FIRST AMENDMENT
to the
PARTICIPATION AGREEMENT
This First Amendment, dated September 30, 1993 by and between The
Union Central Life Insurance Company (the "Company") and Xxxxxxx
Variable Life Investment Fund (the "Fund"), is as follows:
WHEREAS, the Company and the Fund are parties to a Participation
Agreement dated February 18, 1992 (the "Agreement").
WHEREAS, the Company and the Fund now desire to modify the
Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements hereinafter contained, the parties hereto
agree as follows:
1. Shares of the Fund shall be made available as an underlying
investment medium for any separate account of the Company upon
written notice duly given to the Fund in accordance with the terms
of Section 10 of the Agreement.
2. The opening paragraph of the Agreement is hereby amended as
follows:
PARTICIPATION AGREEMENT (the "Agreement") made by and between
XXXXXXX VARIABLE LIFE INVESTMENT FUND (the "Fund"), a Massachusetts
business trust created under a Declaration of Trust dated March 15,
1985, as amended, with a principal place of business in Boston,
Massachusetts and The Union Central Life Insurance Company, an Ohio
corporation (the "Company"), with a principal place of business in
Cincinnati, Ohio on behalf of the Carillon Account, a separate
account of the Company, and any other separate account of the
Company, as designated by the Company from time to time, upon
written notice to the Fund in accordance with Section 10 herein
(each, an "Account").
IN WITNESS WHEREOF, the parties hereto have executed this First
Amendment as of the date first above written.
THE UNION CENTRAL LIFE INSURANCE COMPANY
By: /s/ Xxxx X. Xxxxxxxx
Name: Xxxx X. Xxxxxxxx
Title: 2nd Vice President
XXXXXXX VARIABLE LIFE INVESTMENT FUND
By: S/S Xxxxx X. Xxxxx
Name: Xxxxx X. Xxxxx
Title: President
PARTICIPATION AGREEMENT
PARTICIPATION AGREEMENT (the "Agreement") made by and between
XXXXXXX VARIABLE LIFE INVESTMENT FUND (the "Fund"), a Massachusetts
business trust created under a Declaration of Trust dated March 15,
1985, as amended, with a principal place of business in Boston,
Massachusetts and The Union Central Life Insurance Company, an Ohio
corporation (the "Company"), with a principal place of business in
Cincinnati, Ohio on behalf of the Carillon Account (the "Account"),
a separate account of the Company.
WHEREAS, the Fund acts as the investment vehicle for the
separate accounts established for variable life insurance policies
and variable annuity contracts (collectively referred to herein as
"Variable Insurance Products") to be offered by insurance companies
which have entered into participation agreements substantially
identical to this Agreement ("Participating Insurance Companies")
and their affiliated insurance companies; and
WHEREAS, the beneficial interest in the Fund is divided into
several series of shares of beneficial interest ("Shares"), and
additional series of Shares may be established, each designated a
"Portfolio" and representing the interest in a particular managed
portfolio of securities; and
WHEREAS, it is in the best interest of Participating Insurance
Companies to make capital contributions if required so that the
annual expenses of each Portfolio of the Fund in which a
Participating Insurance Company is a shareholder will not exceed a
fixed percentage of the Portfolio's average annual net assets; and
WHEREAS, the Parties desire to evidence their agreement as to
certain other matters,
NOW THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements hereinafter contained, the parties
hereto agree as follows:
1. Additional Definitions.
For the purposes of this Agreement, the following definitions
shall apply:
(a) The "expenses of a Portfolio" for any fiscal year shall
mean the expenses for such fiscal year as shown in the Statement of
Operations (or similar report) certified by the Fund's independent
public accountants;
(b) A "Portfolio's average daily net assets" for each fiscal
year shall mean the sum of the net asset values determined
throughout the year for the purpose of determining net asset value
per Share, divided by the number of such determinations during such
year;
(c) The Company's "Required Contribution" on behalf of the
Account in respect of a Portfolio for any fiscal year shall mean an
amount equal to the expenses of that Portfolio for such year minus
the below-indicated percentage of that Portfolio's average daily
net assets for the year:
Managed International Portfolio . . . . . . 1.5%
Managed Natural Resources Portfolio . . . . 1.5%
Each other Portfolio. . . . . . . . . . . . 0.75%
multiplied by a fraction the denominator of which is the average
daily net assets of that Portfolio and the numerator of which is
the average daily net asset value of the Shares of that Portfolio
owned by the Account (referred to herein as a "Participating
Shareholder"). The Company's Required Contribution in respect of a
Portfolio shall be pro-rated based on the number of business days
on which this Agreement is in effect for periods of less than a
fiscal year.
