ITEM 24. (B) 8 (c)(iv)
M FUND, INC.
M FINANCIAL INVESTMENT ADVISERS, INC.
AMENDED AND RESTATED
PARTICIPATION AGREEMENT
WITH
XXXX XXXXXXX LIFE INSURANCE COMPANY
XXXX XXXXXXX VARIABLE LIFE INSURANCE COMPANY
XXXX XXXXXXX LIFE INSURANCE COMPANY U.S.A. AND
XXXX XXXXXXX LIFE INSURANCE COMPANY OF NEW YORK
THIS AGREEMENT, dated and effective as of this 13th day of November,
2009, by and among M FUND, INC., a corporation organized and existing under the
laws of the State of Maryland (the "Fund"), M FINANCIAL INVESTMENT ADVISERS,
INC., a corporation organized and existing under the laws of the State of
Colorado (the "Adviser"), Xxxx Xxxxxxx Life Insurance Company ("JHLICO")
(formerly Xxxx Xxxxxxx Mutual Life Insurance Company) and Xxxx Xxxxxxx Variable
Life Insurance Company ("JHVLICO"), both life insurance companies organized and
existing under the laws of the Commonwealth of Massachusetts, Xxxx Xxxxxxx Life
Insurance Company (U.S.A.) ("JHUSA"), a life insurance company organized and
existing under the laws of the state of Michigan, and Xxxx Xxxxxxx Life
Insurance Company of New York ("JHNY"), a life insurance company organized and
existing under the laws of the State of New York, (JHLICO, JHVLICO, JHUSA and
JHNY are each referred to singularly herein as the "Company" and collectively,
as the "Companies"), on their own behalf and on behalf of each separate account
of the Companies identified herein.
WHEREAS, JHLICO and JHVLICO were parties to Participation Agreements
with the Fund, dated January 19, 1996 (collectively, the "Participation
Agreements"), which Participation Agreements were amended on or about April 16,
2007; and
WHEREAS, pursuant to an Agreement and Plan of Merger dated as of
September 28, 2003 among Xxxx Xxxxxxx Financial Services, Inc. (the parent
company of JHLICO and JHVLICO) and Manulife Financial Corporation (the parent
company of JHUSA and JHNY), JHLICO and JHVLICO, became affiliated as
subsidiaries of Manulife Financial Corporation ("MFC"), a publicly traded
corporation organized under the laws of Canada; and
WHEREAS, the Fund is a series-type mutual fund offering shares of
beneficial interest (the "Fund shares") consisting of one or more series
("Series") of shares ("Series shares"), each such Series share representing an
interest in a particular managed portfolio of securities and other assets; and
WHEREAS, the Fund was established for the purpose of serving as an
investment vehicle for insurance company separate accounts supporting variable
annuity contracts and variable life insurance policies to be offered by
insurance companies; and
WHEREAS, the Companies desire that the Fund serve as an investment
vehicle for certain separate account(s) of the Companies; and
WHEREAS, JHLICO and JHVLICO desire to further amend and restate the
Participation Agreements and to include JHUSA and JHNY and as set forth herein.
NOW, THEREFORE, in consideration of their mutual promises, the Fund,
the Adviser, and the Companies agree as follows:
ARTICLE I. Additional Definitions
1.1. "Account" -- each separate account of the Companies described
more specifically in Schedule 1 to this Agreement (as may be amended from time
to time).
1.2. "Business Day" -- each day that the Fund is open for business as
provided in the Fund Prospectus.
1.3. "Code" -- the Internal Revenue Code of 1986, as amended.
1.4. "Company Contact" - - Xxxxxxx Xxxxxxx, M Products & Marketing,
000 Xxxxxxxxx Xxxxxx, Xxxxxx, XX 00000
1.5. "Contracts" -- the variable annuity contracts and variable life
insurance policies issued by the Companies and described more specifically on
Schedule 2 to this Agreement (as may be amended from time to time).
1.6. "Contract Owners" -- the owners of the Contracts, as
distinguished from all Product Owners.
1.7. "FINRA" - Financial Industry Regulatory Authority
1.8. "Participating Account" -- an Account investing all or a portion
of its assets in the Fund.
1.9. "Participating Insurance Company" -- any insurance company
investing in the Fund on its behalf or on behalf of a Participating Account,
including the Companies.
1.10. "Products" -- variable annuity contracts and variable life
insurance policies supported by Participating Accounts investing assets
attributable thereto in the Fund, including the Contracts.
1.11. "Product Owners" -- owners of Products, including Contract
Owners.
1.12. "Prospectus" -- with respect to the Fund shares or a class of
Contracts, each version of the definitive prospectus therefore or supplement
thereto filed with the SEC (as defined below) pursuant to Rule 497 under the
1933 Act (as defined below). With respect to any provision of this Agreement
requiring a party to take action in accordance with a Prospectus, such reference
thereto shall be deemed to be to the version last so filed prior to the taking
of such action. For purposes of Section 4.5 and Article VIII, the term
"Prospectus" shall include any statement of additional information incorporated
therein.
1.13. "Registration Statement" -- with respect to the Fund shares or a
class of Contracts, the registration statement filed with the SEC to register
the securities issued thereby under the 1933 Act,
-2-
or the most recently filed amendment thereto, in either case in the form in
which it was declared or became effective. The Contract's Registration Statement
(if any) is described more specifically on Schedule 2 to this Agreement. The
Fund Registration Statement was filed on Form N-1A (File No. 33-95472).
1.14. "1940 Act Registration Statement" -- with respect to the Fund or
the Account, the registration statement filed with the SEC to register such
person as an investment company under the 1940 Act (as defined below), or the
most recently filed amendment thereto. The Account 1940 Act Registration
Statement (if any) is described more specifically on Schedule 2 to this
Agreement. The Fund 1940 Act Registration Statement was filed on Form N-1A (File
No. 811-9082).
1.15. "Statement of Additional Information" -- with respect to the
Fund or a class of Contracts, each version of the definitive statement of
additional information or supplement thereto filed with the SEC pursuant to Rule
497 under the 0000 Xxx.
1.15. "SEC" - the Securities and Exchange Commission
1.16. "1933 Act" - the Securities Act of 1933, as amended.
1.17 "1940 Act" - the Investment Company Act of 1940, as amended.
ARTICLE II. Sale of Fund Shares
2.1. The Fund shall make shares of those Series listed on Schedule 3
available for purchase by each Company on its own behalf or on behalf of the
Account, such purchases to be effected at net asset value in accordance with
Section 2.3 of this Agreement. Notwithstanding the foregoing, (i) Fund Series in
existence now or that may be established in the future and not listed on
Schedule 3 will be made available to the Companies only as the Adviser may so
provide, and (ii) the Board of Directors of the Fund (the "Fund Board") may
suspend or terminate the offering of Fund shares of any Series or class thereof,
if such action is required by law or by regulatory authorities having
jurisdiction or if, in the sole discretion of the Fund Board acting in good
faith and in light of its fiduciary duties under federal and any applicable
state laws, suspension or termination is necessary or in the best interests of
the shareholders of any Series (it being understood that "shareholders" for this
purpose shall mean Product Owners).
2.2. The Fund shall redeem, at any Company's request, any full or
fractional Fund shares held by such Company on behalf of the Account, such
redemptions to be effected at net asset value in accordance with Section 2.3 of
this Agreement. Notwithstanding the foregoing, the Fund may delay redemption of
Fund shares of any Series to the extent permitted by the 1940 Act or any rules,
regulations or orders thereunder.
2.3. Purchase and Redemption Procedures
(a) The Fund hereby appoints each Company as an agent of the Fund
for the limited purpose of receiving purchase and redemption requests for
shares of the Fund based on allocations of amounts to the Accounts or
subaccounts thereof under the Contracts and other transactions arising out
of the Contracts. Receipt of any such request (or relevant transactional
-3-
information therefore) on any Business Day by any Company as such limited
agent of the Fund prior to the Fund's close of business, as defined from
time to time in the Fund Prospectus. (which as of the date of execution of
this Agreement is 4 p.m. Eastern Time) shall constitute receipt by the Fund
on that same Business Day, provided that the Fund receives notice of such
request by 10:00 a.m. Eastern Time on the next following Business Day.
(b) Each Company shall pay for shares of each Series on the same
day that it notifies the Fund of a purchase request for such shares.
Payment for Series shares shall be made in federal funds transmitted to the
Fund by wire to be received by the Fund by 11:00 a.m. Eastern Time on the
day the Fund is notified of the purchase request for Series shares (unless
the Fund determines and so advises such Company that sufficient proceeds
are available from redemption of shares of other Series effected pursuant
to redemption requests tendered by such Company on behalf of the Account).
If federal funds are not received on time, such funds will be invested, and
Series shares purchased thereby will be issued, as soon as practicable.
