Exhibit (8)(a)
PARTICIPATION AGREEMENT
BY AND AMONG
SUMMIT MUTUAL FUNDS, INC.,
CARILLON INVESTMENTS, INC.
WOODMEN OF THE WORLD LIFE INSURANCE SOCIETY,
ON BEHALF OF ITSELF AND
ITS SEPARATE ACCOUNTS,
AND
[NAME OF WOODMEN BROKER-DEALER]
TABLE OF CONTENTS
Description Page
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Section 1. Available Funds................................................. 2
1.1 Availability..................................................... 2
1.2 Addition, Deletion or Modification of Funds...................... 2
1.3 No Sales to the General Public................................... 2
Section 2. Processing Transactions......................................... 3
2.1 Timely Pricing and Orders........................................ 3
2.2 Timely Payments ................................................. 3
2.3 Applicable Price................................................. 3
2.4 Dividends and Distributions...................................... 4
2.5 Book Entry....................................................... 4
Section 3. Costs and Expenses.............................................. 5
3.1 General.......................................................... 5
3.2 Parties To Cooperate............................................. 5
Section 4. Legal Compliance ............................................... 5
4.1 Tax Laws......................................................... 5
4.2 Insurance and Certain Other Laws................................. 7
4.3 Securities Laws.................................................. 8
4.4 Notice of Certain Proceedings and Other Circumstances............ 9
4.5 LIFE COMPANY To Provide Documents; Information About SMFI........ 10
4.6 SMFI To Provide Documents; Information About LIFE COMPANY......... 11
Section 5. Mixed and Shared Funding........................................ 12
5.1 General.......................................................... 12
5.2 Disinterested Directors ......................................... 12
5.3 Monitoring for Material Irreconcilable Conflicts................. 12
5.4 Conflict Remedies................................................ 13
5.5 Notice to LIFE COMPANY........................................... 14
5.6 Information Requested by Board of Directors...................... 15
5.7 Compliance with SEC Rules........................................ 15
5.8 Other Requirements............................................... 15
Section 6. Termination..................................................... 15
6.1 Events of Termination............................................ 15
6.2 Notice Requirement for Termination............................... 16
6.3 Funds To Remain Available........................................ 17
6.4 Survival of Warranties and Indemnifications...................... 17
6.5 Continuance of Agreement for Certain Purposes.................... 17
Section 7. Parties To Cooperate Respecting Termination..................... 17
Section 8. Assignment...................................................... 18
Section 9. Notices......................................................... 18
Section 10. Voting Procedures.............................................. 18
Section 11. Foreign Tax Credits............................................ 19
Section 12. Indemnification................................................ 19
12.1 Of SMFI and Carillon by LIFE COMPANY and UNDERWRITER............. 19
12.2 Of LIFE COMPANY and UNDERWRITER by SMFI and Carillon............. 21
12.3 Effect of Notice................................................. 24
12.4 Successors....................................................... 24
Section 13. Applicable Law................................................. 24
Section 14. Execution in Counterparts...................................... 24
Section 15. Severability................................................... 24
Section 16. Rights Cumulative.............................................. 24
Section 17. Headings....................................................... 25
Section 18. Confidentiality................................................ 25
Section 19. Trademarks and Fund Names...................................... 25
Section 20. Parties to Cooperate .......................................... 27
Section 21. Excessive Trading ............................................. 27
PARTICIPATION AGREEMENT
THIS AGREEMENT, made and entered into as of the ---- day of ---------,
2002 ("Agreement"), by and among Summit Mutual Funds, Inc., a Maryland
corporation ("SMFI"), Carillon Investments, Inc., an Ohio Corporation
("Carillon"), Woodmen of the World Life Insurance Society, a Nebraska life
insurance company ("LIFE COMPANY"), on behalf of itself and each of its
segregated asset accounts listed in Schedule A hereto, as the parties hereto may
amend from time to time (each, an "Account," and collectively, the "Accounts");
and Woodmen Financial Services, Inc., an affiliate of LIFE COMPANY and the
principal underwriter of the Contracts ("UNDERWRITER") (collectively, the
"Parties").
WITNESSETH THAT:
WHEREAS, SMFI is registered with the Securities and Exchange Commission
("SEC") as an open-end management investment company under the Investment
Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, SMFI currently consists of seven separate series ("Series")
within its Pinnacle series of funds, shares ("Shares") of each of which are
registered under the Securities Act of 1933, as amended (the "1933 Act") and are
currently sold to one or more separate accounts of life insurance companies to
fund benefits under variable annuity contracts and variable life insurance
contracts; and
WHEREAS, SMFI will make Shares of each Series listed on Schedule A hereto
as the Parties hereto may amend from time to time (each a "Fund"; references
herein to "SMFI" includes reference to each Fund, to the extent the context
requires) available for purchase by the Accounts; and
WHEREAS, LIFE COMPANY will be the issuer of certain variable annuity
contracts and/or variable life insurance contracts ("Contracts") as set forth on
Schedule A hereto, as the Parties hereto may amend from time to time, which
Contracts (hereinafter collectively, the "Contracts"), if required by applicable
law, will be registered under the 1933 Act; and
WHEREAS, LIFE COMPANY will fund the Contracts through the Accounts, each
of which may be divided into two or more subaccounts ("Subaccounts"; references
herein to an "Account" includes reference to each Subaccount thereof to the
extent the context requires); and
WHEREAS, LIFE COMPANY will serve as the depositor of the Accounts, each of
which is registered as a unit investment trust investment company under the 1940
Act (or exempt therefrom), and the security interests deemed to be issued by the
Accounts under the Contracts will be registered as securities under the 1933 Act
(or exempt therefrom); and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, LIFE COMPANY intends to purchase Shares in one or more of the Funds
on behalf of the Accounts to fund the Contracts; and
WHEREAS, UNDERWRITER is a broker-dealer registered with the SEC under the
Securities Exchange Act of 1934 ("1934 Act") and a member in good standing of
the National Association of Securities Dealers, Inc. ("NASD");
WHEREAS, Carillon is a broker-dealer registered with the SEC under the
Securities Exchange Act of 1934 ("1934 Act") and a member in good standing of
the National Association of Securities Dealers, Inc. ("NASD");
NOW, THEREFORE, in consideration of the mutual benefits and promises
contained herein, the Parties hereto agree as follows:
SECTION 1. AVAILABLE FUNDS
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1.1 AVAILABILITY.
------------
SMFI will make Shares of each Fund available to LIFE COMPANY for purchase
and redemption at net asset value and with no sales charges, subject to the
terms and conditions of this Agreement. The Board of Directors of SMFI may
refuse to sell Shares of any Fund to any person, or suspend or terminate the
offering of Shares of any Fund if such action is required by law or by
regulatory authorities having jurisdiction or if, in the sole discretion of the
Directors acting in good faith and in light of their fiduciary duties under
federal and any applicable state laws, such action is deemed in the best
interests of the shareholders of such Fund.
1.2 ADDITION, DELETION OR MODIFICATION OF FUNDS.
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The Parties hereto may agree, from time to time, to add other Funds to
provide additional funding media for the Contracts, or to delete, combine, or
modify existing Funds, by amending Schedule A hereto. Upon such amendment to
Schedule A, any applicable reference to a Fund, SMFI, or its Shares herein shall
include a reference to any such additional Fund. Schedule A, as amended from
time to time, is incorporated herein by reference and is a part hereof.
1.3 NO SALES TO THE GENERAL PUBLIC.
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SMFI represents and warrants that no Shares of any Fund have been or will
be sold to the general public, it being understood by the Parties that SMFI may
sell shares of any Fund to any person eligible to invest in that Fund in
accordance with applicable provisions of Section 817(h) of the Code and the
regulations thereunder, and that if such provisions are not applicable, then
SMFI may sell shares of any Fund to any person, including members of the general
public.
SECTION 2 PROCESSING TRANSACTIONS
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2.1 TIMELY PRICING AND ORDERS.
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(a) SMFI or its designated agent will use its best efforts to provide
LIFE COMPANY with the net asset value per Share for each Fund by 6:30 p.m.
Eastern Standard Time on each Business Day. As used herein, "Business Day" shall
mean any day on which (i) the New York Stock Exchange is open for regular
trading (ii) SMFI calculates the Fund's net asset value, and (iii) LIFE COMPANY
is open for business.
(b) LIFE COMPANY will use the data provided by SMFI each Business Day
pursuant to paragraph (a) immediately above to calculate Account unit values and
to process transactions that receive that same Business Day's Account unit
values. LIFE COMPANY will perform such Account processing the same Business Day,
and will place corresponding orders to purchase or redeem Shares with SMFI by
9:30 a.m. Eastern Standard Time the following Business Day; provided, however,
that SMFI shall provide additional time to LIFE COMPANY in the event that SMFI
is unable to meet the 6:30 p.m. time stated in paragraph (a) immediately above.
Such additional time shall be equal to the additional time that SMFI takes to
make the net asset values available to LIFE COMPANY.
(c) With respect to payment of the purchase price by LIFE COMPANY and of
redemption proceeds by SMFI, LIFE COMPANY and SMFI shall net purchase and
redemption orders with respect to each Fund and shall transmit one net payment
per Fund in accordance with Section 2.2, below.
