Exhibit 9(e)
FORM OF
PARTICIPATION AGREEMENT
AMONG
ST. CLAIR FUNDS, INC.,
AND
ZURICH-XXXXXX LIFE INSURANCE COMPANY
AND
LONGROW SECURITIES INC.
THIS AGREEMENT, made and entered into this day of
__________ 1997 by and among St. Clair Funds, Inc. a Maryland
corporation (the "Fund"); [Zurich-Xxxxxx], a
corporation (the "Company"), on its own behalf and on behalf of
each separate account of the Company named in Schedule 1 to this
Agreement as in effect at the time this Agreement is executed and
such other separate accounts that may be added to Schedule 1 from
time to time in accordance with the provisions of Article XI of
this Agreement (each such account referred to as the "Account");
and Longrow Securities Inc., a corporation organized under the
laws of (the "Distributor").
WHEREAS, the Fund is engaged in business as an open-end
management investment company and certain series of the Fund were
established for the purpose of serving as the investment vehicle
for separate accounts established for variable annuity contracts
(referred to as "Variable Insurance Products," the owners of such
products being referred to as "Product Owners") to be offered by
insurance companies which have entered into participation
agreements with the Fund ("Participating Insurance Companies");
and
WHEREAS, the common stock of the Fund (the "Fund shares")
consists of separate series ("Series"), each such series
representing an interest in a particular managed portfolio of
securities and other assets; and
WHEREAS, the Fund has filed or will file with the Securities
and Exchange Commission (the "SEC") and the SEC has declared or
will declare effective a registration statement (referred to
herein as the "Fund Registration Statement" and the prospectus
contained therein, or filed pursuant to Rule 497 under the
Securities Act of 1933, as amended (the "1933 Act"), referred to
herein as the "Fund Prospectus") on Form N-1A to register the
Series as open-end management investment companies under the
Investment Company Act of 1940, as amended (the "1940 Act"), and
the Fund shares under the 1933 Act; and
WHEREAS, the Company has filed or will file a registration
statement with the SEC to register under the 1933 Act interests in
certain variable annuity contracts described in Schedule 2 to this
Agreement as in effect at the time this Agreement is executed and
such other variable annuity contracts which may be added to
Schedule 2 from time to time in accordance with the terms and
provisions of the Agreement (such policies and contracts shall be
referred to herein collectively as the "Contracts," each such
registration statement for a class or classes of contracts listed
on Schedule 2 being referred to as the "Contracts Registration
Statement," and the prospectus with respect to the offering of the
Contracts being referred to as the "Prospectus" and the owners of
such contracts, as distinguished from all Product Owners, being
referred to as "Contract Owners"); and
WHEREAS, the Accounts, validly existing separate accounts,
duly authorized by resolution of the Board of Directors of the
Company, set aside and invest assets attributable to the
Contracts; and
WHEREAS, the Company has registered or will register the
Accounts with the SEC each as a unit investment trust under the
1940 Act before certain Contracts are issued by the Account; and
WHEREAS, the Distributor is registered as a broker-dealer
with the SEC under the Securities Exchange Act of 1934, as amended
(the "1934 Act"), and is a member in good standing of the National
Association of Securities Dealers, Inc. (the "NASD"); and
WHEREAS, the Distributor and the Fund have entered into an
agreement (the "Fund Distribution Agreement") pursuant to which
the Distributor will distribute Fund shares; and
WHEREAS, to the extent permitted by applicable insurance
laws and regulation, the Company intends to purchase Series shares
of the Series named in Schedule 3 to this Agreement on behalf of
the Accounts to fund the Contracts and the Distributor is
authorized to sell such Series shares to the Accounts at net asset
value;
NOW, THEREFORE, in consideration of their mutual promises,
the Company, the Fund and the Distributor agree as follows:
Article I. Sale of Fund Shares
1.1 The Distributor agrees to sell to the Company those
Series shares which the Company orders on behalf of the Account,
executing such orders on a daily basis in accordance with Section
1.4 of this Agreement.
1.2 The Fund agrees to make the shares of its Series
available for purchase by the Company on behalf of the Account at
the then applicable net asset value per share on Business Days as
defined in Section 1.4 of this Agreement, and the Fund shall use
best efforts to calculate such net asset value on each such
Business Day. Notwithstanding any other provision in this
Agreement to the contrary, the Board of Directors of the Fund (the
"Fund Board") may suspend or terminate the offering of Series
shares, if such action is required by law or by regulatory
authorities having jurisdiction or if, in the sole discretion of
the Fund Board acting in good faith and in light of its fiduciary
duties under Federal and any applicable state laws, suspension or
termination is necessary and in the best interests of the
shareholders of any Series (it being understood that
"shareholders" for this purpose shall mean Product Owners).
