EX-99.B8c
Proposed Participation Agreement
PARTICIPATION AGREEMENT
Among
XXXXXX INSTITUTIONAL PRODUCTS TRUST
XXXXXX ASSOCIATES, INC.
and
____________________________________
THIS AGREEMENT, made and entered into this day of , 19__ by and among
COMPANY, (hereinafter the "Insurance Company"), a Nebraska corporation, on its
own behalf and on behalf of each segregated asset account of the Insurance
Company set forth on Schedule A hereto as may be amended from time to time (each
such account hereinafter referred to as the "Account"), XXXXXX INSTITUTIONAL
PRODUCTS TRUST, a Delaware business trust (the "Trust") and XXXXXX ASSOCIATES,
INC., a Delaware corporation ("Xxxxxx Associates").
WHEREAS, the Trust engages in business as an open-end management
investment company and is available to act as the investment vehicle for
variable annuity and life insurance contracts to be offered by separate accounts
of insurance companies which have entered into participation agreements
substantially identical to this Agreement ("Participating Insurance Companies")
and for qualified retirement and pension plans ("Qualified Plans"); and
WHEREAS, the beneficial interest in the Trust is divided into several
series of shares, each designated a "Fund" and representing the interest in a
particular managed portfolio of securities and other assets; and
WHEREAS, the Trust has obtained an order from the Securities and
Exchange Commission (the "Commission"), dated _________________________, 19__
(File No. 812- ), granting Participating Insurance Companies and their separate
accounts exemptions from the provisions
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of Sections 9(a), 13(a), 15(a), and 15(b) of the Investment Company Act of 1940,
as amended, (the "1940 Act") and Rules 6e-2(b)(15) and 6e-(T)(b)(15) thereunder,
to the extent necessary to permit shares of the Trust to be sold to and held by
Qualified Plans and by variable annuity and variable life insurance separate
accounts of life insurance companies that may or may not be affiliated with one
another (the "Mixed and Shared Funding Exemptive Order"); and
WHEREAS, the Trust is registered as an open-end management investment
company under the 1940 Act and the offering of its shares is registered under
the Securities Act of 1933, as amended (hereinafter the "1933 Act"); and
WHEREAS, Xxxxxx Associates is duly registered as an investment adviser
under the Investment Advisers Act of 1940 and any applicable state securities
law; and
WHEREAS, the Insurance Company has registered under the 1933 Act, or
will register under the 1933 Act, certain variable annuity or variable life
insurance contracts identified by the form number(s) listed on Schedule B to
this Agreement, as amended from time to time hereafter by mutual written
agreement of all the parties hereto (the "Contracts"); and
WHEREAS, each Account is a duly organized, validly existing segregated
asset account, established by resolution of the board of directors of the
Insurance Company on the date shown for that Account on Schedule A hereto, to
set aside and invest assets attributable to the Contracts; and
WHEREAS, the Insurance Company has registered or will register each
Account as a unit investment trust under the 1940 Act; and
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WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Insurance Company intends to purchase shares in the Funds at
net asset value on behalf of each Account to fund the Contracts;
NOW, THEREFORE, in consideration of their mutual promises, the
Insurance Company, the Trust and Xxxxxx Associates agree as follows:
ARTICLE I. SALE OF TRUST SHARES
1.1. The Trust agrees to sell to the Insurance Company those shares of
the Trust which each Account orders, executing such orders on a daily basis at
the net asset value next computed after receipt by the Trust or its designee of
the order for the shares of the Trust. For purposes of this Section 1.1, the
Insurance Company shall be the designee of the Trust for receipt of such orders
from the Accounts and receipt by such designee shall constitute receipt by the
Trust; provided that the Trust receives notice of such order by 7:00 a.m.,
Mountain Time, on the next following Business Day. In this Agreement, "Business
Day" shall mean any day on which the New York Stock Exchange is open for trading
and on which the Trust calculates its net asset value pursuant to the rules of
the Commission.
1.2. The Trust agrees to make its shares available for purchase at the
applicable net asset value per share by the Insurance Company and its Accounts
on those days on which the Trust calculates its Funds' net asset values pursuant
to rules of the Commission and the Trust shall use reasonable efforts to
calculate its Funds' net asset values on each day on which the New York Stock
Exchange is open for trading. Notwithstanding the foregoing, the trustees of the
Trust may refuse to sell shares of any Fund to any person, or suspend or
terminate the offering of shares of any Fund if such action is required by law
or by regulatory authorities having jurisdiction or is, in the sole discretion
of the trustees of the Trust acting in good faith and in light of their
fiduciary duties under federal and any applicable state laws, necessary in the
best interests of the shareholders of that Fund.
1.3. The Trust agrees that shares of the Trust will be sold only to
Accounts of Participating Insurance Companies and to Qualified Plans. No shares
of any Fund will be sold to the general public.
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1.4. The Trust will not sell its shares to any insurance company or
separate account unless an agreement containing provisions substantially the
same as Sections 2.4, 3.4, 3.5, and Sections 7.1 - 7.7 of this Agreement is in
effect to govern such sales.
1.5. The Trust agrees to redeem, on the Insurance Company's request,
any full or fractional shares of the Trust held by the Account, executing such
requests on a daily basis at the net asset value next computed after receipt by
the Trust or its designee of the request for redemption. However, if one or more
Funds has determined to settle redemption transactions for all of its
shareholders on a delayed basis (more than one business day, but in no event
more than three Business Days, after the date on which the redemption order is
received, unless otherwise permitted by an order of the Commission under Section
22(e) of the 1940 Act), the Trust shall be permitted to delay sending redemption
proceeds to the Insurance Company by the same number of days that the Trust is
delaying sending redemption proceeds to the other shareholders of the Fund. For
purposes of this Section 1.5, the Insurance Company shall be the designee of the
Trust for receipt of the requests for redemption from each Account and receipt
by that designee shall constitute receipt by the Trust; provided that the Trust
receives notice of the request for redemption by 7:00 a.m., Mountain Time, on
the next following Business Day.
1.6. The Insurance Company agrees to purchase and redeem the shares of
each Fund offered by the then-current prospectus of the Trust in accordance with
the provisions of that prospectus. The Insurance Company agrees that all net
amounts available under the Contracts shall be invested in the Trust, or in the
Insurance Company' general account, provided that such amounts may also be
invested in an investment company other than the Trust if (a) the other
investment company, or series thereof, has investment objectives or policies
that are substantially different from the investment objectives and policies of
any Fund of the Trust in which the Account may invest; or (b) the other
investment company was available as a funding vehicle for the Contracts prior to
the date of this Agreement and the Insurance Company so informs the Trust and
Xxxxxx Associates prior to their signing this Agreement; or (c) the Trust and
Xxxxxx Associates consent in advance in writing to the use of the other
investment company.
