EXHIBIT 23(H)(XXI) UNDER FORM N-1A
EXHIBIT 10(H) UNDER ITEM 601/REG. S-K
PARTICIPATION AGREEMENT
Among
THE HUNTINGTON FUNDS,
EDGEWOOD SERVICES, INC.,
HUNTINGTON ASSET ADVISORS, INC.,
TRANSAMERICA FINANCIAL LIFE INSURANCE COMPANY
and
TRANSAMERICA LIFE INSURANCE COMPANY
THIS AGREEMENT, made and entered into as of the 23rd day of June, 2006, by
and among TRANSAMERICA FINANCIAL LIFE INSURANCE COMPANY ("TFLIC"); TRANSAMERICA
LIFE INSURANCE COMPANY, an Iowa corporation (together with its affiliate, TFLIC,
the "Company"), on its own behalf and on behalf of each segregated asset account
of the Company set forth on Schedule A hereto as may be amended from time to
time (each such account hereinafter referred to as an "Account"); THE HUNTINGTON
FUNDS, a Delaware statutory trust (the "Trust"), on its behalf and on behalf of
each of its series set forth in Schedule A; EDGEWOOD SERVICES, INC., a New York
corporation (the "Distributor"); and HUNTINGTON ASSET ADVISORS, INC., a
registered investment advisor (the "Advisor").
WHEREAS, the Trust engages in business as an open-end, management
investment company and its Funds (as defined below) are available to act as the
investment vehicle for separate accounts established for variable life insurance
policies and variable annuity contracts (collectively, the "Variable Insurance
Products") to be issued by the Company; and
WHEREAS, the beneficial interest in the Trust is divided into several
series of shares, each representing the interest in a particular managed
portfolio of securities and other assets, any one or more of which may be made
available under this Agreement, as set forth on Schedule A hereto and as may be
amended from time to time by mutual agreement of the parties hereto (each such
series hereinafter referred to as a "Fund"); and
WHEREAS, the Trust is registered as an open-end, management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act")
and its shares are registered under the Securities Act of 1933, as amended (the
"1933 Act"); and
WHEREAS, the Trust has engaged the Advisor, an investment adviser
registered under the federal Investment Advisers Act of 1940 (the "Advisers
Act") and any applicable state securities law, to provide investment advisory
services, including managing the Funds pursuant to applicable diversification
requirements of the Internal Revenue Code of 1986 (the "Code"); and
WHEREAS, the Company has registered or will register the variable life
insurance and variable annuity contracts listed on Schedule A, as it maybe
amended from time to time (the "Contracts") under the 1933 Act or will not
register the contracts in proper reliance on an exemption from registration
under the 1933 Act and the 1940 Act; and
WHEREAS, each Account is a duly organized, validly existing segregated
asset account, established by resolution of the Board of Directors of the
Company, on the date shown for such Account on Schedule A hereto, to set aside
and invest assets attributable to the aforesaid variable annuity contracts; and
WHEREAS, the Company has registered or will register each Account as a
unit investment trust under the 1940 Act; and
WHEREAS, the Distributor is registered as a broker dealer with the
Securities and Exchange Commission ("SEC") under the Securities Exchange Act of
1934, as amended, (the "1934 Act"), and is a member in good standing of the
National Association of Securities Dealers, Inc. (the "NASD"); and
WHEREAS, the Trust has obtained an order from the SEC granting
participating insurance companies and their separate accounts exemptions under
Section 6(c) of the 1940 Act from the provisions of Sections 9(a), 13(a), 15(a),
and 15(b) of the 1940 Act and Rules 6e-2(b)(15) and 6e-3(T)(b)(15) thereunder,
to the extent necessary to permit shares of the Trust to be sold to and held by
variable annuity and variable life insurance separate accounts of both
affiliated and nonaffiliated life insurance companies and certain qualified
pension and retirement plans (the "Shared Exemptive Order"); and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares in the Funds on behalf of
each Account to fund certain of the aforesaid variable life and variable annuity
contracts and the Distributor is authorized to sell such shares to unit
investment trusts such as each Account at net asset value;
NOW, THEREFORE, in consideration of the foregoing and the mutual promises
and covenants hereinafter set forth, the Company, the Trust, and the Advisor and
the Distributor agree as follows:
ARTICLE I. SALE OF TRUST SHARES
1.1. The Distributor agrees to sell to the Company those shares of the
Funds which each Account orders, and agrees to execute such orders on each day
on which the New York Stock Exchange is open for trading and the Funds calculate
their net asset value pursuant to rules of the SEC, all as described in the
Funds' registration statement (a "Business Day") at the net asset value next
computed after receipt and acceptance by the Trust or its designee of the order
for the shares of the Funds. For purposes of this Section 1.1, the Company
shall be the designee of the Trust for receipt of such orders from each Account
and receipt by such designee shall constitute receipt by the Trust; provided
that the Trust receives notice of such order in accordance with the requirements
set forth in Schedule B.
1.2. The Trust agrees to make its shares available for purchase at the
applicable net asset value per share by the Company and its Accounts on each
Business Day. Notwithstanding the foregoing, the Board of Trustees of the Trust
(the "Board") 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 Board 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 such Fund.
1.3. The Trust and the Distributor agree that shares of the Funds will be
sold only to the Company and its Accounts or to other life insurance companies
that offer variable annuity and/or variable life insurance contracts to the
public and which have entered into an agreement with the Trust, and to other
persons not inconsistent with each Fund being adequately diversified pursuant to
Section 817(h) of the Code, and the regulations thereunder. No shares of any
Fund will be sold to the general public to the extent inconsistent with such
Fund being adequately diversified pursuant to Section 817(b) of the Code, and
the regulations thereunder.
1.4. Upon receipt of a request for redemption in proper form from the
Company, the Trust agrees to redeem directly any full or fractional shares of
the Fund held by the Company, ordinarily executing such requests on each
Business Day at the net asset value next computed after receipt and acceptance
by the Trust or its designee of the request for redemption except that the Trust
reserves the right to suspend the right of redemption, consistent with
Section 22(e) of the 1940 Act and any rules thereunder. Such redemption shall
be paid consistent with applicable rules of the SEC and procedures and policies
of the Trust as described in the current registration statement. For purposes
of this Section 1.4, the Company shall be the designee of the Trust for the
limited purpose of receiving and accepting purchase and redemption orders from
each Account and receipt by such designee shall constitute receipt by the Trust;
provided that the Trust receives notice of such request for redemption in
accordance with the requirements set forth in Schedule B. The Company agrees to
submit such orders electronically through secured trading systems as described
on Schedule B to this Agreement or, if it is unable to submit orders
electronically, the Company shall submit such orders through manual
transmissions using the procedures described in Schedule B to this Agreement.
1.5. The Company agrees that purchases and redemptions of Fund shares
offered by the then current prospectus of the Trust shall be made in accordance
with the provisions of such prospectus.