(d) The "average daily net asset value of the Shares of the
Portfolio" owned by the Account for any fiscal year of the Fund
shall mean the greater of (i) $500,000 or (ii) the sum of the
aggregate net asset values of the Shares so owned determined during
the fiscal year, as of each determination of the net asset value
per Share, divided by the total number of determinations of net
asset value during such year.
(e) "Shares" means shares of beneficial interest, without par
value, of any Portfolio, now or hereafter created, of the Fund.
2. Capital Contribution.
The Company on behalf of the Account shall, within sixty days
after the end of each fiscal year of the Fund, make a capital
contribution to the Fund in respect of each Portfolio equal to the
Required Contribution for that Portfolio for such year; provided,
however, that in the event that both clauses (i) and (ii) of
paragraph (d) of Section 1 of this Agreement or similar agreements
are applicable to different Participating Insurance Companies
during the same fiscal year, there shall be a proportionate
reduction of the Required Contribution of each Participating
Insurance Company to which said clause (ii) is applicable so that
the total of all required capital contributions to the Fund on
behalf of any Portfolio is not greater than the excess of the
expenses of that Portfolio for that fiscal year less the percentage
of that Portfolio's total expenses set forth in paragraph (c) of
Section 1 of this Agreement for such fiscal year.
3. Duty of Fund to Sell.
The Fund shall make its Shares available for purchase at the
applicable net asset value per Share by Participating Insurance
Companies and their affiliates and separate accounts on those days
on which the Fund calculates its net asset value pursuant to rules
of the Securities and Exchange Commission: provided, however, that
the Trustees of the Fund may refuse to sell Shares of any Portfolio
to any person, or suspend or terminate the offering of Shares of
any Portfolio, if such action is required by law or by regulatory
authorities having jurisdiction or is, in the sole discretion of
the Trustees, necessary in the best interest of the shareholders of
any Portfolio.
4. Requirement to Execute Participation Agreement; Requests.
Each Participating Insurance Company shall, prior to
purchasing Shares in the Fund, execute and deliver a participation
agreement in a form substantially identical to this Agreement.
The Fund shall make available, upon written request from the
Participating Insurance Company given in accordance with Paragraph
10, to each Participating Insurance Company which has executed an
Agreement and which Agreement has not been terminated pursuant to
Paragraph 8 (i) a list of all other Participating Insurance
Companies, and (ii) a copy of the Agreement as executed by any
other Participating Insurance Company. The Fund shall also make
available upon request to each Participating Insurance Company
which has executed an Agreement and which Agreement has not been
terminated pursuant to Paragraph 8, the net asset value of any
Portfolio of the Fund as of any date upon which the Fund calculates
the net asset value of its Portfolios for the purpose of purchase
and redemption of Shares.
5. Indemnification.
The Company agrees to indemnify and hold harmless the Fund and
each of its Trustees and officers and each person, if any, who
controls the Fund within the meaning of Section 15 of the
Securities Act of 1933 (the "Act") against any and all losses,
claims, damages, liabilities or litigation (including legal and
other expenses), arising out of the acquisition of any Shares by
any person, to which the Fund or such Trustees, officers or
controlling person may become subject under the Act, under any
other statute, at common law or otherwise, which (i) may be based
upon any wrongful act by the Company, any of its employees or
representatives, any affiliate of or any person acting on behalf of
the Company or a principal underwriter of its insurance products,
or (ii) may be based upon any untrue statement or alleged untrue
statement of a material fact contained in a registration statement
or prospectus covering Shares or any amendment thereof or
supplement thereto or the omission or alleged omission to state
therein a material fact required to be stated therein or necessary
to make the statements therein not misleading if such a statement
or omission was made in reliance upon information furnished to the
Fund by the Company, or (iii) may be based on any untrue statement
or alleged untrue statement of a material fact contained in a
registration statement or prospectus covering insurance products
sold by the Company or any insurance company which is an affiliate
thereof, or any amendments 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, unless such statement or omission was made
in reliance upon information furnished to the Company or such
affiliate by or on behalf of the Fund; provided, however, that in
no case (i) is the Company's indemnity in favor of a Trustee or
officer or any other person deemed to protect such Trustee or
officer or other person against any liability to which any such
person would otherwise be subject by reason of willful misfeasance,
bad faith, or gross negligence in the performance of his duties or
by reason of his reckless disregard of obligations and duties under
this Agreement or (ii) is the Company to be liable under its
indemnity agreement contained in this Paragraph 5 with respect to
any claim made against the Fund or any person indemnified unless
the Fund or such person, as the case may be, shall have notified
the Company in writing pursuant to Paragraph 10 within a reasonable
time after the summons or other first legal process giving
information of the nature of the claims shall have been served upon
the Fund or upon such person (or after the Fund or such person
shall have received notice of such service on any designated
agent), but failure to notify the Company of any such claim shall
not relieve the Company from any liability which it has to the Fund
or any person against whom such action is brought otherwise than on
account of its indemnity agreement contained in this Paragraph 5.