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1.7. The Insurance Company shall pay for Trust shares by 1:00 p.m.,
Mountain Time, on the next Business Day after an order to purchase Trust shares
is made in accordance with the provisions of Section 1.1 hereof. Payment shall
be in federal funds transmitted by wire. For the purpose of Sections 2.9 and
2.10, upon receipt by the Trust of the federal funds so wired, such funds shall
cease to be the responsibility of the Trust. Payment of net redemption proceeds
(aggregate redemptions of a Fund's shares by an Account minus aggregate
purchases of that Fund's shares by that Account) of less than $1 million for a
given Business Day will be made by wiring federal funds to the Insurance Company
on the next Business Day after receipt of the redemption request. Payment of net
redemption proceeds of $1 million or more will be by wiring federal funds within
three Business Days after receipt of the redemption request.
1.8. Issuance and transfer of the Trust's shares will be by book entry
only. Stock certificates will not be issued to the Insurance Company or any
Account. Shares ordered from the Trust will be recorded in an appropriate title
for each Account or the appropriate subaccount of each Account.
1.9. The Trust shall furnish same day notice (by wire or telephone,
followed by written confirmation) to the Insurance Company of any income,
dividends or capital gain distributions payable on the Funds' shares. The
Insurance Company hereby elects to receive all income, dividends and capital
gain distributions payable on a Fund's shares in additional shares of that Fund.
The Insurance Company reserves the right to revoke this election and to receive
all such income, dividends and capital gain distributions in cash. The Trust
shall notify the Insurance Company of the number of shares issued as payment of
dividends and distributions.
1.10. The Trust shall make the net asset value per share for each Fund
available to the Insurance Company on a daily basis as soon as reasonably
practical after the net asset value per share is calculated and shall use its
best efforts to make those per-share net asset values available by 5:00 p.m.,
Mountain Time.
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ARTICLE II. REPRESENTATIONS, WARRANTIES AND AGREEMENTS
2.1. The Insurance Company represents, warrants and agrees that the
offerings of the Contracts are, or will be, registered under the 1933 Act; that
the Contracts will be issued and sold in compliance in all material respects
with all applicable federal and state laws and that the sale of the Contracts
shall comply in all material respects with applicable state insurance
suitability requirements. The Insurance Company further represents that it is an
insurance company duly organized and in good standing under applicable law and
that it has legally and validly established the Account prior to any issuance or
sale thereof as a segregated asset account under Section _______of the Insurance
Code and has registered, or warrants and agrees that prior to any issuance or
sale of the Contracts it will register, the Account as a unit investment trust
in accordance with the provisions of the 1940 Act to serve as a segregated
investment account for the Contracts.
2.2. The Trust warrants and agrees that Trust shares sold pursuant to
this Agreement shall be registered under the 1933 Act, duly authorized for
issuance and sale in compliance with the laws of the State of Delaware and all
applicable federal securities laws and that the Trust is and shall remain
registered under the 1940 Act. The Trust warrants and agrees that it shall amend
the registration statement for its shares under the 1933 Act and the 1940 Act
from time to time as required in order to effect the continuous offering of its
shares. The Trust shall register and qualify the shares for sale in accordance
with the laws of the various states only if and to the extent deemed advisable
by the Trust or Xxxxxx Associates.
2.3. The Trust represents that it is currently qualified as a
Regulated Investment Company under Subchapter M of the Internal Revenue Code of
1986, as amended, (the "Code") and warrants and agrees that it will make all
reasonable efforts to maintain its qualification (under Subchapter M or any
successor or similar provision) and that it will notify the Insurance Company
immediately upon having a reasonable basis for believing that it has ceased to
so qualify or that it might not so qualify in the future.
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2.4. The Insurance Company represents that the Contracts are currently
treated as annuity or life insurance contracts under applicable provisions of
the Code and warrants and agrees that it will make every effort to maintain such
treatment and that it will notify the Trust and Xxxxxx Associates immediately
upon having a reasonable basis for believing that the Contracts have ceased to
be so treated or that they might not be so treated in the future.
2.5. The Trust may elect to make payments to finance distribution
expenses pursuant to Rule 12b-1 under the 1940 Act. To the extent that it
decides to finance distribution expenses pursuant to Rule 12b-1, the Trust
undertakes to have a board of trustees, a majority of whom are not interested
persons of the Trust, formulate and approve any plan under Rule 12b-1 to finance
distribution expenses.
2.6. The Trust makes no representation warranties as to whether any
aspect of its operations (including, but not limited to, fees and expenses and
investment policies) complies or will comply with the insurance laws or
regulations of the various states.
2.7. The Trust represents that it is lawfully organized and validly
existing under the laws of the State of Delaware and represents, warrants and
agrees that it does and will comply in all material respects with the 1940 Act.
2.8. Xxxxxx Associates represents that it is and warrants that it
shall remain duly registered as an investment adviser under all applicable
federal and state securities laws and agrees that it shall perform its
obligations for the Trust in compliance in all material respects with the laws
of the State of Colorado and any applicable state and federal securities laws.
2.9. The Trust and Xxxxxx Associates represent and warrant that all of
their officers, employees, investment advisers, investment sub-advisers, and
other individuals or entities described in Rule 17g-1 under the 1940 Act dealing
with the money and/or securities of the Trust are, and shall continue to be at
all times, covered by a blanket fidelity bond or similar coverage for the
benefit of the Trust in an amount not less than the minimum coverage required
currently by Rule 17g-1 under the 1940 Act
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or related provisions as may be promulgated from time to time. That fidelity
bond shall include coverage for larceny and embezzlement and shall be issued by
a reputable bonding company.
2.10. The Insurance Company represents and warrants that all of its
officers, employees, investment advisers, and other individuals or entities
described in Rule 17g-1 under the 1940 Act are and shall continue to be at all
times covered by a blanket fidelity bond or similar coverage for the benefit of
the Trust, in an amount not less than the minimum coverage required currently
for entities subject to the requirements of Rule 17g-1 of the 1940 Act or
related provisions or may be promulgated from time to time. The aforesaid bond
shall include coverage for larceny and embezzlement and shall be issued by a
reputable bonding company.
ARTICLE III. DISCLOSURE DOCUMENTS AND VOTING
3.1. Xxxxxx Associates shall provide the Insurance Company (at the
Insurance Company's expense) with as many copies of the Trust's current
prospectus as the Insurance Company may reasonably request. If requested by the
Insurance Company in lieu thereof, the Trust shall provide such documentation
(including a final copy of the new prospectus as set in type at the Trust's
expense) and other assistance as is reasonably necessary in order for the
Insurance Company once each year (or more frequently if the prospectus for the
Trust is amended) to have the prospectus for the Contracts and the Trust's
prospectus printed together in one document (at the Insurance Company's
expense).
3.2. The Trust's prospectus shall state that the Statement of
Additional Information for the Trust (the "SAI") is available from the Trust,
and Xxxxxx Associates (or the Trust), at its expense, shall print and provide
the SAI free of charge to the Insurance Company and to any owner of a Contract
or prospective owner who requests the SAI.
3.3. The Trust, at its expense, shall provide the Insurance Company
with copies of its proxy material, reports to shareholders and other
communications to shareholders in such quantity as the Insurance Company shall
reasonably require for distributing to Contract owners.
