FORM OF FUND PARTICIPATION AGREEMENT
BETWEEN
PORTFOLIO PARTNERS, INC.,
GOLDEN AMERICAN LIFE INSURANCE COMPANY
AND
AETNA LIFE INSURANCE AND ANNUITY COMPANY
Golden American Life Insurance Company (the "Company"), Portfolio
Partners, Inc. (the "Fund") and Aetna Life Insurance and Annuity Company (the
"Adviser") hereby agree to an arrangement whereby the Fund shall be made
available to serve as underlying investment media for Variable Annuity or
Variable Life Contracts ("Contracts") to be issued by the Company.
1. ESTABLISHMENT OF ACCOUNTS; AVAILABILITY OF FUND.
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(a) The Company represents that it has established Separate Account B
and may establish such other accounts as may be set forth in
Schedule A attached hereto and as may be amended from time to time
with the mutual consent of the parties hereto (the "Accounts"),
each of which is a separate account under ________________
Insurance law, and has registered or will register each of the
Accounts (except for such Accounts for which no such registration
is required) as a unit investment trust under the Investment
Company Act of 1940 (the "1940 Act"), to serve as an investment
vehicle for the Contracts. Each Contract provides for the
allocation of net amounts received by the Company to an Account
for investment in the shares of one of more specified open-end
management investment companies available through that Account as
underlying investment media. Selection of a particular investment
management company and changes therein from time to time are made
by the participant or Contract owner, as applicable under a
particular Contract.
(b) The Fund and the Adviser represent and warrant that the
investments of the series of the Fund (each designated a
"Portfolio") specified in Schedule B attached hereto (as may be
amended from time to time with the mutual consent of the parties
hereto) will at all times be adequately diversified within the
meaning of Section 817(h) of the Internal Revenue Service Code of
1986, as amended (the "Code"), and the Regulations thereunder, and
that at all times while this agreement is in effect, all
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beneficial interests will be owned by one or more insurance
companies or by any other party permitted under Section
1.817-5(f)(3) of the Regulations promulgated under the Code or by
the successor thereto, or by any other party permitted under a
Revenue Ruling or private letter ruling granted by the Internal
Revenue Service.
2. PRICING INFORMATION; ORDERS; SETTLEMENT.
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(a) The Fund will make Fund shares available to be purchased by the
Company, and will accept redemption orders from the Company, on
behalf of each Account at the net asset value applicable to each
order on those days on which the Fund calculates its net asset
value (a "Business Day"). Fund shares shall be purchased and
redeemed in such quantity and at such time determined by the
Company to be necessary to meet the requirements of those
Contracts for which the Fund serve as underlying investment media,
provided, however, that the Board of Trustees of the Fund
(hereinafter the "Trustees") may upon reasonable notice to the
Company, refuse to sell shares of any Portfolio to any person, or
suspend or terminate the offering of shares of any Portfolio if
such action is required by law or by regulatory authorities having
jurisdiction or is, in the sole discretion of the Trustees, acting
in good faith and in the best interests of the shareholders of any
Portfolio and is acting in compliance with their fiduciary
obligations under federal and/or any applicable state laws.
(b) The Fund will provide to the Company closing net asset value,
dividend and capital gain information at the close of trading each
day that the New York Stock Exchange (the "Exchange" is open (each
such day a "Business Day"), and in no event later than 7:00 p.m.
Eastern Standard time on such Business Day. The Company will send
via facsimile or electronic transmission to the Fund or its
specified agent orders to purchase and/or redeem Fund shares by
10:00 a.m. Eastern Standard Time the following business day.
Payment for net purchases will be wired by the Company to an
account designated by the Fund to coincide with the order for
shares of the Fund.