1.6. Unless otherwise specified in Schedule B, the Company shall pay for
Trust shares 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 purpose of Section 2.10 and 2.11,
upon receipt by the Trust of the federal funds so wired, such funds shall cease
to be the responsibility of the Company and shall become the responsibility of
the Trust.
1.7. Issuance and transfer of Fund shares will be by book entry only.
Stock certificates will not be issued to the Company or any Account. Shares
ordered from the Funds will be recorded in an appropriate title for each Account
or the appropriate subaccount of each Account. The Trust shall furnish to the
Company the CUSIP number assigned to each Fund identified in Schedule A
attached, as may be amended from time to time.
1.8. Unless otherwise specified in Schedule B, the Trust shall furnish
same day notice (by wire or telephone, followed by written confirmation) to the
Company of any income, dividends or capital gain distributions payable on the
Fund's shares. The Company hereby elects to receive all such income dividends
and capital gain distributions as are payable on the Fund shares in additional
shares of that Fund. The Company reserves the right to revoke this election in
writing and to receive all such income dividends and capital gain distributions
in cash. The Trust or its agent shall notify the Company of the number of
shares so issued as payment of such dividends and distributions.
1.9. Unless otherwise specified in Schedule B, the Trust shall make the
net asset value per share for each Fund available to the Company on each
Business Day as soon as reasonably practical after the net asset value per share
is calculated and shall use its best efforts to make such net asset value per
share available by 6:00 p.m. Central Time.
A. If the Trust or its agent provides materially incorrect share net
asset value information through no fault of the Company, the Accounts shall be
entitled to an adjustment with respect to the Fund shares purchased or redeemed
to reflect the correct net asset value per share.
B. The determination of the materiality of any net asset value pricing
error and its correction shall be based on the SEC's recommended guidelines
regarding these errors. Any material error in the calculation or reporting of
net asset value per share, dividend or capital gain information shall be
reported promptly to the Company upon discovery. The Trust and/or its agents
shall indemnify and hold harmless the Company against any amount the Company is
legally required to pay qualified plans ("Plans") or Contract owners, and which
amount is due to the Trust's or its agents' material miscalculation and/or
incorrect reporting of the daily net asset value, dividend rate or capital gains
distribution rate. The Company shall submit an invoice to the Trust or its
agents for such losses incurred as a result of the above which shall be payable
within sixty (60) days of receipt. Should a material miscalculation by the
Trust or its agents result in a gain to the Company, the Company shall
immediately reimburse the Trust or its agents for any amount lost by the Trust
or its agents as a result of the incorrect calculation. Should a material
miscalculation by the Trust or its agents result in a gain to the Plans or
Contract owners, the Company will consult with the Trust or its designee as to
what reasonable efforts shall be made to recover the money and repay the Trust
or its agents. The Company shall then make such reasonable effort, at the
expense of the Trust or its agents, to recover the money and repay the Trust or
its agents; but the Company shall not be obligated to take legal action against
the Plans or Contract owners.
With respect to the material errors or omissions relating to net asset
value pricing, this section shall control over other indemnification provisions
in this Agreement.
1.10. The Parties hereto acknowledge that the arrangement contemplated by
this Agreement is not exclusive; the Trust's shares may be sold to other
insurance companies (subject to Section 1.3 and Article VI hereof) and the cash
value of the Contracts may be invested in other investment companies.
ARTICLE IB. GENERAL DUTIES
1.11. The Company shall take all such actions as are necessary under
applicable federal and state law to permit the sale of the Contracts issued by
the Company, including registering each Account as an investment company to the
extent required under the 1940 Act, and registering the Contracts or interests
in the Accounts under the Contracts to the extent required under the 1933 Act,
and obtaining all necessary approvals to offer the Contracts from state
insurance commissioners.
1.12. The Company shall make every effort to maintain the treatment of
the Contracts issued by the Company as annuity contracts or life insurance
policies, whichever is appropriate, under the applicable provisions of the Code,
and shall notify the Trust and the Distributor immediately upon having a
reasonable basis for believing that such Contracts have ceased to be so treated
or that they might not be so treated in the future. In that regard, the Company
shall make every effort to remedy any Contract's failure to be treated as
annuity contracts or life insurance policies, as appropriate, under applicable
provisions of the Code, including Section 72 and regulations thereunder within
the required time frames.
1.13. The Company or its agents shall offer and sell the Contracts in
accordance with applicable provisions of the 1933 Act, the 1934 Act, the 1940
Act, the NASD Rules of Fair Practice, and state insurance law respecting the
offering of variable life insurance policies and variable annuity contracts.
1.14. The Distributor shall sell and distribute the shares of the Funds
in accordance with the applicable provisions of the 1933 Act, the 1934 Act, the
1940 Act, the NASD Rules of Fair Practice, and state law.
1.15. During such time as the Trust engages in activities that require a
Shared Exemptive Order, a majority of the Trust's Board shall consist of persons
who are not "interested persons" of the Trust, as defined by Section 2(a)(19) of
the 1940 Act and the rules thereunder, and as modified by any applicable orders
of the SEC ("Disinterested Trustees"), except that if this provision is not met
by reason of the death, disqualification, or bona fide resignation of any
Trustee or Trustees, then the operation of this provision shall be suspended (a)
for a period of 45 days if the vacancy or vacancies may be filled by the Trust's
Board; (b) for a period of 60 days if a vote of shareholders is required to fill
the vacancy or vacancies; or (c) for such longer period as the SEC may prescribe
by rule or order upon application.
ARTICLE II. REPRESENTATIONS AND WARRANTIES
2.1. The Company represents and warrants that the Contracts are or will
be registered under the 1933 Act; or that the Contracts are not registered in
proper reliance on an exemption from registration under the 1933 Act; that the
Contracts will be issued and sold in compliance in all material respects with
applicable provisions of the 1933 Act, the 1934 Act, the 1940 Act, the NASD
Rules of Fair Practice, and state insurance law respecting the offering of
variable life insurance policies and variable annuity contracts and that the
sale of the Contracts shall comply in all material respects with state insurance
suitability requirements. The Company further represents and warrants that it is
an insurance company duly organized and in good standing under applicable law,
that it is taxed as an insurance company under Subchapter L of the Code and that
it has legally and validly established each Account prior to any issuance or
sale thereof as a segregated asset account under Section 508A.1 of the Iowa
Insurance Code and has registered or, prior to any issuance or sale of the
Contracts, will register each 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, or that the Company will not register the Account in proper
reliance upon an exclusion from registration under the1940 Act.
2.2. The Trust represents and warrants that Fund shares sold pursuant to
this Agreement shall be registered under the 1933 Act, duly authorized for
issuance and sold in compliance with applicable federal and state securities
laws and that the Trust is and shall remain registered under the 1940 Act. The
Trust 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 Fund shares
for sale in accordance with the laws of the various states only if and to the
extent deemed advisable by the Trust or the Distributor.