The Company shall be entitled to participate, at its own expense,
in the defense, or, if it so elects, to assume the defense of any
suit brought to enforce any such liability, but, if it elects to
assume the defense, such defense shall be conducted by counsel
chosen by it and satisfactory to the Fund, to its officers and
Trustees, or to any controlling person or persons, defendant or
defendants in the suit. In the event that the Company elects to
assume the defense of any such suit and retain such counsel, the
Fund, such officers and Trustees or controlling person or persons,
defendant or defendants in the suit, shall bear the fees and
expenses of any additional counsel retained by them, but, in case
the Company does not elect to assume the defense of any such suit,
the Company will reimburse the Fund, such officers and Trustees or
controlling person or persons, defendant or defendants in such
suit, for the reasonable fees and expenses of any counsel retained
by them. The Company agrees promptly to notify the Fund pursuant to
Paragraph 10 of the commencement of any litigation or proceedings
against it in connection with the issue and sale of any Shares.
The Fund agrees to indemnify and hold harmless the Company and
each of its directors and officers and each person, if any, who
controls the Company within the meaning of Section 15 of the Act
against any and all losses, claims, damages, liabilities or
litigation (including legal and other expenses) to which it or such
directors, officers or controlling person may become subject under
the Act, under any other statute, at common law or otherwise,
arising out of the acquisition of any Shares by any person which
(i) may be based upon any wrongful act by the Fund, any of its
employees or representatives or a principal underwriter of the
Fund, or (ii) may be based upon any untrue statement or alleged
untrue statement of a material fact contained in a registration
statement or prospectus covering Shares or any amendment thereof or
supplement thereto or the omission or alleged omission to state
therein a material fact required to be stated therein or necessary
to make the statements therein not misleading unless such statement
or omission was made in reliance upon information furnished to the
Fund by the Company or (iii) may be based on any untrue statement
or alleged untrue statement of a material fact contained in a
registration statement or prospectus covering insurance products
sold by the Company, or any amendment or supplement thereto, or the
omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statement or
statements therein not misleading, if such statement or omission
was made in reliance upon information furnished to the Company by
or on behalf of the Fund; provided, however, that in no case (i) is
the Fund's indemnity in favor of a director or officer or any other
person deemed to protect such director or officer or other person
against any liability to which any such person would otherwise be
subject by reason of willful misfeasance, bad faith, or gross
negligence in the performance of his duties or by reason of his
reckless disregard of obligations and duties under this Agreement
or (ii) is the Fund to be liable under its indemnity agreement
contained in this Paragraph 5 with respect to any claims made
against the Company or any such director, officer or controlling
person unless it or such director, officer or controlling person,
as the case may be, shall have notified the Fund in writing
pursuant to Paragraph 10 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 it or upon such director,
officer or controlling person (or after the Company or such
director, officer or controlling person shall have received notice
of such service on any designated agent), but failure to notify the
Fund of any claim shall not relieve it from any liability which it
may have to the person against whom such action is brought
otherwise than on account of its indemnity agreement contained in
this Paragraph. The Fund will be entitled to participate at its own
expense in the defense, or, if it so elects, to assume the defense
of any suit brought to enforce any such liability, but if the Fund
elects to assume the defense, such defense shall be conducted by
counsel chosen by it and satisfactory to the Company, its
directors, officers or controlling person or persons, defendant or
defendants, in the suit. In the event the Fund elects to assume the
defense of any such suit and retain such counsel, the Company, its
directors, officers or controlling person or persons, defendant or
defendants in the suit, shall bear the fees and expenses of any
additional counsel retained by them, but, in case the Fund does not
elect to assume the defense of any such suit, it will reimburse the
Company or such directors, officers or controlling person or
persons, defendant or defendants in the suit, for the reasonable
fees and expenses of any counsel retained by them. The Fund agrees
promptly to notify the Company pursuant to Paragraph 10 of the
commencement of any litigation or proceedings against it or any of
its officers or Trustees in connection with the issuance or sale of
any Shares.