(c) The Fund hereby appoints the Company as its agent for the limited
purpose of accepting purchase and redemption orders for Fund
shares relating to the Contracts from Contract owners or
participants. Orders from Contract owners or participants received
from any distributor of the Contracts (including affiliates of the
Company) by the Company, acting
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as agent for the Fund, prior to the close of the Exchange on
any given business day will be executed by the Fund at the net
asset value determined as of the close of the Exchange on such
Business Day, provided that the Fund receives written
(or facsimile) notice of such order by 10 a.m. Eastern Standard
Time on the next following Business Day. Any orders received by
the Company acting as agent on such day but after the close of
the Exchange will be executed by the Fund at the net asset
value determined as of the close of the Exchange on the next
business day following the day of receipt of such order,
provided that the Fund receives written (or facsimile) notice of
such order by 10 a.m. Eastern Standard Time within two days
following the day of receipt of such order.
(d) Payments for net redemptions of shares of the Fund will be wired
by the Fund to an account designated by the Company. Payments for
net purchases of the Fund will be wired by the Company to an
account designated by the Fund on the same Business Day the
Company places an order to purchase Fund shares. Payments shall be
in federal funds transmitted by wire.
(e) In lieu of applicable provisions set forth in paragraphs 2(a)
through 2(d) above, the parties may agree to provide pricing
information, execute orders and wire payments for purchases and
redemptions through National Securities Clearing Corporation's
Fund/SERV system in which case such activities will be governed by
the provisions set forth in an Exhibit to this Agreement.
(f) Each party has the right to rely on information or confirmations
provided by the other party (or by any affiliate of the other
party), and shall not be liable in the event that an error is a
result of any misinformation supplied by the other party.
(g) The Company agrees to purchase and redeem the shares of the
Portfolios named in Schedule B offered by the then current
prospectus and statement of additional information of the Fund in
accordance with the provisions of such prospectus and statement of
additional information. The Company shall not permit any person
other than a Contract owner or Participant to give instructions to
the Company which would require the Company to redeem or exchange
shares of the Fund. This provision shall not be construed to
prohibit the Company from substituting shares of another fund, as
permitted by law.
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3. EXPENSES.
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(a) Except as otherwise provided in this Agreement, all expenses
incident to the performance by the Fund under this Agreement shall
be paid by the Fund, including the cost of registration of Fund
shares with the Securities and Exchange Commission (the "SEC") and
in states where required. The Fund and Adviser shall pay no fee or
other compensation to the Company under this Agreement, and the
Company shall pay no fee or other compensation to the Fund or
Adviser, except as provided herein and in Schedule C attached
hereto and made a part of this Agreement as may be amended from
time to time with the mutual consent of the parties hereto. All
expenses incident to performance by each party of its respective
duties under this Agreement shall be paid by that party, unless
otherwise specified in this Agreement.
(b) The Fund or the Adviser shall provide to the Company Post Script
files of periodic fund reports to shareholders and other materials
that are required by law to be sent to Contract owners. In
addition, the Fund or the Adviser shall provide the Company with a
sufficient quantity of its prospectuses, statements of additional
information and any supplements to any of these materials, to be
used in connection with the offerings and transactions
contemplated by this Agreement. In addition, the Fund shall
provide the Company with a sufficient quantity of its proxy
material that is required to be sent to Contract owners. The
Adviser shall be permitted to review and approve the typeset form
of such material prior to such printing provided such material has
been provided by the Adviser to the Company within a reasonable
period of time prior to typesetting.
(c) In lieu of the Fund's or Adviser's providing printed copies of
prospectuses, statements of additional information and any
supplements to any of these materials, and periodic fund reports
to shareholders, the Company shall have the right to request that
the Fund transmit a copy of such materials in an electronic format
(Post Script files), which the Company may use to have such
materials printed together with similar materials of other Account
funding media that the Company or any distributor will distribute
to existing or prospective Contract owners or participants.
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4. REPRESENTATIONS.
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(a) The Company agrees that it and its agents shall not, without the
written consent of the Fund or the Adviser, make representations
concerning the Fund, or its shares except those contained in the
then current prospectuses and in current printed sales literature
approved by or deemed approved by the Fund or the Adviser.
(b) The Fund and Adviser represent and warrant that (i) they have
examined and tested their systems and made reasonable inquiry of
their business partners and other entities with whom they conduct
business with respect to Year 2000 problems and (ii) their ability
to perform their obligations under this Agreement will not be
interrupted or disrupted as a result of any business interruptions
or other business problems relating to specific dates or days
before, during and after the Year 2000.