2.3. The Trust and the Advisor represent that each Fund intends to
qualify as a Regulated Investment Company under Subchapter M of the Code and
that the Trust and the Advisor will make every effort to maintain such
qualification (under Subchapter M or any successor or similar provision) and
that the Trust and the Advisor will notify the Company immediately upon having a
reasonable basis for believing that a Fund has ceased to so qualify or that it
might not so qualify in the future.
2.4. The Company represents that the Contracts are currently treated as
endowment or annuity insurance contracts, under applicable provisions of the
Code and that it will make every effort to maintain such treatment and that it
will notify the Trust and the Distributor 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. In that regard, the Company shall make
every effort to remedy any variable contract's failure to be treated as annuity
contracts or life insurance policies, as appropriate, under applicable
provisions of the Code, including Section 72 and regulations thereunder within
the required time frames.
2.5. The Trust represents and warrants that should it ever desire to make
any payments to finance distribution expenses pursuant to Rule 12b-1 under the
1940 Act, the Trustees, including a majority who are Disinterested Trustees,
will formulate and approve any plan under Rule 12b-1 to finance distribution
expenses. To the extent that any Class of the Fund may finance its distribution
expenses pursuant to a Plan adopted under Rule 12b-1, the Fund undertakes to
comply with any then current SEC and SEC staff interpretations concerning Rule
12b-1 or any successor provisions.
2.6. The Trust makes no representation as to whether any aspect of its
operations (including, but not limited to, fees and expenses and investment
policies) complies with the insurance laws or regulations of the various states
except that the Trust represents that the Trust's investment policies, fees and
expenses are and shall at all times remain in compliance with the laws of the
State of Delaware and the Trust and the Distributor represent that their
respective operations are and shall at all times remain in material compliance
with their respective laws organization to the extent required to perform this
Agreement.
2.7. The Distributor represents and warrants that it is a member in good
standing of the NASD and is registered as a broker-dealer with the SEC. The
Distributor further represents that it will sell and distribute the Trust shares
in accordance with all applicable state and federal securities laws, including
without limitation the 1933 Act, the 1934 Act, and the 1940 Act, and the NASD
Rules of Fair Practice.
2.8. The Trust represents that it is lawfully organized and validly
existing under the laws of State of Delaware and that it does and will comply in
all material respects with the 1940 Act.
2.9. The Advisor represents and warrants that it is and shall remain duly
registered as an investment adviser in all material respects under all
applicable federal and state securities laws and that the Advisor shall perform
its obligations for the Trust in compliance in all material respects with any
applicable state and federal securities laws.
2.10. The Trust represents and warrants that all of its trustees,
officers, employees, investment advisers, and other individuals/entities 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 minimal coverage as required
currently by Rule 17g-(1) under the 1940 Act or related provisions as 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.
2.11. The Company represents and warrants that all of its directors,
officers, employees, investment advisers, and other individuals/entities dealing
with the money and/or securities of the Trust are covered by a blanket fidelity
bond or similar coverage for the benefit of the Trust, and that said bond is
issued by a reputable bonding company, includes coverage for larceny and
embezzlement, and is in an amount not less than $5 million. The Company agrees
to make all reasonable efforts to see that this bond or another bond containing
these provisions is always in effect, and agrees to notify the Trust and the
Distributor in the event that such coverage no longer applies.
2.12. Provided it is consistent with their fiduciaries duties, the
Company and its agents will not in any way recommend any proposal in opposition
to, or oppose or interfere with, any proposal submitted by the Fund at a meeting
of owners of Contracts or shareholders of the Fund, and will in no way recommend
any proposal in opposition to, or oppose or interfere with, the solicitation of
proxies by the Fund of shares held by Contract owners, without the prior written
consent of the Fund.
2.13. Each party hereto shall cooperate with each other party and all
appropriate governmental authorities having jurisdiction (including, without
limitation, the SEC, the NASD, and state insurance regulators) and shall permit
such authorities reasonable access to its books and records in connection with
any investigation or inquiry relating to this Agreement or the transactions
contemplated hereby.
ARTICLE III. PROSPECTUSES AND PROXY STATEMENTS; VOTING
3.1. The Distributor shall provide the Company with as many printed
copies of the Trust's current prospectus and Statement of Additional Information
(describing only the designated Funds listed on Schedule A) or, to the extent
existing, the Trust's profiles as the Company may reasonably request. If
requested by the Company in lieu thereof, the Trust shall provide camera-ready
film or an electronic file in a format acceptable to the Company containing the
Trust's prospectus and Statement of Additional Information, and such other
assistance as is reasonably necessary in order for the Company once each year
(or more frequently if the prospectus and/or Statement of Additional Information
for the Trust is amended during the year) to have the prospectus for the
Contracts and the Trust's prospectus printed together in one document, and to
have the Statement of Additional Information for the Trust and the Statement of
Additional Information for the Contracts printed together in one document.
Alternatively, the Company may print the Trust's prospectus and/or its Statement
of Additional Information in combination with other fund companies' prospectuses
and statements of additional information. In such event, the Trust shall bear
its pro rata share of printing expenses based on the number of combined printed
pages. All such documents shall be provided to the Company within time
reasonably required to allow for printing and delivery to Contract owners, but
no later than five business days prior to the date the documents are required
under then-current regulations to be sent to Contract owners. Except as
provided in the following three sentences, all expenses of printing and
distributing Trust prospectuses and Statements of Additional Information shall
be the expense of the Company. For prospectuses and Statements of Additional
Information provided by the Company to its existing owners of Contracts in order
to update disclosure annually as required by the 1933 Act and/or the 1940 Act,
the cost of printing shall be borne by the Trust. If the Company chooses to
receive camera-ready film or an electronic file in lieu of receiving printed
copies of the Trust's prospectus, the Trust will reimburse the Company in an
amount equal to the product of A and B where A is the number of such
prospectuses distributed to owners of the Contracts, and B is the Trust's per
unit cost of typesetting and printing the Trust's prospectus. The same
procedures shall be followed with respect to the Trust's Statement of Additional
Information.
The Company agrees to provide the Trust or its designee with such
information as may be reasonably requested by the Trust to assure that the
Trust's expenses do not include the cost of printing any prospectuses or
Statements of Additional Information other than those actually distributed to
existing owners of the Contracts.
3.2. The Trust's prospectus shall state that the Statement of Additional
Information for the Trust is available from the Distributor or the Company (or
in the Trust's discretion, the Prospectus shall state that such Statement is
available from the Trust).
3.3. At its expense, the Trust shall provide the Company with copies of
the Trust's proxy statements, reports to shareholders, and other required
shareholder communications (except for prospectuses and Statements of Additional
Information, which are covered in Section 3.1) to shareholders in such quantity
as the Company shall reasonably require for distributing to Contract owners.