1.3 The Fund agrees to redeem, at the Company's request,
any full or fractional shares of the Fund held by the Account or
the Company, executing such requests at the net asset value on a
daily basis in accordance with Section 1.4 of this Agreement, the
applicable provisions of the 1940 Act and the then currently
effective Prospectus. Notwithstanding the foregoing, the Fund may
delay redemption of Fund shares to the extent permitted by the
1940 Act, any rules, regulations or orders thereunder, or the then
currently effective Prospectus.
1.4 (a) For purposes of Sections 1.1, 1.2 and 1.3, the
Company shall be the agent of the Fund for the limited purpose of
receiving redemption and purchase requests from the Account (but
not from the general account of the Company) based on transactions
in the Account's securities or units, and receipt on any Business
Day by the Company as such limited agent of the Fund prior to the
time prescribed in the current Prospectus (which as of the date of
execution of this Agreement is 4:00 p.m., Eastern Time) shall
constitute receipt by the Fund on that same Business Day, provided
that the Fund receives notice of such redemption or purchase
request by 9:00 a.m., Eastern Time, on the next following Business
Day. For purposes of this Agreement, "Business Day" shall mean
any day on which the New York Stock Exchange is open for trading
and on which the Series calculate their respective net asset
values pursuant to rules of the SEC.
(b) The Company shall pay for shares of each Series
on the same day that it places an order with the Fund to purchase
those Series shares. Payment for Series shares will be made by
the Account or the Company in Federal Funds transmitted to the
Fund by wire to be received no later than 4:00 p.m., Eastern Time,
on the day the Fund is properly notified of the purchase order for
Series shares (unless sufficient proceeds are available from
redemption of shares of other Series). The Fund will, upon
receipt of notice of the purchase order, inform the Investment
Advisor of such order. In the event that the payment is not
received by the Fund by 4:00 p.m., Eastern Time, on the same day
the Company places an order with the Fund, the Company will
reimburse the Fund for all interest, charges, costs, fees or other
expenses, if any, imposed on the Fund, and for all losses, if any,
incurred by the Fund as a result of such delayed payment.
(c) Payment for Series shares redeemed by the
Account or the Company will be made in Federal Funds transmitted
to the Company by wire on the next Business Day after the Fund is
notified of the redemption order of Series shares provided such
notification is received by the Fund by 4:00 p.m., Eastern Time
(unless redemption proceeds are applied to the purchase of shares
of other Series), except that the Fund reserves the right to
redeem shares in assets other than cash in accordance with the
Fund Registration Statement and to delay payment of redemption
proceeds, but in no event may such payment be delayed longer than
the period permitted under Section 22(e) of the 1940 Act. Neither
the Fund nor the Distributor shall bear any responsibility
whatsoever for the proper disbursement or crediting of redemption
proceeds; the Company alone shall be responsible for such action.
1.5 Issuance and transfer of Fund shares will be by book
entry only. Stock certificates will not be issued to the Company
or the Accounts. Purchase and redemption orders for Fund shares
will be recorded in an appropriate ledger for the Accounts or the
appropriate subaccount of the Accounts.
1.6 The Fund shall furnish notice as soon as reasonably
practicable to the Company of any income dividends or capital gain
distributions payable on any Series shares. The Company, on its
behalf and on behalf of the Accounts, hereby elects to receive all
such dividends and distributions as are payable on any Series
shares in the form of additional shares of that Series. The
Company reserves the right, on its behalf and on behalf of the
Accounts, to revoke this election and to receive all such
dividends in cash. The Fund shall notify the Company of the
number of Series shares so issued as payment of such dividends and
distributions.
1.7 The Fund shall use its best efforts to make the net
asset value per share for each Series available to the Company by
6:00 p.m., Eastern Time, each Business Day, and in any event, as
soon as reasonably practicable after the net asset value per share
for such Series is calculated, and shall calculate such net asset
value in accordance with the then currently effective Prospectus.
Neither the Fund, any Series, the Distributor, nor any of their
affiliates shall be liable for any information provided to the
Company pursuant to the Agreement which information is based on
incorrect information supplied by the Company or other
Participating Insurance Company to the Fund or the Distributor.
