Exhibit 10.1
Strategic Alliance Agreement
FINAL EXECUTION COPY
STRATEGIC ALLIANCE AGREEMENT
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This agreement ("Agreement"), is entered into as of the date on which the
Registration Statement is declared effective by the SEC (the "Effective Date"),
by and among PHL VARIABLE INSURANCE COMPANY ("PHLVIC"), PHOENIX LIFE INSURANCE
COMPANY, ("PLIC" and, together with PHLVIC, "PHL Variable"), PHOENIX EQUITY
PLANNING CORPORATION ("PEPCO" and, together with PHLVIC and PLIC, the "PHL
Parties"), XXXXXXXX CAPITAL MANAGEMENT, INC. ("LCM"), MBSC SECURITIES
CORPORATION ("MBSC"), and DREYFUS SERVICE ORGANIZATION, INC. ("DSO" and,
together with MBSC, "Dreyfus"; and DSO, together with MBSC and LCM, the "LCM
Parties"). Except as otherwise defined, capitalized terms used herein shall have
the meanings given to them in Section 1. Definitions, below.
RECITALS
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A. PHL Variable will offer to issue the GRIS to LIS Clients.
B. LCM is an investment adviser that is registered with the SEC under the
Advisers Act and sponsors LIS.
C. LCM has established certain asset allocation Models with respect to
LIS that are eligible for use with the GRIS, and in the future may establish
other Models that become eligible for use with the GRIS.
D. The Parties have entered into the Sales and General Agency Agreement,
effective as of the Effective Date, pursuant to which Dreyfus will solicit sales
of the GRIS to LIS Clients.
E. PHL Variable will provide or cause one or more of their Affiliates to
provide to the LCM Parties, and LCM will provide or cause one or more of its
Affiliates to provide to the PHL Parties, certain administrative services
described herein.
F. The Parties desire to set forth herein certain of their respective
duties and obligations in connection with the GRIS, all upon the terms and
subject to the conditions more fully set forth below.
NOW, THEREFORE, in consideration of the foregoing recitals, the mutual
covenants and obligations hereinafter set forth, and for other good and valuable
considerations, the receipt and sufficiency of which are hereby acknowledged,
the Parties hereto, intending to be legally bound, agree as follows:
SECTION 1 DEFINITIONS
1.01 1933 ACT. The Securities Act of 1933, as amended.
1.02 1934 ACT. The Securities Exchange Act of 1934, as amended.
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1.03 ADVISERS ACT. The Investment Advisers Act of 1940, as amended.
1.04 AFFILIATE. With respect to a person, any other person controlling,
controlled by, or under common control with, such person.
1.05 AGREEMENT. The term shall have the meaning set forth in the
introductory paragraph of this Agreement.
1.06 APPLICATION. The application, enrollment form, or similar form
approved for use by PHL Variable by which an LIS Client applies for
a GRIS.
1.07 BOOKS AND RECORDS. All books and records maintained or required by
applicable Law to be maintained by each of the Parties hereto in
connection with this Agreement and the GRIS, including to the extent
any of the following exist: (i) hard copy and microfiche records; (ii)
all paper files; (iii) all electronic images; (iv) all computer data
files; and (v) any and all records in other forms. In the case of the
LCM Parties, Books and Records shall include all records related to
each LIS Account and each Model, including Nonpublic Personal
Information, deposits, withdrawals, investments, account values,
selection of annual optional increases with respect to each LIS
Account, and any and all data provided to any of the PHL Parties or
any Affiliate thereof in connection with this Agreement, the Sales and
General Agency Agreement or the Memorandum of Understanding. In the
case of the PHL Parties, Books and Records shall include all records
related to the GRIS, including Nonpublic Personal Information,
applications, GRIS issuance, benefit calculations and determinations,
claim determinations, and customer correspondence. Books and Records
shall not include any internal documentation of any of the internal
programs, systems and procedures of any of the LCM Parties or their
Affiliates, or any of the PHL Parties or their Affiliates.
1.08 BUSINESS DAY. A day when the New York Stock Exchange is open for
business.
1.09 CERTIFICATE. The certificate of insurance issued by PHL Variable to an
LIS Client pursuant to the Master Group Annuity Contracts.
1.10 CERTIFICATE OWNER. The person or entity that is the owner of a
Certificate.
1.11 CHANGE OF CONTROL. The term shall have the meaning set forth in
Section 18.01.2.
1.12 CONFIDENTIAL INFORMATION. The term shall have the meaning set forth in
Section 13.03.1
1.13 CUSTOMER COMPLAINT. The term shall have the meaning set forth in
Section 13.05.
1.14 DETERMINATION. The term shall have the meaning set forth in Section
14.02.1(f).
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1.15 DREYFUS. The term shall have the meaning set forth in the introductory
paragraph of this Agreement.
1.16 DSO. The term shall have the meaning set forth in the introductory
paragraph of this Agreement.
1.17 EFFECTIVE DATE. The date set forth in the introductory paragraph of
this Agreement.
1.18 FEE INCREASE NOTICE DATE. The term shall have the meaning set forth in
Section 10.08.1.
1.19 GOVERNMENTAL ENTITY. Any domestic, federal or State, court,
governmental or regulatory authority or agency, including State
insurance and State securities regulators.
1.20 GRIS. The Master Group Annuity Contracts and each Certificate issued
by PHL Variable and registered on Form S-1 under the 1933 Act with the
SEC under File No. 333-137802 as in effect on the Effective Date,
including any riders, endorsements or amendments to the Master Group
Annuity Contracts or the Certificates, and each Application.
1.21 GRIS FEES. The fees due to either PHLVIC or PLIC, as applicable, by a
Certificate Owner under a Certificate for coverage under such
Certificate.
1.22 INVESTMENT COMPANY ACT. The Investment Company Act of 1940, as
amended.
1.23 IRC. The Internal Revenue Code of 1986, as amended.
1.24 LAW. Any law, rule, regulation, order or written interpretation of any
governmental body or self regulatory organization, and any writ,
judgment, injunction or court decree.
1.25 LCM. The term shall have the meaning set forth in the introductory
paragraph of this Agreement.
1.26 LCM GRIS PERSONS. The term shall have the meaning set forth in Section
9.07.1
1.27 LCM INDEMNITEES. The term shall have the meaning set forth in Section
14.01.
1.28 LCM PARTIES. The term shall have the meaning set forth in the
introductory paragraph of this Agreement.
1.29 LCM PARTIES AUTHORIZED PERSONS. The term shall have the meaning set
forth in Section 13.02.2.
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1.30 LCM PARTIES LICENSED MARKS. The term shall have the meaning set forth
in Section 11.02.2.
1.31 LCM SERVICES. The term shall have the meaning set forth in Section
10.02.1.
1.32 LICENSE. The term shall have the meaning set forth in Section 11.02.2.
1.33 LICENSEE. The term shall have the meaning set forth in Section
11.02.4.
1.34 LICENSOR. The term shall have the meaning set forth in Section
11.02.4.
1.35 LIS. Xxxxxxxx Investment Strategies, a discretionary, unified managed
account wrap product sponsored by LCM as described in its Form ADV,
Part II, Schedule H.
1.36 LIS ACCOUNT. An account established by an LIS Client that is invested
in accordance with a Model and eligible for coverage under a GRIS.
1.37 LIS CLIENT. An investment advisory client of LCM who has established
an LIS Account.
1.38 MASTER GROUP ANNUITY CONTRACTS. The Master Group Annuity Contracts
entered into by and between PHLVIC and LCM, and by and between PLIC
and LCM.
1.39 MBSC. The term shall have the meaning set forth in the introductory
paragraph of this Agreement.
1.40 MEMORANDUM OF UNDERSTANDING. The confidential Memorandum of
Understanding, dated as of the Effective Date, entered into by and
among PHLVIC, PLIC and LCM.
1.41 MODELS. The confidential and proprietary asset allocation models more
fully described in the Memorandum of Understanding.
1.42 NONPUBLIC PERSONAL INFORMATION. The term shall have the meaning set
forth in Section 13.04.1
1.43 PARTIES. The term "Parties" refers to PHVLIC, PLIC, PEPCO, LCM, MBSC
and DSO collectively and the term "Party" refers to each of them
individually.
1.44 PEPCO. The term shall have the meaning set forth in the introductory
paragraph of this Agreement.
1.45 PHL GRIS PERSONS. This term shall have the meaning set forth in
Section 10.07.1
1.46 PHL PARTIES. The term shall have the meaning set forth in the
introductory paragraph of this Agreement.
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1.47 PHL PARTIES AUTHORIZED PERSONS. The term shall have the meaning set
forth in Section 13.02.1.
1.48 PHL LICENSED MARKS. This term shall have the meaning set forth in
Section 11.02.3.
1.49 PHL SERVICES. The term shall have the meaning set forth in Section
9.03.1.
1.50 PHL VARIABLE. The term shall have the meaning set forth in the
introductory paragraph of this Agreement.
1.51 PHLVIC. The term shall have the meaning set forth in the introductory
paragraph of this Agreement.
1.52 PLIC. The term shall have the meaning set forth in the introductory
paragraph of this Agreement.
1.53 PROSPECTUS. The prospectus included within a Registration Statement,
including supplements thereto filed under Rule 424 under the 1933 Act,
prepared by PHL Variable, from and after the date on which each shall
have been filed.
1.54 REGISTRATION STATEMENT. At any time that this Agreement is in effect,
each currently effective registration statement and each currently
effective post-effective amendment thereto filed with the SEC under
the 1933 Act on Form S-1 or otherwise relating to the GRIS including
the Prospectus and financial statements included in, and all exhibits
to, such registration statement or post-effective amendment prepared
by PHL Variable.
1.55 SALES AND GENERAL AGENCY AGREEMENT. The Sales and General Agency
Agreement effective as of the Effective Date, by and among the
Parties, as amended from time to time, pursuant to which Dreyfus will
solicit sales of the GRIS from LIS Clients.
1.56 SEC. The United States Securities and Exchange Commission.
1.57 STATE. Any state of the United States and the District of Columbia.
1.58 TERM. The term shall have the meaning set forth in Section 2.
1.59 TERRITORY. The Territory shall initially consist of all States, as may
be changed from time to time by the written agreement of the Parties.
1.60 TRADEMARK CONSENT. The term shall have the meaning set forth in
Section 11.02.1.
1.61 TRADEMARK LICENSE TERMS. The term shall have the meaning set forth in
Section 11.02.2.
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1.62 TRANSACTION DOCUMENTS. The term shall mean this Agreement, the Sales
and General Agency Agreement, the Memorandum of Understanding, and the
GRIS.
SECTION 2 TERM
This Agreement shall commence on the Effective Date and shall continue
until it is terminated in accordance with the provisions of Section 17 of this
Agreement ("Term").
SECTION 3 REPRESENTATIONS AND WARRANTIES OF LCM
LCM hereby represents and warrants to the PHL Parties as follows:
3.01 ORGANIZATION. LCM is a corporation duly incorporated and validly
existing under the laws of the State of Delaware.
3.02 POWER AND AUTHORITY. LCM has the requisite power and authority under
its certificate of incorporation and by-laws to enter into and perform
its duties and obligations under the Transaction Documents to which it
is a party.
3.03 CORPORATE ACTION. All requisite actions have been taken to authorize
LCM to enter into and perform its duties and obligations set forth in
the Transaction Documents to which it is a party and to execute and
deliver the Transaction Documents to which it is a party and, when so
executed and delivered, the Transaction Documents to which it is a
party shall constitute the valid and binding obligations of LCM
enforceable against it in accordance with its terms.
3.04 NON-CONTRAVENTION. LCM has duly executed and delivered this Agreement
and neither such execution and delivery nor the performance by LCM of
any of its obligations under the Transaction Documents to which it is
a party will (i) violate any provision of its certificate of
incorporation or by-laws (ii) result in a violation or breach of, or
constitute a default or an event of default under, any indenture,
mortgage, bond or other contract, license, agreement, permit,
instrument or other commitment or obligation to which it is a party or
by which it is bound or (iii) materially violate any Law applicable to
it or its business.
3.05 LICENSES AND PERMITS. As of the Effective Date, LCM has, and during
the term of this Agreement shall, maintain, all material licenses,
permits, registrations, authorizations, orders, consents, and other
approvals by each Government Entity necessary or advisable for the
performance of its obligations under the Transaction Documents to
which it is a party.
3.06 COMPLIANCE WITH LAW. As of the Effective Date, LCM's business
operations in connection with performance of its duties and
obligations under the Transaction Documents to which it is a party are
conducted, and will continue to be conducted, in compliance in all
material respects with applicable Law.
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3.07 EQUIPMENT, FACILITIES AND STAFF. LCM has the equipment, facilities,
systems, staff and other assets necessary to perform its duties and
obligations under the Transaction Documents to which it is a party.
3.08 PENDING LITIGATION AND ACTIONS. LCM is not subject to any current or
pending litigation or any pending regulatory actions that would
materially impair its ability to carry out its duties and obligations
under the Transaction Documents to which it is a party.
