the appropriate regulatory agencies, all records, data,
access to operating procedures that may be reasonably requested in
connection with compliance and regulatory requirements related to the
Agreement or any party's obligations under this Agreement.
4.8 Subject to the terms of Sections 4.1 and 4.2 of this Agreement, the
Trust (and its Portfolios), PIM and PFD hereby each consents in connection
with the marketing of the Contracts to the Company's use of their names or
other identifying marks, including PIONEER INVESTMENTS(R) and Pioneer's
sail logo, in connection with the marketing of the Contracts. The Trust,
PIM or PFD or their affiliates may withdraw this authorization as to any
particular use of any such name or identifying xxxx at any time: (i) upon
a reasonable determination that such use would have a material adverse
effect on its reputation or marketing efforts or its affiliates or (ii) if
any of the Portfolios of the Trust cease to be available through the
Company. Except as set forth in the previous sentence, the Company will
not cause or permit, without prior written permission, the use, description
or reference to a Pioneer party's name, or to the relationship contemplated
in this Agreement, in any advertisement, or promotional materials or
activities, including without limitation, any advertisement or promotional
materials published, distributed, or made available, or any activity
conducted through, the Internet or any other electronic medium.
ARTICLE V. FEES AND EXPENSES
5.1. Neither the Trust, PIM nor PFD shall pay any fee or other
compensation to the Company under this Agreement, other than pursuant to
Schedule B attached hereto, and the Company shall pay no fee or other
compensation to the Trust, PIM or PFD under this Agreement.
Notwithstanding the foregoing, the parties hereto will bear certain
expenses under the provisions of this Agreement and shall reimburse other
parties for expenses initially paid by one party but allocated to another
party. In addition, nothing herein shall prevent the parties hereto from
otherwise agreeing to perform, and arranging for appropriate compensation
for, other services relating to the Trust and/or to the Accounts pursuant
to this Agreement.
9
5.2. The Trust or its designee shall bear the expenses for the cost of
registration and qualification of the Shares under all applicable federal
and state laws, including preparation and filing of the Trust's
registration statement, and payment of filing fees and registration fees;
preparation and filing of the Trust's proxy materials and reports to
Shareholders; setting in type and printing its prospectus and statement of
additional information (to the extent provided by and as determined in
accordance with Article III above); setting in type and printing the proxy
materials and reports to Shareholders (to the extent provided by and as
determined in accordance with Article III above); the preparation of all
statements and notices required of the Trust by any federal or state law
with respect to its Shares; all taxes on the issuance or transfer of the
Shares; and the costs of distributing the Trust's prospectuses, reports to
Shareholders and proxy materials to owners of Contracts and participants
funded by the Shares and any expenses permitted to be paid or assumed by
the Trust pursuant to a plan, if any, under Rule 12b-1 under the 1940 Act.
The Trust shall not bear any expenses of marketing the Contracts.
5.3. The Company shall bear the expenses of distributing the Shares'
prospectus or prospectuses in connection with new sales of the Contracts
and of distributing the Trust's Shareholder reports to Contract owners.
The Company shall bear all expenses associated with the registration,
qualification, and filing of the Contracts under applicable federal
securities and state insurance laws; the cost of preparing, printing and
distributing the Contract prospectus and statement of additional
information; and the cost of preparing, printing and distributing annual
individual account statements for Contract owners as required by state
insurance laws.
5.4. The Company agrees to provide certain administrative services,
specified in Schedule B attached hereto, in connection with the
arrangements contemplated by this Agreement. The parties intend that the
services referred to in the Section 5.4 be recordkeeping, shareholder
communication, and other transaction facilitation and processing, and
related administrative services and are not the services of an underwriter
or principal underwriter of the Trust and the Company is not an underwriter
for Shares within the meaning of the 1933 Act.
ARTICLE VI. DIVERSIFICATION AND RELATED LIMITATIONS
6.1. The Trust and PIM represent and warrant that each Portfolio of the
Trust in which an Account invests will meet the diversification
requirements of Section 817(h)(1) of the Code and Treas. Reg. 1.817-5,
relating to the diversification requirements for variable annuity,
endowment, or life insurance contracts, as they may be amended from time
to time (and any revenue rulings, revenue procedures, notices, and other
published announcements of the Internal Revenue Service interpreting these
sections), as if those requirements applied directly to each such
Portfolio.
6.2. The Trust and PIM represent that each Portfolio will elect to be
qualified as a Regulated Investment Company under Subchapter M of the Code
and that they will maintain such qualification (under Subchapter M or any
successor or similar provision).