(d) If SMFI provides materially incorrect Share net asset value
information (as determined under SEC guidelines), LIFE COMPANY shall be entitled
to an adjustment to the number of Shares purchased or redeemed to reflect the
correct net asset value per Share, and any reasonable out-of-pocket expenses
incurred by the LIFE COMPANY in adjusting the Share net asset value. Any
material error in the calculation or reporting of net asset value per Share,
dividend or capital gain information shall be reported promptly upon discovery
to LIFE COMPANY.
2.2 TIMELY PAYMENTS.
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LIFE COMPANY will wire payment for net purchases to a custodial account
designated by SMFI by 2:00 p.m. Eastern Standard Time on the same day as the
order for Shares is placed, to the extent practicable. SMFI will wire payment
for net redemptions to an account designated by LIFE COMPANY by 2:00 p.m.
Eastern Standard Time on the same day as the Order is placed, to the extent
practicable, but in any event within five (5) calendar days after the date the
order is placed in order to enable LIFE COMPANY to pay redemption proceeds
within the time specified in Section 22(e) of the 1940 Act or such shorter
period of time as may be required by law.
2.3 APPLICABLE PRICE.
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(a) Share purchase payments and redemption orders that result from
purchase payments, premium payments, surrenders and other transactions under
Contracts (collectively, "Contract transactions") and that LIFE COMPANY receives
prior to the close of regular trading on the New York Stock Exchange on a
Business Day will be executed at the net asset values of the appropriate Funds
next computed after receipt by SMFI or its designated agent of the orders. For
purposes of this Section 2.3(a), LIFE COMPANY shall be the designated agent of
SMFI for receipt of orders relating to Contract transactions on each Business
Day and receipt by such designated agent shall constitute receipt by SMFI;
provided that SMFI receives notice of such orders by 9:30 a.m. Eastern Standard
Time on the next following Business Day or such later time as computed in
accordance with Section 2.1 (b) hereof.
(b) All other Share purchases and redemptions by LIFE COMPANY will be
effected at the net asset values of the appropriate Funds next computed after
receipt by SMFI or its designated agent of the order therefor, and such orders
will be irrevocable.
(c) Notwithstanding any provision of the Agreement to the contrary, the
Parties agree that SMFI shall determine the applicable price for Share orders
attributable to Contracts funded by unregistered Accounts in accordance with
Section 2.3(a) hereof, provided that LIFE COMPANY represents and warrants that
it is legally or contractually obligated to treat such orders in the same manner
as orders attributable to Contracts funded by registered Accounts. Each Share
order placed by LIFE COMPANY that is attributable, in whole or in part, to
Contracts funded by an unregistered Account, shall be deemed to constitute such
representation and warranty by LIFE COMPANY unless the order specifically states
to the contrary. Otherwise, SMFI shall determine the applicable price for Share
orders attributable to Contracts funded by unregistered Accounts in accordance
with Section 2.3(b) hereof. As used herein, an Account is registered if it is
registered under the 1940 Act.
2.4 DIVIDENDS AND DISTRIBUTIONS.
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SMFI will furnish notice by wire or telephone (followed by written
confirmation) on or prior to the payment date to LIFE COMPANY of any income
dividends or capital gain distributions payable on the Shares of any Fund. LIFE
COMPANY hereby elects to reinvest all dividends and capital gains distributions
in additional Shares of the corresponding Fund at the ex-dividend date net asset
values until LIFE COMPANY otherwise notifies SMFI in writing, it being agreed by
the Parties that the ex-dividend date and the payment date with respect to any
dividend or distribution will be the same Business Day. LIFE COMPANY reserves
the right to revoke this election and to receive all such income dividends and
capital gain distributions in cash.
2.5 BOOK ENTRY.
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Issuance and transfer of SMFI Shares will be by book entry only. Stock
certificates will not be issued to LIFE COMPANY. Shares ordered from SMFI will
be recorded in an appropriate title for LIFE COMPANY, on behalf of its Account.
SECTION 3. COSTS AND EXPENSES
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3.1 GENERAL.
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Except as otherwise specifically provided in Schedule C, attached hereto
and made a part hereof, each Party will bear, or arrange for other to bear, all
expenses incident to its performance under this Agreement.
3.2 PARTIES TO COOPERATE.
---------------------
Each Party agrees to cooperate with the others, as applicable, in
arranging to print, mail and/or deliver, in a timely manner, combined or
coordinated prospectuses or other materials of SMFI and the Accounts.
SECTION 4. LEGAL COMPLIANCE
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4.1 TAX LAWS.
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(a) SMFI represents and warrants that each Fund is currently qualified
as a regulated investment company ("RIC") under Subchapter M of the Internal
Revenue Code of 1986, as amended (the "Code"), and represents that it will use
its best efforts to qualify and to maintain qualification of each Fund as a RIC.
SMFI will notify LIFE COMPANY immediately upon having a reasonable basis for
believing that a Fund has ceased to so qualify or that it might not so qualify
in the future.
(b) SMFI represents that it will use its best efforts to comply and to
maintain each Fund's compliance with the diversification requirements set forth
in Section 817(h) of the Code and Section 1.817-5(b) of the regulations under
the Code. SMFI will notify LIFE COMPANY immediately upon having a reasonable
basis for believing that a Fund has ceased to so comply or that a Fund might not
so comply in the future. In the event of a breach of this Section 4.1(b) by
SMFI, it will use its best efforts to adequately diversify the Fund so as to
achieve compliance within the grace period afforded by Section 1.817-5 of the
regulations under the Code. The representations and warranties of this Section
4.1(b) shall not apply with respect to any Fund whose beneficial interests are
held solely by owners of "pension plan contracts" within the meaning of Section
818(a) of the Code and other persons whose federal income tax treatment is not
dependent on the Fund's compliance with the requirements of Section 817(h) of
the Code.
(c) Notwithstanding any other provision herein to the contrary, LIFE
COMPANY agrees that if the Internal Revenue Service ("IRS") asserts in writing
in connection with any governmental audit or review of LIFE COMPANY or, to LIFE
COMPANY's knowledge, of any Participant, that any Fund has failed to comply with
the diversification requirements of Section 817(h) of the Code or LIFE COMPANY
otherwise becomes aware of any facts that could give rise to any claim against
SMFI or its affiliates as a result of such a failure or alleged failure:
(i) LIFE COMPANY shall promptly notify SMFI of such assertion or
potential claim (subject to the Confidentiality provisions of
Section 18 as to any Participant);
(ii) LIFE COMPANY shall consult with SMFI as to how to minimize any
liability that may arise as a result of such failure or alleged
failure;
(iii) LIFE COMPANY shall use its best efforts to minimize any liability
of SMFI or its affiliates resulting from such failure, including,
without limitation, demonstrating, pursuant to Treasury
Regulations Section 1.817-5(a)(2), to the Commissioner of the IRS
that such failure was inadvertent;
(iv) LIFE COMPANY shall permit SMFI, its affiliates and their legal and
accounting advisors to participate in any conferences, settlement
discussions or other administrative or judicial proceeding or
contests (including judicial appeals thereof) with the IRS, any
Participant or any other claimant regarding any claims that could
give rise to liability to SMFI or its affiliates as a result of
such a failure or alleged failure; provided, however, that LIFE
COMPANY will retain control of the conduct of such conferences
discussions, proceedings, contests or appeals;
(v) any written materials to be submitted by LIFE COMPANY to the IRS,
any Participant or any other claimant in connection with any of
the foregoing proceedings or contests (including, without
limitation, any such materials to be submitted to the IRS pursuant
to Treasury Regulations Section 1.817-5(a)(2)), (a) shall be
provided by LIFE COMPANY to SMFI (together with any supporting
information or analysis), subject to the confidentiality
provisions of Section 18, at least ten (10) business days or such
shorter period to which the Parties hereto agree prior to the day
on which such proposed materials are to be submitted, and (b)
shall not be submitted by LIFE COMPANY to any such person without
the express written consent of SMFI which shall not be
unreasonably withheld;
(vi) LIFE COMPANY shall provide SMFI or its affiliates and their
accounting and legal advisors with such cooperation as SMFI shall
reasonably request (including, without limitation, by permitting
SMFI and its accounting and legal advisors to review the relevant
books and records of LIFE COMPANY) in order to facilitate review
by SMFI or its advisors of any written submissions provided to it
pursuant to the preceding clause or its assessment of the validity
or amount of any claim against its arising from such a failure or
alleged failure;
(vii) LIFE COMPANY shall not with respect to any claim of the IRS or any
Participant that would give rise to a claim against SMFI or its
affiliates (a) compromise or settle any claim, (b) accept any
adjustment on audit, or (c) forego any allowable administrative or
judicial appeals, without the express written consent of SMFI or
its affiliates, which shall not be unreasonably withheld, provided
that LIFE COMPANY shall not be required, after exhausting all
administrative penalties, to appeal any adverse judicial decision
unless SMFI or its affiliates shall have provided an opinion of
independent counsel to the effect that a reasonable basis exists
for taking such appeal; and provided further that the costs of any
such appeal shall be borne equally by the Parties hereto; and
(viii) SMFI and its affiliates shall have no liability as a result of
such failure or alleged failure if LIFE COMPANY fails to comply
with any of the foregoing clauses (i) through (vii), and such
failure could be shown to have materially contributed to the
liability.