3.09 REGISTRATION STATEMENT AND PROSPECTUS. All information about LCM and
LIS that LCM has provided to PHL Variable for use in the Registration
Statement did not, on the effective date of the Registration
Statement, contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein not
misleading in light of the circumstances under which they were made.
LCM shall promptly notify PHLVIC in the event LCM believes the
representations and warranties in this Section 3.09 are no longer true
in any material respect (it being understood that no representation is
made with respect to information about the PHL Parties or the GRIS).
3.10 FORM ADV, PART II, SCH. H. Schedule H of Part II of LCM's Form ADV
relating to the LIS Accounts is in compliance with Rule 204-3(f) under
the Advisers Act and the requirements of Schedule H of Part II of Form
ADV. LCM shall promptly notify each of the PHL Parties if there are
any material changes to the Form ADV, Part II, Schedule H relating to
the LIS Accounts.
SECTION 4 REPRESENTATIONS AND WARRANTIES OF MBSC
MBSC hereby represents and warrants to the PHL Parties as follows:
4.01 ORGANIZATION. MBSC is a corporation duly incorporated and validly
existing under the laws of the State of New York.
4.02 POWER AND AUTHORITY. MBSC has the requisite power and authority under
its articles of incorporation and by-laws to enter into and perform
its duties and obligations under the Transaction Documents to which it
is a party.
4.03 CORPORATE ACTION. All requisite actions have been taken to authorize
MBSC to enter into and perform its duties and obligations set forth in
the Transaction Documents to which it is a party and to execute and
deliver the Transaction Documents to which it is a party and, when so
executed and delivered, the Transaction Documents to which it is a
party shall constitute the valid and binding obligations of MBSC
enforceable against it in accordance with its terms.
4.04 NON-CONTRAVENTION. MBSC has duly executed and delivered this Agreement
and neither such execution and delivery nor the performance by MBSC of
any of its obligations under the Transaction Documents to which it is
a party will (i) violate any provision of its articles of
incorporation or by-laws (ii) result in a violation or breach of, or
constitute a default or an event of default under, any
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indenture, mortgage, bond or other contract, license, agreement,
permit, instrument or other commitment or obligation to which it is a
party or by which it is bound or (iii) materially violate any Law
applicable to it or its business.
4.05 LICENSES AND PERMITS. As of the Effective Date, MBSC has, and during
the term of this Agreement shall, maintain, all material licenses,
permits, registrations, authorizations, orders, consents, and other
approvals by each Government Entity necessary or advisable for the
performance of its obligations under the Transaction Documents to
which it is a party.
4.06 COMPLIANCE WITH LAW. As of the Effective Date, MBSC's business
operations in connection with performance of its duties and
obligations under the Transaction Documents to which it is a party are
conducted, and will continue to be conducted, in compliance in all
material respects with applicable Law.
4.07 EQUIPMENT, FACILITIES AND STAFF. MBSC has the equipment, facilities,
systems, staff and other assets necessary to perform its duties and
obligations under the Transaction Documents to which it is a party.
4.08 PENDING LITIGATION AND ACTIONS. MBSC is not subject to any current or
pending litigation or any pending regulatory actions that would
materially impair its ability to carry out its duties and obligations
under the Transaction Documents to which it is a party.
SECTION 5 REPRESENTATIONS AND WARRANTIES OF DSO
DSO hereby represents and warrants to the PHL Parties as follows:
5.01 ORGANIZATION. DSO is a corporation duly incorporated and validly
existing under the laws of the State of Delaware.
5.02 POWER AND AUTHORITY. DSO has the requisite power and authority under
its certificate of incorporation and by-laws to enter into and perform
its duties and obligations under the Transaction Documents to which it
is a party.
5.03 CORPORATE ACTION. All requisite actions have been taken to authorize
DSO to enter into and perform its duties and obligations set forth in
the Transaction Documents to which it is a party and to execute and
deliver the Transaction Documents to which it is a party and, when so
executed and delivered, the Transaction Documents to which it is a
party shall constitute the valid and binding obligations of DSO
enforceable against it in accordance with its terms.
5.04 NON-CONTRAVENTION. DSO has duly executed and delivered this Agreement
and neither such execution and delivery nor the performance by DSO of
any of its obligations under the Transaction Documents to which it is
a party will (i) violate any provision of its certificate of
incorporation or by-laws (ii) result in a violation or breach of, or
constitute a default or an event of default under, any indenture,
mortgage, bond or other contract, license, agreement, permit,
instrument or other
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commitment or obligation to which it is a party or by which it is
bound or (iii) materially violate any Law applicable to it or its
business.
5.05 LICENSES AND PERMITS. As of the Effective Date, DSO has, and during
the term of this Agreement shall, maintain, all material licenses,
permits, registrations, authorizations, orders, consents, and other
approvals by each Government Entity necessary or advisable for the
performance of its obligations under the Transaction Documents to
which it is a party.
5.06 COMPLIANCE WITH LAW. As of the Effective Date, DSO's business
operations in connection with performance of its duties and
obligations under the Transaction Documents to which it is a party are
conducted, and will continue to be conducted, in compliance in all
material respects with applicable Law.
5.07 EQUIPMENT, FACILITIES AND STAFF. DSO has the equipment, facilities,
systems, staff and other assets necessary to perform its duties and
obligations under the Transaction Documents to which it is a party.
5.08 PENDING LITIGATION AND ACTIONS. DSO is not subject to any current or
pending litigation or any pending regulatory actions that would
materially impair its ability to carry out its duties and obligations
under the Transaction Documents to which it is a party.
SECTION 6 REPRESENTATIONS AND WARRANTIES OF PHLVIC
PHLVIC hereby represents and warrants to the LCM Parties as follows:
6.01 ORGANIZATION. PHLVIC is a corporation duly incorporated and validly
existing under the laws of the State of Connecticut.
6.02 POWER AND AUTHORITY. PHLVIC has the requisite power and authority
under its articles of incorporation and by-laws to enter into and
perform its duties and obligations under the Transaction Documents to
which it is a party.
6.03 CORPORATE ACTION. All requisite actions have been taken to authorize
PHLVIC to enter into and perform its duties and obligations set forth
in the Transaction Documents to which it is a party and to execute and
deliver the Transaction Documents to which it is a party and, when so
executed and delivered, the Transaction Documents to which it is a
party shall constitute the valid and binding obligation of PHLVIC
enforceable against it in accordance with its terms.
6.04 NON-CONTRAVENTION. PHLVIC has duly executed and delivered this
Agreement and neither such execution and delivery nor the performance
by PHLVIC of any of its obligations under the Transaction Documents to
which it is a party will (i) violate any provision of its articles of
incorporation or by-laws (ii) result in a violation or breach of, or
constitute a default or an event of default under, any indenture,
mortgage, bond or other contract, license, agreement, permit,
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instrument or other commitment or obligation to which it is a party or
by which it is bound or (iii) materially violate any Law applicable to
it or its business.
6.05 LICENSES AND PERMITS. As of the Effective Date, PHLVIC has, and during
the term of this Agreement shall, maintain all material licenses,
permits, registrations, authorizations, orders, consents, and other
approvals by each Government Entity necessary or advisable for the
performance of its obligations under the Transaction Documents to
which it is a party.
6.06 COMPLIANCE WITH LAW. As of the Effective Date, PHLVIC's business
operations in connection with performance of its duties and
obligations under the Transaction Documents to which it is a party are
conducted, and will continue to be conducted, in compliance in all
material respects with applicable Law.
6.07 EQUIPMENT, FACILITIES AND STAFF. PHLVIC has the equipment, facilities,
systems, staff and assets necessary to perform its duties and
obligations under the Transaction Documents to which it is a party.
6.08 PENDING LITIGATION AND ACTIONS. PHLVIC is not subject to any current
or pending litigation or regulatory actions that would materially
impair its ability to carry out its duties and obligations under the
Transaction Documents to which it is a party.
6.09 REGISTRATION STATEMENT AND PROSPECTUS. The Registration Statement, on
the date of which it was declared effective, did not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein not misleading in light of
the circumstances under which they were made (it being understood that
no representation is made with respect to information about LCM or LIS
provided by LCM in writing to PHL Variable). All statements in the
Registration Statement, on the date of which it was declared
effective, relating to taxation and tax effects are true in all
material respects. The Prospectus or other information contained in
the Registration Statement, when disseminated or used after the
effective date of the Registration Statement, shall not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein not misleading in light of
the circumstances under which they were made (it being understood that
no representation is made with respect to information about LCM or LIS
provided by LCM in writing to PHL Variable). PHVLIC shall immediately
notify each of the LCM Parties in the event PHVLIC believes or has
reason to believe that the representations and warranties in this
paragraph are no longer true or completely accurate.
6.10 TAX MATTERS. It is more likely than not that: (1) PHLVIC will not be
treated as the owner of the assets in an LIS Account for federal
income tax purposes; (2) the GRIS, including each Certificate, will be
treated as an annuity contract for federal income tax purposes;
however, if the value of an LIS Account happens to be greater than
zero when an Owner's life expectancy is less than one year (which
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will only occur at extremely advanced ages), it is possible that the
Policy could be treated as no longer constituting an annuity contract
for Federal tax purposes from that point on; (3) for all Certificate
Holders on the date of GRIS issuance and during the entire period
during which the GRIS and each Certificate is in effect, losses with
respect to the LIS Account will be deductible under Section 165(a) of
the IRC notwithstanding the existence of the GRIS' conditional
guarantee of annual lifetime income payments in the event that the
value of the assets in an LIS Account decreases to zero; (4) for all
Certificate Owners on the date of GRIS issuance and during the entire
period during which the GRIS and each Certificate is in effect,
dividends on stock held in an LIS Account otherwise meeting the
requirements of Section 1(h)(11) of the IRC will constitute qualified
dividend income notwithstanding the existence of a GRIS and its
conditional guarantee of annual lifetime income payments in the event
the value of the assets in the LIS Account decreases to zero; and (5)
for each Certificate Owner on the date of Certificate issuance and
during the entire period during which the GRIS and each Certificate is
in effect, the Certificate and assets in the LIS Account subject
thereto will not be treated as a straddle under Section 1092 of the
IRC.
6.11 OWNERSHIP OF GRIS; NO CLAIMS RELATING TO GRIS. Except as set forth in
Section 11.01, PHLVIC and its Affiliates, as applicable, are the
exclusive legal and beneficial owner of and have good and marketable
title in and to the GRIS and all intellectual property rights therein,
free and clear of all pledges, claims, liens, charges, encumbrances
and security interests of any kind or character, including any claims
for infringement of intellectual property rights. For the purposes of
this Section, intellectual property includes GRIS forms, specimen
forms, the features of the GRIS, materials filed by any of the PHL
Parties with State insurance regulators, and any other forms prepared
by any of the PHL Parties or any of their Affiliates in connection
with the GRIS. There are no claims, actions, suits, investigations or
proceedings (arbitration or otherwise) pending against, or to the
knowledge of PHLVIC, threatened against or affecting, all or any part
of the GRIS or to the transactions contemplated by any of the
Transaction Documents. To the knowledge of PHLVIC, there are no facts
that could reasonably serve as a basis for such claim, action, suit,
investigation or proceeding. The use and issuance of the GRIS does not
and will not infringe, misappropriate, violate or dilute any
intellectual property rights of any person.
SECTION 7 REPRESENTATIONS AND WARRANTIES OF PLIC
PLIC hereby represents and warrants to the LCM Parties as follows:
7.01 ORGANIZATION. PLIC is a corporation duly incorporated and validly
existing under the laws of the State of New York.
7.02 POWER AND AUTHORITY. PLIC has the requisite power and authority under
its articles of incorporation and by-laws to enter into and perform
its duties and obligations under the Transaction Documents to which it
is a party.
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7.03 CORPORATE ACTION. All requisite actions have been taken to authorize
PLIC to enter into and perform its duties and obligations set forth in
the Transaction Documents to which it is a party and to execute and
deliver the Transaction Documents to which it is a party and, when so
executed and delivered, the Transaction Documents to which it is a
party shall constitute the valid and binding obligation of PLIC
enforceable against it in accordance with its terms.
7.04 NON-CONTRAVENTION. PLIC has duly executed and delivered this Agreement
and neither such execution and delivery nor the performance by PLIC of
any of its obligations under the Transaction Documents to which it is
a party will (i) violate any provision of its articles of
incorporation or by-laws (ii) result in a violation or breach of, or
constitute a default or an event of default under, any indenture,
mortgage, bond or other contract, license, agreement, permit,
instrument or other commitment or obligation to which it is a party or
by which it is bound or (iii) materially violate any Law applicable to
it or its business.
7.05 LICENSES AND PERMITS. As of the Effective Date, PLIC has, and during
the term of this Agreement shall, maintain all material licenses,
permits, registrations, authorizations, orders, consents, and other
approvals by each Government Entity necessary or advisable for the
performance of its obligations under the Transaction Documents to
which it is a party.
7.06 COMPLIANCE WITH LAW. As of the Effective Date, PLIC's business
operations in connection with performance of its duties and
obligations under the Transaction Documents to which it is a party are
conducted, and will continue to be conducted, in compliance in all
material respects with applicable Law.