1.8 The Fund and the Distributor agree that Fund shares
will be sold only to Participating Insurance Companies and their
separate accounts or such other persons, including qualified
pension plans, as are permitted under applicable provisions of the
Internal Revenue Code of 1986, as amended (the "Code"), and
regulations promulgated thereunder, the sale to which will not
impair the tax treatment currently afforded the Contracts. The
Fund and the Distributor will not sell Fund shares to any
insurance company, separate account or other persons unless an
agreement complying with Article VII of this Agreement is in
effect to govern such sales. No Fund shares of any Series will be
sold directly to the general public.
1.9 (a) Until this Agreement is terminated pursuant to
Article X, the Company shall promote the Fund on the same basis as
other funding vehicles available under the Contracts. Funding
vehicles other than those listed on Schedule 3 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 and policies that are
substantially different from the investment objectives and
policies of the Series available hereunder; (ii) the Company gives
the Fund and the Distributor 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 Fund vehicle for the
Contracts prior to the date of this Agreement and the Company has
so informed the Fund and the Distributor prior to their signing
this Agreement, the Fund or Distributor 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 Distributor (unless otherwise required by applicable law) take
any action to operate the Accounts as management investment
companies under the 1940 Act.
(c) The Company shall not, without prior notice to
the Distributor (unless otherwise required by applicable law),
induce Contract Owners to change or modify the Fund or change the
Fund's distributor or investment adviser.
Article II. Representations and Warranties
2.1 The Company represents and warrants (a) that the
Contracts are registered under the 1933 Act or will be so
registered before the issuance thereof, (b) that the Contracts
will be issued in compliance in all material respects with all
applicable Federal securities and state insurance and securities
laws, and (c) that the Company will require of every person
distributing the Contracts (i) that the Contracts be offered and
sold in compliance in all material respects with all applicable
Federal and state laws and regulations promulgated thereunder, and
(ii) that at the time it is issued each Contract is a suitable
purchase for the applicant therefor under applicable state
insurance laws. The Company further represents and warrants that
it is an insurance company duly organized, validly existing and in
good standing under applicable law and that it has legally and
validly authorized the accounts as separate accounts under
applicable state insurance laws and regulations. The Company
further represents that for Accounts which are governed by the
1940 Act, the Company has registered or, prior to the issuance of
any Contracts, will register such Accounts as such unit investment
trusts in accordance with the provisions of the 1940 Act (unless
exempt therefrom) to serve as separate Accounts for the Contracts
so requiring a registered account, and that it will maintain such
registration for so long as such Contracts are outstanding.
2.2 The Fund represents and warrants that Fund shares sold
pursuant to this Agreement shall be registered under the 1933 Act
and duly authorized for issuance in accordance with applicable law
and that the Fund is and shall remain registered under the 1940
Act for so long as the Fund shares are sold. The Fund further
represents and warrants that it is a Maryland corporation duly
organized, validly existing and in good standing under the laws of
Maryland.
2.3 The Fund represents that it currently qualifies and
will make every effort to continue to qualify as a Regulated
Investment Company under Subchapter M of the Code, and to maintain
such qualification (under Subchapter M or any successor or similar
provision), and that it will notify the Company immediately upon
having a reasonable basis for believing that it has ceased to so
qualify or that it might not so qualify in the future.
2.4 The Fund represents that it will comply with Section
817(h) of the Code, and all regulations issued thereunder.
2.5 The Company represents that the Contracts are currently
and at the time of issuance will be treated as annuity contracts,
under applicable provisions of the Code. The Company shall make
every effort to maintain such treatment and shall notify the Fund
and the Distributor 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.
2.6 The Fund makes no representation as to whether any
aspect of its operations (including, but not limited to, fees and
expenses and investment policies) complies with the insurance laws
or regulations of any state. The Company alone shall be
responsible for informing the Fund of any investment restrictions
imposed by state insurance law and applicable to the Fund;
provided, however, that upon being so informed by the Company, the
Fund shall abide by such investment restrictions.
2.7 The Distributor represents and warrants that the
Distributor is duly registered as a broker-dealer under the 1934
Act, a member in good standing with the NASD, and duly registered
as a broker-dealer under applicable state securities laws; its
operations are in compliance with applicable law, and it will
distribute the Fund shares according to applicable law. The
Distributor represents and warrants that it shall remain duly
registered in all material respects under all applicable federal
and state securities laws as required to perform its obligations
under this Agreement.