3.4. If and to the extent required by law the 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 a
particular separate account in the same proportion as Trust shares
of such Fund for which instructions have been received in that
separate account, so long as and to the extent that the SEC
continues to interpret the 1940 Act to require pass-through voting
privileges for variable contract owners. The Company reserves the
right to vote Trust shares held in any segregated asset account in
its own right, to the extent permitted by law.
3.5. The Company shall be responsible for assuring that each of its
separate accounts participating in the Trust calculates voting privileges as
required by the Shared Exemptive Order and consistent with any reasonable
standards the Trust may adopt.
3.6. 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 or comply with Section 16(c) of the 1940 Act (although the Trust
is not one of the trusts described in Section 16(c) of that Act) as well as with
Sections 16(a) and, if and when applicable, 16(b). Further, the Trust will act
in accordance with the SEC'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.
3.7. If and during the time as the Trust engages in activities that
require a Shared Exemptive Order, the Trust shall disclose in its prospectus or
Statement of Additional Information that (1) the Funds are intended to be
funding vehicles for variable annuity and variable life insurance contracts
offered by various insurance companies, (2) material irreconcilable conflicts
possibly may arise, and (3) the Board will monitor events in order to identify
the existence of any material irreconcilable conflicts and to determine what
action, if any, should be taken in response to any such conflict. The Trust
hereby notifies the Company that prospectus or Statement of Additional
Information disclosure may be appropriate regarding potential risks of offering
shares of the Funds to separate accounts funding Contracts of unaffiliated life
insurance companies.
ARTICLE IV. SALES MATERIAL AND INFORMATION
4.1. The 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, the Advisor or the Distributor is named, at least
fifteen Business Days prior to its use. No such material shall be used if the
Trust or its designee reasonably objects to such use within fifteen Business
Days after receipt of such material.
4.2. The 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 registration statement or prospectus for the
Trust shares, as such registration statement and prospectus 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 the Distributor, except with the permission of the Trust or
the Distributor or the designee of either.
4.3. The Trust, the Advisor, the Distributor, or its designee shall
furnish, or shall cause to be furnished, to the Company or its designee, each
piece of sales literature or other promotional material in which the Company
and/or its separate account(s), is named at least fifteen Business Days prior to
its use. No such material shall be used if the Company or its designee
reasonably objects to such use within fifteen Business Days after receipt of
such material.
4.4. The Trust, the Advisor, and the Distributor shall not give any
information or make any representations on behalf of the Company or concerning
the Company, each Account, or the Contracts other than the information or
representations contained in a registration statement or prospectus for the
Contracts, as such registration statement and prospectus may be amended or
supplemented from time to time, or in published reports for each Account which
are in the public domain or approved by the Company for distribution to Contract
owners, or in sales literature or other promotional material approved by the
Company or its designee, except with the permission of the Company.
4.5. The Trust will provide to the Company at least one complete copy of
all registration statements, prospectuses, Statements of Additional Information,
reports, proxy statements, sales literature and other promotional materials,
applications for exemptions, requests for no-action letters, and all amendments
to any of the above, that relate to the Trust or its shares, promptly after the
filing of such document with the SEC or other regulatory authorities.
4.6. The Company will provide to the Trust at least one complete copy of
all registration statements, prospectuses, Statements of Additional Information,
reports, solicitations for voting instructions, sales literature and other
promotional materials, applications for exemptions, requests for no action
letters, and all amendments to any of the above, that relate to the Contracts or
each Account, promptly after the filing of such document with the SEC 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, any of the
following that refer to the Trust or any affiliate of the Trust: advertisements
(such as material published, or designed for use in, a newspaper, magazine, or
other periodical, radio, television, telephone or tape recording, videotape
display, signs or billboards, motion pictures, or other public media), sales
literature (i.e., any written communication distributed or made generally
available to customers or the public, including brochures, circulars, research
reports, market letters, form letters, seminar texts, reprints or excerpts of
any other advertisement, sales literature, or published article), educational or
training materials or other communications distributed or made generally
available to some or all agents or employees, and registration statements,
prospectuses, Statements of Additional Information, shareholder reports, and
proxy materials.
ARTICLE V. FEES AND EXPENSES
5.1. The Distributor shall pay no fee or other compensation to the
Company under this agreement, except that if the Trust or any Fund adopts and
implements a plan pursuant to Rule 12b-1 to finance distribution expenses, then
the Trust or Distributor may make payments to the Company or to the underwriter
for the Contracts if and in amounts agreed to by the Distributor in writing and
such payments will be made out of existing fees otherwise payable to the
Distributor, past profits of the Distributor or other resources available to the
Distributor. However, the parties reserve the right to agree to compensate the
Company in return for services it provides by executing a Schedule to this
Agreement or a separate agreement for services.
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 all its
shares are registered and authorized for issuance in accordance with applicable
federal law and, if and to the extent deemed advisable by the Trust, in
accordance with applicable state laws prior to their sale. The Trust shall bear
the expenses for 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 (including
the costs of printing a prospectus that constitutes an annual report), 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 Company shall bear the expenses of distributing the Trust's
prospectus, proxy materials and reports to owners of Contracts issued by the
Company.
ARTICLE VI. DIVERSIFICATION
6.1. The Trust and the Advisor represent and warrant that the Funds
currently comply, and will continue to comply, with the diversification
provisions of Section 817(h) of the Code and Treasury Regulation 1.817-5,
relating to the diversification requirements for variable annuity, endowment, or
life insurance contracts and any amendments or other modifications to such
Section or Regulations. In the event of a breach of this Article VI by the
Advisor or the Trust, each will take all reasonable steps (a) to notify the
Company of such breach and (b) to adequately diversify the Trust so as to
achieve compliance within the grace period afforded by Regulation 1.817-5.
ARTICLE VII. POTENTIAL CONFLICTS
7.1. If the Trust determines to offer Fund shares to any other insurance
company, separate account or to a qualified plan, then the Trust shall furnish
the Company with a copy of its application for an order of the SEC under Section
6(c) of the 1940 Act for mixed and shared funding relief, and the notice of such
application and order when issued by the SEC. The Company agrees to comply with
the conditions on which such order is issued, including reporting any potential
or existing conflicts promptly to the Board of Trustees of the Trust ("Board"),
and in particular whenever contract owner voting instructions are disregarded,
to the extent such conditions are not materially different from the conditions
of the mixed and shared funding relief that the Company has agreed to be bound
by in similar participation agreements with other fund providers, and recognizes
that it shall be responsible for assisting the Board in carrying out is
responsibilities in connection with such order. The Company agrees to carry out
such responsibilities with a view to the interests of existing contract owners.
If and during the time that the Trust engages in activities that require a
Shared Exemptive Order, the parties shall comply with this Article VII.