7.07 EQUIPMENT, FACILITIES AND STAFF. PLIC has the equipment, facilities,
systems, staff and assets necessary to perform its duties and
obligations under the Transaction Documents to which it is a party.
7.08 PENDING LITIGATION AND ACTIONS. PLIC is not subject to any current or
pending litigation or regulatory actions that would materially impair
its ability to carry out its duties and obligations under the
Transaction Documents to which it is a party.
7.09 REGISTRATION STATEMENT AND PROSPECTUS. The Registration Statement, on
the date of which it was declared effective, did not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein not misleading in light of
the circumstances under which they were made (it being understood that
no representation is made with respect to information about LCM or LIS
provided by LCM in writing to PHL Variable). All statements in the
Registration Statement, on the date of which it was declared
effective, relating to taxation and tax effects are true in all
material respects. The Prospectus or other information contained in
the Registration Statement, when disseminated or used after the
effective date of the Registration Statement, shall not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein not misleading in light of
the
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circumstances under which they were made (it being understood that no
representation is made with respect to information about LCM or LIS
provided by LCM in writing to PHL Variable). PLIC shall immediately
notify each of the LCM Parties in the event PLIC believes or has
reason to believe that the representations and warranties in this
paragraph are no longer true or completely accurate.
7.10 TAX MATTERS. It is more likely than not that: (1) PLIC will not be
treated as the owner of the assets in an LIS Account for federal
income tax purposes; (2) the GRIS, including each Certificate, will be
treated as an annuity contract for federal income tax purposes; (3)
for all Certificate Holders on the date of GRIS issuance and during
the entire period during which the GRIS and each Certificate is in
effect, losses with respect to the LIS Account will be deductible
under Section 165(a) of the IRC notwithstanding the existence of the
GRIS' conditional guarantee of annual lifetime income payments in the
event that the value of the assets in an LIS Account decreases to
zero; (4) for all Certificate Owners on the date of GRIS issuance and
during the entire period during which the GRIS and each Certificate is
in effect, dividends on stock held in an LIS Account otherwise meeting
the requirements of Section 1(h)(11) of the IRC will constitute
qualified dividend income notwithstanding the existence of a GRIS and
its conditional guarantee of annual lifetime income payments in the
event the value of the assets in the LIS Account decreases to zero;
and (5) for each Certificate Owners on the date of Certificate
issuance and during the entire period during which the GRIS and each
Certificate is in effect, the Certificate and assets in the LIS
Account subject thereto will not be treated as a straddle under
Section 1092 of the IRC.
7.11 OWNERSHIP OF GRIS; NO CLAIMS RELATING TO GRIS. Except as set forth in
Section 11.01, PLIC and its Affiliates, as applicable, are the
exclusive legal and beneficial owner of and have good and marketable
title in and to the GRIS and all intellectual property rights therein,
free and clear of all pledges, claims, liens, charges, encumbrances
and security interests of any kind or character, including any claims
for infringement of intellectual property rights. For the purposes of
this Section, intellectual property includes GRIS forms, specimen
forms, the features of the GRIS, materials filed by any of the PHL
Parties with State insurance regulators, and any other forms prepared
by any of the PHL Parties or any of their Affiliates in connection
with the GRIS. There are no claims, actions, suits, investigations or
proceedings (arbitration or otherwise) pending against, or to the
knowledge of PLIC, threatened against or affecting, all or any part of
the GRIS or to the transactions contemplated by any of the Transaction
Documents. To the knowledge of PLIC, there are no facts that could
reasonably serve as a basis for such claim, action, suit,
investigation or proceeding. The use and issuance of the GRIS does not
and will not infringe, misappropriate, violate or dilute any
intellectual property rights of any person.
SECTION 8 REPRESENTATIONS AND WARRANTIES OF PEPCO
PEPCO hereby represents and warrants to the LCM Parties as follows:
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8.01 ORGANIZATION. PEPCO is a corporation duly incorporated and validly
existing under the laws of the State of Connecticut.
8.02 POWER AND AUTHORITY. PEPCO has the requisite power and authority under
its articles of incorporation and by-laws to enter into and perform
its duties and obligations under the Transaction Documents to which it
is a party.
8.03 CORPORATE ACTION. All requisite actions have been taken to authorize
PEPCO to enter into and perform its duties and obligations set forth
in the Transaction Documents to which it is a party and to execute and
deliver the Transaction Documents to which it is a party and, when so
executed and delivered, the Transaction Documents to which it is a
party shall constitute the valid and binding obligations of PEPCO
enforceable against it in accordance with its terms.
8.04 NON-CONTRAVENTION. PEPCO has duly executed and delivered this
Agreement and neither such execution and delivery nor the performance
by PEPCO of any of its obligations under the Transaction Documents to
which it is a party will (i) violate any provision of its articles of
incorporation or by-laws (ii) result in a violation or breach of, or
constitute a default or an event of default under, any indenture,
mortgage, bond or other contract, license, agreement, permit,
instrument or other commitment or obligation to which it is a party or
by which it is bound or (iii) materially violate any Law applicable to
it or its business.
8.05 LICENSES AND PERMITS. As of the Effective Date, PEPCO has, and during
the term of this Agreement shall, maintain all material licenses,
permits, registrations, authorizations, orders, consents, and other
approvals by each Government Entity necessary or advisable for the
performance of its obligations under the Transaction Documents to
which it is a party.
8.06 COMPLIANCE WITH LAW. As of the Effective Date, PEPCO's business
operations in connection with performance of its duties and
obligations under the Transaction Documents to which it is a party are
conducted, and will continue to be conducted, in compliance in all
material respects with applicable Law.
8.07 EQUIPMENT, FACILITIES AND STAFF. PEPCO has the equipment, facilities,
systems, staff and assets necessary to perform its duties and
obligations under the Transaction Documents to which it is a party.
8.08 PENDING LITIGATION AND ACTIONS. PEPCO is not subject to any current or
pending litigation or regulatory actions that would materially impair
its ability to carry out its duties and obligations under the
Transaction Documents to which it is a party.
8.09 REGISTRATION STATEMENT AND PROSPECTUS. The Registration Statement, on
the date of which it was declared effective, did not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein not misleading in light of
the circumstances under which they were made
- 14 -
(it being understood that no representation is made with respect to
information about LCM or LIS provided by LCM in writing to PHL
Variable). All statements in the Registration Statement, on the date
of which it was declared effective, relating to taxation and tax
effects are true in all material respects. The Prospectus or other
information contained in the Registration Statement, when disseminated
or used after the effective date of the Registration Statement, shall
not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein not misleading
in light of the circumstances under which they were made (it being
understood that no representation is made with respect to information
about LCM or LIS provided by LCM in writing to PHL Variable). PEPCO
shall immediately notify each of the LCM Parties in the event PEPCO
believes or has reason to believe that the representations and
warranties in this paragraph are no longer true or completely
accurate.
8.10 TAX MATTERS. It is more likely than not that: (1) PEPCO will not be
treated as the owner of the assets in an LIS Account for federal
income tax purposes; (2) the GRIS, including each Certificate, will be
treated as an annuity contract for federal income tax purposes; (3)
for all Certificate Holders on the date of GRIS issuance and during
the entire period during which the GRIS and each Certificate is in
effect, losses with respect to the LIS Account will be deductible
under Section 165(a) of the IRC notwithstanding the existence of the
GRIS' conditional guarantee of annual lifetime income payments in the
event that the value of the assets in an LIS Account decreases to
zero; (4) for all Certificate Owners on the date of GRIS issuance and
during the entire period during which the GRIS and each Certificate is
in effect, dividends on stock held in an LIS Account otherwise meeting
the requirements of Section 1(h)(11) of the IRC will constitute
qualified dividend income notwithstanding the existence of a GRIS and
its conditional guarantee of annual lifetime income payments in the
event the value of the assets in the LIS Account decreases to zero;
and (5) for each Certificate Owner on the date of Certificate issuance
and during the entire period during which the GRIS and each
Certificate is in effect, the Certificate and assets in the LIS
Account subject thereto will not be treated as a straddle under
Section 1092 of the IRC.
8.11 OWNERSHIP OF GRIS. Except as set forth in Section 11.01, PEPCO and its
Affiliates, as applicable, are the exclusive legal and beneficial
owner of and have good and marketable title in and to the GRIS and all
intellectual property rights therein, free and clear of all pledges,
claims, liens, charges, encumbrances and security interests of any
kind or character, including any claims for infringement of
intellectual property rights. For the purposes of this Section,
intellectual property includes GRIS forms, specimen forms, the
features of the GRIS, materials filed by any of the PHL Parties with
State insurance regulators, and any other forms prepared by any of the
PHL Parties or any of their Affiliates in connection with the GRIS.
There are no claims, actions, suits, investigations or proceedings
(arbitration or otherwise) pending against, or to the knowledge of
PEPCO, threatened against or affecting, all or any part of the GRIS or
to the transactions contemplated by any of the Transaction Documents.
To the
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knowledge of PEPCO, there are no facts that could reasonably serve as
a basis for such claim, action, suit, investigation or proceeding. The
use and issuance of the GRIS does not and will not infringe,
misappropriate, violate or dilute any intellectual property rights of
any person.
SECTION 9 OBLIGATIONS OF THE PHL PARTIES
9.01 ADEQUATE RESOURCES. Each of the PHL Parties shall devote commercially
reasonable resources to ensure each of them and their Affiliates, as
applicable, can perform their respective duties and obligations under
the Transaction Documents.
9.02 GRIS FILING AND APPROVAL. PHL Variable shall take all commercially
reasonable efforts to (1) qualify the offer and sale of the GRIS in
each jurisdiction within the Territory, and (2) obtain any approvals
that are or may be required by any Governmental Entity to permit or
facilitate the offer and sale of the GRIS in each such jurisdiction;
provided however that neither PHL Variable nor any other PHL Party
shall be required to seek to qualify the offer and sale of the GRIS or
obtain any approvals to permit or facilitate the offer or sale of the
GRIS in the State of New York or the State of Maine. Such actions
shall include, as applicable, filing the Registration Statement and
using commercially reasonable efforts to maintain the effectiveness of
the Registration Statement, filing forms of the Master Group Annuity
Contracts, Certificates, and Applications with Governmental Entities,
including State insurance departments, and filing or submitting such
notices, requests, and other documents in furtherance of the
foregoing. One or more of the PHL Parties will immediately notify each
of the LCM Parties if any Governmental Entity withdraws or modifies a
previously issued approval of the GRIS.
9.03 ADMINISTRATIVE SERVICES.
9.03.1 PHL SERVICES. During the Term, each of the PHL Parties, as
applicable, shall use commercially reasonable efforts to
provide those administrative services set forth on Exhibit A
(the "PHL Services").
9.03.2 STANDARDS FOR SERVICES. In performing the PHL Services, each of
the PHL Parties shall at all times (1) act in good faith and
with the care, skill, and diligence of a person experienced in
providing services similar to the PHL Services; (2) perform
such services consistent with applicable Law, and (3) perform
such services in a manner the Parties may agree in writing from
time to time.
9.03.3 SUBCONTRACTING WITH AFFILIATES. The PHL Parties may subcontract
with one or more of their Affiliates for the performance of
some or all of the PHL Services; provided, however, that no
subcontract shall relieve any of the PHL Parties from any of
their respective duties, obligations or liabilities under this
Agreement and each of the PHL
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Parties shall remain responsible for all such duties,
obligations and liabilities, whether or not performed in whole
or in part by a subcontractor.
9.04 CONTINUING DUTIES AND OBLIGATIONS. Nothing contained in the
Transaction Documents shall relieve any of the PHL Parties from their
respective duties and obligations under any of the other Transaction
Documents.
9.05 REGISTRATIONS AND LICENSES. Each of the PHL Parties shall maintain,
and cause each of the directors, officers, employees, agents and
representatives of each of the PHL Parties or any Affiliate thereof to
maintain all material registrations, licenses, memberships, approvals,
and consents necessary or desirable to carry out their respective
obligations under any of the Transaction Documents during the terms of
the Transaction Documents, as applicable. PHL Variable shall promptly
notify each of the LCM Parties in writing upon the lapse, termination,
non-renewal, suspension, revocation, or cancellation (without
replacement) of any such registration, license, membership, approval,
order or consent.
9.06 BOOKS AND RECORDS. Each of PHLVIC and PLIC shall maintain their
respective Books and Records as required by applicable Law.
9.07 PROPRIETARY INTERESTS OF THE LCM PARTIES.
9.07.1 INTERFERENCE WITH CONTRACTS. During the term hereof and for a
period of two years following termination, none of the PHL
Parties, their Affiliates, or any of their respective officers,
directors, employees, agents, or representatives will:
(a) knowingly and intentionally interfere with the contractual
relationships existing between or among any of the LCM
Parties or their Affiliates (as the case may be), on the
one hand, and any officer, director, employee, agent, or
other representative of any of the LCM Parties or their
Affiliates assigned to assist the Parties or their
Affiliates in connection with the negotiation and
implementation of the GRIS and any Transaction Document, or
the sales and marketing of the GRIS ("LCM GRIS Persons"),
on the other;
(b) knowingly and intentionally induce, solicit, or encourage
LCM GRIS Persons to terminate their respective contracts,
or otherwise change their relationship, with any of the LCM
Parties or their Affiliates; provided, however, in no way
shall this Section 9.07.1(b) limit or reduce the
obligations of any of the LCM Parties to their respective
clients and customers; or
(c) without the prior written consent of the LCM Parties,
employ or otherwise contract with any LCM GRIS Persons.