6. Procedure for Resolving Irreconcilable Conflicts.
(a) The Trustees of the Fund will monitor the operations of
the Fund for the existence of any material irreconcilable conflict
among the interests of all the contractholders and policyowners of
Variable Insurance Products (the "Participants") of all separate
accounts investing in the Fund. An irreconcilable material conflict
may arise, among other things, from: (a) an action by any state
insurance regulatory authority; (b) a change in applicable
insurance laws or regulations; (c) a tax ruling or provision of the
Internal Revenue Code or the regulations thereunder; (d) any other
development relating to the tax treatment of insurers,
contractholders or policyowners or beneficiaries of Variable
Insurance Products; (e) the manner in which the investments of any
Portfolio are being managed; (f) a difference in voting
instructions given by variable annuity contractholders, on the one
hand, and variable life insurance policyowners, on the other hand,
or by the contractholders or policyowners of different
participating insurance companies; or (g) a decision by an insurer
to override the voting instructions of Participants.
(b) The Company will be responsible for reporting any
potential or existing conflicts to the Trustees of the Fund. The
Company will be responsible for assisting the Trustees in carrying
out their responsibilities under this Paragraph 6(b) and Paragraph
6(a), by providing the Trustees with all information reasonably
necessary for the Trustees to consider the issues raised. The Fund
will also request its investment adviser to report to the Trustees
any such conflict which comes to the attention of the adviser.
(c) If it is determined by a majority of the Trustees of the
Fund, or a majority of its disinterested Trustees, that a material
irreconcilable conflict exists involving the Company, the Company
shall, at its expense, and to the extent reasonably practicable (as
determined by a majority of the disinterested Trustees), take
whatever steps are necessary to eliminate the irreconcilable
material conflict, including withdrawing the assets allocable to
some or all of the separate accounts from the Fund or any Portfolio
and reinvesting such assets in a different investment medium,
including another Portfolio of the Fund, offering to the affected
Participants the option of making such a change or establishing a
new funding medium including a registered investment company.
For purposes of this Paragraph 6(c), the Trustees, or the
disinterested Trustees, shall determine whether or not any proposed
action adequately remedies any irreconcilable material conflict. In
the event of a determination of the existence of an irreconcilable
material conflict, the Trustees shall cause the Fund to take such
action, such as the establishment of one or more additional
Portfolios, as they in their sole discretion determine to be in the
interest of all shareholders and Participants in view of all
applicable factors, such as cost, feasibility, tax, regulatory and
other considerations. In no event will the Fund be required by this
Paragraph 6(c) to establish a new funding medium for any variable
contract or policy.
The Company shall not be required by this Paragraph 6(c) to
establish a new funding medium for any variable contract or policy
if an offer to do so has been declined by a vote of a majority of
the Participants materially adversely affected by the material
irreconcilable conflict. The Company will recommend to its
Participants that they decline an offer to establish a new funding
medium only if the Company believes it is in the best interest of
the Participants.
(d) The Trustees' determination of the existence of an
irreconcilable material conflict and its implications promptly
shall be communicated to all Participating Insurance Companies by
written notice thereof delivered or mailed, first class postage
prepaid.
7. Voting Privileges.
The Company shall be responsible for assuring that its
separate account or accounts participating in the Fund shall use a
calculation method of voting procedures substantially the same as
the following: those Participants permitted to give instructions
and the number of Shares for which instructions may be given will
be determined as of the record date for the Fund shareholders'
meeting, which shall not be more than 60 days before the date of
the meeting. Whether or not voting instructions are actually given
by a particular Participant, all Fund shares held in any separate
account or sub-account thereof and attributable to policies will be
voted for, against, or withheld from voting on any proposition in
the same proportion as (i) the aggregate record date cash value
held in such sub-account for policies giving instructions,
respectively, to vote for, against, or withhold votes on such
proposition, bears to (ii) the aggregate record date cash value
held in the sub-account for all policies for which voting
instructions are received. Participants continued in effect under
lapse options will not be permitted to give voting instructions.
Shares held in any other insurance company general or separate
account or sub-account thereof will be voted in the proportion
specified in the second preceding sentence for shares attributable
to policies.