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3.4. If and to the extent required by law, the Insurance Company
shall:
(i) solicit voting instructions from Contract owners;
(ii) vote the Trust shares in accordance with instructions
received from Contract owners; and
(iii) vote Trust shares for which no instructions have
been received in the same proportion as Trust shares
of that Fund for which instructions have been
received;
so long as and to the extent that the Commission continues to interpret the 1940
Act to require pass-through voting privileges for variable contract owners. The
Insurance Company reserves the right to vote Trust shares held in any segregated
asset account in its own right, to the extent permitted by law. Participating
Insurance Companies shall be responsible for assuring that each of their
separate accounts participating in the Trust calculates voting privileges in a
manner consistent with the standards set forth in Schedule C attached hereto and
incorporated herein by this reference, which standards will also be provided to
the other Participating Insurance Companies. The Insurance Company shall fulfill
its obligation under, and abide by the terms and conditions of, the Mixed and
Shared Funding Exemptive Order.
3.5. The Trust will comply with all provisions of the 1940 Act
requiring voting by shareholders, and in particular the Trust will either
provide for annual meetings (except insofar as the Commission may interpret
Section 16 of the 1940 Act not to require such meetings) or, as the Trust
currently intends, comply with Section 16(c) of the 1940 Act (although the Trust
is not one of the trust described in Section 16(c) of that Act) as well as with
Sections 16(a) and, if and when applicable, 16(b). Further, the Trust will act
in accordance with the Commission's interpretation of the requirements of
Section 16(a) with respect to periodic elections of trustees and with whatever
rules the Commission may promulgate with respect thereto.
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ARTICLE IV. SALES MATERIALS AND INFORMATION
4.1. The Insurance Company shall furnish, or shall cause to be
furnished, to the Trust or its designee, each piece of sales literature or other
promotional material in which the Trust, a sub-adviser of one of the Funds, or
Xxxxxx Associates is named, at least fifteen calendar days prior to its use. No
such material shall be used if the Trust or its designee objects to such use
within ten calendar days after receipt of such material.
4.2. The Insurance Company shall not give any information or make any
representations or statements on behalf of the Trust or concerning the Trust in
connection with the sale of the Contracts other than the information or
representations contained in the Trust's registration statement, prospectus or
SAI, as that registration statement, prospectus or SAI may be amended or
supplemented from time to time, or in reports or proxy statements for the Trust,
or in sales literature or other promotional material approved by the Trust or
its designee or by Xxxxxx Associates, except with the permission of the Trust or
Xxxxxx Associates.
4.3. The Trust, Xxxxxx Associates, or its designee shall furnish, or
shall cause to be furnished, to the Insurance Company or its designee, each
piece of sales literature or other promotional material in which the Insurance
Company or the Account is named at least fifteen calendar days prior to its use.
No such material shall be used if the Insurance Company or its designee objects
to such use within ten calendar days after receipt of that material.
4.4. The Trust and Xxxxxx Associates shall not give any information or
make any representations on behalf of the Insurance Company or concerning the
Insurance Company, any Account, or the Contracts other than the information or
representations contained in a registration statement, prospectus or statement
of additional information for the Contracts, as that registration statement,
prospectus or statement of additional information may be amended or supplemented
from time to time, or in published reports for any Account which are in the
public domain or approved by the Insurance Company for distribution to Contract
owners, or in sales literature or other promotional material approved by the
Insurance Company or its designee, except with the permission of the Insurance
Company.
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4.5. The Trust will provide to the Insurance Company at least one
complete copy of each registration statement, prospectus, statement of
additional information, report, proxy statement, piece of sales literature or
other promotional material, application for exemption, request for no-action
letter, and any amendment to any of the above, that relate to the Trust or its
shares, contemporaneously with the filing of the document with the Commission,
the National Association of Securities Dealers, Inc. ("NASD"), or other
regulatory authorities.
4.6. The Insurance Company will provide to the Trust at least one
complete copy of each registration statement, prospectus, statement of
additional information, report, solicitation for voting instructions, piece of
sales literature and other promotional material, application for exemption,
request for no-action letter, and any amendment to any of the above, that
relates to the Contracts or the Account, contemporaneously with the filing of
the document with the Commission, the NASD, or other regulatory authorities.
4.7. For purposes of this Article IV, the phrase "sales literature or
other promotional material" includes, but is not limited to, advertisements,
newspaper, magazine, or other periodical, radio, television, telephone or tape
recording, videotape display, signs or billboards, motion pictures, or other
public media, sales literature (i.e., any written communication distributed or
made generally available to customers or the public, including brochures,
circulars, research reports, market letters, form letters, shareholder
newsletters, seminar texts, reprints or excerpts of any other advertisement,
sales literature, or published article), educational or training materials or
other communications distributed or made generally available to some or all
agents or employees, and registration statements, prospectuses, statements of
additional information, shareholder reports, and proxy materials.
4.8. At the request of any party to this Agreement, each other party
will make available to the other party's independent auditors and/or
representative of the appropriate regulatory agencies, all records, data and
access to operating procedures that may be reasonably requested.
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ARTICLE V. FEES AND EXPENSES
5.1. The Trust and Xxxxxx Associates shall pay no fee or other
compensation to the Insurance Company under this agreement, except as set forth
in Section 5.4 and except that if the Trust or any Fund adopts and implements a
plan pursuant to Rule 12b-1 to finance distribution expenses, Xxxxxx Associates
or the Trust may make payments to the Insurance Company in amounts consistent
with that 12b-1 plan, subject to review by the trustees of the Trust.
5.2. All expenses incident to performance by the Trust under this
Agreement shall be paid by the Trust. The Trust shall see to it that any
offering of its shares is registered and that all of its shares are authorized
for issuance in accordance with applicable federal law and, if and to the extent
deemed advisable by the Trust or Xxxxxx Associates, in accordance with
applicable state laws prior to their sale. The Trust shall bear the cost of
registration and qualification of the Trust's shares, preparation and filing of
the Trust's prospectus and registration statement, proxy materials and reports,
setting the prospectus in type, setting in type and printing the proxy materials
and reports to shareholders, the preparation of all statements and notices
required by any federal or state law, and all taxes on the issuance or transfer
of the Trust's shares.
5.3. The Insurance Company shall bear the expenses of printing and
distributing to Contract owners the Contract prospectuses and of distributing to
Contract owners the Trust's prospectus, proxy materials and reports.
5.4. The Insurance Company bears the responsibility and correlative
expense for administrative and support services for Contract owners. Xxxxxx
Associates recognizes the Insurance Company as the sole shareholder of shares of
the Trust issued under this Agreement. From time to time, Xxxxxx Associates may
pay amounts from its past profits to the Insurance Company for providing certain
administrative services for the Trust or for providing other services that
relate to the Trust. In consideration of the savings resulting from such
arrangement, and to compensate the Insurance Company for its costs, Xxxxxx
Associates agrees to pay to the Insurance Company an amount equal to
12
basis points (0. %) per annum of the average aggregate amount invested by the
Insurance Company in the Trust under this Agreement. The parties agree that such
payments are for administrative services and investor support services, and do
not constitute payment for investment advisory, distribution or other services.
Payment of such amounts by Xxxxxx Associates shall not increase the fees paid by
the Trust or its shareholders.
ARTICLE VI. DIVERSIFICATION
6.1. The Trust will comply with Section 817(h) of the Code and
Treasury Regulation 1.817-5 relating to the diversification requirements for
variable annuity, endowment, modified endowment or life insurance contracts and
any amendments or other modifications to that Section or Regulation at all times
necessary to satisfy those requirements.