Should SMFI or any of its affiliates refuse to give its written consent to
any compromise or settlement of any claim or liability hereunder, LIFE COMPANY
may, in its discretion, authorize SMFI or its affiliates to act in the name of
LIFE COMPANY in, and to control the conduct of, such conferences, discussions,
proceedings, contests or appeals and all administrative or judicial appeals
thereof, and in that event SMFI or its affiliates shall bear the fees and
expenses associated with the conduct of the proceedings that it is so authorized
to control; provided, that in no event shall LIFE COMPANY have any liability
resulting from SMFI's refusal to accept the proposed settlement or compromise
with respect to any failure caused by SMFI. As used in this Agreement, the term
"affiliates" shall have the same meaning as "affiliated person" as defined in
Section 2(a)(3) of the 1940 Act.
(d) LIFE COMPANY represents and warrants that the Contracts currently
are and will be treated as annuity contracts or life insurance contracts under
applicable provisions of the Code and that it will use its best efforts to
maintain such treatment; LIFE COMPANY will notify SMFI immediately upon having a
reasonable basis for believing that any of the Contracts have ceased to be so
treated or that they might not be so treated in the future.
(e) LIFE COMPANY represents and warrants that each Account is a
"segregated asset account" and that interests in each 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. LIFE COMPANY will use its best efforts to continue to
meet such definitional requirements, and it will notify SMFI 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.
4.2 INSURANCE AND CERTAIN OTHER LAWS.
--------------------------------
(a) SMFI will use its best efforts to comply with any applicable state
insurance laws or regulations, to the extent specifically requested in writing
by LIFE COMPANY, including, the furnishing of information not otherwise
available to LIFE COMPANY which is required by state insurance law to enable
LIFE COMPANY to obtain the authority needed to issue the Contracts in any
applicable state.
(b) LIFE COMPANY represents and warrants that (i) it is an insurance
company duly organized, validly existing and in good standing under the laws of
the State of Nebraska and has full corporate power, authority and legal right to
execute, deliver and perform its duties and comply with its obligations under
this Agreement, (ii) it has legally and validly established and maintains each
Account as a segregated asset account under Nebraska Insurance Law and the
regulations thereunder, and (iii) the Contracts comply in all material respects
with all other applicable federal and state laws and regulations.
(c) SMFI represents and warrants that it is a corporation duly organized,
validly existing, and in good standing under the laws of the State of Maryland
and has full power, authority, and legal right to execute, deliver, and perform
its duties and comply with its obligations under this Agreement.
4.3 SECURITIES LAWS.
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(a) LIFE COMPANY represents and warrants that (i) interests in each
Account pursuant to the Contracts will be registered under the 1933 Act to the
extent required by the 1933 Act, (ii) the Contracts will be duly authorized for
issuance and sold in compliance with all applicable federal and state laws,
including, without limitation, the 1933 Act, the 1934 Act, the 1940 Act and
Nebraska law, (iii) each Account is and will remain registered under the 1940
Act, to the extent required by the 1940 Act, (iv) each Account does and will
comply in all material respects with the requirements of the 1940 Act and the
rules thereunder, to the extent required, (v) each Account's 1933 Act
registration statement relating to the Contracts, together with any amendments
thereto, will at all times comply in all material respects with the requirements
of the 1933 Act and the rules thereunder, (vi) LIFE COMPANY will amend the
registration statement for its Contracts under the 1933 Act and for its Accounts
under the 1940 Act from time to time as required in order to effect the
continuous offering of its Contracts or as may otherwise be required by
applicable law, and (vii) each Account's prospectus, statement of additional
information, private placement memoranda and other documents pursuant to which
Contracts are offered, and any amendments or supplements thereto (collectively,
the "Account Prospectus"), will at all times comply in all material respects
with all applicable requirements of the 1933 Act and the rules thereunder.
(b) SMFI represents and warrants that (i) Shares sold pursuant to this
Agreement will be registered under the 1933 Act to the extent required by the
1933 Act and duly authorized for issuance and sold in compliance with Maryland
law, (ii) SMFI is and will remain registered under the 1940 Act to the extent
required by the 1940 Act, (iii) SMFI will amend the registration statement for
its Shares under the 1933 Act and itself under the 1940 Act from time to time as
required in order to effect the continuous offering of its Shares, (iv) SMFI
does and will comply in all material respects with the requirements of the 1940
Act and the rules thereunder, (v) SMFI's 1933 Act registration statement,
together with any amendments thereto, will at all times comply in all material
respects with the requirements of the 1933 Act and rules thereunder, and (vi)
SMFI's prospectus, statement of additional information and any amendments or
supplements thereto (collectively, the "SMFI Prospectus") will at all times
comply in all material respects with all applicable requirements of the 1933 Act
and the rules thereunder.
(c) SMFI will at its expense register and qualify its Shares for sale in
accordance with the laws of any state or other jurisdiction if and to the extent
reasonably deemed advisable by SMFI.
(d) SMFI currently does not intend to make any payments to finance
distribution expenses pursuant to Rule 12b-1 under the 1940 Act or otherwise
with respect to the Pinnacle Series, although it reserves the right to make such
payments in the future. To the extent that it decides to finance distribution
expenses pursuant to Rule 12b-1, SMFI undertakes to have its Board of Directors,
a majority of whom are not "interested" persons of the Fund, formulate and
approve any plan under Rule 12b-1 to finance distribution expenses.
(e) SMFI represents and warrants that all of its directors, officers,
employees, investment advisers, and other individuals/entities having access to
the funds and/or securities of the Fund are and continue to be at all times
covered by a blanket fidelity bond or similar coverage for the benefit of the
Fund in an amount not less than the minimal coverage as required currently by
Rule 17g-(1) of the 1940 Act or related provisions as may be promulgated from
time to time. The aforesaid bond includes coverage for larceny and embezzlement
and is issued by a reputable bonding company.
4.4 NOTICE OF CERTAIN PROCEEDINGS AND OTHER CIRCUMSTANCES.
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(a) SMFI will immediately notify LIFE COMPANY of (i) the issuance by any
court or regulatory body of any stop order, cease and desist order, or other
similar order with respect to SMFIs registration statement under the 1933 Act or
SMFI Prospectus, (ii) any request by the SEC for any amendment to such
registration statement or SMFI Prospectus that may affect the offering of Shares
of SMFI, (iii) the initiation of any proceedings for that purpose or for any
other purpose relating to the registration or offering of SMFI's Shares, or (iv)
any other action or circumstances that may prevent the lawful offer or sale of
Shares of any Fund in any state or jurisdiction, including, without limitation,
any circumstances in which (a) such Shares are not registered and, in all
material respects, issued and sold in accordance with applicable state and
federal law, or (b) such law precludes the use of such Shares as an underlying
investment medium of the Contracts issued or to be issued by LIFE COMPANY. SMFI
will make every reasonable effort to prevent the issuance, with respect to any
Fund, of any such stop order, cease and desist order or similar order and, if
any such order is issued, to obtain the lifting thereof at the earliest possible
time.
(b) LIFE COMPANY will immediately notify SMFI of (i) the issuance by any
court or regulatory body of any stop order, cease and desist order, or other
similar order with respect to each Account's registration statement under the
1933 Act relating to the Contracts or each Account Prospectus, (ii) any request
by the SEC for any amendment to such registration statement or Account
Prospectus that may affect the offering of Shares of SMFI, (iii) the initiation
of any proceedings for that purpose or for any other purpose relating to the
registration or offering of each Account's interests pursuant to the Contracts,
or (iv) any other action or circumstances that may prevent the lawful offer or
sale of said interests in any state or jurisdiction, including, without
limitation, any circumstances in which said interests are not registered and, in
all material respects, issued and sold in accordance with applicable state and
federal law. LIFE COMPANY will make every reasonable effort to prevent the
issuance of any such stop order, cease and desist order or similar order and, if
any such order is issued, to obtain the lifting thereof at the earliest possible
time.
4.5 LIFE COMPANY TO PROVIDE DOCUMENTS; INFORMATION ABOUT SMFI.
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(a) LIFE COMPANY will provide to SMFI or its designated agent at least one
(1) complete copy of all SEC registration statements, Account Prospectuses,
reports, any preliminary and final voting instruction solicitation material,
applications for exemptions, requests for no-action letters, and all amendments
to any of the above, that relate to each Account or the Contracts,
contemporaneously with the filing of such document with the SEC or other
regulatory authorities.
(b) LIFE COMPANY will provide to SMFI or its designated agent at least one
(1) complete copy of each piece of sales literature or other promotional
material in which SMFI or any of its affiliates is named, at least five (5)
Business Days prior to its use or such shorter period as the Parties hereto may,
from time to time, agree upon. No such material shall be used if SMFI or its
designated agent objects to such use within five (5) Business Days after receipt
of such material or such shorter period as the Parties hereto may, from time to
time, agree upon. SMFI hereby designates Summit Investment Partners, Inc. as the
entity to receive such sales literature, until such time as SMFI appoints
another designated agent by giving notice to LIFE COMPANY in the manner required
by Section 9 hereof.
(c) Neither LIFE COMPANY nor any of its affiliates, will give any
information or make any representations or statements on behalf of or concerning
SMFI or its affiliates in connection with the sale of the Contracts other than
(i) the information or representations contained in the registration statement,
including the SMFI Prospectus contained therein, relating to Shares, as such
registration statement and SMFI Prospectus may be amended from time to time; or
(ii) in reports or proxy materials for SMFI; or (iii) in published reports for
SMFI that are in the public domain and approved by SMFI for distribution; or
(iv) in sales literature or other promotional material approved by SMFI, except
with the express written permission of SMFI.