2.8 Each party to this Agreement represents and warrants
that it is not aware of any pending or threatened litigation
matter or claim or regulatory proceeding, investigation or
inquiry, involving such party or any of its affiliates, the
outcome of which would have a material adverse effect on this
Agreement or the transactions completed thereunder.
2.9 The Company represents and warrants that all of its
directors, officers, employees, and other individuals or entities
dealing with the money and/or securities of the Accounts are and
shall continue to be at all times covered by a blanket fidelity
bond or similar coverage for the benefit of the Accounts in an
amount not less than [$5 million]. The aforesaid bond shall
include coverage for larceny and embezzlement and shall be 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 Distributor in the event that such
coverage no longer applies.
Article III. Prospectuses and Proxy Statements; Sales Materials
and Other Information
3.1 The Distributor shall provide the Company with as many
copies of the current Fund Prospectus (describing only the Series
listed on Schedule 3 attached hereto) as the Company may
reasonably request. The Company shall bear the expense of
printing copies of the current prospectus for the Contracts that
will be distributed to existing Contract Owners, and the Company
shall bear the expense of printing copies of the Fund Prospectus
that is 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 new prospectus on diskette 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
Prospectus printed together in one document (such printing to be
at the Company's expense).
3.2 The Fund Prospectus shall state that the Statement of
Additional Information for the Fund is available from the
Distributor (or, in the Fund's discretion, the Fund Prospectus
shall state that such Statement is available from the Fund), and
the Distributor (or the Fund) shall provide such Statement free of
charge to the Company and to any outstanding or prospective
Contract Owner who requests such Statement.
3.3 The Fund shall provide the Company (at the Fund's
expense) with copies of its proxy material, shareholder reports
and other communications to shareholders in such quantities as the
Company shall reasonably request for distributing to Product
Owners.
3.4 The Company shall furnish each piece of sales
literature or other promotional material, if any, in which a
Series, the Fund or the Distributor is named. No such material
shall be used until approved by the Fund (or its designee) or the
Distributor, as applicable, at least ten business days prior to
its use. No such material shall be used, except with the prior
permission of the party or parties named therein. 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 Series thereof) or the Distributor is named,
and no such material shall be used if the Fund or its designee so
object.
3.5 The Company shall not give any information or make any
representations or statements on behalf of the Fund or concerning
the Fund other than the information or representations contained
in the Fund Registration Statement or Fund Prospectus, as such
Fund Registration Statement, Fund Prospectus, as applicable, 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 prior permission of the Fund or its designee.
3.6 The Fund and the Distributor shall not give any
information or make any representations on behalf of the Company
or concerning the Company, the Account or the Contracts other than
the information or representations contained in the Prospectus, as
such Prospectus may be amended or supplemented from time to time,
or in published reports of the Accounts 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, except with the prior permission of the
Company.
3.7 The Fund will upon request of the Company provide to
the Company at least one complete copy of all Fund Registration
Statements, Fund Prospectuses, Statements of Additional
Information, annual and semi-annual reports and other reports,
proxy statements, sales literature and other promotional
materials, applications for exemptions, requests for no-action
letters, and all amendments or supplements to any of the above,
that relate to the Fund or Fund shares, promptly after the filing
of such document with the SEC or other regulatory authorities.
3.8 The Company will upon request of the Fund provide to
the Fund at least one complete copy of all Fund Registration
Statements, the Fund Prospectus, Statements of Additional
Information, reports, sales literature and other promotional
materials, if any, applications for exemptions, requests for
no-action letters, and all amendments or supplements to any of the
above, that relate to the Contracts or those Sub-Accounts of the
Accounts to which Contract purchase payments and value are
allocable, promptly after the filing of such document with the SEC
or other regulatory authorities.
3.9 For purposes of this Article III, 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 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, research reports, market letters, form
letters, seminar texts, or reprints or excerpts of any other
advertisement, sales literature, or published article),
educational or training materials or other communications
distributed or made generally available to some or all agents or
employees, registration statements, prospectuses, Statements of
Additional Information, shareholder reports and proxy materials,
and any other material constituting sales literature or
advertising under NASD rules, the 1940 Act or the 1933 Act.