6.3. No Shares of the Trust will be sold directly to the general public.
ARTICLE VII. POTENTIAL MATERIAL CONFLICTS
7.1. The Trust agrees that the Board, constituted with a majority of
disinterested trustees, will monitor each Portfolio of the Trust for the
existence of any material irreconcilable conflict between
10
the interests of the variable annuity contract owners and the variable life
insurance policy owners of the Company and/or affiliated companies
("contract owners") investing in the Trust. A material irreconcilable
conflict may arise for a variety of reasons, including: (a) an action by
any state insurance regulatory authority; (b) a change in applicable
federal or state insurance, tax, or securities laws or regulations, or a
public ruling, private letter ruling, no-action or interpretive letter, or
any similar action by insurance, tax or securities regulatory authorities;
(c) an administrative or judicial decision in any relevant proceeding; (d)
the manner in which the investments of any Portfolio are being managed; (e)
a difference in voting instructions given by variable annuity contract and
variable life insurance contract owners or by contract owners of different
Participating Insurance Companies; or (f) a decision by a Participating
Insurance Company to disregard the voting instructions of contract owners.
The Board shall have the sole authority to determine if a material
irreconcilable conflict exists, and such determination shall be binding on
the Company only if approved in the form of a resolution by a majority of
the Board, or a majority of the disinterested trustees of the Board. The
Board will give prompt notice of any such determination to the Company.
7.2. The Company agrees that it will be responsible for assisting the
Board in carrying out its responsibilities under the conditions set forth
in the Trust's exemptive application pursuant to which the SEC has granted
the Mixed and Shared Funding Exemptive Order by providing the Board, as it
may reasonably request, with all information necessary for the Board to
consider any issues raised and agrees that it will be responsible for
promptly reporting any potential or existing conflicts of which it is aware
to the Board including, but not limited to, an obligation by the Company to
inform the Board whenever contract owner voting instructions are
disregarded. The Company also agrees that, if a material irreconcilable
conflict arises, it will at its own cost remedy such conflict up to and
including (a) withdrawing the assets allocable to some or all of the
Accounts from the Trust or any Portfolio and reinvesting such assets in a
different investment medium, including (but not limited to) another
Portfolio of the Trust, or submitting to a vote of all affected contract
owners whether to withdraw assets from the Trust or any Portfolio and
reinvesting such assets in a different investment medium and, as
appropriate, segregating the assets attributable to any appropriate group
of contract owners (E.G., annuity contract owners, life insurance owners
or variable contract owners of one or more Participating Insurance
Companies) that votes in favor of such segregation, or offering to any of
the affected contract owners the option of segregating the assets
attributable to their contracts or policies, and (b) establishing a new
registered management investment company and segregating the assets
underlying the Contracts, unless a majority of Contract owners materially
adversely affected by the conflict have voted to decline the offer to
establish a new registered management investment company.
7.3. A majority of the disinterested trustees of the Board shall
determine whether any proposed action by the Company adequately remedies
any material irreconcilable conflict. In the event that the Board
determines that any proposed action does not adequately remedy any material
irreconcilable conflict, the Company will withdraw from investment in the
Trust each of the Accounts designated by the disinterested trustees and
terminate this Agreement within six (6) months after the Board informs the
Company in writing of the foregoing determination; provided, however, that
such withdrawal and termination shall be limited to the extent required to
remedy any such material irreconcilable conflict as determined by a
majority of the disinterested trustees of the Board.
7.4 If a material irreconcilable conflict arises because of a decision
by the Company to disregard Contract owner voting instructions and that
decision represents a minority position or would preclude a majority vote,
the Company may be required, at the Trust's election, to withdraw the
Account's investment in the Trust and terminate this Agreement; provided,
11
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 Trust's independent trustees. Any such
withdrawal and termination must take place within six (6) months after the
Trust gives written notice that this provision is being implemented, and
until the end of that six-month period PFD and the Trust shall continue to
accept and implement orders by the Company for the purchase and redemption
of shares of the Trust.
7.5. If material irreconcilable conflict arises because of particular
state insurance regulator's decision applicable to the Company conflicts
with the majority of other state regulators, then the Company will withdraw
the Account's investment in the Trust and terminate this Agreement within
six (6) months after the Trust's Board informs the Company in writing that
it has determined that such decision has created a material irreconcilable
conflict; provided, however, that such withdrawal and termination shall be
limited to the extent required by the foregoing material irreconcilable
conflict as determined by a majority of the disinterested members of the
Trust's Board. Until the end of the foregoing six (6) month period, the
Trust and PFD shall continue to accept and implement orders by the Company
for the purchase and redemption of shares of the Trust.