(d) LIFE COMPANY shall adopt and implement procedures reasonably designed
to ensure that information concerning SMFI and its affiliates that is intended
for use only by brokers or agents selling the Contracts (i.e., information that
is not intended for distribution to Participants) ("broker only materials") is
so used, and neither SMFI nor any of its affiliates shall be liable for any
losses, damages or expenses relating to the improper use of such broker only
materials.
(e) For the purposes of this Section 4.5, 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, (e.g., on-
line networks such as the Internet or other electronic messages), 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, 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 the NASD rules, the 1933 Act or the 0000 Xxx.
4.6 SMFI TO PROVIDE DOCUMENTS; INFORMATION ABOUT LIFE COMPANY.
---------------------------------------------------------
(a) SMFI will provide to LIFE COMPANY at least one (1) complete copy of
all SEC registration statements, SMFI Prospectuses, reports, any preliminary and
final proxy material, applications for exemptions, requests for no-action
letters, and all amendments to any of the above, that relate to SMFI or the
Shares of a Fund, contemporaneously with the filing of such document with the
SEC or other regulatory authorities.
(b) SMFI will provide to LIFE COMPANY camera ready copy of all SMFI
prospectuses and printed copies, in an amount specified by LIFE COMPANY, of SMFI
statements of additional information, proxy materials, periodic reports to
shareholders and other materials required by law to be sent to Participants who
have allocated any Contract value to a Fund. SMFI will provide such copies to
LIFE COMPANY in a timely manner so as to enable LIFE COMPANY, as the case may
be, to print and distribute such materials within the time required by law to be
furnished to Participants. The form of the prospectus and statement of
additional information provided by SMFI to the LIFE COMPANY shall be the final
form of prospectus and statement of additional information as filed with the
Securities and Exchange Commission. The prospectus shall include only those
Funds identified in Schedule A.
(c) SMFI will provide to LIFE COMPANY or its designated agent at least one
(1) complete copy of each piece of sales literature or other promotional
material in which LIFE COMPANY, or any of its respective affiliates is named, or
that refers to the Contracts, at least five (5) Business Days prior to its use
or such shorter period as the Parties hereto may, from time to time, agree upon.
No such material shall be used if LIFE COMPANY or its designated agent objects
to such use within five (5) Business Days after receipt of such material or such
shorter period as the Parties hereto may, from time to time, agree upon. LIFE
COMPANY shall receive all such sales literature until such time as it appoints a
designated agent by giving notice to SMFI in the manner required by Section 9
hereof.
(d) Neither SMFI nor any of its affiliates will give any information or
make any representations or statements on behalf of or concerning LIFE COMPANY,
each Account, or the Contracts other than (i) the information or representations
contained in the registration statement, including each Account Prospectus
contained therein, relating to the Contracts, as such registration statement and
Account Prospectus may be amended from time to time; or (ii) in published
reports for the Account or the Contracts that are in the public domain and
approved by LIFE COMPANY for distribution; or (iii) in sales literature or other
promotional material approved by LIFE COMPANY or its affiliates, except with the
express written permission of LIFE COMPANY.
(e) SMFI shall cause its principal underwriter to adopt and implement
procedures reasonably designed to ensure that information concerning LIFE
COMPANY, and its respective affiliates that is intended for use only by brokers
or agents selling the Contracts (i.e., information that is not intended for
distribution to Participants) ("broker only materials") is so used, and neither
LIFE COMPANY, nor any of its respective affiliates shall be liable for any
losses, damages or expenses relating to the improper use of such broker only
materials.
(f) For purposes of this Section 4.6, 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, (e.g., on-
line networks such as the Internet or other electronic messages), 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, 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 the NASD rules, the 1933 Act or the 1940 Act.
SECTION 5. MIXED AND SHARED FUNDING
-----------------------------------
5.1 GENERAL.
-------
SMFI has received an order from the SEC to exempting it from certain
provisions of the 1940 Act and rules thereunder so that SMFI may be available
for investment by certain other entities, including, without limitation,
separate accounts funding variable annuity contracts or variable life insurance
contracts, separate accounts of insurance companies unaffiliated with LIFE
COMPANY, and trustees of qualified pension and retirement plans (collectively,
"Mixed and Shared Funding"). The Parties recognize that the SEC has imposed
terms and conditions for such orders that are substantially identical to many of
the provisions of this Section 5. Sections 5.2 through 5.8 below shall apply
pursuant to such an exemptive order granted to SMFI. SMFI hereby notifies LIFE
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.
5.2 DISINTERESTED DIRECTORS.
-----------------------
SMFI agrees that its Board of Directors shall at all times consist of
directors a majority of whom (the "Disinterested Directors") are not interested
persons of SMFI within the meaning of Section 2(a)(19) of the 1940 Act and the
rules thereunder and as modified by any applicable orders of the SEC, except
that if this condition is not met by reason of the death, disqualification, or
bona fide resignation of any director, then the operation of this condition
shall be suspended (a) for a period of forty-five (45) days if the vacancy or
vacancies may be filled by the Board;(b) for a period of sixty (60) days if a
vote of shareholders is required to fill the vacancy or vacancies; or (c) for
such longer period as the SEC may prescribe by order upon application.
5.3 MONITORING FOR MATERIAL IRRECONCILABLE CONFLICTS.
------------------------------------------------
SMFI agrees that its Board of Directors will monitor for the existence of
any material irreconcilable conflict between the interests of the Participants
in all separate accounts of life insurance companies utilizing SMFI
("Participating Insurance Companies"), including each Account, and participants
in all qualified retirement and pension plans investing in SMFI ("Participating
Plans"). LIFE COMPANY agrees to inform the Board of Directors of SMFI of the
existence of or any potential for any such material irreconcilable conflict of
which it is aware. The concept of a "material irreconcilable conflict" is not
defined by the 1940 Act or the rules thereunder, but the Parties recognize that
such a conflict may arise for a variety of reasons, including, without
limitation:
(a) an action by any state insurance or other 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
interpretative 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 Fund are being managed;
(e) a difference in voting instructions given by variable annuity contract
and variable life insurance contract Participants or by Participants of
different Participating Insurance Companies;
(f) a decision by a Participating Insurance Company to disregard the
voting instructions of Participants; or
(g) a decision by a Participating Plan to disregard the voting
instructions of Plan participants.
Consistent with the SEC's requirements in connection with exemptive orders
of the type referred to in Section 5.1 hereof, LIFE COMPANY will assist the
Board of Directors in carrying out its responsibilities by providing the Board
of Directors with all information reasonably necessary for the Board of
Directors to consider any issue raised, including information as to a decision
by LIFE COMPANY to disregard voting instructions of Participants. LIFE COMPANY's
responsibilities in connection with the foregoing shall be carried out with a
view only to the interests of Participants.
5.4 CONFLICT REMEDIES.
-----------------
(a) It is agreed that if it is determined by a majority of the members of
the Board of Directors or a majority of the Disinterested Directors that a
material irreconcilable conflict exists, LIFE COMPANY will, if it is a
Participating Insurance Company for which a material irreconcilable conflict is
relevant, at its own expense and to the extent reasonably practicable (as
determined by a majority of the Disinterested Directors), take whatever steps
are necessary to remedy or eliminate the material irreconcilable conflict, which
steps may include, but are not limited to:
(i) withdrawing the assets allocable to some or all of the Accounts from
SMFI or any Fund and reinvesting such assets in a different
investment medium, including another Fund of SMFI, or submitting the
question whether such segregation should be implemented to a vote of
all affected Participants and, as appropriate, segregating the assets
of any particular group (e.g., annuity Participants, life insurance
Participants or all Participants) that votes in favor of such
segregation, or offering to the affected Participants the option of
making such a change; and
(ii) establishing a new registered investment company of the type defined
as a "management company" in Section 4(3) of the 1940 Act or a new
separate account that is operated as a management company.
(b) If the material irreconcilable conflict arises because of LIFE
COMPANY's decision to disregard Participant voting instructions and that
decision represents a minority position or would preclude a majority vote, LIFE
COMPANY may be required, at SMFI's election, to withdraw each Account's
investment in SMFI or any Fund. No charge or penalty will be imposed as a result
of such withdrawal. Any such withdrawal must take place within six (6) months
after SMFI gives notice to LIFE COMPANY that this provision is being
implemented, and until such withdrawal SMFI shall continue to accept and
implement orders by LIFE COMPANY for the purchase and redemption of Shares of
SMFI.
(c) If a material irreconcilable conflict arises because a particular
state insurance regulator's decision applicable to LIFE COMPANY conflicts with
the majority of other state regulators, then LIFE COMPANY will withdraw each
Account's investment in SMFI within six (6) months after SMFI's Board of
Directors informs LIFE COMPANY that it has determined that such decision has
created a material irreconcilable conflict, and until such withdrawal SMFI shall
continue to accept and implement orders by LIFE COMPANY for the purchase and
redemption of Shares of SMFI. No charge or penalty will be imposed as a result
of such withdrawal.
(d) LIFE COMPANY agrees that any remedial action taken by it in resolving
any material irreconcilable conflict will be carried out at its expense and with
a view only to the interests of Participants.