ARTICLE VII. POTENTIAL CONFLICTS
7.1. The trustees of the Trust will monitor the Trust for the
existence of any material irreconcilable conflict between the interests of the
variable Contract owners of all separate accounts investing in the Trust and the
participants of all Qualified Plans investing in the Trust. An irreconcilable
material conflict may arise for a variety of reasons, including: (a) an action
by any state insurance regulatory authority; (b) a change in applicable federal
or state insurance, tax, or securities laws or regulations, or a public ruling,
private letter ruling, no-action or interpretive letter, or any similar action
by insurance, tax, or securities regulatory authorities; (c) an administrative
or judicial decision in any relevant proceeding; (d) the manner in which the
investments of any Fund are being managed; (e) a difference in voting
instructions given by variable annuity contract and variable life insurance
contract owners; or (f) a decision by a Participating Insurance Company to
disregard the voting instructions of variable contract owners. The trustees of
the Trust shall promptly inform the Insurance Company if they determine that an
irreconcilable material conflict exists and the implications thereof. The
trustees of the Trust shall have sole authority to determine whether an
irreconcilable material conflict exists and their determination shall be binding
upon the Insurance Company.
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7.2. The Insurance Company and Xxxxxx Associates each will report
promptly any potential or existing conflicts of which it is aware to the
trustees of the Trust. The Insurance Company and Xxxxxx Associates each will
assist the trustees of the Trust in carrying out their responsibilities under
the Mixed and Shared Funding Exemptive Order, by providing the trustees of the
Trust with all information reasonably necessary for them to consider any issues
raised. This includes, but is not limited to, an obligation by the Insurance
Company to inform the trustees of the Trust whenever Contract owner voting
instructions are to be disregarded. These responsibilities shall be carried out
by the Insurance Company with a view only to the interests of the Contract
owners and by Xxxxxx Associates with a view only to the interests of Contract
holders and Qualified Plan participants.
7.3. If it is determined by a majority of the trustees of the Trust,
or a majority of the trustees who are not interested persons of the Trust, any
of its Funds, or Xxxxxx Associates (the "Independent Trustees"), that a material
irreconcilable conflict exists, the Insurance Company and/or other Participating
Insurance Companies or Qualified Plans that have executed participation
agreements shall, at their expense and to the extent reasonably practicable (as
determined by a majority of the Independent Trustees), take whatever steps are
necessary to remedy or eliminate the irreconcilable material conflict, up to and
including: (1) withdrawing the assets allocable to some or all of the separate
accounts from the Trust or any Fund and reinvesting those assets in a different
investment medium, including (but not limited to) another Fund of the Trust, or
submitting the question whether such segregation should be implemented to a vote
of all affected variable contract owners and, as appropriate, segregating the
assets of any appropriate group (e.g., annuity contract owners, life insurance
contract owners, or variable contract owners of one or more Participating
Insurance Companies) that votes in favor of such segregation, or offering to the
affected variable contract owners the option of making such a change; and (2)
establishing a new registered management investment company or managed separate
account and obtaining any necessary approvals or orders of the Commission in
connection therewith.
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7.4. If a material irreconcilable conflict arises because of a
decision by the Insurance Company to disregard Contract owner voting
instructions and that decision represents a minority position or would preclude
a majority vote, the Insurance Company may be required, at the Trust's election,
to withdraw the affected Account's investment in the Trust and terminate this
Agreement with respect to that Account; provided, however, that such withdrawal
and termination shall be limited to the extent required by the foregoing
material irreconcilable conflict as determined by a majority of the Independent
Trustees. Any such withdrawal and termination must take place within six (6)
months after the Trust gives written notice that this provision is being
implemented, and, until the end of that six month period, the Trust shall
continue to accept and implement orders by the Insurance Company for the
purchase (and redemption) of shares of the Trust.
7.5. If a material irreconcilable conflict arises because a particular
state insurance regulator's decision applicable to the Insurance Company
conflicts with the majority of other state regulators, then the Insurance
Company will withdraw the affected Account's investment in the Trust and
terminate this Agreement with respect to that Account within six months after
the trustees of the Trust inform the Insurance Company in writing that they have
determined that the state insurance regulator's decision has created an
irreconcilable material conflict; provided, however, that such withdrawal and
termination shall be limited to the extent required by the foregoing material
irreconcilable conflict as determined by a majority of the Independent Trustees.
Until the end of the foregoing six month period, the Trust shall continue to
accept and implement orders by the Insurance Company for the purchase (and
redemption) of shares of the Trust.
7.6. For purposes of Sections 7.3 and 7.6 of this Agreement, a
majority of the Independent Trustees shall determine whether any proposed action
adequately remedies any irreconcilable material conflict, but in no event will
the Trust be required to establish a new funding medium for the Contracts. The
Insurance Company shall not be required by Section 7.3 to establish a new
funding medium for the Contracts if an offer to do so has been declined by vote
of a majority of Contract owners materially adversely affected by the
irreconcilable material conflict. In the event that the trustees of the Trust
determine that any
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proposed action does not adequately remedy any irreconcilable material conflict,
then the Insurance Company will withdraw the Account's investment in the Trust
and terminate this Agreement within six (6) months after the trustees of the
Trust inform the Insurance Company in writing of the foregoing determination,
provided, however, that the withdrawal and termination shall be limited to the
extent required by the material irreconcilable conflict, as determined by a
majority of the Independent Trustees.
7.7. If and to the extent that Rule 6e-2 and Rule 6e-3(T) are amended,
or Rule 6e-3 is adopted, to provide exemptive relief from any provision of the
Act or the rules promulgated thereunder with respect to mixed or shared funding
(as defined in the Mixed and Shared Funding Exemptive Order) on terms and
conditions materially different from those contained in the Mixed and Shared
Funding Exemptive Order, then (a) the Trust and/or the Participating Insurance
Companies, as appropriate, shall take such steps as may be necessary to comply
with Rules 6e-2 and 6e-3(T), as amended, and Rule 6e-3, as adopted, to the
extent those rules are applicable; and (b) Sections 3.4, 3.5, 7.1, 7.2, 7.3,
7.4, and 7.5 of this Agreement shall continue in effect only to the extent that
terms and conditions substantially identical to those Sections are contained in
the Rule(s) as so amended or adopted.