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Nothing contained in this Section 9.07.1 shall prohibit a
PHL Party from hiring any LCM GRIS Persons (i) responding
to any advertisement or other general solicitation not
targeted to the LCM Parties or their Affiliates or (ii)
whose employment with a LCM Party or Affiliate has
terminated and such termination was not induced or
solicited by a PHL Party.
9.07.2 INTERFERENCE WITH CUSTOMERS. During the term hereof and for a
period of two years following termination, none of the PHL
Parties, any of their Affiliates, or any of their respective
officers, directors, employees, agents, or representatives,
will knowingly and intentionally interfere with contractual
relationships between any of the LCM Parties (as the case may
be), on the one hand, and any customer of any of the LCM
Parties, including, without limitation, any LIS Client, on the
other. For the purposes of this Section, (i) prohibited acts of
interference shall include any action to induce or solicit the
lapse, replacement, cancellation or modification of any such
contractual relationship and (ii) nothing contained in this
Section shall prohibit (a) a PHL Party from entering into a
contractual relationship with any such customer or client
responding to any advertisement or other general solicitation
not targeted to clients or customers of the LCM Parties, or (b)
a person who has been appointed by PHL Variable as an insurance
agent from selling an insurance policy or annuity contract to
any such customer.
9.07.3 NON-SOLICITATION. During the term hereof and for a period of
two years following termination, none of the PHL Parties, any
of their Affiliates, or any of their respective officers,
directors, employees, agents, or representatives, shall,
without the prior written approval of each of the LCM Parties,
(1) knowingly and intentionally market any products or services
to an LIS Client or Certificate Owner other than the GRIS, if
such LIS Client or Certificate Owner is identified from
information any of the PHL Parties, any of their Affiliates, or
any of their respective officers, directors, employees, agents,
or representatives, obtain pursuant to any of the Transaction
Documents or any transaction contemplated thereunder, or (2)
contact, solicit or communicate with any Certificate Owner,
either orally or in writing, in connection with any lifetime
payment option available under any Certificate unless either
PHLVIC or PLIC receives an unsolicited inquiry from a
Certificate Owner, in which event either PHLVIC or PLIC, as
applicable, may only provide information limited to how the
option works and the cost thereof. Notwithstanding Section
9.07.3(1) and subject to Section 9.07.3(2), PHLVIC and PLIC may
communicate with Certificate Owners as is necessary to
administer the Certificates or as required by applicable Law.
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9.08 ONGOING DUE DILIGENCE. During the Term, each of the PHL Parties shall
provide to each of the LCM Parties such materials and documents
regarding each of the PHL Parties as such LCM Party may reasonably
request in order to permit the LCM Parties to evaluate the PHL
Parties; provided, however, that such materials and documents shall be
provided at least quarterly.
SECTION 10 OBLIGATIONS OF THE LCM PARTIES
10.01 ADEQUATE RESOURCES. LCM shall devote commercially reasonable
resources to ensure it can perform its duties and obligations under
the Transaction Documents.
10.02 ADMINISTRATIVE SERVICES.
10.02.1 LCM SERVICES. During the Term, each of the LCM Parties shall
use commercially reasonable efforts to provide those
administrative services set forth on Exhibit B (the "LCM
Services").
10.02.2 STANDARDS FOR SERVICES. In performing the LCM Services, each
of the LCM Parties shall at all times (1) act in good faith
and with the care, skill, and diligence of a person
experienced in providing services similar to the LCM Services;
(2) perform such services consistent with applicable Law, and
(3) perform such services in a manner the Parties may agree in
writing from time to time.
10.02.3 SUBCONTRACTING WITH AFFILIATES. The LCM Parties may
subcontract with one or more of their Affiliates for the
performance of some or all of the LCM Services; provided,
however, that no subcontract shall relieve any of the LCM
Parties from any of its duties, obligations or liabilities
under this Agreement and each of the LCM Parties shall remain
responsible for all such duties, obligations and liabilities,
whether or not performed in whole or in part by a
subcontractor.
10.03 CONTINUING DUTIES AND OBLIGATIONS. Nothing contained in the
Transaction Documents shall relieve any of the LCM Parties from their
respective duties and obligations under any of the other Transaction
Documents.
10.04 INFORMATION TO BE PROVIDED TO THE PHL PARTIES. LCM shall provide to
the PHL Parties such information reasonably necessary to describe LCM
and LIS in the Registration Statement and Prospectus. Such information
shall not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements provided not
misleading in light of the circumstances under which they were made
(it being understood that no representation is made with respect to
information about the PHL Parties or the GRIS).
10.05 REGISTRATIONS AND LICENSES. Each of the LCM Parties shall maintain,
and cause each of the directors, officers, employees, agents and
representatives of each of the LCM Parties or any Affiliate thereof to
maintain all material registrations, licenses, memberships, approvals,
and consents necessary or desirable to carry out
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their respective obligations under this Agreement or the Master Group
Annuity Contracts during the terms of such agreements, as applicable.
The LCM Parties shall promptly notify each of the PHL Parties in
writing upon the lapse, termination, non-renewal, suspension,
revocation or cancellation (without replacement) of any such
registration, license, membership, approval, order or consent.
10.06 BOOKS AND RECORDS. LCM shall maintain its Books and Records as
required by applicable Law.
10.07 PROPRIETARY INTERESTS OF THE PHL PARTIES.
10.07.1 INTERFERENCE WITH CONTRACTS. During the term hereof and for a
period of two years following termination, none of the LCM
Parties, any of their Affiliates, or any of their respective
officers, directors, employees, agents, or representatives
will:
(a) knowingly and intentionally interfere in any way with the
contractual relationships existing between or among any of
the PHL Parties or their Affiliates (as the case may be),
on the one hand, and any officer, director, employee,
agent, or other representative of any of the PHL Parties
or their Affiliates assigned to assist the Parties or
their Affiliates in connection with the negotiation and
implementation of the GRIS and any Transaction Document,
or the sales and marketing of the GRIS ("PHL GRIS
Persons"), on the other;
(b) knowingly and intentionally induce, solicit, or encourage
PHL GRIS Persons to terminate their respective contracts,
or otherwise change their relationship, with any of the
PHL Parties or their Affiliates; or
(c) without the prior written consent of the PHL Parties,
employ or otherwise contract with any PHL GRIS Persons.
Nothing contained in this Section 10.07.1 shall prohibit a
LCM Party from hiring any PHL GRIS Persons whose
employment with a PHL Party or Affiliate has terminated
and such termination was not induced or solicited by a LCM
Party.
10.08 LCM ADVISORY FEES.
10.08.1 EXISTING LIS ACCOUNTS. During the Term, LCM may increase the
LIS Program Fee LCM charges LIS Clients in connection with
any LIS Account that exists on the date LCM provides written
notice to PHL Variable of the proposed fee increase (such
date, the "Fee Increase Notice Date") only upon receipt of the
written consent of PHL Variable, which consent shall not be
unreasonably withheld. If
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PHL Variable does not disapprove the proposed fee increase
within 10 days from the Fee Increase Notice Date, then such
increase shall be deemed approved.
10.08.2 NEW LIS ACCOUNTS. During the Term, LCM may increase the LIS
Program Fee LCM charges LIS Clients in connection with any LIS
Account established after the Fee Increase Notice Date so long
as the fee increase will not take effect for at least 30 days
from the Fee Increase Notice Date.
SECTION 11 INTELLECTUAL PROPERTY RIGHTS.
11.01 OWNERSHIP OF GRIS. Notwithstanding anything to the contrary contained
in any of the Transaction Documents, none of the PHL Parties or any of
their Affiliates shall own (1) any information about any of the LCM
Parties or any of their Affiliates, whether contained or referenced in
the GRIS, Prospectus, Registration Statement, or otherwise, (2) any of
the Books or Records of any of the LCM Parties or any of their
Affiliates, or (3) any data or other information relating to an LIS
Account or LIS Client.
11.02 Names, Logos, Trademarks, and Service Marks. 11.02.1 PROHIBITION. No
Party shall use any of the names, trade names, trademarks, service
marks and logos of another Party without the prior written consent of
such Party (the "Trademark Consent"). The provisions of Section 11.02
shall apply in the event a Trademark Consent is given.
11.02.2 LCM LICENSED MARKS. Each of the LCM Parties or each of their
Affiliates, as applicable, is the owner of all rights, title
and interests in and to the names, trade names, trademarks,
service marks and logos specified in and attached to the
Trademark Consent of such Party or Affiliate (collectively,
the "LCM Parties Licensed Marks"). Except as may be otherwise
specified in its Trademark Consent, during the Term and
subject to Section 11.02.5, the terms and conditions of the
Trademark Consent, and the additional trademark terms and
conditions set forth on EXHIBIT C ("Trademark License Terms"),
each of the LCM Parties or its Affiliates, as applicable,
shall grant to the PHL Parties and their Affiliates, as
applicable, a non-exclusive limited license (a "License") to
use the LCM Licensed Marks solely in connection with the
performance of the duties and obligations of each of the PHL
Parties and their Affiliates, as applicable, under the
Transaction Documents. Each of the PHL Parties, on behalf of
itself and any of its Affiliates, acknowledges that this
Section 11.02.2, together with the Trademark Consent and
Trademark License Terms, constitute a complete grant of the
rights within this Section 11.02.2.
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11.02.3 PHL VARIABLE LICENSED MARKS. Each of the PHL Parties or each
of their Affiliates, as applicable, is the owner of all
rights, title and interests in and to the names, trade names,
trademarks, service marks and logos specified in and attached
to the Trademark Consent of such Party or Affiliate
(collectively, the "PHL Licensed Marks"). Except as may be
otherwise specified in its Trademark Consent, during the Term
and subject to Section 11.02.5, the terms and conditions of
the Trademark Consent and the Trademark License Terms, each of
the PHL Parties or its Affiliates, as applicable, shall grant
to the LCM Parties and their Affiliates, as applicable, a
non-exclusive limited license (a "License") to use the PHL
Licensed Marks solely in connection with the performance of
the duties and obligations of each of the LCM Parties and
their Affiliates, as applicable, under the Transaction
Documents. Each of the LCM Parties, on behalf of itself and
any of its Affiliates, acknowledges that this Section 11.02.3
together with the Trademark Consent and Trademark License
Terms constitute a complete grant of the rights within this
Section 11.02.3.
11.02.4 DEFINITIONS. Each Party granting a License is sometimes
referred to as a "Licensor" and each recipient of the grant is
sometimes referred to as a "Licensee."
11.02.5 TERMS AND CONDITIONS
(a) TERMINATION. Subject to the restrictions set forth in this
Section, each License shall terminate as follows:
(1) In the event of a complete termination of this
Agreement under Sections 17.01 and 17.02 as to all
Certificates, the grant of all Licenses shall
automatically terminate as of the effective date of
termination. In the event of such termination, each of
the LCM Parties and their Affiliates shall cease using
the PHL Licensed Marks and each of the PHL Parties and
their Affiliates shall cease using the LCM Licensed
Marks.
(2) In the event of termination under Section 17.02.1 as to
new business and during such time as any Certificate
remains in force and benefit payments thereunder have
not commenced, the grant of all Licenses shall continue
only as necessary for the Parties to carry out their
respective duties and obligations under the Transaction
Documents as applicable. For the purposes of clarity,
each Party acknowledges that the Licenses shall not
extend to sales and distribution of the GRIS after the
effective date of termination pursuant to Section
17.02.1, and upon such termination, each LCM Party and
their Affiliates shall
- 22 -
cease using the PHL Licensed Marks and each PHL Party
and their Affiliates shall cease using the LCM Licensed
Marks in connection with the sales and distribution of
the GRIS.
(3) In the event of termination under Section 17.02.1 as to
new business and during such time as the only
Certificates remaining in force are those with respect
to which benefit payments have commenced, the grant of
the License to the PHL Parties and their Affiliates
shall continue only as necessary to make benefit
payments under such Certificates and only until payment
of the last benefit due is made under the last
Certificate in force. In the event of such termination,
(1) the License granted to the LCM Parties and their
Affiliates shall terminate on the date on which the
only remaining Certificates in force are those under
which benefit payments have commenced and thereafter
the LCM Parties and their Affiliates shall cease using
all PHL Licensed Marks, and (2) the License granted to
the PHL Parties and their Affiliates, restricted as
noted in this subsection, shall terminate on the date
on which the last benefit payment is made under the
last Certificate in force and thereafter the PHL
Parties and their Affiliates shall cease using all LCM
Licensed Marks.
(4) In the event of suspension under Section 17.02.2, the
grant of all Licenses shall continue only as necessary
for the Parties to carry out their respective duties
and obligations under the Transaction Documents, as
applicable.