7.2 The Board will monitor the Trust for the existence of any material
irreconcilable conflict between the interests of the contract owners of all
separate accounts 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 interpretative letter, or any similar action by
insurance, tax, or securities regulatory authorities; (c) an administrative or
judicial decision in any relevant proceeding; (d) the manner in which the
investments of any Fund are being managed; (e) a difference in voting
instructions given by variable annuity contract and variable life insurance
contract owners or trustees of qualified pension or retirement plans; or (f) a
decision by an insurer to disregard the voting instructions of contract owners
or if applicable, a decision by a qualified pension or retirement plan to
disregard the voting instructions of its participants. The Board shall promptly
inform the Company if it determines that an irreconcilable material conflict
exists and the implications thereof.
7.3. The Company will report any potential or existing conflicts of which
it is aware to the Board. The Company will assist the Board in carrying out its
responsibilities under the Shared Exemptive Order by providing the Board with
all information reasonably necessary for the Board to consider any issues
raised. This includes, but is not limited to, an obligation by the Company to
inform the Board whenever contract owner voting instructions are disregarded.
The Company shall carry out its responsibilities under this Section 7.3 with a
view only to the interests of the contract owners.
7.4. If it is determined by a majority of the Board, or a majority of its
Disinterested Trustees, that a material irreconcilable conflict exists, 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 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 such 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 Contract owners and, as appropriate, segregating the assets of
any appropriate group (i.e., annuity contract owners, life insurance contract
owners, or variable contract owners of the Company) that votes in favor of such
segregation, or offering to the affected contract owners the option of making
such a change; and (2) establishing a new registered management investment
company or managed separate account.
7.5. If a material irreconcilable conflict arises because of a decision
by the Company to disregard contract owner voting instructions and that decision
represents a minority position or would preclude a majority vote, the Company
shall be required, at the Trust's election, to withdraw the affected Account's
investment in the Trust and terminate this Agreement with respect to such
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 Disinterested Trustees of the Board. 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 Distributor and Trust shall continue to accept and
implement orders by the Company for the purchase (and redemption) of shares of
the Trust.
7.6. If a material irreconcilable conflict arises because a particular
state insurance regulator's decision applicable to the Company conflicts with
the majority of other state regulators, then the Company will withdraw the
affected Account's investment in the Trust and terminate this Agreement with
respect to such Account within six months after the Board informs the Company in
writing that it has determined that such 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 Disinterested Trustees of the Board.
Until the end of the foregoing six month period, the Distributor and Trust shall
continue to accept and implement orders by the Company for the purchase (and
redemption) of shares of the Trust.
7.7. For purposes of Sections 7.4 through 7.7 of this Agreement, a
majority of the Disinterested Trustees of the Board 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 Company shall not be required by Section 7.4 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 Board determines that
any proposed action does not adequately remedy any irreconcilable material
conflict, then the Company will withdraw the Account's investment in the Trust
and terminate this Agreement within six (6) months after the Board informs the
Company in writing of the foregoing determination, provided, however, that such
withdrawal and termination shall be limited to the extent required by any such
material irreconcilable conflict as determined by a majority of the
Disinterested Trustees of the Board.
7.8. 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 1940
Act or the rules promulgated thereunder with respect to mixed or shared funding
(as defined in the Shared Exemptive Order) on terms and conditions materially
different from those contained in the Shared Exemptive Order, then the Trust
and/or the Company, 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 such rules are applicable.
7.9. The Company, at least annually, shall submit to the Board such
reports, materials, or data as the Board reasonably may request so that the
Trustees may fully carry out the obligations imposed upon the Board by the
conditions contained in the application for the Shared Exemptive Order and said
reports, materials, and data shall be submitted more frequently if deemed
appropriate by the Board.
7.10 All reports of potential or existing conflicts received by the Board
and all Board action with regard to determining the existence of a conflict,
notifying participating insurance companies of a conflict, and determining
whether any proposed action adequately remedies a conflict, shall be properly
recorded in the minutes of the Board or other appropriate records, and such
minutes or other records shall be made available to the SEC upon request.
ARTICLE VIII. INDEMNIFICATION
8.1. Indemnification By The Company
8.1(a). The Company agrees to indemnify and hold harmless the
Distributor, the Advisor and the Trust and each trustee of the Board and
officer, employees and agents and any "affiliated person" (as defined in
Section 2(a)(3) of the 0000 Xxx) of the Trust, Distributor or Advisor
(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 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 or acquisition of the Trust's shares or
the Contracts and:
(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 (which shall include the portions of an offering memorandum that
contain information regarding the Trust, Distributor or Advisor) 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
to the Company by or on behalf of the Indemnified Parties 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 Trust shares; or
(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
Company, or persons under its control) or wrongful conduct of the Company or
persons under its control, with respect to the sale or distribution of the
Contracts or Trust shares; or
(iii) arise out of any untrue statement or alleged untrue statement
of a material fact contained in the Trust's registration statement, prospectus,
or sales literature 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 by
or on behalf of the Company; or
(iv) arise as a result of any material failure of this Agreement by
the Company; or
(v) arise out of or result from any material breach of any
representation and/or warranty made by the Company in this Agreement or arise
out of or result from any other material breach of this Agreement by the
Company;
as limited by and in accordance with the provisions of Sections 8.1(b) and
8.1(c) hereof.
8.1(b). The 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 as such may arise from such
Indemnified Party's willful misfeasance, bad faith, or gross negligence in the
performance of such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations or duties under this Agreement or to
the Trust or the Contracts, whichever is applicable.
8.1(c). The Company shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the 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 such
Indemnified Party (or after such Indemnified Party 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 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 Company shall be entitled to participate,
at its own expense, in the defense of such action. The Company also shall be
entitled to assume the defense thereof, with counsel satisfactory to the party
named in the action. After notice from the Company to such party of the
Company's election to assume the defense thereof, the Indemnified Party shall
bear the fees and expenses of any additional counsel retained by it, and the
Company will not be liable to such party under this Agreement for any legal or
other expenses subsequently incurred by such party independently in connection
with the defense thereof other than reasonable costs of investigation. If the
Company assumes the defense or representation of an Indemnified Party, the
Company shall not consent or agree to any settlement without the prior approval
of the Indemnified Party.
8.1(d). An Indemnified Party will promptly notify the Company of the
commencement of any litigation or proceedings against it in connection with the
issuance or sale of the Trust shares or the Contracts or the operation of the
Trust.