7.6 For purposes of Sections 7.3 through 7.6 of this Agreement, a
majority of the disinterested members of the Board shall determine whether
any proposed action adequately remedies any material irreconcilable
conflict, but in no event will the Trust be required to establish a new
funding medium for the Contracts. The Company shall not be required by
Section 7.2 to establish a new funding medium for the contracts if an offer
to do so has been declined by vote of a majority of Contract owners
affected by the material irreconcilable conflict. In the event that the
Board determines that any proposed action does not adequately remedy any
material irreconcilable conflict, then the Company will withdraw the
Account's investment in the Trust and terminate this Agreement within six
(6) months after the Board informs the Company in writing of the foregoing
determination; provided, however, that such withdrawal and termination
shall be limited to the extent required by any such material irreconcilable
conflict as determined by a majority of the independent trustees.
7.7. 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 Trust and/or the
Participating Insurance Companies, as appropriate, shall take such steps as
may be necessary to comply with Rule 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, 3.6, 7.1, 7.2, 7.3 and 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 agrees to indemnify and hold harmless the Trust, PIM,
PFD, any affiliates of PIM, and each of their respective directors,
trustees, officers and each person, if any, who controls the Trust or PIM
within the meaning of Section 15 of the 1933 Act, and any agents or
employees of the foregoing (each an "Indemnified Party," or collectively,
the "Indemnified Parties" for purposes
12
of this Section 8.1) against any and all losses, claims, damages,
liabilities (including amounts paid in settlement with the written consent
of the Company) or expenses (including reasonable counsel fees) to which
any Indemnified Party may become subject under any statute, regulation,
at common law or otherwise, insofar as such losses, claims, damages,
liabilities or expenses (or actions in respect thereof) or settlements:
(a) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the
registration statement, prospectus or statement of additional
information for the Contracts or contained in the Contracts or
sales literature or other promotional material 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 reasonable reliance upon and in
conformity with information furnished to the Company or its
designee by or on behalf of the Trust, PIM or PFD for use in the
registration statement, prospectus or statement of additional
information for the Contracts or in the Contracts or sales
literature or other promotional material (or any amendment or
supplement) or otherwise for use in connection with the sale of
the Contracts or Shares; or
(b) arise out of or as a result of statements or representations
not supplied by the Company or its designee, or persons under its
control (other than statements or representations contained in the
Trust's registration statement, prospectus, statement of
additional information or in sales literature or other promotional
material of the Trust and on which the Company has reasonably
relied) or wrongful conduct of the Company or persons under its
control, with respect to the sale or distribution of the Contracts
or Shares; or
(c) arise out of any untrue statement or alleged untrue statement of a
material fact contained in the registration statement, prospectus,
statement of additional information, or sales literature or other
promotional literature of the Trust, or any amendment thereof or
supplement thereto, or the omission or alleged omission to state
therein a material fact required to be stated therein or necessary
to make the statement or statements therein not misleading, if
such statement or omission was made in reliance upon information
furnished to the Trust by or on behalf of the Company; or
(d) 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
(e) arise as a result of any failure by the Company to perform any of
its obligations under this Agreement;
as limited by and in accordance with the provisions of this Article VIII.
8.2. INDEMNIFICATION BY PIM AND PFD
13
PIM and PFD agree to indemnify and hold harmless the Company and
Policy Underwriter and each of their trustees and officers and each person,
if any, who controls the Company or Policy Underwriter within the meaning
of Section 15 of the 1933 Act, and any agents or employees of the foregoing
(each an "Indemnified Party," or collectively, the "Indemnified Parties"
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 Trust) or expenses (including reasonable counsel fees) to
which any Indemnified Party may become subject under any statute, at common
law or otherwise, insofar as such losses, claims, damages, liabilities or
expenses (or actions in respect thereof) or settlements are related to the
sale or acquisition of the Shares or the Contracts and:
(a) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the
registration statement, prospectus, statement of additional
information or sales literature or other promotional material of
the Trust (or any amendment or supplement to any of the
foregoing), or arise out of or are based upon the omission or the
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statement therein not
misleading, provided that this agreement to indemnify shall not
apply as to any Indemnified Party if such statement or omission or
such alleged statement or omission was made in reasonable reliance
upon and in conformity with information furnished to the Trust,
PIM, PFD or their respective designees by or on behalf of the
Company for use in the registration statement, prospectus or
statement of additional information for the Trust or in sales
literature or other promotional material for the Trust (or any
amendment or supplement) or otherwise for use in connection with
the sale of the Contracts or Shares; or
(b) arise out of or as a result of statements or representations
(other than statements or representations contained in the
Contract's registration statement, prospectus, statement of
additional information or in sales literature or other promotional
material for the Contracts not supplied by the Trust, PIM, PFD or
any of their respective designees or persons under their
respective control and on which any such entity has reasonably
relied) or wrongful conduct of the Trust, PIM, PFD or persons
under their control, with respect to the sale or distribution of
the Contracts or Shares; or
(c) arise out of any untrue statement or alleged untrue statement of a
material fact contained in the registration statement, prospectus,
statement of additional information, or sales literature or other
promotional literature of the Accounts or relating to 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 Trust, PIM or PFD; or
(d) arise out of or result from any material breach of any
representation and/or warranty made by the Trust in this Agreement
(including a failure, whether unintentional or in good faith or
otherwise, to comply with the diversification requirements
specified in Article VI of this Agreement) or arise out of or
result from any other material breach of this Agreement by the
Trust; or
14
(e) arise out of or result from the materially incorrect or untimely
calculation or reporting of the daily net asset value per share or
dividend or capital gain distribution rate; or
(f) arise as a result of any failure by PIM or PFD to perform any
of their respective obligations under this Agreement;
as limited by and in accordance with the provisions of this Article VIII.