(c) Payment for Series shares redeemed by any Account or any
Company shall be made in federal funds transmitted by wire to such Company
or any other designated person on the next Business Day after the Fund is
properly notified of the redemption order of Series shares (unless
redemption proceeds are to be applied to the purchase of Fund shares of
other Series in accordance with Section 2.3(b) of this Agreement), except
that the Fund reserves the right to delay payment of redemption proceeds to
the extent permitted under Section 22(e) of the 0000 Xxx. The Fund shall
not bear any responsibility whatsoever for the proper disbursement or
crediting of redemption proceeds; each Company shall be responsible for
such action.
(d) Any purchase or redemption requests for Fund shares that do
not result directly from transactions relating to the Contracts or the
Account shall be effected at the net asset value per share next determined
after the Fund's receipt of such request, provided that, in the case of a
purchase request, payment for Fund shares so requested is received by the
Fund in federal funds prior to close of business for determination of such
value, as defined from time to time in the Fund Prospectus.
2.4. The Fund shall use its best efforts to calculate and make the net
asset value per share for each Series available to the Companies by 5:30 p.m.
Eastern Time each Business Day, and in any event, as soon as reasonably
practicable after the net asset value per share for such Series is calculated,
and shall calculate such net asset value in accordance with the Fund Prospectus.
Neither the Fund, any Series, the Adviser, nor any of their affiliates shall be
liable for any information provided to any Company pursuant to this Agreement to
the extent such information is based on incorrect information supplied by such
Company or any other Participating Insurance Company or Qualified Person (as
defined in Section 2.8 of this Agreement) to the Fund or the Adviser.
2.5. The Fund shall furnish notice to the Company Contact (by fax, or
telephone followed by written confirmation) as soon as reasonably practicable of
any income dividends or capital gain distributions payable on any Series shares.
Each Company, on its behalf and on behalf of the Accounts, hereby elects to
receive all such dividends and distributions as are payable on any Series shares
in the form of additional shares of that Series. Each Company reserves the
right, on its behalf and on behalf of the Accounts, to revoke this election and
to receive all such dividends and distributions in cash. The Fund shall notify
the Company Contact promptly of the number of Series shares so issued as payment
of such dividends and distributions.
-4-
2.6. Issuance and transfer of Fund shares shall be by book entry only.
Stock certificates will not be issued to the Companies or the Accounts. Purchase
and redemption orders for Fund shares shall be recorded in an appropriate ledger
for the Account or the appropriate subaccounts of the Accounts.
2.7. (a) Any Company may withdraw the Account's investment in the Fund
or a Series of the Fund only: (i) as necessary to facilitate Contract Owner
requests; (ii) upon a determination by a majority of the Fund Board, or a
majority of disinterested Fund Board members, that an irreconcilable
material conflict exists among (x) the interests of all Product Owners or
(y) the interests of the Participating Insurance Companies investing in the
Fund; (iii) upon requisite vote of the Contract Owners having an interest
in the affected Series; (iv) as required by state and/or federal laws or
regulations or judicial or other legal precedent of general implication;
(v) upon sixty (60) days advance written notice; (vi) from a Series, upon a
change in the portfolio manager for that Series; or (vii) as permitted by
an order of the SEC pursuant to Section 26(b) of the 0000 Xxx.
(b) The Companies shall not, without the prior written consent of
the Adviser (unless otherwise required by applicable law), solicit, induce
or encourage Contract Owners to change or modify the Fund or change the
Fund's Adviser or investment sub-adviser.
2.8. The Fund shall sell Fund shares only to Participating Insurance
Companies and their separate accounts and to persons or plans ("Qualified
Persons") that qualify to purchase and hold shares of the Fund under Section
817(h) of the Code. The Fund shall not sell Fund shares to any insurance
company, separate account or Qualified Person unless an agreement containing
provisions substantially similar to Articles II, V, and VII of this Agreement is
in effect to govern such sales (to the extent required in order to comply with
the "Exemptive Order" referred to in Section 7.1 below).
ARTICLE III. Representations and Warranties
3.1. Each Company represents and warrants that: (i) each Company is a
life insurance company duly organized, duly existing and in good standing under
the insurance laws of their states of domicile as set forth in the preamble to
this Agreement, and (ii) the Accounts are (or will be prior to the purchase by
any Company of Fund shares for the Accounts) validly existing separate accounts,
duly established and maintained in accordance with applicable law; (iii) the
Contracts will be issued in compliance in all material respects with all
applicable federal and state laws; (iv) the Contracts currently are and at the
time of issuance will be treated as annuity contracts or life insurance
policies, whichever is appropriate, under applicable provisions of the Code; and
(v) the Company and the Accounts qualify (or will qualify prior to the purchase
by any Company of Fund shares for the Accounts) to purchase and hold shares of
the Fund under Section 817(h) of the Code.
3.2. The Fund represents and warrants that: (i) the Fund is a
corporation duly organized, validly existing and in good standing under Maryland
law; (ii) the Fund's Registration Statement under the 1933 Act and the 1940 Act
has been filed with the SEC in accordance with the provisions of the 1940 Act
and the Fund is and shall remain duly registered as an open-end management
investment company thereunder; (iii) the Fund Registration Statement has been
declared effective by the SEC (or will be declared effective before the sale by
the Fund of its shares pursuant to this Agreement); (iv) Fund shares sold
pursuant to this Agreement have been duly authorized for issuance in accordance
with applicable law; (v) the Fund currently qualifies as a "regulated investment
company" under Subchapter M of the Code and is and shall remain in compliance
with Section 817(h) of the Code; and (vi) the Fund does and
-5-
will comply in all material respects with the 1940 Act. The Fund, however, makes
no representation as to whether any aspect of its operations (including, but not
limited to, fees and expenses and investment policies) otherwise complies with
the insurance laws or regulations of any state.
3.3. The Adviser represents and warrants that it is and will remain
registered in all material respects as an investment adviser under federal and
all applicable state securities laws, and shall perform its obligations
hereunder in compliance in all material respects with any such applicable state
and federal laws. The Adviser represents that it will manage the Fund consistent
with the Fund's investment objectives, policies, and restrictions.
3.4. Each party represents that the execution and delivery of this
Agreement and the consummation of the transactions contemplated herein have been
duly authorized by all necessary corporate or trust action, as applicable, by
such party, and, when so executed and delivered, this Agreement will be the
valid and binding obligation of such party enforceable in accordance with its
terms.
3.5. The Fund represents and warrants that all of its directors,
officers, and employees dealing with the money and/or securities of the Fund are
and shall continue to be at all times covered by a blanket fidelity bond or
similar coverage for the benefit of the Fund in an amount not less than the
minimal coverage as required currently by Rule 17g-1 of 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.
3.6. Each Company represents and warrants that all of the directors,
officers, and employees of each Company dealing with the money and/or securities
of the Fund are and shall continue to be at all times covered by a blanket
fidelity bond or similar coverage for the benefit of the Fund, in an amount not
less than the minimal coverage as required currently by entities subject to the
requirements of Rule 17g-1 of 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.
ARTICLE IV. Filings, Information and Expenses
4.1. The Fund shall amend the Fund Registration Statement as filed
under the 1933 Act and the 1940 Act from time to time as required in order to
effect the continuous offering of Fund shares and to maintain the Fund's
registration under the 1933 Act and the 1940 Act for so long as Fund shares are
sold. The Fund shall file, register, qualify and obtain approval of the Fund
shares for sale under state securities laws to the extent deemed advisable by
the Adviser.
4.2. Unless other arrangements are made, the Fund shall provide the
Company Contact with: (i) a copy, in camera-ready form or otherwise suitable for
printing or duplication, of each Fund Prospectus and any supplement thereto and
each Fund Statement of Additional Information and any supplement thereto; and
(ii) copies of the Fund's proxy materials, reports to shareholders, and other
communications to shareholders in such quantity as any Company shall reasonably
require for distributing to Contract Owners.
-6-
4.3. Each Company shall amend the Contracts' Registration Statements
under the 1933 Act (if any) and the Accounts' 1940 Act Registration Statement
(if any) from time to time as required in order to effect the continuous
offering of the Contracts or as may otherwise be required by applicable law.
Each Company shall file, register, qualify and obtain approval of the Contracts
for sale to the extent required by applicable insurance and securities laws of
the various states.
4.4. Each Company shall inform the Fund of any investment restrictions
imposed by state insurance law that may become applicable to the Fund from time
to time as a result of the Account's investment therein (including, but not
limited to, restrictions with respect to fees and expenses and investment
policies). Upon receipt of such information from such Company, the Fund shall
determine whether it is in the best interests of shareholders to comply with any
such restrictions. If the Fund determines that it is not in the best interests
of shareholders (it being understood that "shareholders" for this purpose shall
mean Product Owners), the Fund shall so inform such Company, and the Fund and
such Company shall discuss alternative accommodations in the circumstances. If
the Fund determines that it is in the best interests of shareholders to comply
with such restrictions, the Fund and the Company may amend this Agreement to
reflect such restrictions.