(b) PRE-USE APPROVAL OF TRADEMARK-BEARING MATERIALS, NAMES AND
LOGOS. A Licensee shall obtain the prior written consent of
the Licensor for the use or public release by such Licensee
of any materials bearing the Licensor's licensed marks.
With respect to the use of names or logos, none of the PHL
Parties or their Affiliates, as applicable, shall use in
advertising or publicity the names of any of the LCM
Parties or their Affiliates, as applicable, or any symbol,
abbreviation, contraction or simulation thereof or relating
to LIS or an LIS Account, without the prior written consent
of the LCM Parties, as applicable. With respect to the use
of names or logos, none of the LCM Parties or their
Affiliates, as applicable, shall use in advertising or
publicity the names of any of the PHL Parties or their
Affiliates, or any symbol, abbreviation, contraction or
simulation thereof, without the prior written consent of
the PHL Parties, as applicable.
- 23 -
(c) RECALL. A Licensor may revoke a Trademark Consent or the
prior written consent provided pursuant to Section
11.02.5(b) only in the event of a material change in
circumstances or in the event of a breach by a Licensee of
Section 11.02, the Trademark Consent, and/or the Trademark
License Terms. If the Trademark Consent or such other
consents are properly revoked, then Licensee shall cease
using all licensed marks affected by the revoked consent.
(d) ACKNOWLEDGMENT OF OWNERSHIP. Each Licensee:
(1) acknowledges and stipulates that 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;
and
(2) shall not alter the Licensor's licensed marks in any
respect but shall use them only in the manner in which
they are depicted in the Trademark Consent, as may be
amended from time to time by Licensor.
SECTION 12 COMPENSATION AND EXPENSES
12.01 COMPENSATION. None of the LCM Parties or any of their Affiliates
shall be entitled to payment or other compensation of any kind or
character from any of the PHL Parties or their Affiliates, and none of
the PHL Parties or their Affiliates shall be entitled to payment or
other compensation of any kind or character from any of the LCM
Parties or their Affiliates, for performing their respective duties
and obligations under any of the Transaction Documents. Each of the
LCM Parties acknowledges that (1) each of the LCM Parties and their
Affiliates may benefit from sale of the GRIS, and (2) such benefits
constitute good and valuable consideration under this Agreement. The
Parties acknowledge that the grant of Licenses pursuant to Section
11.02 also constitutes good and valuable consideration.
12.02 EXPENSES. Each Party shall be obligated to pay all costs and expenses
it incurs in connection with developing and implementing the GRIS and
incident to preparing for, entering into and carrying out this each of
the Transaction Documents, as applicable, and the transactions
contemplated therein.
SECTION 13 ADDITIONAL COVENANTS
13.01 COMPLIANCE WITH APPLICABLE LAW. Each Party shall perform, and shall
cause each of its respective Affiliates, as applicable, to perform,
their respective duties and obligations under the Transaction
Documents in compliance in all material respects with applicable Law.
13.02 AUTHORIZED PERSONS.
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13.02.1 PHL PARTIES AUTHORIZED PERSONS. The persons listed on EXHIBIT
D (the "PHL Parties Authorized Persons") are authorized to
give written instructions and directions to, and receive
written instructions and directions on behalf of, any of the
PHL Parties or their Affiliates with respect to any matters
arising in connection with any of the Transaction Documents.
The PHL Parties shall at all times maintain a list of PHL
Parties Authorized Persons that includes persons with
sufficient authority and knowledge concerning the GRIS such
that the PHL Parties can provide such instructions as are
reasonably necessary to permit the LCM Parties to fulfill
their obligations under the Transaction Documents. The LCM
Indemnitees shall not be liable for, and shall be indemnified
and held harmless by each of the PHL Parties against any loss,
cost, damage or expense arising from, any action taken or
omitted by any of them to the extent any of the LCM Parties
can demonstrate that the action or omission was authorized in
writing by a PHL Parties Authorized Person. The PHL Parties
may at any time provide to the LCM Parties written notice of
any changes in the PHL Parties Authorized Person.
13.02.2 LCM PARTIES AUTHORIZED PERSONS. The persons listed on EXHIBIT
E (the "LCM Parties Authorized Persons") are authorized to
give written instructions and directions to, and receive
written instructions and directions on behalf of, any of the
LCM Parties or their Affiliates with respect to any matters
arising in connection with any of the Transaction Documents.
The LCM Parties shall at all times maintain a list of LCM
Parties Authorized Persons that includes persons with
sufficient authority and knowledge concerning the GRIS such
that the LCM Parties can provide such instructions as are
reasonably necessary to permit the PHL Parties to fulfill
their obligations under the Transaction Documents. The PHL
Indemnitees shall not be liable for, and shall be indemnified
and held harmless by each of the LCM Parties against any loss,
cost, damage or expense arising from, any action taken or
omitted by any of them to the extent any of the PHL Parties
can demonstrate that the action or omission was authorized in
writing by a LCM Parties Authorized Person. The LCM Parties
may at any time provide to the PHL Parties written notice of
any changes in the LCM Parties Authorized Person. 13.02.3
NOTICE. Notwithstanding anything to the contrary contained in
this Section, the Parties hereto must comply with Section
18.03 (Notice).
13.03 CONFIDENTIALITY.
13.03.1 DEFINITION.
(a) "Confidential Information" means information obtained from
a Party (i) in connection with the development of or
performance of
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any of the Transaction Documents; (ii) concerning customers
of the Parties or customers of their Affiliates, including
their identities, addresses, and telephone numbers; (iii)
as to a Party's or its Affiliate's business methods,
operations, or affairs, or the processes and systems used
in the operation of its or its Affiliate's business; (iv)
concerning the Parties and their Affiliates that is
identified as confidential by a Party; or (v) required to
be treated as confidential under applicable Law.
(b) "Confidential Information" does not include (i) information
now available in the public domain or that in the future
enters the public domain through no fault of the receiving
Party; (ii) information disclosed to the receiving Party by
a third party without violation by such third party of an
independent obligation of confidentiality; (iii)
information that is independently developed by or for a
Party or its Affiliate in the ordinary course of business
outside of any of the Transaction Documents; or (iv)
information whose disclosure by the receiving Party is
consented to in writing by the disclosing Party.
13.03.2 OBLIGATION TO KEEP CONFIDENTIAL. The receiving Party shall:
(a) hold, and ensure that its Affiliates and the respective
officers, directors, employees, agents, and representatives
of the receiving Party and its Affiliates hold, the
Confidential Information in strict confidence according to
standards the receiving Party utilizes for confidential
information of a similar nature;
(b) not copy, reproduce, sell, assign, license, market,
transfer, or otherwise dispose of, give, or disclose such
Confidential Information to unaffiliated third persons or
to the respective officers, directors, employees, agents,
and representatives of the receiving Party and its
Affiliates who have not agreed in writing to be bound by
such obligations except as required by Law;
(c) not use the Confidential Information for any purposes
whatsoever other than the performance of the duties and
obligations of the receiving Party or its Affiliates, as
applicable, under the Transaction Documents; and
(d) notify its Affiliates and the respective officers,
directors, employees, agents, and representatives of the
receiving Party and its Affiliates who may be exposed to
such Confidential Information of their obligations to keep
such information confidential and not to disclose or use
such information except as expressly provided herein.
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13.03.3 NOTICE OF DISCLOSURE. In the event the receiving Party is
requested to disclose all or any part of the Confidential
Information under the terms of a valid subpoena or order
issued by a court of competent jurisdiction or other
Governmental Entity, the receiving Party shall promptly notify
the disclosing Party promptly of such request and shall
provide the disclosing Party with reasonable opportunity to
obtain and reasonable assistance in obtaining a protective
order or similar remedy, provided that no such notice shall be
required if such notice is prohibited by Law or if the
Governmental Entity requesting such information has requested
that the request not be disclosed. 13.03.4 INTERNAL CONTROLS,
POLICIES AND PROCEDURES. The Parties shall establish and
maintain appropriate policies, procedures and internal
controls to comply with this Section 13.
13.04 NONPUBLIC PERSONAL INFORMATION.
13.04.1 CONFIDENTIALITY OF NONPUBLIC PERSONAL INFORMATION. The Parties
each acknowledge they may come into possession of nonpublic
personal information regarding "customers" or "consumers" of
the other Party, as those terms are defined in Regulation S-P
as enacted by the SEC and in other applicable Laws relating to
privacy of nonpublic personal information (collectively,
"Nonpublic Personal Information."). No Party shall (1) share
any Nonpublic Personal Information with any person except as
permitted by the privacy notices such Party has provided to
its consumers and customers in accordance with applicable
Laws; (2) share any Nonpublic Personal Information with any
unaffiliated third person regardless of whether such sharing
is permitted by such Party's privacy notices; and (3) share
any Nonpublic Personal Information with any Affiliate unless
such sharing is necessary for performance of that Party's
duties and obligations under this Agreement, the Sales and
General Agency Agreement, or the Memorandum of Understanding.
13.04.2 INTERNAL CONTROLS, POLICIES AND PROCEDURES. Each Party shall
establish and maintain written policies, procedures and
internal controls that establish adequate administrative,
technical, and physical safeguards for the protection of
customer records and information as required by Rule 30 under
Regulation S-P or applicable Law. Each Party represents and
warrants that its respective policies, procedures and internal
controls are reasonably designed to (1) ensure the security
and confidentiality of Nonpublic Personal Information, (2)
protect against anticipated threats or hazards to the security
and integrity of Nonpublic Personal Information, and (3)
protect against unauthorized access to or use of Nonpublic
Personal Information.
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13.05 DUTY TO NOTIFY; COOPERATION. Each Party shall promptly notify the
others of the following of which any of them has received notice or
has otherwise become aware: (1) any violation of Law by the personnel
of such Party that would materially impact on the ability of that
Party or its Affiliates, as applicable, to perform their respective
duties and obligations under any of the Transaction Documents, as
applicable, (2) any violation of Law that relates in any way to the
GRIS; (3) any complaint or allegation by a GRIS Certificate Owner
relating in any way to the GRIS (each, a "Customer Complaint"); and
(4) any examination, investigation, allegation, proceeding, or action
by a Governmental Entity, including a court, federal or State
securities regulators, State insurance regulators, and State attorney
general, related to any of the Transaction Documents provided that no
such notice shall be required if such notice is prohibited by Law or
if the Governmental Entity requesting such information has requested
that the request not be disclosed.
13.05.1 CUSTOMER COMPLAINTS. The Parties shall cooperate with each
other in resolving each Customer Complaint. Any proposed
response by a Party to a Customer Complaint shall be sent to
the other Parties not less than five (5) Business Days prior
to the response being sent to any person, including the
Certificate Owner or any Governmental Entity, provided,
however, that if a more prompt response is required, the
Parties shall send to the other Parties the proposed response
as soon as practicable under the circumstances but in no event
shall any Party submit such response to another person without
providing the other Party with prior written notice of and a
copy of the response.
13.05.2 EXAMINATIONS, INVESTIGATIONS AND PROCEEDINGS. The Parties
shall cooperate with each other in connection with any matter
described under Section 13.05(4) above.
SECTION 14 INDEMNIFICATION
14.01 INDEMNIFICATION BY THE PHL PARTIES.
14.01.1 INDEMNIFICATION. Each of the PHL Parties shall, jointly and
severally, indemnify and hold harmless each of the LCM
Parties, their Affiliates, and each of their respective
officers, directors, employees, representatives, successors
and permitted assigns (collectively, the "LCM Indemnitees"),
from and against any and all losses, claims, damages,
liabilities, judgments, costs and expenses, including
reasonable attorney fees and costs of investigation
(collectively, "Loss" or "Losses"), to which any LCM
Indemnitee may become subject, relating to or arising from any
of the following:
(a) a material breach by any of the PHL Parties, any of their
Affiliates, or any their respective officers, directors,
employees, agents,
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representatives, successors or permitted assigns of any
provision of any of the Transaction Documents to which they
are a party;
(b) a material violation of applicable Law by any of the PHL
Parties, any of their Affiliates, or any their respective
officers, directors, employees, agents, representatives,
successors or permitted assigns relating to or arising from
any of the Transaction Documents to which they are a party;
provided, however, that none of the PHL Parties shall owe
indemnification for Losses related to a material violation
of Law arising out of or based upon reliance by any of the
PHL Parties or any of its Affiliates upon information about
any of the LCM Parties or any Affiliate thereof provided by
any of the LCM Parties in writing to a PHL Party;
(c) the GRIS, including its issuance and administration and any
benefit payments due under the GRIS;
(d) any and all documents relating to or arising from the GRIS
that are drafted by, or are reviewed and approved by, any
of the PHL Parties or any Affiliate thereof, including the
Registration Statement, correspondence with Certificate
Owners, and filings with Governmental Entities;
(e) any claim by any person or entity related in any way to the
development of all or any part of the GRIS; or
(f) any claim for infringement of intellectual property rights
by an unaffiliated third party in connection with any
product that is similar to or resembles all or any part of
the GRIS.