8.3. In no event shall the Trust, PIM or PFD be liable under the
indemnification provisions contained in this Agreement to any individual or
entity, including without limitation, the Company, or any Participating
Insurance Company or any Contract owner, with respect to any losses,
claims, damages, liabilities or expenses that arise out of or result from
(i) a breach of any representation, warranty, and/or covenant made by the
Company hereunder or by any Participating Insurance Company under an
agreement containing substantially similar representations, warranties and
covenants; (ii) the failure by the Company or any Participating Insurance
Company to maintain its segregated asset account (which invests in any
Portfolio) as a legally and validly established segregated asset account
under applicable state law and as a duly registered unit investment trust
under the provisions of the 1940 Act (unless exempt therefrom); or (iii)
the failure by the Company or any Participating Insurance Company to
maintain its variable annuity and/or variable life insurance contracts
(with respect to which any Portfolio serves as an underlying funding
vehicle) as life insurance, endowment or annuity contracts under
applicable provisions of the Code.
8.4. Neither the Company, the Trust, PIM nor PFD shall be liable under
the indemnification provisions contained in this Agreement with respect to
any losses, claims, damages, liabilities or expenses to which an
Indemnified Party would otherwise be subject by reason of such Indemnified
Party's willful misfeasance, willful misconduct, or gross negligence in the
performance of such Indemnified Party's duties or by reason of such
Indemnified Party's reckless disregard of obligations and duties under this
Agreement.
8.5. Promptly after receipt by an Indemnified Party under this Section
8.5. of notice of commencement of any action, such Indemnified Party will,
if a claim in respect thereof is to be made against the indemnifying party
under this section, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not
relieve it from any liability which it may have to any Indemnified Party
otherwise than under this section. In case any such action is brought
against any Indemnified Party, and it notified the indemnifying party of
the commencement thereof, the indemnifying party will be entitled to
participate therein and, to the extent that it may wish, assume the defense
thereof, with counsel satisfactory to such Indemnified Party. After notice
from the indemnifying party of its intention to assume the defense of an
action, the Indemnified Party shall bear the expenses of any additional
counsel obtained by it, and the indemnifying party shall not be liable to
such Indemnified Party under this section for any legal or other expenses
subsequently incurred by such Indemnified Party in connection with the
defense thereof other than reasonable costs of investigation.
8.6. 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
15
9.1. This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of The Commonwealth of
Massachusetts.
9.2. This Agreement shall be subject to the 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.
ARTICLE X. NOTICE OF FORMAL PROCEEDINGS OR LITIGATION
The Trust, PIM, PFD and the Company agree that each such party
shall promptly notify the other parties to this Agreement, in writing, of
the institution of any formal proceedings brought against such party or its
designees by FINRA, the SEC, or any insurance department or any other
regulatory body relating to such party's duties under this Agreement. Each
of the parties further agrees promptly to notify the other parties of the
commencement of any litigation or proceeding against it or any of its
respective officers, directors, trustees, employees or 1933 Act control
persons in connection with the party's duties under this Agreement. The
indemnification provisions contained in this Article VIII shall survive any
termination of this Agreement.