8. Duration and Termination.
This Agreement shall remain in force for the period ending
five years from the date of its execution (such date and any
anniversary of such date being hereinafter called a "Renegotiation
Date"), and from year to year thereafter provided that neither the
Company nor the Fund shall have given written notice to the other
within thirty (30) days prior to a Renegotiation Date that it
desires to renegotiate the amount of contribution to capital due
hereunder ("Renegotiation Notice"). If a Renegotiation Notice is
properly given as aforesaid and the Fund and the Company shall
fail, within sixty (60) days after the Renegotiation Date, either
to enter into an amendment to this Agreement or a written
acknowledgment that the Agreement shall continue in effect, this
Agreement shall terminate as of the one hundred twentieth day after
such Renegotiation Date. If this Agreement is so terminated, the
Fund may, at any time thereafter, automatically redeem the Shares
of any Portfolio held by a Participating Shareholder. This
Agreement may be terminated at any time, at the option of either of
the Company or the Fund, when neither the Company, any insurance
company nor the separate account or accounts of such insurance
company which is an affiliate thereof which is not a Participating
Insurance Company own any Shares of the Fund or may be terminated
by either party to the Agreement upon a determination by a majority
of the Trustees of the Fund, or a majority of its disinterested
Trustees, following certification thereof by a Participating
Insurance Company given in accordance with Paragraph 10 that an
irreconcilable conflict exists among the interests of (i) all
contractholders and policyholders of Variable Insurance Products of
all separate accounts or (ii) the interests of the Participating
Insurance Companies investing in the Fund. Notwithstanding anything
to the contrary in this Agreement or its termination as provided
herein, the Company's obligation to make a capital contribution to
the Fund in accordance with this Agreement at the time in effect
shall continue (i) following a properly given Renegotiation Notice,
in the absence of agreement otherwise, until termination of this
Agreement, and (ii) (except termination due to the existence of an
irreconcilable conflict), following termination of this Agreement,
until the later of the fifth anniversary of the date of this
Agreement or the date on which the Company, its separate account(s)
or the separate account(s) of any affiliated insurance company owns
no Shares.
9. Compliance.
The Fund will comply with the provisions of Section 4240(a) of
the New York Insurance Law.
Each Portfolio of the Fund will comply with the provisions of
Section 817(h) of the Internal Revenue Code of 1986, as amended
(the "Code"), relating to diversification requirements for variable
annuity, endowment and life insurance contracts. Specifically, each
Portfolio will comply with either (i) the requirement of Section
817(h)(1) of the Code that its assets be adequately diversified, or
(ii) the "Safe Harbor for Diversification" specified in Section
817(h)(2) of the Code, or (iii) the diversification requirement of
Section 817(h)(1) of the Code by having all or part of its assets
invested in U.S. Treasury securities which qualify for the "Special
Rule for Investments in United States Obligations" specified in
Section 817(h)(3) of the Code.
The provisions of Paragraphs 6 and 7 of this Agreement shall
be interpreted in a manner consistent with any Rule or order of the
Securities and Exchange Commission under the Investment Company Act
of 1940, as amended, applicable to the parties hereto.
No Shares of any Portfolio of the Fund may be sold to the
general public.
10. Notices.
Any notice shall be sufficiently given when sent by registered
or certified mail to the other party at the address of such party
set forth below or at such other address as such party may from
time to time specify in writing to the other party.
If to the Fund:
Xxxxxxx Variable Life Investment Fund
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
(000) 000-0000
Attn: Xxxxx X. Xxxxx
If to the Company:
The Union Central Life Insurance Company
X.X. Xxx 000
Xxxxxxxxxx, XX 00000
Attn: Xxxx X. Xxxxxxxx
11. Massachusetts Law to Apply.
This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of The
Commonwealth of Massachusetts.
12. Miscellaneous.
The name "Xxxxxxx Variable Life Investment Fund" is the
designation of the Trustees for the time being under a Declaration
of Trust dated March 15, 1985, as amended, and all persons dealing
with the Fund must look solely to the property of the Fund for the
enforcement of any claims against the Fund as neither the Trustees,
officers, agents or shareholders assume any personal liability for
obligations entered into on behalf of the Fund. No Portfolio shall
be liable for any obligations properly attributable to any other
Portfolio.
The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the
provisions hereof or otherwise affect their construction or effect.
This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and
the same instrument.
13. Entire Agreement. This Agreement incorporates the entire
understanding and agreement among the parties hereto, and
supercedes any and all prior understandings and agreements between
the parties hereto with respect to the subject matter hereof.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed in its name and behalf by its duly
authorized representative and its seal to be hereunder affixed
hereto as of the 18 day of FEB, 1992.
SEAL
XXXXXXX VARIABLE LIFE INVESTMENT FUND
/s/ Xxxxxxx X. Xxxxx
By: Xxxxxxx X. Xxxxx
Vice President
SEAL
THE UNION CENTRAL LIFE INSURANCE COMPANY
/s/ Xxxxxx X. Xxxxxxx
By: Xxxxxx X. Xxxxxxx
Its: Executive Vice President