8.2. Indemnification by the Distributor
8.2(a). The Distributor agrees to indemnify and hold harmless the Trust,
the Advisor and the Company and each of their directors, trustees, officers,
employees and agents and any affiliated person (as defined in Section 2(a)(3) of
the 0000 Xxx) of the Trust, the Advisor or the Company (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 the Distributor) 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 or acquisition 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
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 such
statement or omission or such alleged statement or omission was made in reliance
upon and in conformity with information furnished to the Distributor by or on
behalf of the Indemnified Parties 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; or
(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 Trust or the Contracts not
supplied by the Distributor or persons under its control) or wrongful conduct of
the Distributor or persons under its control, with respect to the sale or
distribution of the Contracts or Trust shares; or
(iii) arise out of any untrue statement or alleged untrue statement
of a material fact contained in the Trust's registration statement, prospectus,
or sales literature, 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 by or on behalf of the Distributor; or
(iv) arise as a result of any material failure by the Distributor
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 and/or warranty made by the Distributor in this Agreement or
arise out of or result from any other material breach of this Agreement by the
Distributor;
as limited by and in accordance with the provisions of Sections 8.2(b) and
8.2(c) hereof.
8.2(b). The Distributor shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
to which an Indemnified Party would otherwise be subject by reason of such
Indemnified Party's willful misfeasance, bad faith, or gross negligence in the
performance of such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations and duties under this Agreement, or to
the Company, the Trust or the Contracts, whichever is applicable.
8.2(c). The Distributor shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Distributor 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 such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Distributor of
any such claim shall not relieve the Distributor 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 Distributor will be entitled to
participate, at its own expense, in the defense thereof. The Distributor also
shall be entitled to assume the defense thereof, with counsel satisfactory to
the party named in the action. After notice from the Distributor to such party
of the Distributor's selection to assume the defense thereof, the Indemnified
Party shall bear the fees and expenses of any additional counsel retained by it,
and the Distributor will not be liable to such party under this Agreement for
any legal or other expenses subsequently incurred by such party independently in
connection with the defense thereof other than reasonable costs of
investigation. If the Distributor assumes the defense or representation of any
Indemnified Party, the Distributor shall not consent or agree to any settlement
without the prior approval of the Indemnified Party.
8.2(d). An Indemnified Party agrees promptly to notify the Distributor 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 each Account.
8.3. Indemnification By the Trust
8.3(a). The Trust agrees to indemnify and hold harmless the Company, the
Distributor and the Advisor and each of their directors, officers, employees and
agents and any affiliated person (as defined in Section 2(a)(3) of the 0000 Xxx)
of the Company, the Distributor or the Advisor (collectively, the "Indemnified
Parties" for purposes of this Section 8.3) against any and all losses, claims,
damages, liabilities (including amounts paid in settlement with the written
consent of the Trust) 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
or acquisition 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
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 such
statement or omission or such alleged statement or omission was made in reliance
upon and in conformity with information furnished to the Distributor or Trust by
or on behalf of the Indemnified Parties 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; or
(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 Trust or the Contracts not
supplied by the Distributor or persons under its control) or wrongful conduct of
the Trust or persons under its control, with respect to the sale or distribution
of the Contracts or Trust shares; or
(iii) arise out of any untrue statement or alleged untrue statement
of a material fact contained in Trust's registration statement, prospectus, or
sales literature, 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 by or on behalf of the Distributor; or
(iv) arise as a result of any material failure by the Trust 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 and/or warranty 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 as such may arise from such
Indemnified Party's willful misfeasance, bad faith, or gross negligence in the
performance of such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations and duties under this Agreement or to
the Company or the Contracts, 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
such 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 such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure 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. After notice from the Trust to such party of the Trust's election to
assume the defense thereof, the Indemnified Party shall bear the fees and
expenses of any additional counsel retained by it, and the Trust will not be
liable to such party under this Agreement for any legal or other expenses
subsequently incurred by such party independently in connection with the defense
thereof other than reasonable costs of investigation. If the Trust assumes the
defense or representation of any Indemnified Party, the Trust shall not consent
or agree to any settlement without the prior approval of the Indemnified Party.
8.3(d). An Indemnified Party agrees promptly to notify the Trust of the
commencement of any litigation or proceedings against it or any of its
respective officers, trustees or directors in connection with this Agreement,
the issuance or sale of the Contracts, with respect to the operation of either
Account, or the sale or acquisition of shares of the Trust.
8.4 Indemnification By the Advisor
8.4(a). The Advisor agrees to indemnify and hold harmless the Trust, the
Distributor and the Company and each of their trustees, directors, officers,
employees, and agents, and any affiliated person (as defined in Section 2(a)(3)
of the 0000 Xxx) of the Trust, the Distributor or the Company (collectively, the
"Indemnified Parties" for purposes of this Section 8.4) against any and all
losses, claims, damages, liabilities (including amounts paid in settlement with
the written consent of the Advisor) or litigation expenses (including reasonable
legal and other expenses) to which the Indemnified Parties may become subject
under any statute or regulation, at common law or otherwise, insofar as such
losses, claims, damages, liabilities or litigation expenses are related to the
sale or acquisition 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 provided by the Advisor and contained in
the registration statement or prospectus or sales literature or other
promotional material 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 about the Advisor required to be
stated therein or necessary to make the statements therein not misleading,
provided that this agreement to indemnify shall not apply as to any Indemnified
Party if such statement or omission or such alleged statement or omission was
made in reliance upon and in conformity with information furnished to the
Advisor by or on behalf of the Indemnified Parties for use in the registration
statement or prospectus for the Trust or in sales literature or other
promotional material (or any amendment or supplement) or otherwise for use in
connection with the sale of the Contracts or Trust shares; or
(ii) arise out of or as a result of any statement or
representations (other than statements or representations contained in the
registration statement, prospectus or sales literature or other promotional
material for the Trust or the Contracts not supplied by the Advisor or any
employees or agents thereof) or wrongful conduct of the Advisor, or the
affiliates, employees, or agents of the Advisor with respect to the sale or
distribution of the Contracts or Trust shares; or
(iii) arise out of any untrue statement or alleged untrue statement
of a material fact contained in the Trust's registration statement, prospectus,
or sales literature, 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 by or on behalf of the Advisor; or
(iv) arise as a result of any material failure by the Advisor 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 and/or warranty made by the Advisor in this Agreement or arise
out of or result from any other material breach of this Agreement by the
Advisor;
as limited by and in accordance with the provisions of Sections 8.4(b) and
8.4(c) hereof.
8.4(b). The Advisor shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
expenses to which an Indemnified Party would otherwise be subject by reason of
willful misfeasance, bad faith, or gross negligence in the performance of such
Indemnified Party's duties or by reason of the Indemnified Party's reckless
disregard of obligations or duties under this Agreement or to the Trust, the
Contracts or the Company, whichever is applicable.
8.4(c). The Advisor shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Advisor 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 such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Advisor of any
such claim shall not relieve the Advisor 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 Advisor will be entitled to participate, at
is own expense, in the defense thereof. The Advisor also shall be entitled to
assume the defense thereof, with counsel satisfactory to the party named in the
action. After notice from the Advisor to such party of the Advisor's election
to assume the defense thereof, the Indemnified Party shall bear the fees and
expenses of any additional counsel retained by it, and the Advisor will not be
liable to such party under this Agreement for any legal or other expense
subsequently incurred by such party independently in connection with the defense
thereof other than reasonable costs of investigation. If the Advisor assumes
the defense or representation of an Indemnified Party, the Advisor shall not
consent or agree to any settlement without the prior approval of the Indemnified
Party.