Article IV. Voting
To the extent required by law, the Company shall:
(a) solicit voting instructions from Contract Owners;
(b) vote Fund shares of each Series attributable to Contract
Owners in accordance with instructions or proxies timely received
from such Contract Owners;
(c) vote Fund shares of each Series attributable to Contract
Owners for which no instructions have been received in the same
proportion as Fund shares of such Series for which instructions
have been timely received; and
(d) vote Fund shares of each Series held by the Company on its
own behalf or on behalf of the Account that are not attributable
to Contract Owners in the same proportion as Fund shares of such
Series for which instructions have been timely received.
Article V. Fees and Expenses
5.1 The Fund and Distributor shall pay no fee or other
compensation to the Company under this Agreement, except that if
the Fund or any Series adopts and implements a plan pursuant to
Rule 12b-1 under the 1940 Act to finance distribution expenses,
then the Distributor may make payments to the Company in amounts
agreed to by the Company and the Distributor in writing.
Currently, no such payments are contemplated. The Fund currently
does not intend to make any payments to finance distribution
expenses pursuant to Rule 12b-1 under the 1940 Act or in the
contravention of such rule, although it may make payments pursuant
to Rule 12b-1 in the future.
5.2 All expenses incident to performance by the Fund under
this Agreement (including expenses expressly assumed by the Fund
pursuant to this Agreement) shall be paid by the Fund to the
extent permitted by law. Except as otherwise provided in Section
3.1, the Company shall not bear any of the expenses for the cost
of preparation and filing of the Fund Prospectus and Fund
Registration Statement, Fund proxy materials and reports, the
preparation of all statements and notices required by any Federal
or state securities law, all taxes on the issuance or transfer of
Fund shares, and any expenses permitted to be paid or assumed by
the Fund pursuant to a plan, if any, under Rule 12b-1 under the
1940 Act. The Company shall bear the expenses for the costs of
setting the Prospectus in type and setting in type, printing and
distributing reports to shareholders. The Company shall also bear
the expenses for the cost of registration and qualification of the
Fund's shares.
Article VI. Compliance Undertakings
6.1 The Fund undertakes to comply with Subchapter M and
Section 817(h) of the Code, and all regulations issued thereunder.
6.2 The Fund shall amend the Fund Registration Statement
under the 1933 Act and the 1940 Act from time to time as required
in order to effect for so long as Fund shares are sold the
continuous offering of Fund shares as described in the then
currently effective Fund Prospectus.
6.3 To the extent that it decides to finance distribution
expenses pursuant to Rule 12b-1, the Fund undertakes to have the
Fund Board and a majority of Fund Directors who are not interested
persons of the Fund, formulate and approve any plan under Rule
12b-1 to finance distribution expenses.
6.4 The Company represents that the Contracts are
currently, and at the time of issuance shall be, treated as life
insurance or annuity insurance contracts, under applicable
provisions of the Code, and that it will make every effort to
maintain such treatment, and that it will notify the Fund and the
Distributor immediately upon having a reasonable basis for
believing the Contracts have ceased to be so treated or that they
might not be so treated in the future. The Company agrees that
any prospectus offering a contract that is a "modified endowment
contract" as that term is defined in Section 7702A of the Code (or
any successor or similar provision), shall identify such contract
as a modified endowment contract.
Article VII. Potential Conflicts
The parties to this Agreement acknowledge that the Fund has filed
or will file an application with the SEC to request an order
granting relief from various provisions of the 1940 Act and the
rules thereunder to the extent necessary to permit Fund shares to
be sold to and held by variable annuity and variable life
insurance separate accounts of both affiliated and unaffiliated
Participating Insurance Companies. The parties to this Agreement
agree that the conditions or undertakings specified in such
application and that may be imposed on the Company, the Fund
and/or the Distributor by virtue of such order shall be
incorporated herein by this reference, as of the date such order
is granted, as though set forth herein in full, and such parties
agree to comply with such conditions and undertakings to the
extent applicable to each such party. The Fund and the
Distributor will not enter into a participation agreement with any
other Participating Insurance Company unless it imposes the same
material conditions and undertakings incorporated by reference
herein on the parties to such agreement.