4.5. Each Company shall provide Contracts, Contracts and Fund
Prospectuses, Contracts and Fund Statements of Additional Information, reports,
solicitations for voting instructions including any related Fund proxy
solicitation materials, and all amendments or supplements to any of the
foregoing, to Contract Owners and prospective Contract Owners, all in accordance
with the federal and any applicable state securities laws.
4.6. All expenses incident to each party's performance under this
Agreement (including expenses expressly assumed by such party pursuant to this
Agreement) shall be paid by such party to the extent permitted by law.
(a) Expenses assumed by the Fund include, but are not limited to,
the costs of: (i) registration and qualification of the Fund shares under
the federal securities laws; (ii) preparation and filing with the SEC of
the Fund Prospectus, Fund Registration Statement, Fund proxy materials and
shareholder reports, and preparation of a camera-ready copy thereof; (iii)
preparation of all statements and notices required by any federal or state
securities law; (iv) printing and mailing to Contract Owners of all proxy
materials and reports required to be provided by the Fund to its
shareholders; (v) all taxes on the issuance or transfer of Fund shares; and
(vi) any expenses permitted to be paid or assumed by the Fund pursuant to a
plan, if any, under Rule 12b-1 under the 1940 Act. The Fund otherwise shall
pay no fee or other compensation to any Company under this Agreement,
unless the parties otherwise agree, except that if the Fund or any Series
adopts and implements a plan pursuant to Rule 12b-1 under the 1940 Act to
finance distribution expenses, then payments may be made to any Company in
accordance with such plan. The Fund currently does not intend to make any
payments to finance distribution expenses pursuant to Rule 12b-1 under the
1940 Act or in contravention of such rule, although it may make payments
pursuant to Rule 12b-1 in the future. To the extent that it decides to
finance distribution expenses pursuant to Rule 12b-1, the Fund undertakes
to have a Board of Directors, a majority of whom are not interested persons
of the Fund, formulate and approve any plan under Rule 12b-1 to finance
distribution expenses.
(b) Expenses assumed by the Companies include, but are not
limited to, the costs of: (i) registration and qualification of the
Contracts under the federal and any applicable state
-7-
securities laws; (ii) preparation and filing with the SEC of the Contracts'
Prospectuses and Registration Statements; and (iii) preparation and
dissemination of all statements and notices to Contract Owners required by
any federal or state insurance law other than those paid for by the Fund.
4.7. Any piece of advertising or sales literature or other promotional
material in which the Fund is named and which will be used by any Company shall
be furnished by such Company to the Fund not less than fifteen (15) days prior
to its use. No such material shall be used if the Fund or its designee objects
to such use within fifteen (15) days after receipt of such material, provided
that it may be used earlier than the end of such fifteen (15) day period if the
Fund or its designee consents in writing to its use. The Fund may delegate its
rights and responsibilities under this provision to the Adviser.
4.8. Any piece of advertising or sales literature or other promotional
material in which any Company or any Account is named and which will be used by
the Fund or the Adviser shall be furnished by the Fund or the Adviser, as
applicable, to the Company Contact not less than (fifteen) 15 days prior to its
use. No such material shall be used if such Company or its designee objects to
such use within fifteen (15) days after receipt of such material, provided that
it may be used earlier than the end of such fifteen (15) day period if such
Company or its designee consents in writing to its use.
4.9. The Companies shall not give any information or make any
representations or statements on behalf of the Fund or concerning the Fund to
the public (including current and prospective Contract owners) in connection
with the sale of the Contracts other than the information or representations
contained in the Fund Registration Statement or Fund Prospectus (as such
Registration Statement or Prospectus may be amended or supplemented from time to
time) or in reports or proxy statements for the Fund, or in sales literature or
other promotional material approved in accordance with Section 4.7 of this
Agreement, except with the prior written consent of the Fund.
4.10. The Fund and the Adviser shall not give any information or make
any representations on behalf of any Company or concerning any Company, any
Accounts or the Contracts other than the information or representations
contained in the Contracts' Registration Statements or Contracts' Prospectuses
(as such Registration Statements or Prospectuses may be amended or supplemented
from time to time) or in published reports of any Account which are in the
public domain or approved in writing by the Company Contact for distribution to
Contract Owners, or in sales literature or other promotional material approved
in accordance with Section 4.8 of this Agreement except with the prior written
consent of such Company.
4.11. The Fund and the Company Contact shall provide to the other upon
request at least one complete copy of all Registration Statements, Prospectuses,
Statements of Additional Information, periodic and other shareholder or Contract
Owner reports, proxy statements, solicitations of voting instructions, sales
literature and other promotional materials, applications for exemptions,
requests for no- action letters, and all amendments or supplements to any of the
above, that relate to the Fund, the Contracts or the Accounts, as the case may
be, promptly after the filing by or on behalf of such party of such document
with the SEC or other regulatory authorities.
4.12. The Fund and the Company Contact shall provide to the other upon
request copies of draft versions of any Registration Statements, Prospectuses,
Statements of Additional Information, periodic and other shareholder or Contract
Owner reports, proxy statements, solicitations for voting instructions, sales
literature and other promotional materials, applications for exemptions,
requests for no-action letters, and all amendments or supplements to any of the
above, to the extent that the other party
-8-
reasonably needs such information for purposes of preparing a report or other
filing to be filed with or submitted to a regulatory agency. If a party requests
any such information before it has been filed, the other party will provide the
requested information if then available and in the version then available at the
time of such request.
4.13. The parties hereto shall cooperate with one another and all
appropriate governmental authorities (including without limitation the SEC,
FINRA and state insurance regulators) and shall permit one another and such
authorities reasonable access to their books and records in connection with any
investigation or inquiry relating to this Agreement or the transactions
contemplated hereby. However, such access shall not extend to attorney-client
privileged information.
4.14. The Companies reserve the right to modify any of the Contracts
in any respect whatsoever. The Companies reserve the right in their sole
discretion to suspend the sale of any of the Contracts, in whole or in part, or
to accept or reject any application for the sale of a Contract. The Companies
agree to notify the Fund and the Adviser promptly upon the occurrence of any
event any Company believes might necessitate a material modification or
suspension.
4.15. For purposes of this Article IV, the phrase "sales literature or
other promotional material" includes, but is not limited to, any material
constituting sales literature or advertising under FINRA rules, the 1940 Act or
the 1933 Act.
ARTICLE V. Voting of Fund Shares
5.1. With respect to any matter put to vote by the holders of Fund
shares or Series shares ("Voting Shares"), to the extent required by law
(including the Exemptive Order referred to in Section 7.1 below) each Company
shall:
(a) solicit voting instructions from Contract Owners to which
Voting Shares are attributable;
(b) vote Voting Shares of each Series attributable to Contract
Owners in accordance with instructions or proxies timely received from such
Contract Owners;
(c) vote Voting Shares of each Series attributable to Contract
Owners for which no instructions have been received in the same proportion
as Voting Shares of such Series for which instructions have been timely
received; and
(d) vote Voting Shares of each Series held by any Company on its
own behalf or on behalf of the Accounts that are not attributable to
Contract Owners in the same proportion as Voting Shares of such Series for
which instructions have been timely received; provided, however, that if
the SEC changes its interpretations of voting privileges for variable
contracts such Company may vote such shares in its own right. Each Company
shall be responsible for assuring that voting privileges for the Accounts
are calculated in a manner consistent with the provisions set forth above
and with the manner employed by all other Participating Accounts.
5.2. The Fund will comply with all provisions of the 1940 Act
requiring voting by shareholders, and in particular the Fund will either provide
for annual meetings or comply with Section 16(c) of the 1940 Act (although the
Fund is not one of the trusts described in Section 16(c) of that Act) as
-9-
well as with Sections 16(a) and, if and when applicable, 16(b). Further, the
Fund 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.
ARTICLE VI. Compliance with Code
6.1. The Fund shall comply with Section 817(h) of the Code, and all
regulations issued thereunder and shall notify the Company Contact immediately
upon having a reasonable basis for believing that it has ceased to so qualify or
that it might not so qualify in the future.
6.2. The Fund shall maintain its qualification as a regulated
investment company (under Subchapter M of the Code or any successor or similar
provision), and shall notify the Company Contact immediately upon having a
reasonable basis for believing that it has ceased to so qualify or that it might
not so qualify in the future.
6.3. The Companies shall maintain the treatment of the Contracts as
annuity contracts or life insurance policies, whichever is appropriate, under
applicable provisions of the Code and shall notify the Fund and the Adviser
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.