ARTICLE VIII. INDEMNIFICATION
8.1 INDEMNIFICATION BY THE INSURANCE COMPANY
8.1(A). The Insurance Company agrees to indemnify and hold harmless
the Trust and each trustee, officer, employee or agent of the Trust, and each
person, if any, who controls the Trust within the meaning of Section 15 of the
1933 Act (collectively, the "Indemnified Parties" for purposes of this Section
8.1) against any and all losses, claims, damages, liabilities (including amounts
paid in settlement with the written consent of the Insurance Company) or
litigation (including legal and other expenses), to which the Indemnified
Parties may become subject under any statute, regulation, at common law or
otherwise, insofar as such losses, claims, damages, liabilities or expenses (or
actions in respect thereof) or settlements are related to the sale, acquisition,
or redemption of the Trust's shares or the Contracts and:
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(i) arise out of or are based upon any untrue statements
or alleged untrue statements of any material fact
contained in the registration statement or prospectus
for the Contracts or contained in the Contracts or
sales literature for the Contracts (or any amendment
or supplement to any of the foregoing), or arise out
of or are based upon the omission or the alleged
omission to state therein a material fact required to
be stated therein or necessary to make the statements
therein not misleading, provided that this agreement
to indemnify shall not apply as to any Indemnified
Party if such statement or omission or such alleged
statement or omission was made in reliance upon and
in conformity with information furnished in writing
to the Insurance Company by or on behalf of the Trust
for use in the registration statement or prospectus
for the Contracts or in the Contracts or sales
literature (or any amendment or supplement) or
otherwise for use in connection with the sale of the
Contracts or shares of the Trust;
(ii) arise out of or as a result of statements or
representations (other than statements or
representations contained in the registration
statement, prospectus or sales literature of the
Trust not supplied by the Insurance Company, or
persons under its control) or wrongful conduct of
the Insurance Company or persons under its control,
with respect to the sale or distribution of the
Contracts or Trust Shares;
(iii) arise out of any untrue statements or alleged untrue
statement of a material fact contained in a
registration statement, prospectus, or sales
literature of the Trust or any amendment thereof or
supplement thereto
17
or the omission or alleged omission to state therein
a material fact required to be stated therein or
necessary to make the statements therein not
misleading if such a statement or omission was made
in reliance upon information furnished in writing to
the Trust by or on behalf of the Insurance Company;
(iv) arise as a result of any failure by the Insurance
Company to provide the services and furnish the
materials under the terms of this Agreement; or
(v) arise out of or result from any material breach of
any representation, warranty or agreement made by
the Insurance Company in this Agreement or arise out
of or result from any other material breach of this
Agreement by the Insurance Company.
as limited by and in accordance with the provisions of Sections 8.1(b) and
8.1(c) hereof.
8.1(B). The Insurance Company shall not be liable under this
indemnification provision with respect to any losses, claims, damages,
liabilities or litigation incurred or assessed against an Indemnified Party that
may arise from that Indemnified Party's willful misfeasance, bad faith, or gross
negligence in the performance of that Indemnified Party's duties or by reason of
that Indemnified Party's reckless disregard of obligations or duties under this
Agreement or to the Trust, whichever is applicable.
8.1(C). The Insurance Company shall not be liable under this
indemnification provision with respect to any claim made against an Indemnified
Party unless that Indemnified Party shall have notified the Insurance Company in
writing within a reasonable time after the summons or other first legal process
giving information of the nature of the claim shall have been served upon that
Indemnified Party (or after the Indemnified Party shall have received notice of
such service on any designated agent). Notwithstanding the foregoing, the
failure of any Indemnified
18
Party to give notice as provided herein shall not relieve the Insurance Company
of its obligations hereunder except to the extent that the Insurance Company has
been prejudiced by such failure to give notice. In addition, any failure by the
Indemnified Party to notify the Insurance Company of any such claim shall not
relieve the Insurance Company from any liability which it may have to the
Indemnified Party against whom the action is brought otherwise than on account
of this indemnification provision. In case any such action is brought against
the Indemnified Parties, the Insurance Company shall be entitled to participate,
at its own expense, in the defense of the action. The Insurance Company also
shall be entitled to assume the defense thereof, with counsel satisfactory to
the party named in the action; provided, however, that if the Indemnified Party
shall have reasonably concluded that there may be defenses available to it which
are different from or additional to those available to the Insurance Company,
the Insurance Company shall not have the right to assume said defense, but shall
pay the costs and expenses thereof (except that in no event shall the Insurance
Company be liable for the fees and expenses of more than one counsel for
Indemnified Parties in connection with any one action or separate but similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances). After notice from the Insurance Company to the
Indemnified Party of the Insurance Company's election to assume the defense
thereof, and in the absence of such a reasonable conclusion that there may be
different or additional defenses available to the Indemnified Party, the
Indemnified Party shall bear the fees and expenses of any additional counsel
retained by it, and the Insurance Company will not be liable to that party under
this Agreement for any legal or other expenses subsequently incurred by the
party independently in connection with the defense thereof other than reasonable
costs of investigation.
8.1(D). The Indemnified Parties will promptly notify the Insurance
Company of the commencement of any litigation or proceedings against them in
connection with the issuance or sale of the Trust's shares or the Contracts or
the operation of the Trust.
19
8.2 INDEMNIFICATION BY XXXXXX ASSOCIATES
8.2(A). Xxxxxx Associates agrees to indemnify and hold harmless the
Insurance Company and each of its directors, officers, employees or agents, and
each person, if any, who controls the Insurance Company within the meaning of
Section 15 of the 1933 Act (collectively, the "Indemnified Parties" for purposes
of this Section 8.2) against any and all losses, claims, damages, liabilities,
(including amounts paid in settlement with the written consent of Xxxxxx
Associates) or litigation (including legal and other expenses) to which the
Indemnified Parties may become subject under any statute, at common law or
otherwise, insofar as such losses, claims, damages, liabilities or expenses (or
actions in respect thereof) or settlements are related to the sale, acquisition
or redemption of the Trust's shares or the Contracts and:
(i) arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact
contained in the registration statement or prospectus
or sales literature of the Trust (or any amendment or
supplement to any of the foregoing), or arise out of
or are based upon the omission or the alleged
omission to state therein a material fact required to
be stated therein or necessary to make the statements
therein not misleading, provided that this agreement
to indemnify shall not apply as to any Indemnified
Party if the statement or omission or alleged
statement or omission was made in reliance upon and
in conformity with information furnished in writing
to Xxxxxx Associates or the Trust by or on behalf of
the Insurance Company for use in the registration
statement or prospectus for the Trust or in sales
literature (or any amendment or supplement) or
otherwise for use in connection with the sale of the
Contracts or Trust shares;
20
(ii) arise out of or as a result of statements or
representations (other than statements or
representations contained in the registration
statement, prospectus or sales literature for the
Contracts not supplied by Xxxxxx Associates or
persons under its control) or wrongful conduct of
the Trust, Xxxxxx Associates or persons under their
control, with respect to the sale or distribution of
the Contracts or shares of the Trust;
(iii) arise out of any untrue statement or alleged untrue
statement of a material fact contained in a
registration statement, prospectus, or sales
literature covering the Contracts, or any amendment
thereof or supplement thereto, or the omission or
alleged omission to state therein a material fact
required to be stated therein or necessary to make
the statement or statements therein not misleading,
if such statement or omission was made in reliance
upon information furnished in writing to the
Insurance Company by or on behalf of the Trust;
(iv) arise as a result of any failure by the Trust to
provide the services and furnish the materials under
the terms of this Agreement (including a failure,
whether unintentional or in good faith or otherwise,
to comply with the diversification requirements
specified in Article VI of this Agreement); or
(v) arise out of or result from any material breach of
any representation, warranty or agreement made by
Xxxxxx Associates in this Agreement or arise out of
our result from any other material breach of this
Agreement by Xxxxxx Associates;
21
as limited by and in accordance with the provisions of Sections 8.2(b) and
8.2(c) hereof.