ARTICLE XI. TERMINATION
11.1. This Agreement shall terminate with respect to the Accounts, or
one, some, or all Portfolios:
(a) at the option of any party upon six (6) months' advance
written notice delivered to the other parties; provided, however,
that such notice shall not be given earlier than six (6) months
following the date of this Agreement; or
(b) at the option of the Company to the extent that the Shares of
Portfolios are not reasonably available to meet the requirements
of the Contracts or are not "appropriate funding vehicles" for
the Contracts, as reasonably determined by the Company. Without
limiting the generality of the foregoing, the Shares of a
Portfolio would not be "appropriate funding vehicles" if, for
example, such Shares did not meet the diversification or other
requirements referred to in Article VI hereof; or if the Company
would be permitted to disregard Contract owner voting
instructions pursuant to Rule 6e-2 or 6e-3(T) under the 1940 Act.
Prompt notice of the election to terminate for such cause and an
explanation of such cause shall be furnished to the Trust by the
Company; or
(c) at the option of the Trust, PIM or PFD upon institution of formal
proceedings against the Company by FINRA, the SEC, or any
insurance department or any other regulatory body regarding the
Company's duties under this Agreement; provided that the party
terminating this Agreement under this provision shall give notice
of such termination to the other parties to this Agreement; or
(d) at the option of the Company upon institution of formal
proceedings against the Trust by FINRA, the SEC, or any state
securities or insurance department or any other regulatory body
regarding the duties of the Trust, PIM or PFD under this
Agreement or related to the sale of the Shares; provided that
the party terminating
16
this Agreement under this provision shall give notice of such
termination to the other parties to this Agreement; or
(e) at the option of the Company, the Trust, PIM or PFD upon
receipt of any necessary regulatory approvals and/or the vote of
the Contract owners having an interest in the Accounts (or any
subaccounts) to substitute the shares of another investment
company for the corresponding Portfolio Shares in accordance with
the terms of the Contracts for which those Portfolio Shares had
been selected to serve as the underlying investment media. The
Company will give thirty (30) days' prior written notice to the
Trust of the Date of any proposed vote or other action taken to
replace the Shares; or
(f) at the option of the Trust, PIM or PFD by written notice to the
Company, if any one or all of the Trust, PIM or PFD 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
(g) at the option of the Company by written notice to the Trust, PIM
or PFD, if the Company shall determine, in its sole judgment
exercised in good faith, that the Trust, PIM or PFD has suffered
a material adverse change in this business, operations, financial
condition or prospects since the date of this Agreement or is the
subject of material adverse publicity; or
(h) at the option of any party to this Agreement, upon another
unaffiliated party's material breach of any provision of or
representation contained in this Agreement.
11.2. The notice shall specify the Portfolio or Portfolios, Contracts
and, if applicable, the Accounts as to which the Agreement is to be
terminated.
11.3. It is understood and agreed that the right of any party hereto to
terminate this Agreement pursuant to Section 11.1(a) may be exercised for
cause or for no cause.
11.4. Except as necessary to implement Contract owner initiated
transactions, or as required by state insurance laws or regulations, the
Company shall not redeem the Shares attributable to the Contracts (as
opposed to the Shares attributable to the Company's assets held in the
Accounts), and the Company shall not prevent Contract owners from
allocating payments to a Portfolio that was otherwise available under the
Contracts, until thirty (30) days after the Company shall have notified the
Trust of its intention to do so.
11.5. Notwithstanding any termination of this Agreement, the Trust and
PFD shall, at the option of the Company, continue for a period not
exceeding six (6) months to make available additional shares of the
Portfolios pursuant to the terms and conditions of this Agreement, for all
Contracts in effect on the effective date of termination of this Agreement
(the "Existing Contracts"), except as otherwise provided under Article VII
of this Agreement; provided, however, that in the event of a termination
pursuant to Section 11.1. (c), (f) or (h), the Trust, PIM and PFD shall at
their option have the right to terminate immediately all sales of Shares to
the Company. Specifically, without limitation, the owners of the Existing
Contracts shall be permitted to transfer or reallocate investment under the
Contracts, redeem investments in any Portfolio and/or invest in the Trust
upon the making of additional purchase payments under the Existing
Contracts.
17
11.6 Notwithstanding any termination of this Agreement, each party's
obligations under Article VIII to indemnify the other parties shall survive
and not be affected by any termination of this Agreement. In addition,
with respect to Existing Contracts, all provisions of this Agreement shall
also survive and not be affected by any termination of this Agreement
ARTICLE XII. NOTICES
Any notice shall be sufficiently given when sent by registered or
certified mail, overnight courier or facsimile to the other party at the
address of such party set forth below or at such other address as such party
may from time to time specify in writing to the other party.