5. TERMINATION.
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This agreement shall terminate as to the sale and issuance of new
Contracts:
(a) at the option of either the Company, the Adviser or the Fund, upon
sixty days advance written notice to the other parties;
(b) at the option of the Company, upon one week advance written notice
to the Adviser and the Fund, if Fund shares are not available for
any reason to meet the requirement of Contracts as determined by
the Company. Reasonable advance notice of election to terminate
shall be furnished by Company;
(c) at the option of either the Company, the Adviser or the Fund,
immediately upon institution of formal proceedings against the
broker-dealer or broker-dealers marketing the Contracts, the
Account, the Company, the Fund or the Adviser by the National
Association of Securities Dealers, Inc. (the "NASD"), the SEC or
any other regulatory body;
(d) upon the determination of the Accounts to substitute for the
Fund's shares the shares of another investment company in
accordance with the terms of the applicable Contracts. The Company
will give 60 days written notice to the Fund and the Adviser of
any decision to replace the Fund's' shares;
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(e) upon assignment of this Agreement, unless made with the written
consent of all other parties hereto;
(f) if Fund shares are not registered, issued or sold in conformance
with Federal law or such law precludes the use of Fund shares as
an underlying investment medium for Contracts issued or to be
issued by the Company. Prompt notice shall be given by the
appropriate party should such situation occur.
6. CONTINUATION OF AGREEMENT.
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Termination as the result of any cause listed in Section 5 shall not
affect the Fund's obligation to furnish its shares to Contracts then in
force for which its shares serve or may serve as the underlying medium
unless such further sale of Fund shares is prohibited by law or the SEC
or other regulatory body, or is determined by the Fund's Board to be
necessary to remedy or eliminate an irreconcilable conflict pursuant to
Section 10 hereof.
7. ADVERTISING MATERIALS; FILED DOCUMENTS.
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(a) Advertising and sales literature with respect to the Fund prepared
by the Company or its agents for use in marketing its Contracts
will be submitted to the Fund or its designee for review before
such material is submitted to any regulatory body for review. No
such material shall be used if the Fund or its designee reasonably
object to such use in writing, transmitted by facsimile within two
business days after receipt of such material.
(b) The Fund will provide additional copies of its financials as soon
as available to the Company and at least one complete copy of all
registration statements, prospectuses, statements of additional
information, annual and semi-annual reports, proxy statements and
all amendments or supplements to any of the above that relate to
the Fund promptly after the filing of such document with the SEC
or other regulatory authorities. At the Adviser's request, the
Company will provide to the Adviser at least one complete copy of
all registration statements, prospectuses, statements of
additional information, annual and semi-annual reports, proxy
statements, and all amendments or supplements to any of the above
that relate to the Account promptly after the filing of such
document with the SEC or other regulatory authority.
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(c) The Fund or the Adviser will provide via Excel spreadsheet
diskette format or in electronic transmission to the Company at
least quarterly portfolio information necessary to update Fund
profiles with seven business days following the end of each
quarter.
(d) The Fund will reimburse the Company for any incorrect information
provided to the Company under this Section as provided for in
Schedule C.
8. PROXY VOTING.
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(a) The Company shall provide pass-through voting privileges on Fund
shares held by registered separate accounts to all Contract owners
and participants to the extent the SEC continues to interpret the
1940 Act as requiring such privileges. The Company shall provide
pass-through voting privileges on Fund shares held by unregistered
separate accounts to all Contract owners.
(b) The Company will distribute to Contract owners and participants,
as appropriate, all proxy material furnished by the Fund and will
vote Fund shares in accordance with instructions received from
such Contract owners and participants. If and to the extent
required by law, the Company, with respect to each group Contract
and in each Account, shall vote Fund shares for which no
instructions have been received in the same proportion as shares
for which such instructions have been received. The Company and
its agents shall not oppose or interfere with the solicitation of
proxies for Fund shares held for such Contract owners and
participants.