ARTICLE VII. Potential Conflicts
7.1. The parties to this Agreement acknowledge that the Fund has
obtained (or will obtain) an order of exemption from the SEC (the "Exemptive
Order," File No. 812-9674) granting relief from various provisions of the 1940
Act and the rules thereunder to the extent necessary to permit Fund shares to be
sold to and held by variable annuity and variable life insurance separate
accounts of both affiliated and unaffiliated Participating Insurance Companies
and other Qualified Persons (as defined in Section 2.8). The Fund hereby
notifies the Companies that Contract Prospectus disclosure regarding potential
risks of such mixed and shared funding may be appropriate.
7.2. The Fund Board shall monitor the existence of any material
irreconcilable conflict between the interests of Product Owners. The Fund Board
shall promptly inform the Company Contact if it determines that a material
irreconcilable conflict exists and the implications thereof.
7.3. (a) The Companies shall report any potential or existing
conflicts promptly to the Fund Board, and in particular whenever Contract
Owner voting instructions are disregarded, and recognizes that it shall be
responsible for assisting the Fund Board in carrying out its
responsibilities in connection with the Exemptive Order. The Companies
agree to carry out such responsibilities with a view only to the interests
of Contract Owners.
(b) The Companies shall at least annually submit to the Fund
Board such reports, materials or data as the Fund Board may reasonably
request so that the Fund Board and the Fund may fully carry out the
obligations imposed upon them by the conditions of the Exemptive Order, and
such reports, material and data shall be submitted more frequently if
deemed appropriate by the Fund Board.
-10-
7.4. If a majority of the Fund Board, or a majority of its directors
who are not "interested persons" as defined in the 1940 Act ("Disinterested
Directors"), determines that a material irreconcilable conflict exists with
regard to Contract Owner investments in the Fund, the Fund Board shall give
prompt notice to all Participating Insurance Companies. If the Fund Board
determines that any Company is responsible in full or in part for causing or
creating said conflict, such Company (and other responsible Participating
Insurance Companies) shall at no cost and expense to the Fund, and to the extent
reasonably practicable (as determined by a majority of the Disinterested
Directors), take such action as is necessary to remedy or eliminate the
irreconcilable material conflict. Such necessary action may include, but shall
not be limited to:
(a) Withdrawing the assets allocable to the Account(s) from the
Fund or any portfolio thereof and reinvesting such assets in a different
investment medium, or submitting the question of 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 other Product Owners)
that votes in favor of such segregation or offering to the affected
Contract Owners the option of making such a change; and
(b) Establishing a new registered management investment company.
7.5. If a material irreconcilable conflict arises as a result of a
decision by any Company to disregard Contract Owner voting instructions and said
decision represents a minority position or would preclude a majority vote by all
Contract Owners having an interest in the Fund, such Company may be required, at
the Fund Board's election, to withdraw the Account's investment in the Fund 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 Directors. Any such withdrawal and termination must take place
within six (6) months after the Fund gives written notice that this provision is
being implemented, and until the end of that six month period the Adviser and
Fund shall continue to accept and implement orders by such Company for the
purchase (and redemption) of shares of the Fund (subject to Section 2.1 above).
No charge or penalty will be imposed as a result of such withdrawal.
7.6. If a material irreconcilable conflict arises because a particular
state insurance regulator's decision applicable to any Company conflicts with
the majority of other state regulators, then such Company will withdraw the
affected Account's investment in the Fund and terminate this Agreement with
respect to such Account within six months after the Board informs the Company
Contact 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
Directors. Until the end of the foregoing six month period, the Adviser and Fund
shall continue to accept and implement orders by such Company for the purchase
(and redemption) of shares of the Fund (subject to Section 2.1 above).
7.7. For purposes of this Article, a majority of the
Disinterested Directors shall determine whether or not any proposed action
adequately remedies any irreconcilable material conflict, but in no event shall
the Fund be required to bear the expense of establishing a new funding medium
for any Contract. No Company shall be required by this Article to establish a
new funding medium for any Contract if an offer to do so has been declined by
vote of a majority of the 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 such Company will withdraw the Account's investment in the Fund
and terminate this Agreement within six (6) months after
-11-
the Board informs the Company Contact 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 Directors.
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
provisions of the 1940 Act or the rules promulgated thereunder with respect to
mixed and shared funding on terms and conditions materially different from those
contained in the Exemptive Order, then (a) the Fund and/or any Company, as
appropriate, shall take such steps as may be necessary to comply with Rules 6e-2
and 6e-3(T), as amended, or Rule 6e-3, as adopted, as applicable, to the extent
such rules are applicable, and (b) Sections 7.2 through 7.7 of this Agreement
shall continue in effect only to the extent that terms and conditions
substantially identical to such Sections are contained in such Rule(s) as so
amended or adopted.
ARTICLE VIII. Indemnification
8.1. Indemnification by the Companies. Each Company shall
indemnify and hold harmless the Fund, the Adviser and each person who controls
the Fund or the Adviser within the meaning of such terms under the 1933 Act (but
not any Participating Insurance Companies or Qualified Plans) and any officer,
trustee, director, employee or agent of the foregoing, against any and all
losses, claims, damages or liabilities, joint or several (including any
investigative, legal and other expenses reasonably incurred in connection with,
and any amounts paid with the written consent of such Company in settlement of,
any action, suit or proceeding or any claim asserted), to which they or any of
them may become subject under any statute or regulation, at common law or
otherwise, insofar as such losses, claims, damages or liabilities are related to
the sale or acquisition of the Fund's shares or the Contracts and:
(a) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the Contract's
Registration Statement, Contract's Prospectus, sales literature or other
promotional material for the Contracts or the Contracts themselves (or any
amendment or supplement to any of the foregoing), or 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 in light
of the circumstances in which they were made; provided that this obligation
to indemnify shall not apply if such statement or omission or such alleged
statement or alleged omission was made in reliance upon and in conformity
with information furnished in writing to such Company by or on behalf of
the Fund or Adviser for use in the Contract's Registration Statement,
Contract's Prospectus or in the Contract's or sales literature or
promotional material for the Contracts (or any amendment or supplement to
any of the foregoing) or otherwise for use in connection with the sale of
the Contracts or Fund shares; or
(b) arise out of any untrue statement or alleged untrue
statement of a material fact contained in the Fund Registration Statement,
Fund Prospectus or sales literature or other promotional material of the
Fund (or any amendment or supplement to any of the foregoing), 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 in light of the circumstances in which they were made, if such
statement or omission was made in reliance upon and in conformity with
information furnished in writing to the Fund or the Adviser by or on behalf
of such Company; or
-12-
(c) arise out of or are based upon any wrongful conduct of
such Company or persons under its control (or subject to its authorization)
with respect to the sale or distribution of the Contracts or Fund shares;
or
(d) arise as a result of any failure by such Company to
provide the services and furnish the materials or to make any payments as
required under this Agreement; or
(e) arise out of any material breach by such Company of this
Agreement.
This indemnification will be in addition to any liability that the Companies may
otherwise have; provided, however, that no party shall be entitled to
indemnification if such loss, claim, damage or liability is due to the willful
misfeasance, bad faith, gross negligence or reckless disregard of duty by the
party seeking indemnification.
8.2. Indemnification by the Fund. The Fund shall indemnify and hold
harmless the Companies and each person who controls the Companies within the
meaning of such terms under the 1933 Act and any officer, director, employee or
agent of the foregoing, against any and all losses, claims, damages or
liabilities, joint or several (including any investigative, legal and other
expenses reasonably incurred in connection with, and any amounts paid with the
written consent of the Fund in settlement of, any action, suit or proceeding or
any claim asserted), to which they or any of them may become subject under any
statute or regulation, at common law or otherwise, insofar as such losses,
claims, damages or liabilities are related to the sale or acquisition of the
Fund's shares or the Contracts and:
(a) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the Fund
Registration Statement, Fund Prospectus or sales literature or other
promotional material of the Fund (or any amendment or supplement to any of
the foregoing), or 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 in light of the circumstances in which
they were made; provided that this obligation to indemnify shall not apply
if such statement or omission or alleged statement or alleged omission was
made in reliance upon and in conformity with information furnished in
writing to the Fund by or on behalf of any Company for use in the Fund
Registration Statement, Fund Prospectus or sales literature or promotional
material for the Fund (or any amendment or supplement to any of the
foregoing); or
(b) arise out of any untrue statement or alleged untrue
statement of a material fact contained in the Contract's Registration
Statement, Contract's Prospectus or sales literature or other promotional
material for the Contracts (or any amendment or supplement to any of the
foregoing), 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 in light of the circumstances in which they were
made, if such statement or omission was made in reliance upon information
furnished in writing by or on behalf of the Fund to such Company; or
(c) arise out of or are based upon wrongful conduct of the
Fund or persons under its control (or subject to its authorization) with
respect to the sale of Fund shares; or
(d) arise as a result of any failure by the Fund to provide
the services and furnish the materials required under the terms of this
Agreement; or
-13-
(e) arise out of any material breach by the Fund of this
Agreement (including any breach of Article VI of this Agreement).