(e) For purposes hereof, a majority of the Disinterested Directors will
determine whether or not any proposed action adequately remedies any material
irreconcilable conflict. In no event, however, will SMFI or any of its
affiliates be required to establish a new funding medium for any Contracts. LIFE
COMPANY will not be required by the terms hereof to establish a new funding
medium for any Contracts if an offer to do so has been declined by vote of a
majority of Participants materially adversely affected by the material
irreconcilable conflict.
5.5 NOTICE TO LIFE COMPANY.
----------------------
SMFI will promptly make known in writing to LIFE COMPANY the Board of
Directors' determination of the existence of a material irreconcilable conflict,
a description of the facts that give rise to such conflict and the implications
of such conflict.
5.6 INFORMATION REQUESTED BY BOARD OF DIRECTORS.
-------------------------------------------
LIFE COMPANY and SMFI (or its investment adviser) will at least annually
submit to the Board of Directors of SMFI such reports, materials or data as the
Board of Directors may reasonably request so that the Board of Directors may
fully carry out the obligations imposed upon it by the provisions hereof or any
exemptive order granted by the SEC to permit Mixed and Shared Funding, and said
reports, materials and data will be submitted at any reasonable time deemed
appropriate by the Board of Directors. All reports received by the Board of
Directors of potential or existing conflicts, and all Board of Directors actions
with regard to determining the existence of a conflict, notifying Participating
Insurance Companies and Participating Plans of a conflict, and determining
whether any proposed action adequately remedies a conflict, will be properly
recorded in the minutes of the Board of Directors or other appropriate records,
and such minutes or other records will be made available to the SEC upon
request.
5.7 COMPLIANCE WITH SEC RULES.
-------------------------
If, at any time during which SMFI is serving as an investment medium for
variable life insurance Contracts, 1940 Act Rules 6e-3(T) or, if applicable, 6e-
2 are amended or Rule 6e-3 is adopted to provide exemptive relief with respect
to Mixed and Shared Funding. SMFI agrees that it will comply with the terms and
conditions thereof and that the terms of this Section 5 shall be deemed modified
if and only to the extent required in order also to comply with the terms and
conditions of such exemptive relief that is afforded by any of said rules that
are applicable.
5.8 OTHER REQUIREMENTS.
------------------
SMFI will require that each Participating Insurance Company and
Participating Plan enter into an agreement with SMFI that contains in substance
the same provisions as are set forth in Sections 4.1(b), 4.1(d), 4.3(a), 4.4(b),
4.5(a), 5, and 10 of this Agreement.
SECTION 6. TERMINATION
----------------------
6.1 EVENTS OF TERMINATION.
---------------------
Subject to Section 6.4 below, this Agreement will terminate as to a Fund:
(a) at the option of any party, with or without cause with respect to the
Fund, upon six (6) months advance written notice to the other parties, or, if
later, upon receipt of any required exemptive relief from the SEC, unless
otherwise agreed to in writing by the parties; or
(b) at the option of SMFI upon institution of formal proceedings against
LIFE COMPANY or its affiliates by the NASD, the SEC, any state insurance
regulator or any other regulatory body regarding LIFE COMPANY's obligations
under this Agreement or related to the sale of the Contracts, the operation of
each Account, or the purchase of Shares, if, in each case, SMFI reasonably
determines that such proceedings, or the facts on which such proceedings would
be based, have a material likelihood of imposing material adverse consequences
on the Fund with respect to which the Agreement is to be terminated; or
(c) at the option of LIFE COMPANY upon institution of formal proceedings
against SMFI, its principal underwriter, or its investment adviser by the NASD,
the SEC, or any state insurance regulator or any other regulatory body regarding
SMFI's obligations under this Agreement or related to the operation or
management of SMFI or the purchase of SMFI Shares, if, in each case, LIFE
COMPANY reasonably determines that such proceedings, or the facts on which such
proceedings would be based, have a material likelihood of imposing material
adverse consequences on LIFE COMPANY, or the Subaccount corresponding to the
Fund with respect to which the Agreement is to be terminated; or
(d) at the option of any Party in the event that (i) the Fund's Shares are
not registered, where required, and, in all material respects, issued and sold
in accordance with any applicable federal or state law, or (ii) such law
precludes the use of such Shares as an underlying investment medium of the
Contracts issued or to be issued by LIFE COMPANY; or
(e) upon termination of the corresponding Subaccount's investment in the
Fund pursuant to Section 5 hereof; or
(f) at the option of LIFE COMPANY if the Fund ceases to qualify as a RIC
under Subchapter M of the Code or under successor or similar provisions, or if
LIFE COMPANY reasonably believes that the Fund may fail to so qualify; or
(g) at the option of LIFE COMPANY if the Fund fails to comply with Section
817(h) of the Code or with successor or similar provisions, as applicable, or if
LIFE COMPANY reasonably believes that the Fund may fail to so comply; or
(h) at the option of SMFI if the Contracts issued by LIFE COMPANY cease to
qualify as annuity contracts or life insurance contracts under the Code (other
than by reason of the Fund's noncompliance with Section 817(h) or Subchapter M
of the Code) or if interests in an Account under the Contracts are not
registered, where required, and, in all material respects, are not issued or
sold in accordance with any applicable federal or state law; or
(i) upon another Party's material breach of any provision of this
Agreement.
6.2 NOTICE REQUIREMENT FOR TERMINATION.
----------------------------------
No termination of this Agreement will be effective unless and until the
Party terminating this Agreement gives prior written notice to the other Party
to this Agreement of its intent to terminate, and such notice shall set forth
the basis for such termination. Furthermore:
(a) in the event that any termination is based upon the provisions of
Sections 6.1(a) or 6.1(e) hereof, such prior written notice shall be given at
least six (6) months in advance of the effective date of termination unless a
shorter time is agreed to by the Parties hereto;
(b) in the event that any termination is based upon the provisions of
Sections 6.1(b) or 6.1(c) hereof, such prior written notice shall be given at
least ninety (90) days in advance of the effective date of termination unless a
shorter time is agreed to by the Parties hereto; and
(c) in the event that any termination is based upon the provisions of
Sections 6.1(d), 6.1(f), 6.1(g), 6.1(h) or 6.1(i) hereof, such prior written
notice shall be given as soon as possible within twenty-four (24) hours after
the terminating Party learns of the event causing termination to be required.
6.3 FUNDS TO REMAIN AVAILABLE.
-------------------------
Notwithstanding any termination of this Agreement, SMFI will, at the option
of LIFE COMPANY, continue to make available additional shares of the Fund
pursuant to the terms and conditions of this Agreement, for all Contracts in
effect on the effective date of termination of this Agreement (hereinafter
referred to as "Existing Contracts"). Specifically, without limitation, the
owners of the Existing Contracts will be permitted to reallocate investments in
the Fund (as in effect on such date), redeem investments in the Fund and/or
invest in the Fund upon the making of additional purchase payments under the
Existing Contracts. The parties agree that this Section 6.3 will not apply to
any terminations under Section 5 and the effect of such terminations will be
governed by Section 5 of this Agreement.
6.4 SURVIVAL OF WARRANTIES AND INDEMNIFICATIONS.
-------------------------------------------
All warranties and indemnifications will survive the termination of this
Agreement.
6.5 CONTINUANCE OF AGREEMENT FOR CERTAIN PURPOSES.
---------------------------------------------
If any Party terminates this Agreement with respect to any Fund pursuant to
Sections 6.1(b), 6.1(c), 6.1(d), 6.1(f), 6.1(g), 6.1 (h) or 6.1(i) hereof, this
Agreement shall nevertheless continue in effect as to any Shares of that Fund
that are outstanding as of the date of such termination (the "Initial
Termination Date"). This continuation shall extend to the earlier of the date as
of which an Account owns no Shares of the affected Fund or a date (the "Final
Termination Date") six (6) months following the Initial Termination Date, except
that LIFE COMPANY may, by written notice shorten said six (6) month period in
the case of a termination pursuant to Sections 6.1(d), 6.1(f), 6.1(g), 6.1 (h)
or 6.1(i).
SECTION 7. PARTIES TO COOPERATE RESPECTING TERMINATION
------------------------------------------------------
The Parties hereto agree to cooperate and give reasonable assistance to one
another in taking all necessary and appropriate steps for the purpose of
ensuring that an Account owns no Shares of a Fund after the Final Termination
Date with respect thereto, or, in the case of a termination pursuant to Section
6.1(a), the termination date specified in the notice of termination. Such steps
may include combining the affected Account with another Account, substituting
other mutual fund shares for those of the affected Fund, or otherwise
terminating participation by the Contracts in such Fund.
SECTION 8. ASSIGNMENT
---------------------
This Agreement may not be assigned by any Party, except with the written
consent of each other Party.
SECTION 9. NOTICES
------------------
Notices and communications required or permitted by this Agreement will be
given by means mutually acceptable to the Parties concerned. Each other notice
or communication required or permitted by this Agreement will be given to the
following persons at the following addresses and facsimile numbers, or such
other persons, addresses or facsimile numbers as the Party receiving such
notices or communications may subsequently direct in writing:
WOODMEN OF THE WORLD LIFE INSURANCE SOCIETY
[WOODMEN FINANCIAL SERVICES, INC.]
[1700 Farnam]
[Omaha, NE 68102
Facsimile: 000-000-0000
Attn: Xxxxxx Xxxxxxxxx
SUMMIT MUTUAL FUNDS, INC.