14.01.2 LIMITATION. Indemnification pursuant to this Section 14.01
shall be in addition to any liability that any of the PHL
Parties may otherwise have. Notwithstanding anything to the
contrary set forth in this Section, no LCM Indemnitee shall be
entitled to indemnification pursuant to this Section to the
extent that (a) Losses are attributable to acts, omissions or
conduct of any LCM Indemnitee that constitute willful
misconduct, gross negligence, bad faith, or recklessness
(other than any of the PHL Parties, any of their Affiliates,
or any their respective officers, directors, employees,
agents, representatives, successors or permitted assigns
acting as an agent or representative of any of the LCM
Indemnitees), unless such acts, omissions or conduct were
committed at the written direction of any of the PHL Parties
Authorized Persons, or (b) such Loss is also a Loss for which
the PHL Indemnitees are indemnified pursuant to Section 14.02
of this Agreement. Each LCM Party acknowledges that none of
the PHL Parties or their Affiliates shall be deemed to have
guaranteed the profitability of the GRIS or any volume of
sales,
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and no indemnification shall arise based on an assertion of
such a guarantee of profitability of the GRIS or volume of
sales.
14.02 INDEMNIFICATION BY LCM.
14.02.1 INDEMNIFICATION. LCM shall indemnify and hold harmless each of
the PHL Parties, their Affiliates, and each of their
respective officers, directors, employees, representatives,
successors and permitted assigns (collectively, the "PHL
Indemnitees"), from and against any and all Losses to which
any PHL Indemnitee may become subject, relating to or arising
from any of the following:
(a) a material breach by LCM, any of their Affiliates, or any
their respective or any of their officers, directors,
employees, agents, representatives, successors or permitted
assigns, of any provision of the Transaction Documents to
which they are a party (excluding the Memorandum of
Understanding);
(b) a material violation of applicable Law by LCM, any of its
Affiliates, or any their respective or any of its officers,
directors, employees, agents, representatives, successors
or permitted assigns, relating to or arising from the
Transaction Documents to which they are a party or LIS;
provided, however, that LCM shall not owe indemnification
for Losses related to a material violation of Law arising
out of or based upon reliance by LCM or any of its
Affiliates upon information about any of the PHL Parties or
any Affiliate thereof provided by any of the PHL Parties in
writing to an LCM Party;
(c) the administration and management of LIS Accounts, but
excluding actions taken by LCM under the Memorandum of
Understanding;
(d) any claim by any person or entity related in any way to the
development of all or any part of LIS, but excluding claims
relating in any way to the development of all or any part
of the GRIS or Registration Statement;
(e) any claim for infringement of intellectual property rights
by an unaffiliated third party in connection with any
product that is similar to or resembles all or any part of
LIS, but excluding any claim relating in any way to the
development of all or any part of the GRIS or Registration
Statement and any claim described in Sections 14.01.1(e)
and (f) of this Agreement; or
(f) a termination of a Certificate by either PHLVIC or PLIC as
a result of a breach of the Memorandum of Understanding by
LCM that is
- 30 -
not cured on or before the 5th consecutive Business Day
following the date on which either PHLVIC or PLIC delivers
notice under the Memorandum of Understanding that PHLVIC or
PLIC, as applicable, has determined it cannot hedge changes
proposed by LCM either (i) without incurring material
additional risk or additional hedging costs that are
material in light of the pricing of the GRIS, or (ii)
because Phoenix is unable to obtain an appropriate hedge (a
determination as to either (i) or (ii), a "Determination");
except a breach shall not be deemed to have occurred if LCM
demonstrates, through binding arbitration pursuant to
Section 16.02 of this Agreement, that a Determination was
unreasonable, erroneous or not made in good faith.
14.02.2 LIMITATION. Indemnification pursuant to this Section 14.02
shall be in addition to any liability that LCM may otherwise
have. Notwithstanding anything to the contrary set forth in
this Section, no PHL Indemnitee shall be entitled to
indemnification pursuant to this Section to the extent that
(a) Losses are attributable to acts, omissions or conduct of
any PHL Indemnitee that constitute willful misconduct, gross
negligence, bad faith, or recklessness (other than any of LCM
Parties, any of their Affiliates, or any their respective
officers, directors, employees, agents, representatives,
successors or permitted assigns acting as an agent or
representative of any of the PHL Indemnitees), unless such
acts, omissions or conduct were committed at the written
direction of LCM Parties Authorized Persons, or (b) such Loss
is also a Loss for which the LCM Indemnitees are indemnified
pursuant to Section 14.01 of this Agreement. Each PHL Party
acknowledges that neither LCM nor any of its Affiliates shall
be deemed to have guaranteed the profitability of the GRIS or
any volume of sales, and no indemnification shall arise in
connection with profitability of the GRIS or volume of sales.
14.03 INTER-PARTY CLAIMS. Any Party seeking indemnification pursuant to this
Section 14 (the "Indemnified Party") shall notify the other Party or
Parties from whom such indemnification is sought (the "Indemnifying
Party") of the Indemnified Party's assertion of such claim for
indemnification, specifying the basis of such claim. The Indemnified
Party shall thereupon give the Indemnifying Party reasonable access to
the documents that evidence or support such claim or the act, omission
or occurrence giving rise to such claim.
14.04 THIRD PARTY CLAIMS.
14.04.1 Each Indemnified Party shall promptly notify the Indemnifying
Party of the assertion by any third party of any claim with
respect to which the indemnification set forth in this Article
14 relates (which shall also constitute the notice required by
Section 18.03). The Indemnifying Party shall have the right,
upon notice to the
- 31 -
Indemnified Party within ten business days after the receipt
of any such notice, to undertake the defense of or, with the
consent of the Indemnified Party, (which consent shall not
unreasonably be withheld), to settle or compromise such claim.
The failure of the Indemnifying Party to give such notice and
to undertake the defense of or to settle or compromise such a
claim shall constitute a waiver of the Indemnifying Party's
rights under this Section 14.04.1 and shall preclude the
Indemnifying Party from disputing the manner in which the
Indemnified Party may conduct the defense of such claim or the
reasonableness of any amount paid by the Indemnified Party in
satisfaction of such claim.
14.04.2 The election by the Indemnifying Party, pursuant to Section
14.04.1, to undertake the defense of a third-party claim shall
not preclude the Party against which such claim has been made
also from participating or continuing to participate in such
defense, so long as such Party bears its own legal fees and
expenses for so doing.
SECTION 15 STATUS OF PARTIES
15.01 INDEPENDENT CONTRACTORS. Each of the PHL Parties and their
Affiliates, on the one hand, and each of the LCM Parties and their
Affiliates, on the other, shall be deemed to be an independent
contractor as to the others for all purposes. None of the Transaction
Documents shall be construed (1) to create the relationship of
employer and employee among the Parties hereto or between any Party
and any of the officers, directors, employees, or representatives of
any other Party, (2) to create a partnership or joint venture among
the Parties hereto, or (3) to authorize any Party to act as a general
or special agent of any other, except as may be specifically set forth
herein. Except as otherwise expressly set for in this Agreement, no
Party shall in any manner be prevented or bound to refrain from
engaging in any business or businesses of any kind or nature, or
owning or dealing in securities of any entity or making any
investments of any kind, or performing services for any other person,
firm, or entity.
15.02 AUTHORITY TO ACT. Except as otherwise expressly set forth in this
Agreement or the Sales and General Agency Agreement, none of the PHL
Parties or their Affiliates, on the one hand, and the LCM Parties or
their Affiliates, on the other, shall have or be deemed to have
authority to act on behalf of the others.
15.03 NO THIRD-PARTY BENEFICIARIES. This Agreement, the Sales and General
Agency Agreement, the Memorandum of Understanding and the
Indemnification Agreement (defined below) are solely among the Parties
hereto, as applicable, and are not intended to create any right or
legal relationship, express or implied, among the Parties or any of
their respective Affiliates, officers, directors, employees, agents,
representatives, successors or permitted assigns, on the one hand, and
any third party, including any Certificate Owner or other person
covered under a GRIS, on the other hand; provided, however, that the
LCM
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Indemnitees and the PHL Indemnitees are expressly intended to be
third-party beneficiaries under this Agreement.
15.04 LCM PARTIES NOT UNDERWRITER, INSURER OR PRODUCER. Notwithstanding
anything to the contrary in any Transaction Document, none of the LCM
Parties, their Affiliates, or any of their respective directors,
officers, employees, agents, or other representatives are or shall be
deemed to be (1) underwriters of any security, including the GRIS; (2)
insurers, guarantors, or underwriters of any obligation of either
PHLVIC and PLIC under the GRIS, including the obligation of either of
PHLVIC or PLIC to pay claims and benefits arising under the GRIS, or
(3) insurance agents, brokers or producers, except in the case of DSO
and certain of its officers, employees, agents, or other
representatives, who are licensed as insurance producers as required
under applicable State insurance Laws.
15.05 PHL PARTIES NOT INVESTMENT ADVISER. Notwithstanding anything to the
contrary in any Transaction Document, none of the PHL Parties or any
of their respective directors, officers, employees, agents, or other
representatives are investment advisers under the Advisers Act or
similar State Laws.
SECTION 16 DISPUTE RESOLUTION
16.01 DISPUTES REGARDING PHL SERVICES OR LCM SERVICES.
16.01.1 NOTICE; AUTHORIZED PERSONS. During the Term, if any of the PHL
Parties, on the one hand, or any of the LCM Parties, on the
other, encounters a problem that it believes constitutes a
material breach of the other's duty to provide either the PHL
Services or the LCM Services, as applicable, the non-breaching
Parties shall promptly notify the other Parties in writing,
and such breaching Party or Parties shall promptly respond. If
the problem is not promptly resolved among the Parties, a PHL
Parties Authorized Person and an LCM Parties Authorized Person
shall, before the end of the first full Business Day following
the date on which initial notice is provided by the
non-breaching Parties, consult with each other in good faith
concerning the existence, cause and remediation of the
possible breach.
(a) If such Authorized Persons mutually determine that the
problem constitutes a material breach, the breaching Party
or Parties shall promptly take such actions and make any
modifications and/or changes as are required to correct the
breach, without charge to the non-breaching Parties.
(b) If such Authorized Persons cannot mutually determine
whether the problem is the result of a material breach,
then the dispute shall be resolved in accordance with
Section 16.02 below.
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16.01.2 INDEMNIFICATION. The non-breaching Party or Parties may seek
indemnification for any damages resulting from a breach under
this Section pursuant to Section 14 (Indemnification).
16.02 ARBITRATION. All controversies, claims or disputes among the Parties
arising out of or relating to this Agreement, either of the Master
Group Annuity Contracts, or breach of any of them, including matters
relating to formation, shall be settled by binding arbitration by the
American Arbitration Association in accordance with its Commercial
Arbitration Rules and Title 9 of the U.S. Code. The place of
arbitration shall be New York, New York.
16.02.1 The arbitrators shall be disinterested. The number of
arbitrators shall be three, one of whom shall be appointed by
the PHL Parties and one of whom shall be appointed by LCM
Parties, and the third of whom shall be selected by mutual
agreement of the first two arbitrators, or by the
administering authority if the first two arbitrators do not
arrive at a mutual agreement within thirty (30) days of the
selection of the second arbitrator.
16.02.2 A decision of a majority of the arbitrators shall be final and
binding and there shall be no appeal therefrom, unless (i) the
decision was procured by corruption, fraud or other undue
means; (ii) there was evident partiality by the arbitrator
appointed as a neutral or corruption in any of the arbitrators
or misconduct prejudicing the rights of any Party; or (iii)
the arbitrators exceeded their powers. The arbitrators shall
issue a written opinion in support of the arbitration award.
16.02.3 The arbitrators shall have no authority to award punitive
damages or any other damages not measured by the prevailing
Party's actual damages, and may not, in any event, make any
ruling, finding or award that does not conform to the terms
and conditions of the applicable agreement.
16.02.4 Each Party shall be responsible for the costs and expenses
incurred by such Party, including attorneys, although the cost
of arbitration, including the fees of the arbitrators, shall
be borne equally by the PHL Parties, on the one hand, and the
LCM Parties, on the other; provided, however, that the panel
of arbitrators may determine to award fees and costs,
including attorney fees, to the prevailing Party. 16.02.5 Any
Party may seek injunctive relief from the arbitrators to
maintain the status quo until such time as the arbitration
award is rendered or the controversy is otherwise resolved.
16.02.6 Judgment upon the award rendered by the arbitrators may be
entered in the courts specified in Section 18.04 below.
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SECTION 17 DURATION AND TERMINATION
17.01 DURATION. Except as to termination of new business pursuant to Section
17.02 of this Agreement, this Agreement shall remain in effect for so
long as any Certificate remains in force with respect to which benefit
payments thereunder have not commenced; provided, however, that the
Parties shall be obligated to fulfill their obligations under the
Transaction Documents to which they are a party with respect to any
Certificate that remains in force.
17.02 TERMINATION AND SUSPENSION AS TO NEW BUSINESS.
17.02.1 TERMINATION. This Agreement may be terminated by either the
PHL Parties, on the one hand, or the LCM Parties, on the
other, with respect to Certificates that have not been issued
as of the effective date of termination in the following
manner:
(a) By any of the PHL Parties, on the one hand, or any of the
LCM Parties, on the other, providing ninety (90) days prior
written notice to the other Parties.