This indemnification will be in addition to any liability that the Fund may
otherwise have; provided, however, that no party shall be entitled to
indemnification if such loss, claim, damage or liability is due to the willful
misfeasance, bad faith, gross negligence or reckless disregard of duty by the
party seeking indemnification.
8.3. Indemnification by the Adviser. The Adviser shall indemnify and
hold harmless the Companies and each person who controls the Companies within
the meaning of such term under the 1933 Act and any officer, director, employee
or agent of the foregoing, against any and all losses, claims, damages or
liabilities, joint or several (including any investigative, legal and other
expenses reasonably incurred in connection with, and any amounts paid with the
written consent of the Adviser in settlement of, any action, suit or proceeding
or any claim asserted), to which they or any of them may become subject under
any statute or regulation, at common law or otherwise, insofar as such losses,
claims, damages or liabilities are related to the sale or acquisition of the
Fund's shares or the Contract and:
(a) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the Fund
Registration Statement, Fund Prospectus or sales literature or other
promotional material of the Fund (or any amendment or supplement to any of
the foregoing), or 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 in light of the circumstances in which
they were made; provided that this obligation to indemnify shall not apply
if such statement or omission or alleged statement or alleged omission was
made in reliance upon and in conformity with information furnished in
writing by or on behalf of any Company to the Fund or the Adviser for use
in the Fund Registration Statement, Fund Prospectus or sales literature or
promotional material for the Fund (or any amendment or supplement to any of
the foregoing); or
(b) arise out of any untrue statement or alleged untrue
statement of a material fact contained in the Contract's Registration
Statement, Contract's Prospectus or sales literature or other promotional
material for the Contracts (or any amendment or supplement to any of the
foregoing), 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 in light of the circumstances in which they were
made, if such statement or omission was made in reliance upon information
furnished in writing by or on behalf of the Adviser to such Company; or
(c) arise out of or are based upon wrongful conduct of the
Fund or the Adviser with respect to the sale of Fund shares; or
(d) arise as a result of any failure by the Fund or the
Adviser to provide the services and furnish the materials required under
the terms of this Agreement; or
(e) arise out of any material breach by the Fund or the
Adviser of this Agreement (including any breach of Article VI of this
Agreement).
This indemnification will be in addition to any liability that the Adviser may
otherwise have; provided, however, that no party shall be entitled to
indemnification if such loss, claim, damage or liability is due to
-14-
the willful misfeasance, bad faith, gross negligence or reckless disregard of
duty by the party seeking indemnification.
8.4. Indemnification Procedures. After receipt by a party entitled to
indemnification ("indemnified party") under this Article VIII of notice of the
commencement of any action, if a claim in respect thereof is to be made by the
indemnified party against any person obligated to provide indemnifi-cation under
this Article VIII ("indemnifying party"), such indemnified party will notify the
indemnifying party in writing of the commencement thereof as soon as practicable
thereafter, provided that the omission to so notify the indemnifying party will
not relieve it from any liability under this Article VIII, except to the extent
that the omission results in a failure of actual notice to the indemnifying
party and such indemnifying party is damaged solely as a result of the failure
to give such notice. The indemnifying party, upon the request of the indemnified
party, shall retain counsel reasonably satisfactory to the indemnified party to
represent the indemnified party and any others the indemnifying party may
designate in such proceeding and shall pay the fees and disbursements of such
counsel related to such proceeding. In any such proceeding, any indemnified
party shall have the right to retain its own counsel and to participate in the
defense of such proceeding, but the fees and expenses of such counsel shall be
at the expense of such indemnified party unless (i) the indemnifying party and
the indemnified party shall have mutually agreed to the retention of such
counsel or (ii) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the indemnified party
and representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interests between them. The indemnifying
party shall not be liable for any settlement of any proceeding effected without
its written consent but if settled with such consent or if there be a final
judgment against the indemnified party, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by reason
of such settlement or judgment.
A successor by law of the parties to this Agreement shall be entitled
to the benefits of the indemnification contained in this Article VIII. The
indemnification provisions contained in this Article VIII shall survive any
termination of this Agreement.
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 Maryland,
without giving effect to the principles of conflicts of law.
9.2. This Agreement shall be subject to the provisions of the 1933
Act, 1940 Act and Securities Exchange Act of 1934, as amended, and the rules and
regulations and rulings thereunder, including such exemptions from those
statutes, rules and regulations as the SEC may grant, and the terms hereof shall
be limited, interpreted and construed in accordance therewith.
-15-
ARTICLE X. Termination
10.1 This Agreement shall not terminate until the Fund is dissolved,
liquidated, or merged into another entity, or, as to any Series of the Fund, the
Account(s) no longer invest in that Series. However, certain obligations of, or
restrictions on, the parties to this Agreement may terminate as provided in
Sections 10.2 and 10.3, and any Company may be required to redeem shares
pursuant to Section 10.4 or in the circumstances contemplated by Article VII.
10.2. Termination of the Fund's Obligation to Sell. The obligation of
the Fund to sell shares to any Company pursuant to Article II of this Agreement
shall terminate at the option of the Fund upon notice to the Company Contact as
provided below:
(a) the Fund Board has terminated the offering of Fund shares or
Series shares pursuant to Section 2.1 of this Agreement; or
(b) upon institution of formal proceedings against any Company by
FINRA, the SEC, the insurance commission of any state or any other
regulatory body regarding such Company's duties under this Agreement or
related to the sale of the Contracts, the operation of the Account(s), the
administration of the Contracts or the purchase of Fund shares, or an
expected or anticipated ruling, judgment or outcome which would, in the
Fund's reasonable judgment, materially impair such Company's ability to
meet and perform its obligations and duties hereunder; or
(c) in the event any of the Contracts are not registered, issued
or sold in accordance with applicable federal and/or state law; or
(d) if the Fund or the Adviser, respectively, shall determine, in
their sole judgment exercised in good faith, that either (1) any Company
shall have suffered a material adverse change in its business or financial
condition since the date of this Agreement or (2) any Company shall have
been the subject of material adverse publicity which is likely to have a
material adverse impact upon the business and operations of either the Fund
or the Adviser; or
(e) upon any Company's assignment of this Agreement (including,
without limitation, any transfer of any Contract or any Account to another
insurance company pursuant to an assumption reinsurance agreement) unless
the Fund consents thereto; or
(f) upon termination pursuant to Section 10.1 or notice from any
Company pursuant to Section 10.3.
Termination of the Fund's obligation shall take effect immediately upon the
giving of such notice upon the occurrence of an event described in clauses (b)
or (c) above, and ten (10) days after the giving of such notice in all other
cases. In exercising its option to terminate its obligation to sell shares to
any Company, the Fund will continue to make Fund shares available to the extent
necessary to permit owners of Contracts in effect on the effective date of such
termination (hereinafter referred to as "Existing Contracts") to reallocate
investments in the Fund, redeem investments in the Fund and/or invest in the
Fund upon the making of additional purchase payments under the Existing
Contracts, unless the Existing Contracts are the basis for the termination. In
that case, the Fund may nonetheless elect to continue to
-16-
make Fund shares available for Existing Contracts and if it so elects, shall
promptly notify such Company whether the Fund is electing to make Fund shares
available after termination.
10.3. As to the Companies. The restrictions on the Companies under
Section 2.7(a) of this Agreement shall terminate at the option of any Company
upon ten (10) days' notice to the Fund by the Company Contact:
(a) if shares of any Series are not reasonably available to meet
the requirements of the Contracts as determined by any Company, and the
Fund, after receiving written notice from the Company Contact of such
non-availability, fails to make available a sufficient number of Fund
shares to meet the requirements of the Contracts within ten (10) days after
receipt thereof; or
(b) upon institution of formal proceedings against the Fund by
FINRA, the SEC or any state securities or insurance commission or any other
regulatory body; or
(c) if the Fund ceases to qualify as a regulated investment
company under Sub-chapter M of the Code, or under any successor or similar
provision, or if any Company reasonably believes the Fund may fail to so
qualify, and the Fund, upon written request from the Company Contact, fails
to provide reasonable assurance that it will take action to cure or correct
such failure; or
(d) if the Fund fails to meet the diversification requirements
specified in Section 817(h) of the Code and any regulations thereunder, and
the Fund, upon written request from the Company Contact, fails to provide
reasonable assurance that it will take action to cure or correct such
failure; or
(e) if the Fund informs the Company Contact pursuant to Section
4.4 that the Fund will not comply with investment restrictions as requested
by the Company Contact, and the Fund and the Company Contact are unable to
agree upon any reasonable alternative accommodations; or
(f) upon receipt by any Company of any necessary regulatory
approvals and the vote of the Contract Owners having an interest in the
Account(s) (or any subaccount) to substitute the shares of another
investment company for the corresponding Fund shares of the Fund in
accordance with the terms of the Contracts for which those Fund shares had
been selected to serve as the underlying investment media. The Company
Contact will give thirty (30) days' prior written notice to the Fund of the
date of any proposed vote or other action taken to replace the Fund's
shares; or
(g) upon a material breach of any provision of this Agreement by
either the Fund or the Adviser; or
(h) if any Company determines in its sole judgment exercised in
good faith, that either the Fund or the Adviser has suffered a material
adverse change in its business, operations, or financial conditions since
the date of this Agreement or is the subject of material adverse publicity
which is likely to have a material adverse impact upon the business and
operations of any Company.