CARILLON INVESTMENTS, INC.
0000 Xxxxxxxx Xxxx
Xxxxxxxxxx, Xxxx 00000
Facsimile: 000-000-0000
Attn: Xxxx X. Xxxxxxxx, Esq., Law Dept.
Xxxxxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxxxxxxx
SECTION 10. VOTING PROCEDURES
-----------------------------
Subject to the cost allocation procedures set forth in Section 3 hereof,
LIFE COMPANY will distribute all proxy material furnished by SMFI to
Participants and/or Policyholders to whom pass-through voting privileges are
required to be extended and will solicit voting instructions from Participants.
LIFE COMPANY will vote Shares in accordance with timely instructions received
from Participants. LIFE COMPANY will vote Shares that are (a) not attributable
to Participants to whom pass-through voting privileges are extended, or (b)
attributable to Participants, but for which no timely instructions have been
received, in the same proportion as Shares for which said instructions have been
received from Participants, so long as and to the extent that the SEC continues
to interpret the 1940 Act to require pass through voting privileges for
Participants. Neither LIFE COMPANY nor any of its affiliates will in any way
recommend action in connection with or oppose or interfere with the solicitation
of proxies for the Shares held for such Participants. LIFE COMPANY reserves the
right to vote shares held in any Account in its own right, to the extent
permitted by law. LIFE COMPANY shall be responsible for assuring that each of
its Accounts holding Shares calculates voting privileges in a manner consistent
with that of other Participating Insurance Companies or in the manner required
by the Mixed and Shared Funding exemptive order obtained by SMFI. SMFI will
notify LIFE COMPANY of any changes of interpretations or amendments to Mixed and
Shared Funding exemptive order it obtains. SMFI will comply with all provisions
of the 1940 Act requiring voting by shareholders, and in particular, SMFI either
will provide for annual meetings (except insofar as the SEC may interpret
Section 16 of the 1940 Act not to require such meetings) or will comply with
Section 16(c) of the 1940 Act (although SMFI is not one of the trusts described
in Section 16(c) of that Act) as well as with Sections 16(a) and, if and when
applicable, 16(b). Further, SMFI will act in accordance with the SEC's
interpretation of the requirements of Section 16(a) with respect to periodic
elections of directors and with whatever rules the SEC may promulgate with
respect thereto.
SECTION 11. FOREIGN TAX CREDITS
-------------------------------
SMFI agrees to consult in advance with LIFE COMPANY concerning any
decision to elect or not to elect pursuant to Section 853 of the Code to pass
through the benefit of any foreign tax credits to its shareholders.
SECTION 12. INDEMNIFICATION
----------------------------
12.1 OF SMFI AND CARILLON BY LIFE COMPANY AND UNDERWRITER.
----------------------------------------------------
(a) Except to the extent provided in Sections 12.1(b) and 12.1(c), below,
LIFE COMPANY and UNDERWRITER agree to indemnify and hold harmless SMFI,
Carillon, their affiliates, and each person, if any, who controls SMFI,
Carillon, or their affiliates within the meaning of Section 15 of the 1933 Act
and each of their respective directors and officers, (collectively, the
"Indemnified Parties" for purposes of this Section 12.1) against any and all
losses, claims, damages, liabilities (including amounts paid in settlement with
the written consent of LIFE COMPANY and UNDERWRITER) or actions in respect
thereof (including, to the extent reasonable, legal and other expenses), to
which the Indemnified Parties may become subject under any statute, regulation,
at common law or otherwise, insofar as such losses, claims, damages, liabilities
or actions:
(i) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any
Account's 1933 Act registration statement, any Account
Prospectus, the Contracts, or sales literature or advertising
for the Contracts (or any amendment or supplement to any of the
foregoing), or arise out of or are based upon the omission or
the alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements
therein not misleading; provided, that this agreement to
indemnify shall not apply as to any Indemnified Party if such
statement or omission or such alleged statement or omission
was made in reliance upon and in conformity with information
furnished to LIFE COMPANY or UNDERWRITER by or on behalf of
SMFI or Carillon for use in any Account's 1933 Act,
registration statement, any Account Prospectus, the Contracts,
or sales literature or advertising or otherwise for use in
connection with the sale of Contracts or Shares (or any
amendment or supplement to any of the foregoing); or
(ii) arise out of or as a result of any other statements or
representations (other than statements or representations
contained in SMFI's 1933 Act registration statement, SMFI
Prospectus, sales literature or advertising of SMFI, or any
amendment or supplement to any of the foregoing, not supplied
for use therein by or on behalf of LIFE COMPANY, UNDERWRITER
or their respective affiliates and on which such persons have
reasonably relied) or the negligent, illegal or fraudulent
conduct of LIFE COMPANY, UNDERWRITER or their respective
affiliates or persons under their control (including, without
limitation, their employees and "Associated Persons," as that
term is defined in paragraph (m) of Article I of the NASD's
By-Laws), in connection with the sale or distribution of the
Contracts or Shares; or
(iii) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in SMFI's 1933
Act registration statement, SMFI Prospectus, sales literature
or advertising of SMFI, or any amendment or supplement to any
of the foregoing, or the omission or alleged omission to state
therein a material fact required to be stated therein or
necessary to make the statements therein not misleading if
such a statement or omission was made in reliance upon and in
conformity with information furnished to SMFI, Carillon or
their affiliates by or on behalf of LIFE COMPANY, UNDERWRITER
or their respective affiliates for use in SMFI's 1933 Act
registration statement, SMFI Prospectus, sales literature or
advertising of SMFI, or any amendment or supplement to any of
the foregoing; or
(iv) arise as a result of any failure by LIFE COMPANY or UNDERWRITER
to perform the obligations, provide the services and furnish
the materials required of them under the terms of this
Agreement, or any material breach of any representation and/or
warranty made by LIFE COMPANY or UNDERWRITER in this Agreement
or arise out of or result from any other material breach of
this Agreement by LIFE COMPANY or UNDERWRITER; or
(v) arise as a result of failure by the Contracts issued by LIFE
COMPANY to qualify as annuity contracts or life insurance
contracts under the Code, otherwise than by reason of any
Fund's failure to comply with Subchapter M or Section 817(h)
of the Code.
(b) Neither LIFE COMPANY nor UNDERWRITER shall be liable under this
Section 12.1 with respect to any losses, claims, damages, liabilities or actions
to which an Indemnified Party would otherwise be subject by reason of willful
misfeasance, bad faith, or gross negligence in the performance by that
Indemnified Party of its duties or by reason of that Indemnified Party's
reckless disregard of obligations or duties (i) under this Agreement, or (ii)
LIFE COMPANY, UNDERWRITER, each Account or Participants.
(c) Neither LIFE COMPANY nor UNDERWRITER shall be liable under this
Section 12.1 with respect to any action against an Indemnified Party unless SMFI
or Carillon shall have notified LIFE COMPANY and UNDERWRITER in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the action shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify LIFE COMPANY and
UNDERWRITER of any such action shall not relieve LIFE COMPANY and UNDERWRITER
from any liability which they may have to the Indemnified Party against whom
such action is brought otherwise than on account of this Section 12.1. Except as
otherwise provided herein, in case any such action is brought against an
Indemnified Party, LIFE COMPANY and UNDERWRITER shall be entitled to
participate, at their own expense, in the defense of such action and also shall
be entitled to assume the defense thereof, with counsel approved by the
Indemnified Party named in the action, which approval shall not be unreasonably
withheld. After notice from LIFE COMPANY or UNDERWRITER to such Indemnified
Party of LIFE COMPANY's or UNDERWRITER's election to assume the defense thereof,
the Indemnified Party will cooperate fully with LIFE COMPANY and UNDERWRITER and
shall bear the fees and expenses of any additional counsel retained by it, and
neither LIFE COMPANY nor UNDERWRITER will be liable to such Indemnified Party
under this Agreement for any legal or other expenses subsequently incurred by
such Indemnified Party independently in connection with the defense thereof,
other than reasonable costs of investigation.