8.2(B). Xxxxxx Associates shall not be liable under this
indemnification provision with respect to any losses, claims, damages,
liabilities or litigation incurred or assessed against an Indemnified Party that
may arise from the Indemnified Party's willful misfeasance, bad faith, or gross
negligence in the performance of the Indemnified Party's duties or by reason of
the Indemnified Party's reckless disregard of obligations and duties under this
Agreement or the Insurance Company or the Account, whichever is applicable.
8.2(C). Xxxxxx Associates shall not be liable under this
indemnification provision with respect to any claim made against an Indemnified
Party unless the Indemnified Party shall have notified Xxxxxx Associates in
writing within a reasonable time after the summons or other first legal process
giving information of the nature of the claim shall have been served upon the
Indemnified Party (or after the Indemnified Party shall have received notice of
such service on any designated agent). Notwithstanding the foregoing, the
failure of any Indemnified Party to give notice as provided herein shall not
relieve Xxxxxx Associates of its obligations hereunder except to the extent that
Xxxxxx Associates has been prejudiced by such failure to give notice. In
addition, any failure by the Indemnified Party to notify Xxxxxx Associates of
any such claim shall not relieve Xxxxxx Associates from any liability which it
may have to the Indemnified Party against whom such action is brought otherwise
than on account of this indemnification provision. In case any such action is
brought against the Indemnified Parties, Xxxxxx Associates will be entitled to
participate, at its own expense, in the defense thereof. Xxxxxx Associates also
shall be entitled to assume the defense thereof, with counsel satisfactory to
the party named in the action; provided, however, that if the Indemnified Party
shall have reasonably concluded that there may be defenses available to it which
are different from or additional to those available to Xxxxxx Associates, Xxxxxx
Associates shall not have the right to assume said defense, but shall pay the
costs and expenses thereof (except that in no event shall Xxxxxx Associates be
liable for the fees and expenses of more than one counsel for Indemnified
Parties in connection with any one action or separate
22
but similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances). After notice from Xxxxxx Associates to
the Indemnified Party of Xxxxxx Associate's election to assume the defense
thereof, and in the absence of such a reasonable conclusion that there may be
different or additional defenses available to the Indemnified Party, the
Indemnified Party shall bear the fees and expenses of any additional counsel
retained by it, and Xxxxxx Associates will not be liable to that party under
this Agreement for any legal or other expenses subsequently incurred by that
party independently in connection with the defense thereof other than reasonable
costs of investigation.
8.2(D). The Insurance Company agrees to notify Xxxxxx Associates
promptly of the commencement of any litigation or proceedings against it or any
of its officers or directors in connection with the issuance or sale of the
Contracts or the operation of the Account.
8.3 INDEMNIFICATION BY THE TRUST
8.3(A). The Trust agrees to indemnify and hold harmless the Insurance
Company, and each of its directors, officers, employees and agents, and each
person, if any, who controls the Insurance Company within the meaning of Section
15 of the 1933 Act (collectively, the "Indemnified Parties" for purposes of this
Section 8.3) against any and all losses, claims, damages, liabilities (including
legal and other expenses) to which the Indemnified Parties may become subject
under any statute, at common law or otherwise, insofar as those losses, claims,
damages, liabilities or expenses (or actions in respect thereof) or settlements
result from the gross negligence, bad faith or willful misconduct of any
trustee(s) of the Trust, are related to the operations of the Trust and:
(i) arise as a result of any failure by the Trust to
provide the services and furnish the materials under
the terms of this Agreement (including a failure to
comply with the diversification requirements
specified in Article VI of this Agreement); or
23
(ii) arise out of or result from any material breach of
any representation, warranty or agreement made by
the Trust in this Agreement or arise out of or
result from any other material breach of this
Agreement by the Trust;
as limited by, and in accordance with the provisions of, Sections 8.3(b) and
8.3(c) hereof.
8.3(B). The Trust shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
incurred or assessed against an Indemnified Party that may arise from the
Indemnified Party's willful misfeasance, bad faith, or gross negligence in the
performance of the Indemnified Party's duties or by reason of the Indemnified
Party's reckless disregard of obligations and duties under this Agreement or to
the Insurance Company, the Trust, Xxxxxx Associates or the Account, whichever is
applicable.
8.3(C). The Trust shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless the
Indemnified Party shall have notified the Trust in writing within a reasonable
time after the summons or other first legal process giving information of the
nature of the claim shall have been served upon the Indemnified Party (or after
the Indemnified Party shall have received notice of such service on any
designated agent). Notwithstanding the foregoing, the failure of any Indemnified
Party to give notice as provided herein shall not relieve the Trust of its
obligations hereunder except to the extent that the Trust has been prejudiced by
such failure to give notice. In addition, any failure by the Indemnified Party
to notify the Trust of any such claim shall not relieve the Trust from any
liability which it may have to the Indemnified Party against whom such action is
brought otherwise than on account of this indemnification provision. In case any
such action is brought against the Indemnified Parties, the Trust will be
entitled to participate, at its own expense, in the defense thereof. The Trust
also shall be entitled to assume the defense thereof, with counsel satisfactory
to the party named in the action; provided, however, that if the Indemnified
Party shall have reasonably concluded that there may be defenses available to
24
it which are different from or additional to those available to the Trust, the
Trust shall not have the right to assume said defense, but shall pay the costs
and expenses thereof (except that in no event shall the Trust be liable for the
fees and expenses of more than one counsel for Indemnified Parties in connection
with any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances).
After notice from the Trust to the Indemnified Party of the Trust's election to
assume the defense thereof, and in the absence of such a reasonable conclusion
that there may be different or additional defenses available to the Indemnified
Party, the Indemnified Party shall bear the fees and expenses of any additional
counsel retained by it, and the Trust will not be liable to that party under
this Agreement for any legal or other expenses subsequently incurred by that
party independently in connection with the defense thereof other than reasonable
costs of investigation.
8.3(D). The Insurance Company and Xxxxxx Associates agree promptly to
notify the Trust of the commencement of any litigation or proceedings against it
or any of its respective officers or directors in connection with this
Agreement, the issuance or sale of the Contracts, the operation of the Account,
or the sale or acquisition of shares of the Trust.
ARTICLE IX. APPLICABLE LAW
9.1. This Agreement shall be construed and provisions hereof
interpreted under and in accordance with the laws of the State of Delaware.
9.2. This Agreement shall be subject to the provisions of the 1933,
1934, and 1940 Acts, and the rules and regulations and rulings thereunder,
including any exemptions from those statutes, rules and regulations the
Commission may grant (including, but not limited to, the Mixed and Shared
Funding Exemptive Order) and the terms hereof shall be interpreted and construed
in accordance therewith.