-17-
10.4. Companies Required to Redeem. The parties understand and
acknowledge that it is essential for compliance with Section 817(h) of the Code
that the Contracts qualify as annuity contracts or life insurance policies, as
applicable, under the Code. Accordingly, if any of the Contracts cease to
qualify as annuity contracts or life insurance policies, as applicable, under
the Code, or if the Fund reasonably believes that any such Contracts may fail to
so qualify, the Fund shall have the right to require such Company to redeem
Shares attributable to such Contracts upon ten (10) days written notice to such
Company and such Company shall so redeem such Shares in order to ensure that the
Fund complies with the provisions of Section 817(h) of the Code applicable to
ownership of Fund Shares. Notice to such Company shall specify the period of
time such Company has to redeem the Shares or to make other arrangements
satisfactory to the Fund and its counsel, such period of time to be determined
with reference to the requirements of Section 817(h) of the Code. In addition,
such Company may be required to redeem Shares pursuant to action taken or
request made by the Fund Board in accordance with an order of the SEC as
described in Article VII, or other SEC rule, regulation or order that may be
adopted after the date hereof. Such Company agrees to redeem Shares in such
circumstances and to comply with applicable terms and provisions.
ARTICLE XI. Applicability to New Accounts and New Contracts
The parties to this Agreement may amend the schedules to this
Agreement from time to time to reflect, as appropriate, changes in or relating
to the Contracts, or Series or funding vehicles thereof, additions of new
classes of Contracts to be issued by any Company and separate accounts therefore
investing in the Fund. The provisions of this Agreement shall be equally
applicable to each such class of Contracts, Series and Accounts, effective as of
the date of amendment of such Schedule, unless the context otherwise requires.
ARTICLE XII. Notice, Request or Consent
Any notice, request or consent to be provided pursuant to this
Agreement is to be made in writing and shall be given:
If to the Fund:
M Fund, Inc.
0000 XX Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxx 00000
Attn: President
If to the Adviser:
M Financial Investment Advisers, Inc.
0000 XX Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxx 00000
Attn: President
-18-
If to the Companies:
Xxxx Xxxxxxx Financial Services
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxx X. Xxxxxxx
or at such other address as such party may from time to time specify in writing
to the other party. Each such notice, request or consent to a party shall be
sent by registered or certified United States mail with return receipt
requested, by overnight delivery with a nationally recognized courier or by
electronically transmitted facsimile, and shall be effective upon receipt or
three (3) days after mailing.
ARTICLE XIII. Shareholder Information
13.1 Definitions. For purposes of this Article XIII, the following
terms shall have the following meanings:
(a) "INTERMEDIARY"or "INTERMEDIARIES" means each Company on
behalf of the variable annuity and variable life separate accounts listed
in Schedule 1 for the Companies, or such other separate accounts as may be
established by such Company from time to time, which invest in the Fund.
(b) "SHARES" means the interests of Contract Owners corresponding
to the redeemable securities of record issued by the Fund under the 1940
Act that are held by the Company on behalf of its separate accounts
investing in the Series of the Fund.
(c) "SHAREHOLDER" means the holder of interests in a Contract
with a beneficial interest in the Fund.
(d) The term "SHAREHOLDER-INITIATED TRANSFER" means a transaction
that is initiated or directed by a Shareholder that results in a transfer
of assets within a Contract to or out of a Series of the Fund, but does not
include transactions that are executed: (1) automatically pursuant to a
contractual or systematic program or enrollment such as a transfer of
assets within a Contract to or out of a Series of the Fund as a result of
"dollar cost averaging" programs or automatic rebalancing programs; (2)
pursuant to a Contract death benefit; (3) one-time step-up in Contract
value pursuant to a Contract death benefit; (4) allocation of assets to a
Series of the Fund through a Contract as a result of payments such as loan
repayments, scheduled contributions, retirement plan salary reduction
contributions, or planned premium payments to the Contract; (5)
pre-arranged transfers at the conclusion of a required free look period;
(6) as a result of any deduction of charges or fees under a Contract; or
(7) within a Contract out of a Series of the Fund as a result of scheduled
withdrawals or surrenders from a Contract.
(e) "WRITTEN" includes electronic writings and facsimile
transmissions.
13.2. Agreement to Provide Information. The Intermediaries will
provide the Fund or its designee, upon written request from the Fund or the
Adviser, the taxpayer identification number ("TIN"), the
Individual/International Taxpayer Identification Number ("ITIN"), or other
government-
-19-
issued identifier ("GII") and the Contract Owner number or participant account
number associated with the Shareholder, if known, of any or all Shareholder(s)
of the account, and the amount, date and transaction type (purchase, redemption,
transfer, or exchange) of every purchase, redemption, transfer, or exchange of
Shares held through an account maintained by the Intermediary during the period
covered by the request. Unless otherwise specifically requested by the Fund, the
Intermediaries shall only be required to provide information relating to
Shareholder-Initiated Transfers.
13.3. Period Covered by Request. Requests must set forth a specific
period, not to exceed ninety (90) calendar days prior to the date of the
request, for which transaction information is sought. The Fund or the Adviser
may request transaction information older than ninety (90) calendar days from
the date of the request as it deems necessary to investigate compliance with
policies established by the Fund or Intermediary for the purpose of eliminating
or reducing any dilution of the value of the outstanding shares issued by the
Fund.
13.4. Timing of Requests. Requests for Shareholder information shall
be made no more frequently than quarterly except as the Fund or the Adviser deem
necessary to investigate compliance with policies established by the Fund or
Intermediary for the purpose of eliminating or reducing any dilution of the
value of the outstanding shares issued by the Fund.
13.5. Form and Timing of Response.
(a) Intermediary will provide, no later than thirty (30) business
days or as mutually agreed upon by the parties, upon request of the Fund or
its designee, the requested information specified in Section 13.2. If
requested by the Fund, the Adviser or their designee, Intermediary will use
its best efforts to determine promptly whether any specific person about
whom the Fund has received the identification and transaction information
specified in Section 13.2 is itself a financial intermediary, as defined in
Rule 22c-2 under the 1940 Act (an "indirect intermediary"), and, upon
further request of the Fund, the Adviser or their designee, promptly either
(1) provide (or arrange to have provided) the information set forth in
Section 13.2 for those shareholders who hold an account with the indirect
intermediary, or (2) restrict or prohibit the indirect intermediary from
purchasing, in nominee name on behalf of other persons, securities issued
by the Fund. In such instances, the Intermediary agrees to inform the Fund
whether it plans to perform (1) or (2).
(b) Responses required by this paragraph must be communicated in
writing and in a format mutually agreed upon by the Fund, the Adviser or
their designee and the Intermediary.
(c) The parties shall mutually agree upon the format for any
transaction information provided to the Fund.
13.6. Limitations on Use of Information. The Fund will not use the
information received pursuant to this Article XIII for any purpose other than as
necessary to comply with the provisions of Rule 22c-2 under the 1940 Act or to
fulfill other regulatory or legal requirements subject to the privacy provisions
of Title V of the Xxxxx-Xxxxx-Xxxxxx Act (Public Law 106-102) and comparable
state laws. This provision survives termination of the Agreement.
13.7 Agreement to Enforce Short-Term Trading Policy. Each Intermediary
has established the short-term trading policy attached hereto as Appendix A (the
"SHORT-TERM TRADING POLICY") and agrees to enforce its Short-Term Trading Policy
during the term of this Agreement. The
-20-
Short-Term Trading Policy may be amended from time to time and the
Intermediaries will promptly amend Appendix A of the Agreement upon such
amendment.
13.8. Agreement to Restrict Trading. During the term of this Agreement
each Intermediary agrees that it shall enforce its Short-Term Trading Policy
with respect to Shareholders. Where an Intermediary or the Fund or the Adviser
has determined that a Shareholder has engaged in potentially harmful market
timing or frequent trading in violation of the Short-Term Trading Policy, then
the Intermediary shall execute written instructions from the Fund to restrict or
prohibit further purchases or exchanges of Shares by such Shareholder.
Instructions must be sent to the Intermediary at the following address, or such
other address that the Intermediary may communicate to the Fund in writing from
time to time, including, if applicable, the following e-mail and facsimile
number:
Xxxxxxxx X. Xxxxxxxxxx
AVP & Senior Counsel
000 Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
000-000-0000
000-000-0000 (fax)
xxxxxxxxxxx@xxxxxxxx.xxx.
