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Exhibit (h)(5)
JOINT INSURED AGREEMENT
AGREEMENT made this eighteenth day of November, 1998, by and among DOW TARGET
VARIABLE FUND LLC, an Ohio limited liability company, OHIO NATIONAL FUND, INC.,
a Maryland corporation, ONE FUND, INC., a Maryland corporation, (each
individually referred to herein as a "Fund," and collectively as the "Funds"),
and OHIO NATIONAL INVESTMENTS, INC. (the "Adviser"), an Ohio corporation.
WHEREAS, the Funds have purchased Financial Institution Bond No. SSB-FR7766
underwritten by Hartford Fire Insurance Company and will, in the future,
purchase similar fidelity bonds in replacement thereof (the "Bond"); and
WHEREAS, the Bond covers the Adviser and the Funds as joint insureds; and
WHEREAS, the Boards of each of the Funds have determined that the Bond premiums
shall be equitably borne by each portfolio of the Funds; and
WHEREAS, future fidelity bonds issued in replacement of the Bond might include
deductible provisions with respect to certain coverages thereunder; and
WHEREAS, the Division of Investment Management of the Securities and Exchange
Commission has adopted the position that applicable law does not permit an
investment company to maintain a fidelity bond having a deductible clause unless
such investment company's investment adviser agrees to indemnify the investment
company for losses subject to the deductible clause and further provided that
such investment adviser shall maintain an amount equal to the deductible amount
in an escrow or similar account;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein contained, the Funds and the Adviser agree as follows:
1. In the event of the recovery under the Bond as a result of any
loss sustained by the Adviser and any or all of the Funds, the
recovering Fund or Funds shall receive an equitable and
proportionate share of the recovery, but at least equal to the
amount which each recovering Fund would have received had it
provided and maintained a single insured bond with the minimum
coverage required by paragraph (d)(1) of Rule 17g-1 under the
Investment Company Act of 1940, as amended.
2. In the event of any loss by a Fund which the underwriter of the
Bond determines would otherwise be payable under the Bond but
for the limitations of any deductible clause, the Adviser
agrees to indemnify that Fund and pay it for any such loss not
to exceed the deductible amount.
3. The Adviser agrees that, in the event that the Bond should
contain any deductible clause, the Adviser shall then maintain
a special reserve account in the amount of no less than the
deductible amount which amount shall be specifically reserved
for payment by the Adviser to the Funds in the event of any
claim by either of the Funds under this agreement.
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4. In the event that either of the Funds should suffer any loss as
a result of the Adviser's failure to maintain adequate reserves
as provided in section 3 of this agreement, the amount of such
loss, as determined by a majority of those members of the Board
of that Fund who are not defined as "interested persons" of the
Fund under Section 2(a)(19) of the Investment Company Act of
1940, shall be set off and deducted from any fees then or later
owed by that Fund to the Adviser under the Investment Advisory
Agreement, or any supplement thereto, between the Fund and the
Adviser.
5. Each of the Funds shall pay, from the assets of each of their
portfolios, that portion of the Bond's premium which is a
fraction of the total premium which, on the date of payment,
each respective portfolio's total net assets bears to the
combined total net assets of all of the Funds.
IN WITNESS WHEREOF, the parties hereto have caused this agreement to be executed
in triplicate in Montgomery, Ohio on the eighteenth day of November, 1998.
OHIO NATIONAL FUND, INC.
By:
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Xxxx X. Xxxxxx
President
ONE FUND, INC.
By:
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Xxxx X. Xxxxxx
President
DOW TARGET VARIABLE FUND LLC
By:
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Xxxx X. Xxxxxx
President
OHIO NATIONAL INVESTMENTS, INC.
By:
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Xxxxxx X. Xxxx
President
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