ARTICLE X. TERMINATION
10.1. This Agreement shall terminate:
25
(a) at the option of any party upon one year advance
written notice to the other parties; provided,
however, such notice shall not be given earlier than
one year following the date of this Agreement; or
(b) at the option of the Insurance Company to the extent
that shares of the Funds are not reasonably
available to meet the requirements of the Contracts
as determined by the Insurance Company, provided,
however, that such termination shall apply only to
the Fund(s) not reasonably available. Prompt written
notice of the election to terminate for such cause
shall be furnished by the Insurance Company to the
Trust and Xxxxxx; or
(c) at the option of the Trust or Xxxxxx Associates, in
the event that formal administrative proceedings are
instituted against the Insurance Company by the
NASD, the Commission, an insurance commissioner or
any other regulatory body regarding the Insurance
Company's duties under this Agreement or related to
the sale of the Contracts, the operation of any
Account, or the purchase of the Trust's shares,
provided, however, that the Trust determines in its
sole judgment exercised in good faith, that any such
administrative proceedings will have a material
adverse effect upon the ability of the Insurance
Company to perform its obligations under this
Agreement; or
(d) at the option of the Insurance Company in the event
that formal administrative proceedings are
instituted against the Trust or Xxxxxx Associates by
the NASD, the Commission, or any state securities or
insurance department or any other regulatory body,
provided, however, that the Insurance Company
determines in its sole judgment exercised in good
faith, that any such administrative proceedings will
have a material adverse effect upon the ability of
the Trust or Xxxxxx Associates to perform its
obligations under this Agreement; or
26
(e) with respect to any Account, upon requisite vote of
the Contract owners having an interest in that
Account (or any subaccount) to substitute the shares
of another investment company for the corresponding
Fund shares in accordance with the terms of the
Contracts for which those Fund shares had been
selected to serve as the underlying investment
media. The Insurance Company will give at least 30
days' prior written notice to the Trust of the date
of any proposed vote to replace the Trust's shares;
or
(f) at the option of the Insurance Company, in the event
any of the Trust's shares are not registered, issued
or sold in accordance with applicable state and/or
federal law or exemptions therefrom, or such law
precludes the use of those shares as the underlying
investment media of the Contracts issued or to be
issued by the Insurance Company; or
(g) at the option of the Insurance Company, if the Trust
ceases to qualify as a regulated investment company
under Subchapter M of the Code or under any
successor or similar provision, of if the Insurance
Company reasonably believes that the Trust may fail
to so qualify; or
(h) at the option of the Insurance Company, if the Trust
fails to meet the diversification requirements
specified in Article VI hereof; or
(i) at the option of either the Trust or Xxxxxx
Associates, if (1) the Trust or Xxxxxx Associates,
respectively, shall determine, in their sole
judgment reasonably exercised in good faith, that
the Insurance Company has suffered a material
adverse change in its business or financial
condition or is the subject of material adverse
publicity and that material adverse change or
material adverse publicity will have a material
adverse impact upon the business and operations of
either the Trust or Xxxxxx Associates, (2) the Trust
or Xxxxxx Associates shall notify the Insurance
Company in writing of that determination and its
intent to terminate this Agreement, and (3) after
considering the actions taken by the Insurance
Company
27
and any other changes in circumstances since the
giving of such a notice, the determination of the
Trust or Xxxxxx Associates shall continue to apply
on the sixtieth (60th) day following the giving of
that notice, which sixtieth day shall be the
effective date of termination; or
(j) at the option of the Insurance Company, if (1) the
Insurance Company shall determine, in its sole
judgment reasonably exercised in good faith, that
either the Trust or Xxxxxx Associates has suffered a
material adverse change in its business or financial
condition or is the subject of material adverse
publicity and that material adverse change or
material adverse publicity will have a material
adverse impact upon the business and operations of
the Insurance Company, (2) the Insurance Company
shall notify the Trust and Xxxxxx Associates in
writing of the determination and its intent to
terminate this Agreement, (3) after considering the
actions taken by the Trust and/or Xxxxxx Associates
and any other changes in circumstances since the
giving of such a notice, the determination shall
continue to apply on the sixtieth (60th) day
following the giving of the notice, which sixtieth
day shall be the effective date of termination; or
(k) at the option of either the Trust or Xxxxxx
Associates, if the Insurance Company gives the Trust
and Xxxxxx Associates the written notice specified
in Section 1.6(b) hereof and at the time that notice
was given there was no notice of termination
outstanding under any other provision of this
Agreement, provided, however, any termination under
this Section 10.1(k) shall be effective forty-five
(45) days after the notice specified in Section
1.6(b) was given.
10.2. It is understood and agreed that the right of any party hereto
to terminate this Agreement pursuant to Section 10.1(a) may be exercised for any
reason or for no reason.
28
10.3. No termination of this Agreement shall be effective unless
and until the party terminating this Agreement gives prior written notice to all
other parties to this Agreement of its intent to terminate, which notice shall
set forth the basis for the termination. Furthermore,
(a) In the event that any termination is based upon the
provisions of Article VII, or the provision of
Section 10.1(a), 10.1(i), 10.1(j), or 10.1(k) of
this Agreement, the prior written notice shall be
given in advance of the effective date of
termination as required by those provisions; and
(b) In the event that any termination is based upon the
provisions of Section 10.1(c) or 10.1(d) of this
Agreement, the prior written notice shall be given
at least ninety (90) days before the effective date
of termination.
10.4. Notwithstanding any termination of this Agreement, subject to
Section 1.2 of this Agreement and for so long as the Trust continues to exist,
the Trust and Xxxxxx Associates shall at the option of the Insurance Company,
continue to make available additional shares of the Trust pursuant to the terms
and conditions of this Agreement, for all Contracts in effect on the effective
date of termination of this Agreement ("Existing Contracts"). Specifically,
without limitation, the owners of the Existing Contracts shall be permitted to
reallocate investments in the Trust, redeem investments in the Trust and/or
invest in the Trust upon the making of additional purchase payments under the
Existing Contracts. The parties agree that this Section 10.4 shall not apply to
any terminations under Article VII and the effect of Article VII terminations
shall be governed by Article VII of this Agreement.
10.5. The Insurance Company shall not redeem Trust shares attributable
to the Contracts (as opposed to Trust shares attributable to the Insurance
Company's assets held in the Account) except (i) as necessary to implement
Contract-owner-initiated transactions; or (ii) as required by state and/or
federal laws or regulations or judicial or other legal precedent of general
application (a "Legally Required Redemption"). Upon request, the Insurance
Company will promptly furnish to the Trust and Xxxxxx Associates the opinion of
counsel for the Insurance
29
Company (which counsel shall be reasonably satisfactory to the Trust and Xxxxxx
Associates) to the effect that any redemption pursuant to clause (ii) above is a
Legally Required Redemption. Furthermore, the Insurance Company shall not
prevent new Contract owners from allocating payments to a Fund that formerly was
available under the Contracts without first giving the Trust or Xxxxxx
Associates 90 days notice of its intention to do so.
ARTICLE XI. NOTICES
Any notice shall be sufficiently given when sent by registered or
certified mail to the other party at the address of that other party set forth
below or at such other address as the other party may from time to time specify
in writing.
If to the Trust:
000 Xxxxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxx, Vice President
If to the Insurance Company:
Attention:
If to Xxxxxx Associates:
000 Xxxxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxx, Vice President
30
ARTICLE XII. MISCELLANEOUS
12.1. Subject to the requirements of legal process and regulatory
authority, each party hereto shall treat as confidential the names and addresses
of the owners of the Contracts and all information reasonably identified as
confidential in writing by any other party hereto and, except as permitted by
this Agreement, shall not disclose, disseminate or utilize such names and
addresses and other confidential information without the express written consent
of the affected party unless and until that information may come into the public
domain.