If to the Trust:
PIONEER VARIABLE CONTRACTS TRUST
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxxxxxxxx Xxxxxx, Assistant Secretary
If to the Company:
MINNESOTA LIFE INSURANCE COMPANY
000 Xxxxxx Xxxxxx Xxxxx
Xx. Xxxx, XX 00000
Attn: General Counsel
If to PIM:
PIONEER INVESTMENT MANAGEMENT, INC.
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxxx, General Counsel
If to PFD:
PIONEER FUNDS DISTRIBUTOR, INC.
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxxx Xxxxxxxx, Executive Vice President
ARTICLE XIII. MISCELLANEOUS
13.1. Subject to the requirements of legal process and regulatory
authority, each party hereto shall treat as confidential all information
reasonably identified as confidential in writing by any party hereto and,
except as permitted by this Agreement or as otherwise required by
applicable law or regulation, shall not disclose, disseminate or utilize
such other confidential information without the express written consent of
the affected party until such time as it may come into the public domain.
Notwithstanding anything to the contrary in this Agreement, in addition to
and not in lieu of other provisions in this Agreement:
18
(a) "Confidential Information" includes without limitation all
information regarding the customers of the Company, the Trust,
PIM, PFD or any of their subsidiaries, affiliates or licensees; or
the accounts, account numbers, names, addresses, social security
numbers or any other personal identifier of such customers; or
any information derived therefrom.
(b) Neither the Company, the Trust, PIM or PFD may disclose
Confidential Information for any purpose other than to carry out
the purpose for which Confidential Information was provided to the
Company, the Trust, PIM or PFD as set forth in this Agreement; and
the Company, the Trust, PIM and PFD agree to cause their
employees, agents and representatives, or any other party to whom
the Company, the Trust, PIM or PFD may provide access to or
disclose Confidential Information to limit the use and disclosure
of Confidential Information to that purpose.
(c) The Company, the Trust, PIM and PFD agree to implement appropriate
measures designed to ensure the security and confidentiality of
Confidential Information, to protect such information against any
anticipated threats or hazards to the security and integrity of
such information, and to protect against unauthorized access to,
or use of, Confidential Information that could result in
substantial harm or inconvenience to any of the customers of the
Company or any of its subsidiaries, affiliates or licensees; the
Company, the Trust, PIM and PFD further agree to cause all their
respective agents, representatives or subcontractors, or any other
party to whom they provide access to or disclose Confidential
Information, to implement appropriate measures to meet the
objectives set forth in this Section 13.1.
13.2. The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions
hereof or otherwise affect their construction or effect.
13.3. This Agreement may be executed simultaneously in one or more
counterparts, each of which taken together shall constitute one and the
same instrument.
13.4. 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.
13.5. The Schedule attached hereto, as modified from time to time, is
incorporated herein by reference and is part of this Agreement.
13.6. Each party hereto shall cooperate with each other party in
connection with inquiries by appropriate governmental authorities
(including without limitation the SEC, FINRA, and state insurance
regulators) and shall permit such authorities reasonable access to its
books and records in connection with any investigation or inquiry relating
to this Agreement or the transactions contemplated hereby.
13.7. 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.
13.8. A copy of the Trust's Certificate of Trust is on file with the
Secretary of State of Delaware. The Company acknowledges that the
obligations of or arising out of this instrument are not binding
19
upon any of the Trust's trustees, officers, employees, agents or
shareholders individually, but are binding solely upon the assets and
property of the Trust in accordance with its proportionate interest
hereunder. The Company further acknowledges that the assets and
liabilities of each Portfolio are separate and distinct and that the
obligations of or arising out of this instrument are binding solely upon
the assets or property of the Portfolio on whose behalf the Trust has
executed this instrument. The Company also agrees that the obligations
of each Portfolio hereunder shall be several and not joint, in accordance
with its proportionate interest hereunder, and the Company agrees not to
proceed against any Portfolio for the obligations of another Portfolio.
13.9. Any controversy or claim arising out of or relating to this
Agreement, or breach thereof, shall be settled by arbitration in a forum
jointly selected by the relevant parties (but if applicable law requires
some other forum, then, such other forum) in accordance with the Commercial
Arbitration Rules of the American Arbitration Association, and judgment
upon the award rendered by the arbitrators may be entered in any court
having jurisdiction thereof.
13.10. Neither this Agreement nor any of the rights and obligations
hereunder may be assigned by any party without the prior written consent of
all parties hereto.
13.11. The Trust, PIM and PFD agree that the obligations assumed by the
Company shall be limited in any case to the Company and its assets and
neither the Trust, PIM nor PFD shall seek satisfaction of any such
obligation from the shareholders of Company, the directors, officers,
employees or agents of the Company, or any of them.