(b) By any of the LCM Parties, if any of the PHL Parties or
their Affiliates, as applicable, materially breaches any of
the Transaction Documents and does not cure such breach
within sixty (60) days of being provided written notice of
such breach by an LCM Party.
(c) By any of the LCM Parties, immediately, if:
(1) Any of the PHL Parties is placed in receivership or
conservatorship or other proceedings pursuant to which
it is substantially prevented from continuing to engage
in the lines of business relevant to the subject matter
hereof.
(2) Any of the PHL Parties becomes a debtor in bankruptcy,
whether voluntary or involuntary, is the subject of an
insolvency, rehabilitation, or delinquency proceeding,
or is determined to be in hazardous financial
condition.
(3) Any of the PHL Parties becomes the subject of a
criminal indictment or information or similar
proceedings.
(4) Any of the PHL Parties assigns or transfers this
Agreement in a manner that does not comply with the
provisions of this Agreement.
(d) By any of the PHL Parties, if any of the LCM Parties or
their Affiliate, as applicable, materially breaches any of
the Transaction Documents to which they are a party and
does not cure such breach
- 35 -
within sixty (60) days of being provided written notice of
such breach by a PHL Party.
(e) By any of the PHL Parties, immediately, if:
(1) Any of the LCM Parties is placed in receivership or
conservatorship or other proceedings pursuant to which
it is substantially prevented from continuing to engage
in the lines of business relevant to the subject matter
hereof.
(2) Any of the LCM Parties becomes a debtor in bankruptcy,
whether voluntary or involuntary, is the subject of an
insolvency, rehabilitation, or delinquency proceeding,
or is determined to be in hazardous financial
condition.
(3) Any of the LCM Parties becomes the subject of a
criminal indictment or information or similar
proceedings.
(4) Any of the LCM Parties assigns or transfers this
Agreement in a manner that does not comply with the
provisions of this Agreement.
17.02.2 SUSPENSION. Any of the PHL Parties, on the one hand, and any
of the LCM Parties, on the other, upon 30 days written notice,
may suspend issuance of (1) new Certificates entirely or (2)
new Certificates guaranteeing LIS Accounts that invest in one
or more Models with certain style attributes or investment
vehicles, as may be expressly provided in such written notice,
provided, however that the PHL Parties may suspend the
issuance of new Certificates affected by a change in any of
the Models after the 5th consecutive Business Day following
the date on which either PHLVIC or PLIC deliver notice under
the Memorandum of Understanding concerning its reasonable
determination that it cannot hedge proposed changes without
incurring material additional risk and/or material additional
hedging costs, or because Phoenix is unable to obtain a
reasonably appropriate hedge, if LCM has made the proposed
changes and not cured such changes within such five-day
period.
SECTION 18 MISCELLANEOUS
18.01 Assignment or Change of Control.
18.01.1 ASSIGNMENT. This Agreement shall be binding on and shall inure
to the benefit of the respective successors and assigns of the
Parties except as otherwise provided in this Agreement. No
Party shall assign this Agreement or any rights or obligations
hereunder or, except as expressly set forth in the Agreement
with respect to the PHL Services and LCM Services, delegate
any of their respective
- 36 -
duties and obligations hereunder, without the prior written
consent of the other Parties, which, in view of the unique and
specialized nature of each Party's obligations hereunder, may
be declined by any LCM Party on the one hand or any PHL Party,
on the other hand, as the case may be, for any reason. Any
attempted assignment or delegation in violation of this
Section shall be void. A Change of Control, as defined below,
shall be considered an assignment under this Section 18.01 and
Sections 17.02.1(c)(4) and 17.02.1(e)(4).
18.01.2 CHANGE OF CONTROL. A "Change of Control" means:
(a) the acquisition by any person, entity or group, including a
"group" required to file a Schedule 13D or Schedule 14D-1
under the 1934 Act (excluding, for this purpose, a Party, its
Affiliates and any employee benefit plan of a Party or its
Affiliates that acquires ownership of voting securities of an
Affiliate of that Party) of beneficial ownership (within the
meaning of Rule 13d-3 under the 0000 Xxx) of 50% or more of
either the (1) then outstanding ordinary shares of a Party, of
a person or entity controlling such Party, or of a person or
entity controlling such person or entity, up to and including
the ultimate controlling person (such Party and persons or
entities collectively, the "Control Group"), or (2) the
combined voting power of the Control Group's then outstanding
voting securities entitled to vote generally in the election
of directors, in each case excluding an acquisition when the
transaction is among Parties that are under common control
both before and after such transaction;
(b) the election or appointment to the board of directors of any
member of the Control Group, or resignation of or removal from
such board of directors with the result that the individuals
who as of the date hereof constituted the board of directors
(the "Incumbent Board") of each member of the Control Group no
longer constitute at least a majority of such board of
directors, provided that any person who becomes a director
subsequent to the date hereof whose appointment, election, or
nomination for election by the shareholders of each member of
the Control Group, was approved by a vote of at least a
majority of the Incumbent Board (other than an appointment,
election or nomination of an individual whose initial
assumption of office is in connection with an actual or
threatened election contest relating to the election of the
directors of a member of the Control Group) shall be, for
purposes of this Agreement, considered as though such person
were a member of the Incumbent Board; or
(c) the approval by the shareholders of any member of the Control
Group of:
(1) a reorganization, merger or consolidation by reason of
which the persons who were the shareholders of such member
of the Control Group immediately prior to such
reorganization, merger or consolidation do not,
- 37 -
immediately thereafter, own more than 50% of the combined
voting power of the reorganized, merged or consolidated
company's then outstanding voting securities entitled to
vote generally in the election of directors, or
(2) a liquidation or dissolution of such member of the Control
Group or the sale, transfer, lease or other disposition of
all or substantially all of the assets of such person
(whether such assets are held directly or indirectly),
in each case excluding a reorganization, merger,
consolidation, sale, transfer, lease or other disposition when
the transaction is among Parties that are under common control
both before and after such transaction.
18.02 RIGHTS, REMEDIES, ETC. ARE 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, which the Parties may be entitled to under State and
federal laws.
18.03 NOTICES. Except as set for in this paragraph, all notices hereunder
shall be made in writing and shall be effective upon delivery, which
shall be made (1) by hand delivery, (2) by registered or certified
United States mail, postage prepaid with return receipt requested,
(3) by a nationally-recognized overnight courier service, to the
addresses set forth below, or to such other address as any Party may
request by giving written notice to the other Parties. A Party may
also provide notice by electronic means (such as email or facsimile)
or telephone in cases when immediate notice is required so long as
the Party giving notice delivers separate written notice to be with
24 hours pursuant to Sections 18.03(1) or 18.03 (3).
If to the PHL Parties
Xxxxxxxx X. XxXxx
Vice President
Life and Annuity Counsel
Phoenix Life Insurance Company
Xxx Xxxxxxxx Xxx
XX Xxx 0000
Xxxxxxxx, XX 00000-0000
With a simultaneous copy that shall not constitute notice under
this section to:
Xxxxxxx X. Xxxxxx
Debevoise & Xxxxxxxx LLP
000 00xx Xxxxxx, X.X.
Xxxxxxxxxx, XX 00000
- 38 -
If to the LCM Parties:
Xxxx Xxxxxxxx
Managing Counsel
Xxxxxxxx Capital Management, Inc.
00 Xxxxxx Xxxxxx Xxxxxxx
Xxxxxxx, XX 00000
Xxxxxxx X. Xxxx
Legal Counsel
Xxxxxxxx Capital Management, Inc.
00 Xxxxxx Xxxxxx Xxxxxxx
Xxxxxxx, XX 00000
Xxxxxxxx XxXxxxxxxx
Assistant General Counsel
MBSC Securities Corporation
Legal Department
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
With a simultaneous copy that shall not constitute notice under
this section to:
Xxxxxx X. Xxxxx
Drinker Xxxxxx & Xxxxx LLP
18th and Cherry Sts.
Xxxxxxxxxxxx, XX 00000
18.04 GOVERNING LAW. This Agreement shall be construed and its provisions
interpreted under and in accordance with the internal Laws of the
State of New York, without giving effect to principles of conflict or
choice of laws of that or any other jurisdiction. Each of the Parties
hereto shall submit to the jurisdiction of the courts of the State of
New York and the federal courts in the Southern District of New York.
18.05 AMENDMENTS. No change may be made to the terms or provisions of this
Agreement except by written agreement signed by the Parties.
18.06 SEVERABILITY. If any provision of this Agreement is held invalid,
illegal, unenforceable, or in conflict with the Law of any
jurisdiction, such provision shall be enforced to the extent
permitted under applicable Law, and the validity, legality, and
enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
18.07 WAIVER. The failure by any Party to insist upon strict compliance
with any condition of this Agreement shall not be construed as a
waiver of such condition.
- 39 -
Waiver by one Party to this Agreement of any obligation of another
Party to this Agreement does not constitute a waiver of any further
or other obligation of such Party.
18.08 INTERPRETATION. This Agreement shall be governed by the following
rules of interpretation: (a) when a reference is made in this
Agreement to an Article, Section, or Exhibit, such reference shall be
to an Article of, a Section of, or Exhibit to, this Agreement unless
otherwise indicated; (b) the headings contained in this Agreement are
for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement; (c) whenever the words
"include," "includes" or "including" are used in this Agreement, they
shall be deemed to be followed by the words "without limitation;" (d)
whenever the singular is used herein, the same shall include the
plural, and whenever the plural is used herein, the same shall
include the singular, where appropriate; and (e) references to
currency or amounts due shall mean United States dollars.
18.09 CONSTRUCTION. The Parties hereto have participated, directly or
indirectly, in the negotiations and preparation of this Agreement. In
no event shall this Agreement be construed more or less stringently
against any Party by reason of another Party being construed as the
principal drafting Party hereto.
18.10 SURVIVAL. The following Sections shall survive termination of this
Agreement: Sections 9.06, 9.07, 10.06, 10.07, 11 (including Exhibit
C), 12, 13.03, 13.04, 14, 15, 16.02, and 18.
18.11 ENTIRE AGREEMENT. This Agreement, the other Transaction Documents and
the Indemnification Agreement between the Parties, effective as of
the Effective Date (the "Indemnification Agreement"), constitute the
entire agreement between the Parties hereto with respect to the
subject matter hereof and thereof, and supersede any and all prior
oral or written understandings, agreements or negotiations, between
or among the Parties with respect to the subject matter hereof and
thereof. No prior writings by or among the Parties with respect to
the subject matter hereof and thereof may be used by any Party in
connection with the interpretation of any provision of this
Agreement, the Indemnification Agreement, or the other Transaction
Documents. In the event of a conflict between this Agreement and the
Memorandum of Understanding, the terms of the Memorandum of
Understanding shall control. In the event of a conflict between this
Agreement and the Master Group Annuity Contracts, the terms of this
Agreement shall control.
18.12 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which taken together shall constitute one and
the same instrument.
- 40 -
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed
and delivered by their duly authorized partners and officers, all as of the
Effective Date.
PHL VARIABLE INSURANCE COMPANY PHOENIX EQUITY PLANNING CORPORATION
______________________________ ______________________________
Name:_________________________ Name:_________________________
Title:________________________ Title:________________________
PHOENIX LIFE INSURANCE COMPANY XXXXXXXX CAPITAL MANAGEMENT, INC.
______________________________ ______________________________
Name:_________________________ Name:_________________________
Title:________________________ Title:________________________
MBSC SECURITIES CORPORATION DREYFUS SERVICE ORGANIZATION, INC.
______________________________ ______________________________
Name:_________________________ Name:_________________________
Title:________________________ Title:________________________
- 41 -
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed
and delivered by their duly authorized partners and officers, all as of the
Effective Date.
PHL VARIABLE INSURANCE COMPANY PHOENIX EQUITY PLANNING CORPORATION
______________________________ ______________________________
Name:_________________________ Name:_________________________
Title:________________________ Title:________________________
INSURANCE COMPANY XXXXXXXX CAPITAL MANAGEMENT, INC.
______________________________ ______________________________
Name:_________________________ Name:_________________________
Title:________________________ Title:________________________
MBSC SECURITIES CORPORATION DREYFUS SERVICE ORGANIZATION, INC.
______________________________ ______________________________
Name:_________________________ Name:_________________________
Title:________________________ Title:________________________
- 41 -
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed
and delivered by their duly authorized partners and officers, all as of the
Effective Date.
PHL VARIABLE INSURANCE COMPANY PHOENIX EQUITY PLANNING CORPORATION
______________________________ ______________________________
Name:_________________________ Name:_________________________
Title:________________________ Title:________________________
INSURANCE COMPANY XXXXXXXX CAPITAL MANAGEMENT, INC.
______________________________ ______________________________
Name:_________________________ Name:_________________________
Title:________________________ Title:________________________
MBSC SECURITIES CORPORATION DREYFUS SERVICE ORGANIZATION, INC.
______________________________ ______________________________
Name:_________________________ Name:_________________________
Title:________________________ Title:________________________
- 41 -
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed
and delivered by their duly authorized partners and officers, all as of the
Effective Date.