12.2. The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions hereof or
otherwise affect their contraction or effect.
12.3. This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
12.4. If any provision of this Agreement shall be held or made invalid
by a court decision, statute, rule or otherwise, the remainder of the Agreement
shall not be affected thereby.
12.5. Each party hereto shall cooperate with each other party and all
appropriate governmental authorities (including without limitation the
Commission, the NASD and state insurance regulators) and shall permit those
authorities reasonable access to its books and records in connection with any
lawful investigation or inquiry relating to this Agreement or the transactions
contemplated hereby.
12.6. The rights, remedies and obligations contained in this Agreement
are cumulative and are in addition to any and all rights, remedies and
obligations, at law or in equity, which the parties hereto are entitled to under
state and federal laws.
12.7. This Agreement shall be binding upon and inure to the benefit
of the parties and their respective successors and
31
assigns; provided, that no party may assign this Agreement without the prior
written consent of the others.
32
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed in its name and on its behalf by its duly authorized
representative and its seal to be hereunder affixed hereto as of the date
specified below.
Insurance Company:
_________________________COMPANY
By its authorized officer,
SEAL By: _______________________
Title: ____________________
Date: _____________________
Trust:
XXXXXX INSTITUTIONAL PRODUCTS TRUST
By its authorized officer,
SEAL By: ______________________
Title: ___________________
Date: ____________________
Xxxxxx Associates:
XXXXXX ASSOCIATES, INC.
By its authorized officer,
SEAL By: ______________________
Title: ___________________
Date: ____________________
33
Schedule A
Accounts
Name of Account Date of Resolution of Insurance Company's Board
which Established the Account
34
Schedule B
Contracts
1. Contract Form
35
Schedule C
Proxy Voting Procedure
The following is a list of procedures and corresponding responsibilities for the
handling of proxies relating to the Trust by Xxxxxx Associates, the Trust and
the Insurance Company. The defined terms herein shall have the meanings assigned
in the Participation Agreement except that the term "Insurance Company" shall
also include the department or third party assigned by the Insurance Company to
perform the steps delineated below.
1. The number of proxy proposals is given to the Insurance Company by
Xxxxxx Associates as early as possible before the date set by the Trust
for the shareholder meeting to facilitate the establishment of
tabulation procedures. At this time Xxxxxx Associates will inform the
Insurance Company of the Record, Mailing and Meeting dates. This will
be done verbally approximately two months before meeting.
2. Promptly after the Record Date, the Insurance Company will perform a
"tape run", or other activity, which will generate the names, addresses
and number of units which are attributed to each
contractowner/policyholder (the "Customer") as of the Record Date.
Allowance should be made for account adjustments made after this date
that could affect the status of the Customers' accounts of the Record
Date.
NOTE: The number of proxy statements is determined by the activities
described in Step #2. The Insurance Company will use its best efforts
to call in the number of Customers to Xxxxxx Associates, as soon as
possible, but no later than one week after the Record Date.
3. The text and format for the Voting Instruction Cards ("Cards" or
"Card") is provided to the Insurance Company by the Trust. The
Insurance Company, at its expense, shall produce and personalize the
Voting Instruction cards. Xxxxxx Associates must approve the Card
before it is printed. Allow approximately 2-4 business days for
printing information on the Cards. Information commonly found on the
Cards includes:
a. name (legal name as found on account registration)
b. address
36
c. Fund or account number
d. coding to state number of units
e. individual Card number for use in tracking and
verification of votes (already on Cards as printed by
the Trust).
(This and related steps may occur later in the chronological process
due to possible uncertainties relating to the proposals.)
4. During this time, Xxxxxx Associates will develop, produce, and the
Trust will pay for the Notice of Proxy and the Proxy Statement (one
document). Printed and folded notices and statements will be sent to
Insurance Company for insertion into envelopes (envelopes and return
envelopes are provided and paid for by the Insurance Company). Contents
of envelope sent to customers by Insurance Company will include:
a. Voting Instruction Card(s)
b. One proxy notice and statement (one document)
c. Return envelope (postage pre-paid by Insurance
Company) addressed to the Insurance Company or its
tabulation agent
d. "Urge buckslip" - optional, but recommended.
(This is a small, single sheet of paper that requests
Customers to vote as quickly as possible and that
their vote is important. One copy will be supplied by
the Trust.)
e. Cover letter - optional, supplied by Insurance
Company and reviewed and approved in advance by
Xxxxxx Associates.
5. The above contents should be received by the Insurance Company
approximately 3-5 business days before mail date. Individual in charge
at Insurance Company reviews and approves the contents of the mailing
package to ensure correctness and completeness. Copy of this approval
sent to Xxxxxx Associates.
6. Package mailed by the Insurance Company.
* The Trust must allow at least a 15-day solicitation time to
the Insurance Company as the shareowner. (A 5-week period is
recommended.) Solicitation time is calculated as calendar days
from (but not including) the meeting, counting backwards.
37
7. Collection and tabulation of Cards begins. Tabulation usually takes
place in another department or another vendor depending on process
used. An often used procedure is to sort cards on arrival by proposal
into vote categories of all yes, no, or mixed replies, and to begin
data entry.
NOTE: Postmarks are not generally needed. A need for postmark
information would be due to an insurance company's internal procedure.
8. If Cards are mutilated, or for any reason are illegible or are not
signed properly, they are sent back to the Customer with an explanatory
letter, a new Card and return envelope. The mutilated or illegible Card
is disregarded and considered to be not received for purposes of vote
tabulation. Such mutilated or illegible Cards are "hand verified,"
i.e., examined as to why they did not complete the system. Any
questions on those Cards are usually remedied individually.
9. There are various control procedures used to ensure proper tabulation
of votes and accuracy of that tabulation. The most prevalent is to sort
the Cards as they first arrive into categories depending upon their
vote; an estimate of how the vote is progressing may then be
calculated. If the initial estimates and the actual vote do not
coincide, then an internal audit of that vote should occur. This may
entail a recount.
10. The actual tabulation of votes is done in units which is then converted
to shares. (It is very important that the Trust receives the
tabulations stated in terms of a percentage and the number of shares.)
Xxxxxx Associates must review and approve tabulation format.
11. Final tabulation in shares is verbally given by the Insurance Company
to Xxxxxx Associates on the morning of the meeting not later than 10:00
a.m. Denver time. Xxxxxx Associates may request an earlier deadline if
required to calculate the vote in time for the meeting.
12. A Certificate of Mailing and Authorization to Vote Shares will be
required from the Insurance Company as well as an original
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copy of the final vote. Xxxxxx Associates will provide a standard form
for each Certification.
13. The Insurance Company will be required to box and archive the Cards
received from the Customers. In the event that any vote is challenged
or if otherwise necessary for legal, regulatory, or accounting
purposes, Xxxxxx Associates will be permitted reasonable access to such
Cards.
14. All approvals and "signing-off" may be done orally, but must always be
followed up in writing.
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