9. INDEMNIFICATION.
---------------
(a) The Company agrees to indemnify and hold harmless the Fund and the
Adviser, and its directors, officers, employees, agents and each
person, if any, who controls the Fund or its Adviser within the
meaning of the Securities Act of 1933 (the "1933 Act") against any
losses, claims, damages or liabilities to which the Fund or any
such director, officer, employee, agent, or controlling person may
become subject, under the 1933 Act or otherwise, insofar as such
losses, claims, damages, or
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liabilities (or actions in respect thereof) arise out of
or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Registration
Statement, prospectus or sales literature of the Company 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, or arise out of or as a result of conduct, statements
or representations (other than statements or representations
contained in the prospectuses or sales literature of the Fund) of
the Company or its agents, with respect to the sale and
distribution of Contracts for which Fund shares are the underlying
investment. The Company will reimburse any legal or other expenses
reasonably incurred by the Fund or any such director, officer,
employee, agent, investment adviser, or controlling person in
connection with investigating or defending any such loss, claim,
damage, liability or action; PROVIDED, HOWEVER, that the Company
will not be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of or is
based upon (i) an untrue statement or omission or alleged omission
made in such Registration Statement or prospectus in conformity
with written materials furnished to the Company by the Fund
specifically for use therein or (ii) the willful misfeasance, bad
faith, or gross negligence by the Fund or Adviser in the
performance of its duties or the Fund's or Adviser's reckless
disregard of obligations or duties under this Agreement or to the
Company, whichever is applicable. This indemnity agreement will be
in addition to any liability which Company may otherwise have.
(b) The Fund and the Adviser agree to indemnify and hold harmless the
Company and its directors, officers, employees, agents and each
person, if any, who controls the Company within the meaning of the
1933 Act against any losses, claims, damages or liabilities to
which the Company or any such director, officer, employee, agent
or controlling person may become subject, under the 1933 Act or
otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement, prospectuses or sales
literature 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 material fact required to be
stated therein or necessary to make the statements therein not
misleading. The Fund will reimburse any legal or other expenses
reasonably incurred by the Company or any such director, officer,
employee, agent, or controlling
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person in connection with investigating or defending any
such loss, claim, damage, liability or action; PROVIDED,
HOWEVER, that the Fund will not be liable in any such case
to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or
omission or alleged omission made in such Registration Statement
or prospectuses which are in conformity with written materials
furnished to the Fund by the Company specifically for use therein.
(c) Promptly after receipt by an indemnified party hereunder of notice
of the commencement of action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying
party hereunder, 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 10. In case
any such action is brought against any indemnified party, and it
notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to
the extent that it may wish to, assume the defense thereof, with
counsel satisfactory to such indemnified party, and after notice
from the indemnifying party to such indemnified party of its
election to assume the defense thereof, the indemnifying party
will not be liable to such indemnified party under this Section 9
for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other
than reasonable costs of investigation.
10. POTENTIAL CONFLICTS.
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(a) The Company has received a copy of an application for exemptive
relief, as amended, filed by the Fund on and with the SEC and the
order issued by the SEC dated December 21, 1998 (File No.
812-11196) in response thereto (the "Mixed and Shared Funding
Exemptive Order"). The Company has reviewed the conditions to the
requested relief set forth in such application for exemptive
relief. As set forth in such application, the Board of Directors
of Fund (the "Board") will monitor the Fund for the existence of
any material irreconcilable conflict between the interests of the
contractholders of all separate accounts ("Participating
Companies") investing in the Fund. An irreconcilable material
conflict may arise for a variety of reasons, including: (i) an
action by any state insurance regulatory authority; (ii) a change
in applicable federal or state insurance, tax, or securities laws
or regulations, or a public ruling,
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private letter ruling, no-action or interpretative letter,
or any similar actions by insurance, tax or securities
regulatory authorities; (iii) an administrative or judicial
decision in any relevant proceeding; (iv) the manner in
which the investments of any portfolio are being
managed; (v) a difference in voting instructions given by
variable annuity contractholders and variable life insurance
contractholders; or (vi) a decision by an insurer to disregard the
voting instructions of contractholders. The Board shall promptly
inform the Company if it determines that an irreconcilable
material conflict exists and the implications thereof.