Article VIII. Indemnification
8.1 Indemnification by the Company
The Company agrees to indemnify and hold harmless the Fund
and the Distributor, and each person who controls or is affiliated
with the Fund or the Distributor, within the meaning of such terms
under the federal securities laws, and any officer, trustee,
director, employee or agent of the foregoing, against any and all
losses, claims, damages or liabilities, joint or several
(including any investigative, legal and other expenses reasonably
incurred in connection with, and any amounts paid in settlement
of, any action, suit or proceeding or any claim asserted), to
which they or any of them may become subject under any statute or
regulation, at common law or otherwise, insofar as such losses,
claims, damages or liabilities (or settlements):
(a) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the
Fund Registration Statement, the Fund Prospectus, the Statement of
Additional Information, sales literature or other promotional
material for the Contracts or the Contracts themselves (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 in light of the
circumstances in which they were made; provided that this
obligation to indemnify shall not apply if such statement or
omission or such alleged statement or alleged omission was made in
reliance upon and in conformity with information furnished in
writing to the Company by the Fund or the Distributor, or any
person controlling or affiliated with such entities (or a person
authorized in writing to do so on behalf of such entities) for use
in the Fund Registration Statement, the Fund Prospectus, the
Statement of Additional Information, or in the 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
(b) arise out of or are based upon any untrue statement or
alleged untrue statement of a material fact by or on behalf of the
Company (other than statements or representations made by the Fund
or the Distributor, or any person controlling or affiliated with
such entities, or contained in the Fund Registration Statement,
Fund Prospectus or sales literature or other promotional material
of the Fund not supplied by the Company or persons under its
control) or wrongful conduct of the Company or persons under its
control with respect to the sale or distribution of the Contracts
or Fund shares; or
(c) arise out of any untrue statement or alleged untrue
statement of a material fact contained in the Fund Registration
Statement, Fund Prospectus, Statement of Additional Information,
or sales literature or other promotional material 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 in light of the circumstances in which they were made,
if such statement or omission was made in reliance upon and in
conformity with information furnished to the Fund by or on behalf
of the Company; or
(d) 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
(e) arise out of any material breach by the Company of this
Agreement, including but not limited to a breach of any of the
representations and/or warranties made by Company hereunder, or
any failure to transmit a request for redemption or purchase of
Fund shares on a timely basis in accordance with the procedures
set forth in Article I.
This indemnification will be in addition to any liability which
the Company may otherwise have; provided, however, that no party
shall be entitled to indemnification if such loss, claim, damage
or liability is due to the willful misfeasance, bad faith, gross
negligence or reckless disregard of duty by the party seeking
indemnification.
8.2 Indemnification by the Fund and the Distributor
The Fund and the Distributor, jointly and severally, agree
to indemnify and hold harmless the Company and each person who
controls or is affiliated with the Company, within the meaning of
such terms under the federal securities laws, and any officer,
director, employee or agent of the Company, against any and all
losses, claims, damages or liabilities, joint or several
(including any investigative, legal and other expenses reasonably
incurred in connection with, and any amounts paid in settlement
of, any action, suit or proceeding or any claim asserted), to
which they or any of them may become subject under any statute or
regulation, at common law or otherwise, insofar as such losses,
claims, damages or liabilities:
(a) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the
Fund Registration Statement, Fund Prospectus (or any amendment or
supplement thereto), Statement of Additional Information or sales
literature or other promotional material of the Fund, 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 in light of the
circumstances in which they were made; provided that this
obligation to indemnify shall not apply if such statement or
omission or alleged statement or alleged omission was made in
reliance upon and in conformity with information furnished in
writing to the Fund or the Distributor, by the Company or any
person controlling or affiliated with the Company (or a person
authorized in writing to do so on behalf of the Company) for use
in the Fund Registration Statement, Fund Prospectus (or any
amendment or supplement thereto), Statement of Additional
Information or sales literature for the Fund or otherwise for use
in connection with the sale of the Contracts or Fund shares: or
(b) arise out of or are based upon any untrue statement or
alleged untrue statement of a material fact by the Distributor or
the Fund (other than statements or representations made by the
Company or any person controlling or affiliated with the Company
or contained in the Fund Registration Statement, Fund Prospectus,
Statement of Additional Information or sales literature or other
promotional material of the Fund not supplied by the Distributor
or the Fund or persons under their control) or wrongful conduct of
the Distributor or persons under its control with respect to the
sale or distribution of the Contracts or Fund shares; or
(c) arise out of any untrue statement or alleged untrue
statement of a material fact contained in the Fund Registration
Statement, Fund Prospectus, Statement of Additional Information or
sales literature or other promotional material for the Contracts
(or any amendment 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 in light of the circumstances in which they were made,
if such statement or omission was made in reliance upon
information furnished in writing by the Distributor or the Fund to
the Company (or a person authorized in writing to do so on behalf
of the Fund or the Distributor; or
(d) arise out of any material breach by the Distributor or the
Fund of this Agreement, including but not limited to a breach of
any of the representations and/or warranties made by the
Distributor or the Fund hereunder.