PHL VARIABLE INSURANCE COMPANY PHOENIX EQUITY PLANNING CORPORATION
______________________________ ______________________________
Name:_________________________ Name:_________________________
Title:________________________ Title:________________________
INSURANCE COMPANY XXXXXXXX CAPITAL MANAGEMENT, INC.
______________________________ ______________________________
Name:_________________________ Name:_________________________
Title:________________________ Title:________________________
MBSC SECURITIES CORPORATION DREYFUS SERVICE ORGANIZATION, INC.
______________________________ ______________________________
Name:_________________________ Name:_________________________
Title:________________________ Title:________________________
- 41 -
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed
and delivered by their duly authorized partners and officers, all as of the
Effective Date.
PHL VARIABLE INSURANCE COMPANY PHOENIX EQUITY PLANNING CORPORATION
______________________________ ______________________________
Name:_________________________ Name:_________________________
Title:________________________ Title:________________________
PHOENIX LIFE INSURANCE COMPANY XXXXXXXX CAPITAL MANAGEMENT, INC.
______________________________ ______________________________
Name:_________________________ Name:_________________________
Title:________________________ Title:________________________
MBSC SECURITIES CORPORATION DREYFUS SERVICE ORGANIZATION, INC.
______________________________ ______________________________
Name:_________________________ Name:_________________________
Title:________________________ Title:________________________
- 41 -
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed
and delivered by their duly authorized partners and officers, all as of the
Effective Date.
PHL VARIABLE INSURANCE COMPANY PHOENIX EQUITY PLANNING CORPORATION
______________________________ ______________________________
Name:_________________________ Name:_________________________
Title:________________________ Title:________________________
INSURANCE COMPANY XXXXXXXX CAPITAL MANAGEMENT, INC.
______________________________ ______________________________
Name:_________________________ Name:_________________________
Title:________________________ Title:________________________
MBSC SECURITIES CORPORATION DREYFUS SERVICE ORGANIZATION, INC.
______________________________ ______________________________
Name:_________________________ Name:_________________________
Title:________________________ Title:________________________
- 41 -
EXHIBIT A TO THE STRATEGIC ALLIANCE AGREEMENT
PHL VARIABLE SERVICES
A. PHL Variable shall, or shall cause one or more of its Affiliates to, provide
all services necessary or desirable to fully administer the GRIS, including, but
not limited to:
1. Notifying MBSC and LCM of any change to the GRIS Fee rate at least ten
calendar days prior to the effective date of the fee change via
E-mail;
2. Calculating the GRIS Fee for each Certificate and send the inception
and quarterly fee information to LCM;
3. Calculating the Retirement Income Base for each Certificate;
4. Calculating the Retirement Income Amount for each Certificate;
5. Calculating the Required Minimum Distribution for each XXX account, as
applicable, but not including tax reporting to the IRS;
6. Providing telephone support to MBSC to enable MBSC to answer
Certificate Owners' questions about their GRIS benefit, including
Retirement Income Base; Retirement Income Amount, and the GRIS Fee on
Business Days during the regular business hours of PHL Variable;
7. Drafting and sending the following documents/correspondence to
Certificate Owners:
a. Welcome Letter and Certificate;
b. GRIS Retirement Income Base /Retirement Income Amount Adjustment
Notice or similar notice, due to a withdrawal, contribution or
reaching retirement income date;
c. GRIS Fee Deduction Notice or similar notice, sent quarterly to
confirm the GRIS Fee deduction;
d. January 1st Letter, with the new Retirement Income Amount for the
year;
e. GRIS Termination Notice or similar notice; and
f. Correspondence after the account value reaches zero;
8. Sending PDF copies of all client correspondence to MBSC, in care of
LCM;
9. Sending LCM a report showing any investments in an LIS Account that
are not invested in accordance with the LIS models, as necessary;
10. Providing LCM with a quarterly data file containing Certificate Owner
data, if requested in writing by LCM in order for LCM to reconcile
data maintained by PHL Variable vs. LCM. LCM shall notify PHL Variable
of any discrepancies identified;
11. Notifying LCM, thirty-five calendar days in advance of the anniversary
date for each Certificate, of fee information relating to the Annual
Optional Increase; Correcting Certificate Owner file data upon
notification of an incorrect Certificate termination by LCM using
current account values;
12. Sending a daily file containing individual account data; and
13. Working with LCM on manual corrections.
- 42 -
B. All information provided shall be in form and content mutually acceptable to
the Parties.
C. Notwithstanding anything to the contrary contained in this Exhibit A,
nothing contained herein shall relieve any of the PHL Parties from their
respective duties and obligations set forth in the Agreement, including those
set forth in Section 9.07.3 of the Agreement.
- 43 -
EXHIBIT B TO THE STRATEGIC ALLIANCE AGREEMENT
LCM SERVICES
A. LCM shall, or shall cause one or more of its Affiliates, to:
1. Notify PHL Variable if a Certificate Owner has changed to a non-GRIS
eligible investment model and has thereby terminated the GRIS;
2. Notify PHL Variable of the amount of non-cash assets transferred into
an LIS Account that are in non-conformance to the model asset
allocation in the daily transmission;
3. Notify PHL Variable of or errors and corrections relating to a
Certificate Owner's additional contributions and withdrawals;
4. For new Certificates, send LIS Account assets and values
electronically to PHL Variable on the certificate effective date;
5. If LCM becomes aware of any material pricing errors, notify PHL
Variable of such errors;
6. On each Business Day, send PHL Variable LIS Account assets, values,
and selected transactions electronically;
7. LCM shall provide PHL Variable with a quarterly data file containing
Certificate Owner data, if requested in writing by PHL Variable in
order for PHL Variable to reconcile data maintained by PHL Variable.
PHL Variable shall notify LCM of any discrepancies identified;
8. Work with PHL Variable on manual corrections; and
9. Debit the GRIS Fee at inception and quarterly, in advance, and remit
the fee to PHL Variable.
10. Notify PHL Variable if a Certificate Owner has terminated the GRIS;
11. Notify PHL Variable of the divorce of Certificate Owners promptly
after such notification is received by MBSC or LCM;
12. Send PHL Variable a copy of Certificate Owners' divorce decrees
promptly after such decrees are received by MBSC or LCM;
13. Notify PHL Variable of the death of a Certificate Owner promptly after
such notification is received by MBSC or LCM;
14. Send PHL Variable a copy of the deceased Certificate Owner's death
certificate promptly after the death certificate is received by MBSC
or LCM;
15. Verify that each Application is completed;
16. Send the completed Application to PHL Variable; and
17. Notify PHL Variable if MBSC becomes aware of an erroneous termination
of a GRIS.
B. All information provided shall be in form and content mutually acceptable to
the Parties.
C. Notwithstanding anything to the contrary contained in this Exhibit B,
nothing contained herein shall relieve any of the LCM Parties from their
respective duties and obligations set forth in the Agreement.
- 44 -
EXHIBIT C
TRADEMARK LICENSE TERMS
The following terms and conditions apply to each License of Trademarks pursuant
to Section 11.02 of the Agreement.
1. LIMITED LICENSE: Nothing in the Agreement or this Exhibit shall be
construed to grant Licensee any rights or license to any trademark,
trade name, certification xxxx, service xxxx, domain name, product
name, logo, patent, technical information, or copyright of Licensor
other than as specified herein. All rights not specifically granted to
Licensee are reserved to Licensor.
a) USE: Licensor reserves the right as owner of the Trademarks to
specify all aspects of use of the Trademarks, including but not
limited to, the manner, place, type, form, layout, design,
channels of trade, channels of distribution, and media of or for
such use, on or in connection with, all displays, advertising,
labels, literature, Internet sites, sales promotion materials,
and all other forms of use of the Trademarks. All use of the
licensed Trademarks shall inure to the benefit of Licensor.
Licensee shall comply with any specific trademark use rules as
may be referenced in any of the Exhibits, or provided to
Licensee, which may be amended or revised by Licensor from time
to time, upon written notice.
b) ACKNOWLEDGMENT: Licensee hereby acknowledges the validity of
Licensor's Trademarks and Licensor's exclusive right, title and
interest in and to the Trademarks. As requested by Licensor,
Licensee shall employ identifying symbols and/or words in
connection with its use of the Trademarks. Licensee shall
cooperate with Licensor in taking all appropriate measures for
the protection of the Trademarks, and shall faithfully observe
and execute the requirements, procedures, and directions of
Licensor with respect to the use and protection of the
Trademarks. Licensee shall not, during the term of this
Agreement, or thereafter:
(1) do or permit to be done any act or thing which prejudices,
infringes or impairs the rights of Licensor with respect to
the Trademarks;
(2) represent that it has any right, title, or interest in or to
the Trademarks, other than the limited license granted
hereunder, or in any registration therefor;
(3) use, register or attempt to register any trademarks, trade
names, logos, domain names, metatags, meta descriptors, or
electronic mail (e-mail) addresses, server names,
search-engine markers, that are identical to, or confusingly
similar to the Trademarks or any other trademarks, trade
names or domain names of Licensor or any of its subsidiaries
or affiliated companies;
(4) do anything or produce any goods in connection with the
Trademarks that damages or reflects adversely upon Licensor,
its subsidiaries or affiliated companies or any of their
trademarks, trade names or domain names; and
- 45 -
(5) continue any use or action in relation to or in connection
with the Trademarks or this Agreement if objected to by
Licensor.
c) GOODWILL: Licensee recognizes the value of the reputation and
goodwill associated with the Trademarks, acknowledges that the
Trademarks have acquired secondary meaning, and that all related
rights and goodwill belong exclusively to Licensor.
d) ART WORK: All art and design or lay-out work that contains, is
derived from or used with the Trademarks, shall be solely owned
by Licensor. Licensee shall not obtain, attempt to obtain or
claim any copyright or trademark rights therein, and upon
request, Licensee shall assign same to Licensor.
e) INFRINGEMENT ACTION: Licensor shall have the sole right to
determine the appropriate action to be taken against any
infringement, imitation, or unauthorized use of the Trademarks
including having the sole discretion to settle any claims or any
controversy arising out of any such claims. Licensee shall
provide Licensor with such reasonable assistance as Licensor may
require in obtaining any protection of Licensor's rights to the
Trademarks at no expense to Licensor. Licensee shall not have any
rights or claim against Licensor for damages or otherwise arising
from any determination by Licensor to act or not to act with
respect to any alleged infringement, imitation or unauthorized
use by others, and any such determination by Licensor shall not
affect the validity or enforceability of this Agreement. Any and
all damages and settlements recovered arising from any action or
proceeding shall belong solely and exclusively to Licensor.
f) ASSIGNMENT TO LICENSOR: Upon request, Licensee shall transfer to
Licensor any rights which accrue to Licensee arising from its use
of the Trademarks or this Agreement.
2. QUALITY STANDARDS, INSPECTION, AND TESTING: So that the value of the
goodwill and reputation associated with the Trademarks will not be
diminished, Licensee shall have an obligation to ensure that all
materials on which the Trademarks are used shall be of at least the
same uniform high quality (i) as may be approved by Licensor
hereunder; or (ii) as specified in quality standards provided by
Licensor hereunder, as the case may be. To monitor for Licensee's
adherence to such obligations, Licensor shall have the right to
inspect such materials from time to time through duly authorized
representatives. Materials not meeting the quality or other
requirements set forth in this Agreement shall not be in any way
promoted in connection with the Trademarks, and all references to the
Trademarks on labels, product literature, promotional material, etc.,
shall be removed at Licensee's expense.
3. LICENSING NOTICE: Licensee shall include a notice on all labeling,
advertising, literature, Internet sites, and sales promotional
materials that the Trademarks are licensed from Licensor. The notice
shall be as follows or as otherwise specified by Licensor:
"_________________(R) is a registered Trademark of [Licensor]
and is used under license to [Licensee]."
- 46 -
4. NO CONSEQUENTIAL DAMAGES, ETC.: IN NO EVENT SHALL ANY PARTY BE LIABLE
FOR ANY SPECIAL, INDIRECT, INCIDENTAL, PUNITIVE, CONSEQUENTIAL, OR ANY
SIMILAR DAMAGES WHETHER OR NOT CAUSED BY OR RESULTING FROM THE
NEGLIGENCE OF SUCH PARTY EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES, IN RELATION TO, ARISING OUT OF OR IN
CONNECTION WITH THIS EXHIBIT OR THE TRADEMARKS.
5. SUPPLEMENTAL PROVISIONS: If any supplemental provisions are made a
part of the Agreement or this Exhibit, they are set forth in Annex A
to this Exhibit.
7. SURVIVAL: Notwithstanding termination of the Agreement, Sections
1(a)-1(f) and 4-6 of this Exhibit shall survive termination of the
Agreement.
- 47 -
EXHIBIT D
PHL PARTIES AUTHORIZED PERSONS
Xxxxx Xxxx
Xxxxxxxxx Xxxx
Xxxxxxxx XxXxx
- 48 -
EXHIBIT E
LCM PARTIES AUTHORIZED PERSONS
Xxxx Xxxxxxxx
Xxxxxxxx XxXxxxxxxx
Xxxxxxx Xxxx
- 49-