13.9. Form of Instructions. Instructions must include the TIN, ITIN or
GII and the specific individual Contract Owner number or participant account
number associated with the Shareholder, if known, and the specific
restriction(s) to be executed. Such instructions shall also include how long the
restriction(s) is(are) to remain in place. If the TIN, ITIN, GII or the specific
individual Contract Owner number or participant account number associated with
the Shareholder is not known, the instructions must include an equivalent
identifying number of the Shareholder(s) or account(s) or other agreed upon
information to which the instruction relates.
13.10. Timing of Response. Intermediary agrees to execute instructions
as soon as reasonably practicable, but not later than ten (10) business days
after receipt of the instructions by the Intermediary, or as mutually agreed
upon by the parties in writing.
13.11. Confirmation by Intermediary. Intermediary must provide written
confirmation to the Fund that instructions have been executed. Intermediary
agrees to provide confirmation as soon as reasonably practicable, but not later
than ten (10) business days after the instructions have been executed, or as
mutually agreed upon by the parties in writing.
13.12. Construction of this Article XIII. To the extent that the terms
of this Article XIII conflict with the other terms of this Agreement, the terms
of this Article XIII shall control.
ARTICLE XIV Miscellaneous
14.1. 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.
14.2. This Agreement may be executed simultaneously in two or more
counterparts, each of which together shall constitute one and the same
instrument.
-21-
14.3. If any provision of this Agreement shall be held or made invalid
by a court decision, statute, rule or otherwise, the remainder of this Agreement
shall not be affected thereby.
14.4. Subject to the requirement of legal process and regulatory
authority, each party hereto shall treat as if 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.
14.5. 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.
14.6 The parties acknowledge that Federal law requires that the Fund
obtain, verify and record information that identifies each person who opens an
account with the Fund, including the Company on behalf of each Account. In
connection with the opening of an account with the Fund, the Fund will request
certain identifying information, including, but not limited to (1) the name of
the account owner, (2) the address of the account owner's principal place of
business, and (3) the account owner's Taxpayer Identification Number (TIN).
[This space is intentionally blank.]
-22-
IN WITNESS WHEREOF, the parties have caused this Amended and Restated
Participation Agreement to be duly executed and delivered by their duly
authorized officers, as of the day and year first above written.
M FUND, INC.
By: /s/ XxXxxx Xxxxxxxxx
------------------------------------
Name: XxXxxx Xxxxxxxxx
Title: Vice President
M FINANCIAL ADVISERS, INC.
By: /s/ XxXxxx Xxxxxxxxx
------------------------------------
Name: XxXxxx Xxxxxxxxx
Title: Vice President
XXXX XXXXXXX LIFE INSURANCE COMPANY
(on behalf of its Separate Accounts)
By: /s/ Xxxxx X. Xxxxx
------------------------------------
Name: Xxxxx X. Xxxxx
Title: Chairman, President and
Chief Executive Officer
XXXX XXXXXXX VARIABLE LIFE INSURANCE
COMPANY
(on behalf of its Separate Accounts)
By: /s/ Xxxxx X. Xxxxx
------------------------------------
Name: Xxxxx X. Xxxxx
Title: Chairman, President and
Chief Executive Officer
-23-
XXXX XXXXXXX LIFE INSURANCE COMPANY
(U.S.A.)
(on behalf of its Separate Accounts)
By: /s/ Xxxxx X. Xxxxx
------------------------------------
Name: Xxxxx X. Xxxxx
Title: Chairman and Chief Executive
Officer
XXXX XXXXXXX LIFE INSURANCE COMPANY OF
NEW YORK
(on behalf of its Separate Accounts)
By: /s/ Xxxxx X. Xxxxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Chairman and President
-24-
APPENDIX A
SHORT-TERM TRADING POLICY FOR EACH INTERMEDIARY
1. In order to deter market timing, each Intermediary restricts transfers to two
per month per insurance contract or qualified plan participant. (For purposes of
this restriction, all transfers made by a contract owner/participant during the
period from the opening of trading each day the net asset value of the shares
are determined (usually 9 a.m.) to the close of trading that day (the close of
day-time trading of the New York Stock Exchange (usually 4 p.m.)) are considered
one transfer.) Contract owners/participants may, however, transfer to the Money
Market Trust of the Fund even if the two transfers per month limit has been
reached if 100% of the assets in the variable investment option are transferred
to the Money Market Trust. If such a transfer to the Money Market Trust is made,
for a 30 day period after such transfer, no subsequent transfers from the Money
Market Trust to another portfolio of the Fund may be made. (Certain group
annuity contracts owned by qualified plans use the Xxxx Xxxxxxx Stable Value
Fund instead of the Money Market Trust. Participants in those plans may make
such a transfer to the Xxxx Xxxxxxx Stable Value Fund subject to the same
conditions.) In certain contracts or plans, certain transfers are excluded from
this policy as described in Section 3. Special provisions apply to corporate
owned life insurance policies as noted below.
Corporate Owned Life Insurance Policies. In lieu of the restrictions above,
each Intermediary restricts corporate owned life insurance policy owners as
follows:
corporate owned life insurance policy owners may rebalance the investment
options in their policies within the following limits: (i) during the 10
calendar day period after any policy values are transferred from one
investment account into a second investment account, the values can only be
transferred out of the second investment account if they are transferred
into the Money Market B investment account; and (ii) any policy values that
would otherwise not be transferable by application of the 10 day limit
described above and that are transferred into the Money Market B investment
account may not be transferred out of the Money Market B investment account
into any other accounts (fixed or investment) for thirty (30) calendar
days.
2. In addition to the above, if any Intermediary determines, in its sole
discretion, that any exchange may disrupt or be potentially disruptive to an
Account or sub-account, it reserves the right to impose additional restrictions,
as permitted under the Variable Contract, including, but not limited to, the
following:
a. restricting the number of exchanges made during a defined period;
b. restricting the dollar amount of exchange;
c. restricting the method used to submit requests for purchases and
exchanges (e.g. requiring purchase and exchange requests to be
submitted in writing via regular U.S. mail); and,
d. restricting exchanges into and out of certain separate accounts and
sub-accounts.
3. Certain transactions, including, but not limited to, the following, shall not
be subject to the restrictions of the above short-term trading policy:
a. purchases of Shares as a result of plan Participant payroll or
employer contributions or loan repayments;
-25-
b. distributions, loans, and in-service withdrawals from a qualified
retirement plan;
c. redemptions or transfers of Shares as a result of a qualified plan
termination or at the direction of a qualified plan;
d. purchases of Shares by reinvestment of dividends or capital gains
distributions, as applicable;
e. transfers or rollovers in a qualified plan;
f. conversions of Shares within one sub-account due to a movement from
one share class to another in the Fund;
g. redemptions of Shares to pay underlying mutual fund, separate account,
or sub-account fees, or plan-level fees;
h. transfers pursuant to automated or pre-established programs;
i. transfers made within a prescribed period before and after a
substitution of underlying funds in an insurer's separate account; and
j. transfers made during an annuity contract's payout phase.
-26-
SCHEDULE 1
Accounts of the Companies
Investing in the Fund
Effective as of the date the Agreement was executed, the following separate
accounts of the Company are subject to the Agreement:
Date Established by SEC 1940 Act Type of Product
Board of Directors Registration Number Supported
Name of Account of the Company (if applicable) by Account
--------------- -------------------------- ------------------- --------------------------
Xxxx Xxxxxxx Variable on or about April 8, 1996 811-07711 Variable Annuity Contracts
Annuity Account H
Xxxx Xxxxxxx Variable on or about November 12, 811-7782 Variable Life Contracts
Life Account S 1993
Xxxx Xxxxxxx Variable on or about May 10, 0000 000-0000 Variable Life Contracts
Life Account UV
Xxxx Xxxxxxx Variable on or about December 13, 811-3068 Variable Life Contracts
Life Account U 1984
Xxxx Xxxxxxx Variable on or about December 11, 811-5290 Variable Life Contracts
Life Account V 1986
Xxxx Xxxxxxx Life on or about December 12, 811-4834 Variable Life Contracts
Insurance Company 2001
(U.S.A.) Account A
Xxxx Xxxxxxx Life on or about December 4, 811-5130 Variable Life Contracts
Insurance Company 2001
(U.S.A.) Account N
Xxxx Xxxxxxx Life on or about August 5, 0000 000-0000 Variable Life Contracts
Insurance Company of
New York Account B
Xxxx Xxxxxxx Variable 1997 N/A Private Placement Life
Account PPM1-V Insurance Contracts
Xxxx Xxxxxxx Variable 1997 N/A Private Placement Life
Account PPM2-3 Insurance Contracts
Xxxx Xxxxxxx Variable 1997 N/A Private Placement Life
Account PPM1-R Insurance Contracts
Xxxx Xxxxxxx Variable 1997 N/A Private Placement Life
Account PPM2-K Insurance Contracts
Xxxx Xxxxxxx Life on or about December N/A Private Placement Life
Insurance Company of 16, 2008 Insurance Contracts
New York PPM1-B
Xxxx Xxxxxxx Life on or about December 16, N/A Private Placement Life
Insurance Company of 2008 Insurance Contracts
New York PPM2-C
Xxxx Xxxxxxx Life on or about December 16, N/A Private Placement Life
Insurance Company 2008 Insurance Contracts
(U.S.A.) PPM1-T
Xxxx Xxxxxxx Life on or about December 16, N/A Private Placement Life
Insurance Company 2008 Insurance Contracts
(U.S.A.) PPM2-S
Effective as of _________________________, this Schedule 1 is hereby amended to
reflect the following changes in Fund Series and other funding vehicles:
IN WITNESS WHEREOF, the Fund, the Adviser, and the Company hereby amend this
Schedule 1 in accordance with Article XI of the Agreement.