This indemnification will be in addition to any liability which
the Fund may otherwise have; provided, however, that no party
shall be entitled to indemnification if such loss, claim, damage
or liability is due to the willful misfeasance, bad faith, gross
negligence or reckless disregard of duty by the party seeking
indemnification.
8.3 Indemnification Procedures
After receipt by a party entitled to indemnification
("indemnified party") under this Article VIII of notice of the
commencement of any action, if a claim in respect thereof is to be
made by the indemnified party against any person obligated to
provide indemnification under this Article VIII ("indemnifying
party"), such indemnified party will notify the indemnifying party
in writing of the commencement thereof as soon as practicable
thereafter, provided that the omission to so notify the
indemnifying party will not relieve it from any liability under
this Article VIII, except to the extent that the omission results
in a failure of actual notice to the indemnifying party and such
indemnifying party is damaged solely as a result of the failure to
give such notice. The indemnifying party, upon the request of the
indemnified party, shall retain counsel reasonably satisfactory to
the indemnified party to represent the indemnified party and any
others the indemnifying party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to
such proceeding. In any such proceeding, any indemnified party
shall have the right to retain its own counsel, but the fees and
expenses of such counsel shall be at the expense of such
indemnified party unless (i) the indemnifying party and the
indemnified party shall have mutually agreed to the retention of
such counsel or (ii) the named parties to any such proceeding
(including any impleaded parties) include both the indemnifying
party and the indemnified party and representation of both parties
by the same counsel would be inappropriate due to actual or
potential differing interests between them. The indemnifying
party shall not be liable for any settlement of any proceeding
effected without its written consent but if settled with such
consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from
and against any loss or liability by reason of such settlement or
judgment.
A successor by law of the parties to the Agreement shall be
entitled to the benefits of the indemnification contained in this
Article VIII. The indemnification provisions contained in this
Article VIII shall survive any termination of this Agreement.
Article IX. Applicable Law
9.1 This Agreement shall be construed and the provisions
hereof interpreted under and in accordance with the laws of the
state of _______, without giving effect to the principles of
conflicts of laws.
9.2 This Agreement shall be subject to the provisions of
the 1933, 1934 and 1940 Acts, where applicable, and the rules and
regulations and rulings thereunder, including such exemptions from
those statutes, rules and regulations as the SEC may grant, and
the terms hereof shall be limited, interpreted and construed in
accordance therewith.
Article X. Termination
10.1 This Agreement shall terminate:
(a) at the option of any party upon six months'
advance written notice to the other parties, such termination to
be effective no earlier than one year following the date on which
the first Contract is issued; or
(b) at the option of the Company, if the
Company reasonably determines in good faith that shares of the
Fund are not registered, issued or sold in accordance with
applicable federal or state law in such a way as to be reasonably
available to meet requirements of the Contracts; or
(c) at the option of the Fund upon institution
of formal proceedings against the Company by the NASD, the SEC,
the insurance commission of any state or any other regulatory body
regarding the Company's duties under this Agreement or related to
the sale of the Contracts, the operation of the Account, the
administration of the Contracts or the purchase of Fund shares, or
an expected or anticipated ruling, judgment or outcome which
would, in the Fund's reasonable judgment, materially impair the
Company's ability to meet and perform the Company's obligations
and duties hereunder; or
(d) at the option of the Company upon
institution of formal proceedings against the Fund by the NASD,
the SEC, or any state securities or insurance commission or any
other regulatory body; or
(e) at the option of the Fund in the event any
of the Contracts are not issued or sold in accordance with
applicable Federal and/or state law; or
(f) termination by the Fund by written notice to the
Company in the event that the Contracts fail to meet the
qualifications specified in Article VI hereof; or
(g) by either the Company or the Fund upon a
determination by a majority of the Fund Board, or a majority of
disinterested Fund Board members, that an irreconcilable material
conflict exists among the interests of (i) all Product Owners or
(ii) the interests of the Participating Insurance Companies
investing in the Fund.