12.2 OF LIFE COMPANY AND UNDERWRITER BY SMFI AND CARILLON.
----------------------------------------------------
(a) Except to the extent provided in Sections 12.2(c), 12.2(d) and
12.2(e), below, SMFI and Carillon agree to indemnify and hold harmless LIFE
COMPANY, UNDERWRITER, their respective affiliates, and each person, if any, who
controls LIFE COMPANY, UNDERWRITER or their respective affiliates within the
meaning of Section 15 of the 1933 Act and each of their respective directors and
officers, (collectively, the "Indemnified Parties" for purposes of this Section
12.2) against any and all losses, claims, damages, liabilities (including
amounts paid in settlement with the written consent of SMFI and/or Carillon) or
actions in respect thereof (including, to the extent reasonable, legal and other
expenses), to which the Indemnified Parties may become subject under any
statute, regulation, at common law, or otherwise, insofar as such losses,
claims, damages, liabilities or actions:
(i) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in SMFI's 1933
Act registration statement, SMFI Prospectus or sales literature
or advertising of SMFI (or any amendment or supplement to any
of the foregoing), or arise out of or are based upon the
omission or the alleged omission to state therein a material
fact required to be stated therein or necessary to make the
statements therein not misleading; provided, that this
agreement to indemnify shall not apply as to any Indemnified
Party if such statement or omission or such alleged statement
or omission was made in reliance upon and in conformity with
information furnished to SMFI or its affiliates by or on behalf
of LIFE COMPANY, UNDERWRITER or their respective affiliates for
use in SMFI's 1933 Act registration statement, SMFI
Prospectus, or in sales literature or advertising or otherwise
for use in connection with the sale of Contracts or Shares (or
any amendment or supplement to any of the foregoing); or
(ii) arise out of or as a result of any other statements or
representations (other than statements or representations
contained in any Account's 1933 Act registration statement, any
Account Prospectus, sales literature or advertising for the
Contracts, or any amendment or supplement to any of the
foregoing, not supplied for use therein by or on behalf of
SMFI, Carillon or their affiliates and on which such persons
have reasonably relied) or the negligent, illegal or
fraudulent conduct of SMFI, Carillon or their affiliates or
persons under their control (including, without limitation,
their employees and "Associated Persons" as that term is
defined in Section (m) of Article I of the NASD By-Laws), in
connection with the sale or distribution of SMFI Shares; or
(iii) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any
Account's 1933 Act registration statement, any Account
Prospectus, sales literature or advertising covering the
Contracts, or any amendment or supplement to any of the
foregoing, or the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to
make the statements therein not misleading, if such statement
or omission was made in reliance upon and in conformity with
information furnished to LIFE COMPANY, UNDERWRITER or their
respective affiliates by or on behalf of SMFI or Carillon for
use in any Account's 1933 Act registration statement, any
Account Prospectus, sales literature or advertising covering
the Contracts, or any amendment or supplement to any of the
foregoing; or
(iv) arise as a result of any failure by SMFI to perform the
obligations, provide the services and furnish the materials
required of it under the terms of this Agreement, or any
material breach of any representation and/or warranty made by
SMFI in this Agreement or arise out of or result from any other
material breach of this Agreement by SMFI.
(b) Except to the extent provided in Sections 12.2(c), 12.2(d) and 12.2(e)
hereof, SMFI and Carillon agree to indemnify and hold harmless the Indemnified
Parties from and against any and all losses, claims, damages, liabilities
(including amounts paid in settlement thereof with, the written consent of SMFI
and/or Carillon) or actions in respect thereof (including, to the extent
reasonable, legal and other expenses) to which the Indemnified Parties may
become subject directly or indirectly under any statute, at common law or
otherwise, insofar as such losses, claims, damages, liabilities or actions
directly or indirectly result from or arise out of the failure of any Fund to
operate as a regulated investment company in compliance. with (i) Subchapter M
of the Code and regulations thereunder, or (ii) Section 817(h) of the Code and
regulations thereunder, including, without limitation, any income taxes and
related penalties, rescission charges, liability under state law to Participants
asserting liability against LIFE COMPANY pursuant to the Contracts, the costs
of any ruling and closing agreement or other settlement with the IRS, and the
cost of any substitution by LIFE COMPANY of Shares of another investment
company or portfolio for those of any adversely affected Fund as a funding
medium for each Account that LIFE COMPANY reasonably deems necessary or
appropriate as a result of the noncompliance.
(c) Neither SMFI nor Carillon shall be liable under this Section 12.2 with
respect to any losses, claims, damages, liabilities or actions to which an
Indemnified Party would otherwise be subject by reason of willful misfeasance,
bad faith, or gross negligence in the performance by that Indemnified Party of
its duties or by reason of such Indemnified Party's reckless disregard of its
obligations and duties (i) under this Agreement, or (ii) to SMFI or Carillon.
(d) Neither SMFI nor Carillon shall be liable under this Section 12.2 with
respect to any action against an Indemnified Party unless the Indemnified Party
shall have notified SMFI and/or Carillon in writing within a reasonable time
after the summons or other first legal process giving information of the nature
of the action shall have been served upon such Indemnified Party (or after such
Indemnified Party shall have received notice of such service on any designated
agent), but failure to notify SMFI or Carillon of any such action shall not
relieve SMFI or Carillon from any liability which it may have to the Indemnified
Party against whom such action is brought otherwise than on account of this
Section 12.2. Except as otherwise provided herein, in case any such action is
brought against an Indemnified Party, SMFI and/or Carillon will be entitled to
participate, at its own expense, in the defense of such action and also shall be
entitled to assume the defense thereof (which shall include, without limitation,
the conduct of any ruling request and closing agreement or other settlement
proceeding with the IRS), with counsel approved by the Indemnified Party named
in the action, which approval shall not be unreasonably withheld. After notice
from SMFI and/or Carillon to such Indemnified Party of SMFI's or Carillon's
election to assume the defense thereof, the Indemnified Party will cooperate
fully with SMFI and Carillon and shall bear the fees and expenses of any
additional counsel retained by it, and SMFI and Carillon will not be liable to
such Indemnified Party under this Agreement for any legal or other expenses
subsequently incurred by such Indemnified Party independently in connection with
the defense thereof, other than reasonable costs of investigation.
(e) In no event shall SMFI or Carillon be liable under the indemnification
provisions contained in this Agreement to any individual or entity, including,
without limitation, LIFE COMPANY, UNDERWRITER or any other Participating
Insurance Company or any Participant, 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 LIFE COMPANY or
UNDERWRITER hereunder or by any Participating Insurance Company under an
agreement containing substantially similar representations, warranties and
covenants; (ii) the failure by LIFE COMPANY or any Participating Insurance
Company to maintain its segregated asset account (which invests in any Fund) 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 LIFE COMPANY or
any Participating Insurance Company to maintain its variable annuity or life
insurance contracts (with respect to which any Fund serves as an underlying
funding vehicle) as annuity contracts or life insurance contracts under
applicable provisions of the Code.
12.3 EFFECT OF NOTICE.
----------------
Any notice given by the indemnifying Party to an Indemnified Party referred
to in Sections 12.1 (c) or 12.2(d) above of participation in or control of any
action by the indemnifying Party will in no event be deemed to be an admission
by the indemnifying Party of liability, culpability or responsibility, and the
indemnifying Party will remain free to contest liability with respect to the
claim among the Parties or otherwise.
12.4 SUCCESSORS.
----------
A successor by law of any Party shall be entitled to the benefits of the
indemnification contained in this Section 12.
SECTION 13. APPLICABLE LAW
--------------------------
This Agreement will be construed and the provisions hereof interpreted
under and in accordance with Ohio law, without regard for that state's
principles of conflict of laws.
SECTION 14. EXECUTION IN COUNTERPARTS
-------------------------------------
This Agreement may be executed simultaneously in two or more counterparts,
each of which taken together will constitute one and the same instrument.
SECTION 15. SEVERABILITY
------------------------
If any provision of this Agreement is held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement will not
be affected thereby.
SECTION 16. RIGHTS CUMULATIVE
-----------------------------
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, that the Parties are entitled to under federal and state
laws.
SECTION 17. HEADINGS
--------------------
The Table of Contents and headings used in this Agreement are for purposes
of reference only and shall not limit or define the meaning of the provisions of
this Agreement.
SECTION 18. CONFIDENTIALITY
---------------------------
SMFI acknowledges that the identities of the customers of LIFE COMPANY or
any of its affiliates (collectively, the "LIFE COMPANY Protected Parties" for
proposes of this Section 18), information maintained regarding those customers,
and all computer programs and procedures or other information developed by the
LIFE COMPANY Protected Parties or any of their employees or agents in connection
with LIFE COMPANY's performance of its duties under this Agreement are the
valuable property of the LIFE COMPANY Protected Parties. SMFI agrees that if it
comes into possession of any list or compilation of the identities of or other
information about the LIFE COMPANY Protected Parties' customers, or any other
information or property of the LIFE COMPANY Protected Parties, other than such
information as may be independently developed or compiled by SMFI from
information supplied to it by the LIFE COMPANY Protected Parties' customers who
also maintain accounts directly with SMFI, SMFI will hold such information or
property in confidence and refrain from using, disclosing or distributing any of
such information or other property except: (a) with LIFE COMPANY'S prior written
consent; or (b) as required by law or judicial process. LIFE COMPANY
acknowledges that the identities of the customers of SMFI or any of its
affiliates (collectively, the "SMFI Protected Parties" for purposes of this
Section 18), information maintained regarding those customers, and all computer
programs and procedures or other information developed by the SMFI Protected
Parties or any of their employees or agents in connection with SMFI's
performance of its duties under this Agreement are the valuable property of the
SMFI Protected Parties. LIFE COMPANY agrees that if it comes into possession of
any list or compilation of the identities of or other information about the SMFI
Protected Parties' customers or any other information or property of the SMFI
Protected Parties, other than such information as may be independently developed
or compiled by LIFE COMPANY from information supplied to it by the SMFI
Protected Parties' customers who also maintain accounts directly with LIFE
COMPANY, LIFE COMPANY will hold such information or property in confidence and
refrain from using, disclosing or distributing any of such information or other
property except: (a) with SMFI's prior written consent; or (b) as required by
law or judicial process. Each party acknowledges that any breach of the
agreements in this Section 18 would result in immediate and irreparable harm to
the other parties for which there would be no adequate remedy at law and agree
that in the event of such a breach, the other parties will be entitled to
equitable relief by way of temporary and permanent injunctions, as well as such
other relief as any court of competent jurisdiction deems appropriate.