13.12. No provision of the Agreement may be deemed or construed to
modify or supersede any contractual rights, duties, or indemnifications, as
between PIM and the Trust and PFD and the Trust.
13.13. This Agreement, including any Schedules or Exhibits hereto, may
be amended only by a written instrument executed by each party hereto.
20
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 above.
MINNESOTA LIFE INSURANCE COMPANY
By its authorized officer,
By:/s/Xxxxx X. Xxxx
-------------------------------------
Xxxxx X. Xxxx
Executive Vice President
Date:
PIONEER VARIABLE CONTRACTS TRUST,
ON BEHALF OF THE PORTFOLIOS
By its authorized officer and not individually,
By:/s/Xxxxxxxxxxx Xxxxxx
-------------------------------------
Xxxxxxxxxxx Xxxxxx
Assistant Secretary
Date:
PIONEER INVESTMENT MANAGEMENT, INC.
By its authorized officer,
By:/s/Xxxx Xxxxxxx
-------------------------------------
Xxxx Xxxxxxx
Executive Vice President
Date:
PIONEER FUNDS DISTRIBUTOR, INC.
By its authorized officer,
By:/s/Xxxxx Xxxxxxx
-------------------------------------
Xxxxx Xxxxxxx
Chief Financial Officer
Date:
21
SCHEDULE A
ACCOUNTS, CONTRACTS AND PORTFOLIOS
SUBJECT TO THE PARTICIPATION AGREEMENT
As of < date >
NAME OF SEPARATE PORTFOLIOS AND
ACCOUNT AND DATE CONTRACTS FUNDED CLASS OF SHARES
ESTABLISHED BY BOARD OF DIRECTORS BY SEPARATE ACCOUNT AVAILABLE TO CONTRACTS
VARIABLE UNIVERSAL LIFE ACCOUNT, VARIABLE GROUP UNIVERSAL LIFE PIONEER MID CAP VALUE VCT PORTFOLIO (CLASS I)
ESTABLISHED AUGUST 8, 1994
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SCHEDULE B
1. ADMINISTRATIVE SERVICES
Administrative services to Contract owners and participants shall be the
responsibility of the Company and shall not be the responsibility of the
Trust or PFD. The Company will provide properly registered and licensed
personnel and any systems needed for all Contract owners servicing and
support - for both fund and annuity and life insurance information and
questions, including:
- Communicate all purchase, withdrawal, and exchange orders it receives from
its customers to PFD;
- Respond to Contract owner and participant inquires;
- Delivery of both Trust and Contract prospectuses as required under
applicable law;
- Entry of initial and subsequent orders;
- Transfer of cash to Portfolios;
- Explanations of Portfolio objectives and characteristics;
- Entry of transfers between Portfolios;
- Portfolio balance and allocation inquires; and
- Mail Trust proxies.
2. ADMINISTRATIVE SERVICE FEES
For the administrative services set forth above, PIM or any of its affiliates
shall pay a servicing fee based on the annual rate of 0.10% of the average
aggregate net daily assets invested in the Class I Shares of the Portfolios
through the Accounts at the end of each calendar quarter. Such payments will
be made to the Company within thirty (30) days after the end of each calendar
quarter. Such fees shall be paid quarterly in arrears. Each payment will be
accompanied by a statement showing the calculation of the fee payable to the
Company for the quarter and such other supporting data as may be reasonably
requested by the Company. The Company will calculate the asset balance on
each day on which the fee is to be paid pursuant to this Agreement with
respect to each Portfolio for the purpose of reconciling its calculation of
average aggregate net daily assets with PIM's calculation. Annually (as of
December 31) or upon reasonable request of PIM, Company will provide PIM a
statement showing the number of subaccounts in each Class of Shares of each
Portfolio as of the most recent calendar quarter end.
3. 12b-1 DISTRIBUTION RELATED FEES (CLASS II SHARES ONLY)
In accordance with the Portfolios' plans pursuant to Rule 12b-1 under the
Investment Company Act of 1940, PFD will make payments to the Company at an
annual rate of 0.xx% of the average daily net assets invested in the Class II
shares of the Portfolios through the Accounts in each calendar quarter. PFD
will make such payments to the Company within thirty (30) days after the end
of each calendar quarter. Each payment will be accompanied by a statement
showing the calculation of the fee payable to the Company for the quarter and
such other supporting data as may be reasonably requested by the Company.