8.4(d). An Indemnified Party agrees promptly to notify the Advisor of the
commencement of any litigation or proceedings against it or any of its
respective officers, trustees or directors in connection with this Agreement,
the issuance or sale of the Contracts, with respect to the operation of either
Account, or the sale or acquisition of shares of the Trust.
8.5(d). Indemnification Disputes. The parties shall use good faith
efforts to resolve any dispute concerning the indemnification obligations in
this Article VIII. Should those efforts fail to resolve the dispute, the
ultimate resolution shall be determined in a de novo proceeding, separate and
apart from the underlying matter complained of, before a court of competent
jurisdiction. Either party may initiate such proceedings with a court of
competent jurisdiction at any time following the termination of the efforts by
such parties to resolve the dispute (termination of such efforts shall be deemed
to have occurred thirty (30) days from the commencement of the same unless such
time period is extended by the written agreement of the parties). The
prevailing party in such a proceeding shall be entitled to recover reasonable
attorneys' fees, costs, and expenses.
ARTICLE IX. APPLICABLE LAW
9.1. This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the State of New York.
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
such exemptions from those statutes, rules and regulations as the SEC may grant
(including any Shared Exemptive Order) and the terms hereof shall be interpreted
and construed in accordance therewith.
ARTICLE X. TERMINATION
10.1. This Agreement shall continue in full force and effect until the
first to occur of:
(a) termination by any party for any reason by one hundred and
eighty (180) days advance written notice delivered to the other parties; or
(b) termination by the Company by prompt written notice to the
other parties with respect to any Fund based upon the Company's determination
that shares of such Fund are not reasonably available to meet the requirements
of the Contracts; or
(c) termination by the Company by written notice to the Trust and
the Distributor with respect to any Fund in the event any of the Fund's shares
are not registered, issued or sold in accordance with applicable state and/or
federal law or such law precludes the use of such shares as the underlying
investment media of the Contracts issued or to be issued by the Company; or
(d) termination by the Company by written notice to the Trust and
the Distributor with respect to any Fund in the event that such Fund ceases to
qualify as a Regulated Investment Company under Subchapter M of the Code or
under any successor or similar provision, or if the Company reasonably believes
that the Trust may fail to so qualify; or
(e) termination by the Company by written notice to the Trust and
the Distributor with respect to any Fund in the event that such Fund fails to
meet the diversification requirements specified in Article VI hereof; or
(f) termination by either the Trust, the Advisor or the Distributor
by written notice to the Company, if (1) any of the Trust, the Advisor or the
Distributor, respectively, shall determine, in their sole judgment reasonably
exercised in good faith, that the Company has suffered a material adverse change
in its business or financial condition or is the subject of material adverse
publicity and such material adverse change or material adverse publicity will
have a material adverse impact upon the business and operations of either the
Trust, the Advisor or the Distributor, (2) the Trust, the Advisor or the
Distributor shall notify the Company in writing of such determination and its
intent to terminate this Agreement, and (3) after considering the actions taken
by the Company and any other changes in circumstances since the giving of such
notice, such determination of the Trust, the Advisor or Distributor shall
continue to apply on the sixtieth (60th) day following the giving of such
notice, which sixtieth day shall be the effective date of termination; or
(g) termination by the Company by written notice to the Trust, the
Advisor and the Distributor, if (1) the Company shall determine, in its sole
judgment reasonably exercised in good faith, that either the Trust, the Advisor
or the Distributor has suffered a material adverse change in its business or
financial condition or is the subject of material adverse publicity and such
material adverse change or material adverse publicity will have a material
adverse impact upon the business and operations of the Company, (2) the Company
shall notify the Trust, the Advisor and the Distributor in writing of such
determination and its intent to terminate the Agreement, and (3) after
considering the actions taken by the Trust, the Distributor and/or the Advisor
and any other changes in circumstances since the giving of such notice, such
determination of the Company shall continue to apply on the sixtieth (60th) day
following the giving of such notice, which sixtieth day shall be the effective
date of termination; or
(h) By any party upon institution of formal proceedings against the
Company, the Trust, the Advisor or the Distributor by the NASD, the SEC, or any
state securities or insurance department or any other regulatory body regarding
a party's duties under this Agreement or related to the sale of the Contracts
issued by the Company, the operation of the Accounts, or the purchase of shares
of the Funds;; or
(i) By the Distributor, the Advisor or the Trust upon written
notice to the Company with respect to any Account in the event that such Account
ceases to be qualified as a segregated asset account under the Iowa insurance
laws; or
(j) By the Distributor, the Advisor or the Trust upon written
notice with respect to any Account in the event that effective registration as a
unit investment trust under the 1940 Act for such Separate is not maintained; or
(k) By the Distributor, the Advisor or the Trust in the event that
the Contracts cease to be treated as annuity contracts under the applicable
provisions of the Code; or
(l) By the Distributor, the Advisor or the Trust in the event that
effective registration or exemption from registration under the 1933 Act of the
Contracts is not maintained; or
(m) By any party to the Agreement upon a determination by a
majority of the Board, or a majority of its Disinterested Trustees, that a
material irreconcilable conflict, as described in Article VII hereof, exists; or
(n) By any party to the Agreement upon requisite vote of the
Contract owners having an interest in the Separate Accounts (or any subaccounts
thereof) to substitute the shares of another investment company for the
corresponding shares of a Fund in accordance with the terms of the Contracts for
which those shares had been selected or serve as the underlying investment
media; or
(o) By either the Advisor or the Distributor in the event of a
termination of either of their contracts with the Trust, but each shall use
their best efforts to substitute themselves under this Agreement with any
successor investment adviser or distributor to the Trust.
Each party to this Agreement shall promptly notify the other parties to
the Agreement of the institution against such party of any such formal
proceedings as described in Article 10.1(h) hereof. The Company shall give 60
days prior written notice to the Trust of the date of any proposed vote of
Contract owners to replace the Fund's shares as described in Article 10.1(n)
hereof.
10.2. Effect of Termination. Notwithstanding any termination of this
Agreement, the Trust, the Advisor and the Distributor shall at the option of the
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 (hereinafter referred to as
"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 10.2 shall not apply to any terminations under Article VII and
the effect of such Article VII terminations shall be governed by Article VII of
this Agreement.