(b) The Company will report any potential or existing conflicts of
which it is aware to the Board. The Company will assist the Board
in carrying out its responsibilities under the Shared Funding
Exemptive Order by providing the Board with all information
reasonably necessary for the Board to consider any issues raised.
This includes, but is not limited to, an obligation by the Company
to inform the Board whenever contractholder voting instructions
are disregarded.
(c) If a majority of the Board, or a majority of its disinterested
Board members, determines that a material irreconcilable conflict
exists with regard to contractholder investments in a Fund, the
Board shall give prompt notice to all Participating Companies. If
the Board determines that the Company is responsible for causing
or creating said conflict, the Company shall at its sole cost and
expense, and to the extent reasonably practicable (as determined
by a majority of the disinterested Board members), take such
action as is necessary to remedy or eliminate the irreconcilable
material conflict. Such necessary action may include but shall not
be limited to:
(i) withdrawing the assets allocable to the Account from the Fund
and reinvesting such assets in a different investment medium
or submitting the question of whether such segregation should
be implemented to a vote of all affected contractholders and
as appropriate, segregating the assets of any appropriate
group (i.e., annuity contract owners, life insurance contract
owners, or variable contract owners of one or more
Participating Companies) that votes in favor of such
segregation, or offering to the affected contractholders the
option of making such a change; and/or
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(ii) establishing a new registered management investment company
or managed separate account.
(d) If a material irreconcilable conflict arises as a result of a
decision by the Company to disregard its contractholder voting
instructions and said decision represents a minority position or
would preclude a majority vote by all of its contractholders
having an interest in the Fund, the Company at its sole cost, may
be required, at the Board's election, to withdraw an Account's
investment in the Fund and terminate this Agreement; 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 Board.
(e) For the purpose of this Section 10, a majority of the
disinterested Board members shall determine whether or not any
proposed action adequately remedies any irreconcilable material
conflict, but in no event will the Fund be required to establish a
new funding medium for any Contract. The Company shall not be
required by this Section 11 to establish a new funding medium for
any Contract if an offer to do so has been declined by vote of a
majority of the Contract owners or participants materially
adversely affected by the irreconcilable material conflict.
11. MISCELLANEOUS.
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(a) AMENDMENT AND WAIVER. Neither this Agreement, nor any provision
hereof, may be amended, waived, discharged or terminated orally,
but only by an instrument in writing signed by all parties hereto.
(b) NOTICES. All notices and other communications hereunder shall be
given or made in writing and shall be delivered personally, or
sent by telex, telecopier or registered or certified mail, postage
prepaid, return receipt requested, or recognized overnight courier
service to the party or parties to whom they are directed at the
following addresses, or at such other addresses as may be
designated by notice from such party to all other parties.
To the Company:
Golden American Life Insurance Company 0000
Xxxxxxxx Xxxxx Xxxx Xxxxxxx, XX 00000
Attention: _____________________
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To the Fund:
Portfolio Partners, Inc.
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attn: J. Xxxx XxXxxxxx, Counsel
Any notice, demand or other communication given in a manner prescribed in
this subsection (b) shall be deemed to have been delivered on receipt.
(c) SUCCESSORS AND ASSIGNS. This agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective
permitted successors and assigns.
(d) COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one
agreement, and any party hereto may execute this Agreement by
signing any such counterpart.
(e) SEVERABILITY. In case any one or more of the provisions contained
in this Agreement should be invalid, illegal or unenforceable in
any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be
affected or impaired thereby.
(f) ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
and understanding between the parties hereto and supersedes all
prior agreement and understandings relating to the subject matter
hereof.
(g) GOVERNING LAW. This Agreement shall be governed and interpreted in
accordance with the laws of the State of Connecticut.
(h) It is understood by the parties that this Agreement is not an
exclusive arrangement in any respect.