The Rule 12b-1 distribution related fees will be paid to the Company for as
long as the Accounts own any Shares of a Portfolio and (i) distribution
services are being provided pursuant to this Agreement and (ii) a Rule 12b-1
plan is in effect with respect to such Portfolio.
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EXHIBIT I
TO
PARTICIPATION AGREEMENT
Procedures for Pricing and Order/Settlement Through National Securities
Clearing Corporation's Mutual Fund Profile System and Mutual Fund Settlement,
Entry and Registration Verification System
1. As provided in Section 1.1 of the
Participation Agreement, the parties
hereby agree to provide pricing information, execute orders and wire payments
for purchases and redemptions of Fund shares through National Securities
Clearing Corporation ("NSCC") and its subsidiary systems as follows:
(a) Distributor or the Funds will furnish to Company or its affiliate
through NSCC's Mutual Fund Profile System ("MFPS") (1) the most current
net asset value information for each Fund, and (2) in the case of fixed
income funds that declare daily dividends, the daily accrual or the
interest rate factor. All such information shall be furnished to Company
or its affiliate by 6:30 p.m. Eastern Time on each business day that the
Fund is open for business (each a "Business Day") or at such other time
as that information becomes available.
(b) Upon receipt of Fund purchase, exchange and redemption instructions
for acceptance as of the time at which a Fund's net asset value is
calculated as specified in such Fund's prospectus ("Close of Trading") on
each Business Day ("Instructions"), and upon its determination that there
are good funds with respect to Instructions involving the purchase of
Shares, Company or its affiliate will calculate the net purchase or
redemption order for each Fund. Orders for net purchases or net
redemptions derived from Instructions received by Company or its
affiliate prior to the Close of Trading on any given Business Day will be
sent to the Defined Contribution Interface of NSCC's Mutual Fund
Settlement, Entry and Registration Verification System ("Fund/SERV") by
5:00 a.m. Eastern Time on the next Business Day. Subject to Company's or
its affiliate's compliance with the foregoing, Company or its affiliate
will be considered the agent of the Distributor and the Funds, and the
Business Day on which Instructions are received by Company or its
affiliate in proper form prior to the Close of Trading will be the date
as of which shares of the Funds are deemed purchased, exchanged or
redeemed pursuant to such Instructions. Instructions received in proper
form by Company or its affiliate after the Close of Trading on any given
Business Day will be treated as if received on the next following
Business Day. Dividends and capital gains distributions will be
automatically reinvested at net asset value in accordance with the Fund's
then current prospectuses.
(c) Company or its affiliate will wire payment for net purchase orders by
the Fund's NSCC Firm Number, in immediately available funds, to an NSCC
settling bank account designated by Company or its affiliate no later
than 5:00 p.m. Eastern time on the same Business Day such purchase orders
are communicated to NSCC. For purchases of shares of daily dividend
accrual funds, those shares will not begin to accrue dividends until the
day after the shares have been cleared.
(d) NSCC will wire payment for net redemption orders by Fund, in immediately
available funds, to an NSCC settling bank account designated by Company
or its affiliate, by 5:00 p.m. Eastern Time on the Business Day such
redemption orders are communicated to NSCC, except as provided in a
Fund's prospectus and statement of additional information.
(e) With respect to (c) or (d) above, if Distributor does not send a
confirmation of Company's or its affiliate's purchase or redemption
order to NSCC by the applicable deadline to be included in that Business
Day's payment cycle, payment for such purchases or redemptions will be
made the
24
following Business Day.
(f) If on any day Company or its affiliate, or Distributor is unable to
meet the NSCC deadline for the transmission of purchase or redemption
orders, it may at its option transmit such orders and make such payments
for purchases and redemptions directly to Distributor or Company or its
affiliate, as applicable, as is otherwise provided in the Agreement.
(g) These procedures are subject to any additional terms in each Fund's
prospectus and the requirements of applicable law. The Funds reserve the
right, at their discretion and without notice, to suspend the sale of
shares or withdraw the sale of shares of any Fund.
2. Company or its affiliate, Distributor and clearing agents (if
applicable) are each required to have entered into membership agreements with
NSCC and met all requirements to participate in the MFPS and Fund/SERV
systems before these procedures may be utilized. Each party will be bound by
the terms of their membership agreement with NSCC and will perform any and
all duties, functions, procedures and responsibilities assigned to it and as
otherwise established by NSCC applicable to the MFPS and Fund/SERV system and
the Networking Matrix Level utilized.
3. Except as modified hereby, all other terms and conditions of the
Agreement shall remain in full force and effect. Unless otherwise indicated
herein, the terms defined in the Agreement shall have the same meaning as in
this Exhibit.
25