10.3. The Company shall not redeem Trust shares attributable to the
Contracts (as opposed to Trust shares attributable to the Company's assets held
in the Account) except (i) as necessary to implement Contract Owner initiated or
approved transactions, or (ii) as required by state and/or federal laws or
regulations or judicial or other legal precedent of general application
(hereinafter referred to as a "Legally Required Redemption") or (iii) as
permitted by an order of the SEC pursuant to Section 26(b) of the 1940 Act.
Upon request, the Company will promptly furnish to the Trust and the Distributor
the opinion of counsel for the Company (which counsel shall be reasonably
satisfactory to the Trust and the Distributor) to the effect that any redemption
pursuant to clause (ii) above is a Legally Required Redemption. Furthermore,
except in cases where permitted under the terms of the Contracts, the Company
shall not prevent Contract Owners from allocating payments to a Fund that was
otherwise available under the Contracts without first giving the Trust or the
Distributor 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 another 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 Trust: With a copy to:
Xxxxx X. Xxxxxxxx, Esq.
The Huntington Funds Xxxxxxxx & Worcester LLP
c/o The Huntington National Bank 0000 X Xxxxxx, X.X.
00 Xxxxx Xxxx Xxxxxx Xxxxxxxxxx, XX 00000
Xxxxxxxx, Xxxx 00000
Attention: President and
Xxxxxx X. Xxxxxxx, Secretary
Xxxx Xxxxx LLP
0000 Xxxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxxxx, XX 00000-0000
If to the Company: If to TFLIC:
Transamerica Life Insurance Company Transamerica Financial Life Insurance Company
000 Xxxxxxxx Xxxxxxx 000 Xxxxxxxx Xxxxxxx
Xx. Xxxxxxxxxx, Xxxxxxx 00000 Xx. Xxxxxxxxxx, Xxxxxxx 00000
If to the Distributor
Edgewood Services, Inc.
0000 Xxxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000-0000
Attn: Secretary
If to the Advisor: With a copy to:
Huntington Asset Advisors, Inc. Xxxxx X. Xxxxxxxx, Esq.
00 Xxxxx Xxxx Xxxxxx Xxxxxxxx & Xxxxxxxxx XXX
Xxxxxxxx, Xxxx 00000 0000 X Xxxxxx, X.X.
Attn: Chief Investment Officer Xxxxxxxxxx, XX 00000
ARTICLE XII. MISCELLANEOUS
12.1 All persons dealing with the Trust must look solely to the property
of the Trust for the enforcement of any claims against the Trust as neither the
Board, officers, agents or shareholders assume any personal liability for
obligations entered into on behalf of the Trust.
12.2 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 until such time as it may come into
the public domain without the express written consent of the affected party.
Each party further agrees to use and disclose Personal Information, as defined
herein, only to carry out the purposes for which it was disclosed to them and
will not use or disclose Personal Information if prohibited by applicable law,
including, without limitation, statutes and regulations enacted pursuant to the
Xxxxx-Xxxxx-Xxxxxx Act (Public Law 106-102). For purposes of this Agreement,
"Personal Information" means financial and medical information that identifies
an individual personally and is not available to the public, including, but not
limited to, credit history, income, financial benefits, policy or claim
information and medical records. If either party outsources services to a third-
party, such third party will agree in writing to maintain the security and
confidentiality of any information shared with them.
12.3 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.
12.4 This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
12.5 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.
12.6 Each party hereto shall cooperate with each other party and all
appropriate governmental authorities (including without limitation the SEC, the
NASD and state insurance regulators) and shall permit such authorities
reasonable access to its books and records in connection with any investigation
or inquiry relating to this Agreement or the transactions contemplated hereby.
Notwithstanding the generality of the foregoing, each party hereto further
agrees to furnish the Iowa Insurance Commissioner with any information or
reports in connection with services provided under this Agreement which such
Commissioner may request in order to ascertain whether the insurance operations
of the Company are being conducted in a manner consistent with the Iowa
Insurance Regulations and any other applicable law or regulations.
12.7 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.
12.8. This Agreement or any of the rights and obligations hereunder may
not be assigned by any party without the prior written consent of all parties
hereto; provided, however, that the Distributor may assign this Agreement or any
rights or obligations hereunder to any affiliate of or company under common
control with the Distributor, if such assignee is duly licensed and registered
to perform the obligations of the Distributor under this Agreement. The Company
shall promptly notify the Trust, the Advisor, and the Distributor of any change
in control of the Company.
12.9. The Company shall furnish, or shall cause to be furnished, to the
Trust, the Advisor or their designee copies of the following reports:
(a) the Company's annual statement (prepared under statutory
accounting principles) and annual report (prepared under generally accepted
accounting principles ("GAAP"), if any), as soon as practical and in any event
within 90 days after the end of each fiscal year;
(b) the Company's quarterly statements (statutory) (and GAAP, if
any), as soon as practical and in any event within 45 days after the end of each
quarterly period:
(c) any financial statement, proxy statement, notice or report of
the Company sent to stockholders and/or policyholders, as soon as practical
after the delivery thereof to stockholders;
(d) any registration statement (without exhibits) and financial
reports of the Company filed with the SEC or any state insurance regulator, as
soon as practical after the filing thereof;
(e) any other report submitted to the Company by independent
accountants in connection with any annual, interim or special audit made by them
of the books of the Company, as soon as practical after the receipt thereof.
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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.
COMPANY:
[SEAL] TRANSAMERICA LIFE INSURANCE COMPANY,
On its behalf and on behalf of each
Separate Account named in Schedule A, as
may be amended from time to time.
By its authorized officer,
By: /s/ Xxxxxxxxx X. Xxxxxxx
Name: Xxxxxxxxx X. Xxxxxxx
Title: Assistant Secretary
Date: September 5, 2006
TFLIC:
[SEAL] TRANSAMERICA FINANCIAL LIFE
INSURANCE COMPANY,
On its behalf and on behalf of each
Separate Account named in Schedule A, as
may be amended from time to time.
By its authorized officer,
By: /s/ Xxxxxxxxx X. Xxxxxxx
Name: Xxxxxxxxx X. Xxxxxxx
Title: Assistant Vice President &
Assistant Secretary
Date: September 5, 2006
TRUST:
[SEAL] THE HUNTINGTON FUNDS,
On its behalf and on behalf of each Fund
named in Schedule A, as may be amended from
time to time.
By its authorized officer,
By: /s/ Xxxxxx X. Xxxxxxx
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
Date: September 5, 2006
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DISTRIBUTOR:
[SEAL] EDGEWOOD SERVICES, INC.
By its authorized officer,
By: /s/ Xxxxxxx X. Xxxxx, Xx.
Name: Xxxxxxx X. Xxxxx, Xx.
Title: President
Date: September 5, 2006
ADVISOR:
[SEAL] HUNTINGTON ASSET ADVISORS, INC.
By its authorized officer,
By: /s/ B. Xxxxxxxx Xxxxxxx
Name: B. Xxxxxxxx Xxxxxxx
Title: President
Date: September 5, 2006
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