SECTION 19. TRADEMARKS AND FUND NAMES
--------------------------------------
(a) Summit Investment Partners, Inc. ("Summit" or "licensor"), an
affiliate of SMFI, owns all right, title and interest in and to the name,
trademark and service xxxx "Summit Pinnacle" and such other tradenames,
trademarks and service marks as may be set forth on Schedule B, as amended from
time to time by written notice from Summit to LIFE COMPANY (the "Summit licensed
marks" or the "licensor's licensed marks") and is authorized to use and to
license other persons to use such marks. LIFE COMPANY and its affiliates are
hereby granted a non-exclusive license to use the Summit licensed marks in
connection with LIFE COMPANY's performance of the services contemplated under
this Agreement, subject to the terms and conditions set forth in this Section
19.
(b) The grant of license to LIFE COMPANY and its affiliates ( the
"licensee") shall terminate automatically upon termination of this Agreement.
Upon automatic termination, the licensee shall cease to use the licensor's
licensed marks, except that LIFE COMPANY shall have the right to continue to
service any outstanding Contracts bearing any of the Summit licensed marks. Upon
Summit's elective termination of this license, LIFE COMPANY and its affiliates
shall immediately cease to issue any new annuity or life insurance contracts
bearing any of the Summit licensed marks and shall likewise cease any activity
which suggests that it has any right under any of the Summit licensed marks or
that it has any association with Summit, except that LIFE COMPANY shall have the
right to continue to service outstanding Contracts bearing any of the Summit
licensed marks.
(c) The licensee shall obtain the prior written approval of the licensor
for the public release by such licensee of any materials bearing the licensor's
licensed marks. The licensor's approvals shall not be unreasonably withheld.
(d) During the term of this grant of license, a licensor may request
that a licensee submit samples of any materials bearing any of the licensor's
licensed marks which were previously approved by the licensor but, due to
changed circumstances, the licensor may wish to reconsider. If, on
reconsideration, or on initial review, respectively, any such samples fail to
meet with the written approval of the licensor, then the licensee shall
immediately cease distributing such disapproved materials. The licensor's
approval shall not be unreasonably withheld, and the licensor, when requesting
reconsideration of a prior approval, shall assume the reasonable expenses of
withdrawing and replacing such disapproved materials. The licensee shall obtain
the prior written approval of the licensor for the use of any new materials
developed to replace the disapproved materials, in the manner set forth above.
(e) The licensee hereunder: (i) acknowledges and stipulates that, to the
best of the knowledge of the licensee, the licensor's licensed marks are valid
and enforceable trademarks and/or service marks and that such licensee does not
own the licensor's licensed marks and claims no rights therein other than as a
licensee under this Agreement; (ii) agrees never to contend otherwise in legal
proceedings or in other circumstances; and (iii) acknowledges and agrees that
the use of the licensor's licensed marks pursuant to this grant of license shall
inure to the benefit of the licensor.
(f) LIFE COMPANY and UNDERWRITER understand that (i) the S&P 500
Index(R) and the S&P MidCap 400 Index(R) are trademarks of The XxXxxx-Xxxx
Companies, Inc.; the Xxxxxxx 2000 Index is a trademark/service xxxx of the Xxxxx
Xxxxxxx Company; Nasdaq and related marks are trademarks or service marks of The
Nasdaq Stock Market, Inc.; and Xxxxxx Xxxxxxx Capital International is the
licensor of the EAFE Index trademark; (ii) these trademarks have been licensed
for use by SMFI; and (iii) the Funds are not sponsored, endorsed, sold or
promoted by any of the licensing organizations, and they make no representation
or warranty regarding the Funds, and bear no liability with respect to the
Funds. LIFE COMPANY and UNDERWRITER agree to comply with any requirements of
the licensing organizations regarding the use of their trademarks in any
prospectuses, sales literature or other promotional material.
SECTION 20. PARTIES TO COOPERATE
--------------------------------
Each party to this Agreement will cooperate with each other party and all
appropriate governmental authorities (including, without limitation, the SEC,
the NASD and state insurance regulators) and will permit each other and such
authorities reasonable access to its books and records (including copies
thereof) in connection with any investigation or inquiry relating to this
Agreement or the transactions contemplated hereby.
SECTION 21. EXCESSIVE TRADING
-----------------------------
(a) LIFE COMPANY agrees to provide Summit Mutual Funds, Inc. ("SMFI") at
least twenty-four (24) hours advance notice for any order of an investor or
group of investors that exceeds $100,000 with respect to any Fund.
(b) LIFE COMPANY represents and warrants that the Contracts to be funded
by investments of the Accounts in one or more of the Funds contain provisions
permitting LIFE COMPANY to restrict excessive or potentially abusive transfers
in at least one of the following ways:
o Limitations on the ability to have exchanges effected other than by
mail with signature guarantees for investor's signature in the event of
excessive or abusive transfers;
o Limitations on transfers into any investment option within 30 days of
having transferred out of it (other than in connection with an
automatic transfer program);
o Limitations on any transfers among sub-accounts within 30 days of prior
transfer (other than in connection with an automatic transfer program);
or
o Limitations on any transfers on a day when net transfers into or out of
a sub-account would have the effect of increasing or reducing the
assets of the Fund by more than 1% without the express permission of
the adviser to that Fund.
LIFE COMPANY also represents and warrants that the Contract prospectuses
contain language describing its policies regarding excessive trading.
(c) SMFI will monitor daily trading activities of each Fund for excessive
trading or potentially abusive exchanges, and will notify the LIFE COMPANY if it
detects such trading or exchanges from LIFE COMPANY'S Accounts. Upon
notification from SMFI, LIFE COMPANY will use its best efforts to exercise its
rights under the Contracts to impose limitations in a way that stops excessive
or potentially abusive exchanges by one or a group of investors. LIFE COMPANY
agrees to indemnify and hold harmless the Fund for any losses incurred as a
result of LIFE COMPANY'S breach of its duties hereunder, and agrees that such
breach will constitute an event of termination under Section 6.1 (i).
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed
in their names and on their behalf by and through their duly authorized officers
signing below.
SUMMIT MUTUAL FUNDS, INC.
Attest:-------------------------- By:----------------------------------
Name: Name:
Title: Title:
CARILLON INVESTMENTS, INC.
Attest:-------------------------- By:----------------------------------
Name: Name:
Title: Title:
WOODMEN OF THE WORLD LIFE INSURANCE SOCIETY,
on behalf of itself and its separate accounts
Attest:-------------------------- By:----------------------------------
Name: Name:
Title: Title:
Woodmen Financial Services, Inc.
Attest:-------------------------- By:----------------------------------
Name: Name:
Title: Title:
9/23/02
SCHEDULE A
FUNDS AVAILABLE UNDER THE CONTRACTS
-----------------------------------
Summit Mutual Funds, Inc. Pinnacle Series:
S&P 500 Index Portfolio
S&P MidCap 400 Index Portfolio
Xxxxxxx 2000 Small Cap Index Portfolio
Nasdaq-100 Index Portfolio
Balanced Index Portfolio
Zenith Portfolio
Bond Portfolio
EAFE International Index Portfolio
Xxxxxx Aggregate Bond Index Portfolio
SEPARATE ACCOUNTS UTILIZING THE FUNDS
-------------------------------------
UNREGISTERED SEPARATE ACCOUNTS UTILIZING THE FUNDS
--------------------------------------------------
CONTRACTS FUNDED BY THE SEPARATE ACCOUNTS
-----------------------------------------
SCHEDULE B
SUMMIT MUTUAL FUNDS, INC.
Summit Pinnacle Series:
S&P 500 Index Portfolio
S&P MidCap 400 Index Portfolio
Xxxxxxx 2000 Small Cap Index Portfolio
Nasdaq-100 Index Portfolio
Balanced Index Portfolio
Zenith Portfolio
Bond Portfolio
EAFE International Index Portfolio
Xxxxxx Aggregate Bond Index Portfolio
Summit and Design
Schedule C
EXPENSE ALLOCATIONS
Life Company SMFI /Carillon
------------ --------------
preparing and filing the Account's preparing and filing the Fund's
registration statement registration statement
text composition for Account text composition for Fund prospectuses
prospectuses and supplements and supplements
text alterations of prospectuses text alterations of prospectuses
(Account) and supplements (Account) (Fund) and supplements (Fund)
printing Account and Fund prospectuses a camera ready Fund prospectus
and supplements
text composition and printing Account text composition and printing Fund
SAIs SAIs
mailing and distributing Account SAIs mailing and distributing Fund SAIs to
to policy owners upon request by policy policy owners upon request by policy
owners owners
mailing and distributing prospectuses
(Account and Fund) and supplements
(Account and Fund) to policy owners of
record as required by Federal
Securities Laws and to prospective
purchasers
text composition (Account), printing, text composition of annual and semi-
mailing, and distributing annual and annual
semi-annual reports for Account (Fund reports (Fund)
and Account as, applicable)
text composition, printing, mailing, text composition, printing, mailing,
distributing, and tabulation of proxy distributing and tabulation of proxy
statements and voting instruction statements and voting instruction
solicitation solicitation
materials to policy owners with respect materials to policy owners with
to proxies related to the Account respect to proxies related to the Fund
preparation, printing and distributing
sales material and advertising relating
to the Funds, insofar as such materials
relate to the Contracts and filing such
materials with and obtaining approval
from, the SEC, the NASD, any state
insurance regulatory authority, and any
other appropriate regulatory authority,
to the extent required