10.2 Notice Requirement Except as otherwise provided in
Section 10.1, no termination of this Agreement shall be effective
unless and until the party terminating this Agreement gives prior
written notice to all other parties to this Agreement of its
intent to terminate which notice shall set forth the basis for
such termination. Furthermore:
(a) in the event that any termination is based upon
the provisions of Article VII or the provisions of Section 10.1(a)
of this Agreement, such prior written notice shall be given in
advance of the effective date of termination as required by such
provisions; and
(b) in the event that any termination is based upon
the provisions of Section 10.1(c) or 10.1(d) of this Agreement,
such prior written notice shall be given at least ninety (90) days
before the effective date of termination; and
(c) in the event that any termination is based upon
the provisions of Section 10.1(e) or 10.1(f) of this Agreement,
such prior written notice shall be given at least sixty (60) days
before the date of any proposed vote to replace the Fund's shares.
10.3 Except as necessary to implement Contract Owner
initiated transactions, or as required by state insurance laws or
regulations, 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).
10.4 Effect of Termination
(a) Notwithstanding any termination of this
Agreement pursuant to Section 10.1 of this Agreement, the Fund
may, at its option, or, in the event of termination of this
Agreement by the Fund pursuant to Section 10.1(a) of this
Agreement, the Company may require the Fund and the Distributor
to, continue to make available additional Fund shares for so long
after the termination of this Agreement as the Company desires
pursuant to the terms and conditions of this Agreement as provided
in paragraph (b) below, for all Contracts in effect on the
effective date of termination of this Agreement (hereinafter
referred to as "Existing Contracts"); provided, however, that the
obligation to make such additional Fund shares available shall
continue only for two years after the termination of this
Agreement. Specifically, without limitation, if the Fund or
Company so elects to make additional Fund shares available, the
owners of the Existing Contracts or the Company, whichever shall
have legal authority to do so, shall be permitted to reallocate
investments in the Fund, redeem investments in the Fund and/or
invest in the Fund upon the making of additional purchase payments
under the Existing Contracts.
(b) In the event of a termination of this Agreement
pursuant to Section 10.1 of this Agreement, the Fund and the
Distributor shall promptly notify the Company whether the
Distributor and the Fund will continue to make Fund shares
available after such termination. If Fund shares continue to be
made available after such termination, the provisions of this
Agreement shall remain in effect except for Section 10.1(a) and
thereafter the Fund, the Distributor, or the Company may terminate
the Agreement, as so continued pursuant to this Section 10.4, upon
prior written notice to the other party, such notice to be for a
period that is reasonable under the circumstances but, if given by
the Fund or Distributor, need not be for more than six months.
(c) The parties agree that this Section 10.4 shall
not apply to any termination made pursuant to Article VII or any
conditions or undertakings incorporated by reference in Article
VII, and the effect of such Article VII termination shall be
governed by the provisions set forth or incorporated by reference
therein.
ARTICLE XI. Applicability to New Accounts and New Contracts
The parties to this Agreement may amend the schedules to this
Agreement from time to time to reflect changes in or relating to
the Contracts and to add new classes of variable annuity contracts
to be issued by the Company through a Separate Account investing
in the Fund. The provisions of this Agreement shall be equally
applicable to each such class of contracts or policies, unless the
context otherwise requires.
ARTICLE XII. 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.
If to the Fund:
c/o Munder Capital Management
000 Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attn: Xxx Xxxxxx
If to the Company:
If to the Distributor:
Longrow Securities Inc.
_________________
_________________
Attn:
ARTICLE XIII. Miscellaneous
13.1 The captions in this Agreement are included for
convenience of reference only and in no way define or delineate
any of the provisions hereof or otherwise affect their
construction or effect
13.2 This Agreement may be executed simultaneously in two
or more counterparts. each of which together shall constitute one
and the same instrument.
13.3 If any provision of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the
remainder of the Agreement shall not be affected thereby
13.4 The Company, the Fund and the Distributor 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.
13.5 Each party represents that the execution and delivery
of this Agreement and the consummation of the transactions
contemplated herein have been duly authorized by all necessary
corporate or trust action, as applicable, by such party, and when
so executed and delivered this Agreement will be the valid and
binding obligation of such party enforceable in accordance with
its terms.
ST. CLAIR FUNDS,
INC.
By:
Name:
Title:
[ZURICH-XXXXXX]
By:
Name:
Title:
LONGROW SECURITIES
INC.
By:
Name:
Title:
SCHEDULE 1
SEPARATE ACCOUNTS
SCHEDULE 2
VARIABLE ANNUITY CONTRACTS
SCHEDULE 3
SERIES
Munder S&P 500 Index Equity Fund
Munder S&P MidCap Index Equity Fund
Munder S&P SmallCap Index Equity Fund
Munder Aggregate Bond Index Fund
Munder Foreign Equity Fund
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