(i) The terms of this Agreement and the Schedules thereto will be held
confidential by each party except to the extent that either party
or its counsel may deem it necessary to disclose such terms.
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12. LIMITATION ON LIABILITY OF DIRECTORS, ETC.
------------------------------------------
This agreement has been executed on behalf of the Fund by the undersigned
officer of the Fund in his or her capacity as an officer of the Fund. The
obligations of this agreement shall be binding upon the assets and property of
the Fund only and shall not be binding on any Director, officer or shareholder
of the Fund individually.
IN WITNESS WHEREOF, the undersigned have executed this Agreement by their
duly authorized officers effective as of the ____ day of _________, _____.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
By:
----------------------------------------------------
Name:
Title:
PORTFOLIO PARTNERS, INC.
By:
--------------------------------
Name:
Title:
AETNA LIFE INSURANCE AND ANNUITY COMPANY
By:
-------------------------------------------
Name:
Title:
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SCHEDULE A
(For any future separate accounts - See Section 1(a)
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SCHEDULE B
(List of portfolios available--See Section 1(b))
Portfolio Partners, Inc. MFS Capital Opportunities Portfolio
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SCHEDULE C
The following costs, expenses and reimbursements will be paid by the party
indicated:
1. For purposes of Sections 2 and 7, the Fund or the Adviser shall be liable
to the Company for any amount the Company is required to pay to Contract
owners or participants due to (i) an incorrect calculation of a Fund's
daily net asset value, dividend rate, or capital gain distribution rate
or (ii) incorrect or late reporting of the daily net asset value, capital
gain distribution rate of a Fund, upon written notification by the
Company, with supporting data, to the Adviser. In addition, the Fund or
the Adviser shall be liable to the Company for systems and out of pocket
costs incurred by the Company in making a Contract owner's or a
participant's account whole, if such costs or expenses are a result of
the Fund's failure to provide timely or correct net asset values,
dividend and capital gains or financial information and if such
information is not corrected by 4pm EST of the next business day after
releasing such incorrect information provided the incorrect NAV as well
as the correct NAV for each day that the error occurred is provided. If a
mistake is caused in supplying such information or confirmations, which
results in a reconciliation with incorrect information, the amount
required to make a Contract owner's or a Participant's account whole
shall be borne by the party providing the incorrect information,
regardless of when the error is corrected.
2. For purposes of Section 3, the Fund or the Adviser shall pay for the cost
of typesetting and printing periodic fund reports to existing
shareholders, prospectuses, prospectus supplements, statements of
additional information and other materials that are required by law to be
sent to existing Contract owners or participants, as well as the cost of
distributing such materials. The Company shall pay for the cost of
prospectuses and statements of additional information and the
distribution thereof for prospective Contract owners or participants.
Each party shall be provided with such supporting data as may reasonably
be requested for determining expenses under Section 3.
3. The Fund shall pay all expenses in connection with the provision to the
Company of a sufficient quantity of its proxy material under Section 3.
The cost associated with proxy preparation, group authorization letters,
programming for tabulation and necessary materials (including postage)
will be paid by the Fund.
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NSCC EXHIBIT
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
As provided in Section 2(e) 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:
Distributor or the Funds will furnish to the Company or its affiliate through
NSCC's Mutual Fund Profile System ("MFPS") (1) the most current net asset value
information for each Fund, (2) a schedule of anticipated dividend and
distribution payment dates for each Fund, which is subject to change without
prior notice, ordinary income and capital gain dividend rates on the Fund's
ex-date, and (4) 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 the 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. Changes in pricing
information will be communicated to both NSCC and the Company or its affiliate.
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, the 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 the 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 the Company's or its
affiliate's compliance with the foregoing, the 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 the 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 the 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.
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The 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 the 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 the payment for those shares is
received.
NSCC will wire payment for net redemption orders by Fund, in immediately
available funds, to an NSCC settling bank account designated by the 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.
With respect to (c) or (d) above, if Distributor does not send a confirmation of
the 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 following Business Day. If on
any day the 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 to the Company or its affiliate, as applicable, as is
otherwise provided in the Agreement.
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. The 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.
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