M FUND, INC.
By:
------------------------------------
Name:
Title:
M FINANCIAL ADVISERS, INC.
By:
------------------------------------
Name:
Title:
XXXX XXXXXXX LIFE INSURANCE COMPANY
(on behalf of its Separate Accounts)
By:
------------------------------------
Name: Xxxxx X. Xxxxx
Title: Chairman, President and
Chief Executive Officer
XXXX XXXXXXX VARIABLE LIFE INSURANCE
COMPANY
(on behalf of its Separate Accounts)
By:
------------------------------------
Name: Xxxxx X. Xxxxx
Title: Chairman, President and
Chief Executive Officer
XXXX XXXXXXX LIFE INSURANCE COMPANY
(U.S.A.)
(on behalf of its Separate Accounts)
By:
------------------------------------
Name: Xxxxx X. Xxxxx
Title: Chairman and Chief
Executive Officer
XXXX XXXXXXX LIFE INSURANCE COMPANY OF
NEW YORK
(on behalf of its Separate Accounts)
By:
------------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Chairman and President
SCHEDULE 2
Classes of Contracts
Supported by Separate Accounts
Listed on Schedule 1
Effective as of the date the Agreement was executed, the following classes of
Contracts are subject to the Agreement:
SEC 1933 Act Name of
Registration Number Supporting Variable Annuity or
Policy Marketing Name (if applicable) Separate Account Variable Life
--------------------- ------------------- ---------------- -------------------
Revolution Value 333-81103 H Variable Annuity
Revolution Value II 333-81103 H Variable Annuity
Revolution Access 333-84771 H Variable Annuity
Revolution Extra 333-84783 H Variable Annuity
Revolution Extra II 333-84783 H Variable Annuity
Magnastar N/A PPM1-V; Variable Life
PPM2-3; Private Placement
PPM1-R;
PPM2-K;
PPM1-B;
PPM2-C
PPM1-T
PPM2-S
Medallion Executive Variable Life 000-000 X
Xxxxxxxxx Xxxxxxxxx Variable Life II 333-425 S
Medallion Executive Variable Life III 333-425 S
Majestic Variable Universal Life 333-15075 S
Majestic Variable Universal Life 98 333-15075 S
Variable Master Plan Plus 33-79108 S
Majestic Variable COLI 333-60274 S
Variable Estate Protection 33-64366 S
Majestic Variable Estate Protection 33-64366 S
Majestic Variable Estate Protection 98 33-64366 S
Variable Estate Protection Plus 33-64366 S
Variable Estate Protection Edge 333-55172 S
Performance Survivorship Variable Universal Life 333-55172 S
Majestic Performance Survivorship Variable Universal Life 333-55172 S
Performance Executive Variable Life 333-111385 S
Medallion Executive Variable Life III 333-63654 UV
Medallion Variable Life 33-76662 UV
Majestic Variable Universal Life 98 333-42378 UV
Majestic Variable COLI 333-91448 UV
Variable Estate Protection 33-64364 UV
Majestic Variable Estate Protection 98 333-73444 UV
Variable Estate Protection Plus 333-73082 UV
Variable Estate Protection Edge 333-73072 UV
Performance Survivorship Variable Universal Life 333-73072 UV
Majestic Performance Survivorship Variable Universal Life 333-73072 UV
Performance Executive Variable Life 333-111383 UV
Medallion Variable Universal Life Plus 333-70734 UV
Medallion Variable Universal Life Edge 333-70746 UV
Medallion Variable Universal Life Edge II 333-70746 UV
Annual Premium Variable Life 33-63900 UV
Flex V1 33-63842 UV
Flex V2 33-75608 UV
Medallion Variable Life 33-76660 U
Medallion Variable Universal Life Plus 33-76660 U
Annual Premium Variable Life 2-68061 U
Medallion Variable Universal Life Edge 333-52128 U
Medallion Variable Universal Life Edge II 333-52128 U
eVariable Life 333-50312 U
Flex V1 33-16611 V
Flex V2 33-75610 V
Protection Variable Universal Life 333-124150 A
Survivorship Variable Universal Life 333-141692 A
Majestic Performance Variable Universal Life 333-131299 A
Majestic Survivorship VULX 333-148991 A
Majestic VULX 333-151630 A
Accumulation VUL 333-152406 A
Accumulation VUL 333-85284 A
Majestic VCOLIX 333-153252 A
Protection Variable Universal Life 333-124150 A
Protection Variable Universal Life 333-127543 B
Majestic Performance Variable Universal Life 333-132905 B
Survivorship Variable Universal Life 333-141693 B
Majestic Survivorship VULX 333-148992 B
Majestic VULX 333-151631 B
Accumulation VUL 333-152407 B
Accumulation VUL 333-131134 B
Majestic VCOLIX 333-153253 B
Protection Variable Universal Life 333-157213 B
Corporate VUL 333-131139 B
Corporate VUL 333-152408 B
Corporate VUL 333-126668 N
Corporate VUL 333-152409 N
Effective as of _________________________, this Schedule 2 is hereby amended to
reflect the following changes in Fund Series and other funding vehicles:
IN WITNESS WHEREOF, the Fund, the Adviser, and the Company hereby amend this
Schedule 2 in accordance with Article XI of the Agreement.
M FUND, INC.
By:
------------------------------------
Name:
Title:
M FINANCIAL ADVISERS, INC.
By:
------------------------------------
Name:
Title:
XXXX XXXXXXX LIFE INSURANCE COMPANY
(on behalf of its Separate Accounts)
By:
------------------------------------
Name: Xxxxx X. Xxxxx
Title: Chairman, President and
Chief Executive Officer
XXXX XXXXXXX VARIABLE LIFE INSURANCE
COMPANY
(on behalf of its Separate Accounts)
By:
------------------------------------
Name: Xxxxx X. Xxxxx
Title: Chairman, President and
Chief Executive Officer
XXXX XXXXXXX LIFE INSURANCE COMPANY
(U.S.A.)
(on behalf of its Separate Accounts)
By:
------------------------------------
Name: Xxxxx X. Xxxxx
Title: Chairman and Chief Executive
Officer
XXXX XXXXXXX LIFE INSURANCE COMPANY OF
NEW YORK
(on behalf of its Separate Accounts)
By:
------------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Chairman and President
SCHEDULE 3
Fund Series and Other Funding
Vehicles Available Under
Each Class of Contracts
Effective as of the date the Agreement was executed, the following Fund Series
and other Funding Vehicles are available under the Contracts:
Xxxxxxx International Equity Fund
M Large Cap Growth
Frontier Capital Appreciation Fund
Business Opportunity Value Fund
Effective as of __________________________, this Schedule 3 is hereby amended to
reflect the following changes in Fund Series and other funding vehicles:
IN WITNESS WHEREOF, the Fund, the Adviser, and the Company hereby amend this
Schedule 3 in accordance with Article XI of the Agreement.
M FUND, INC.
By:
------------------------------------
Name:
Title:
M FINANCIAL ADVISERS, INC.
By:
------------------------------------
Name:
Title:
XXXX XXXXXXX LIFE INSURANCE COMPANY
(on behalf of its Separate Accounts)
By:
------------------------------------
Name: Xxxxx X. Xxxxx
Title: Chairman, President and
Chief Executive Officer
XXXX XXXXXXX VARIABLE LIFE INSURANCE
COMPANY
(on behalf of its Separate Accounts)
By:
------------------------------------
Name: Xxxxx X. Xxxxx
Title: Chairman, President and Chief
XXXX XXXXXXX LIFE INSURANCE COMPANY
(U.S.A.)
(on behalf of its Separate Accounts)
By:
------------------------------------
Name: Xxxxx X. Xxxxx
Title: Chairman and Chief Executive
Officer
XXXX XXXXXXX LIFE INSURANCE COMPANY OF
NEW YORK
(on behalf of its Separate Accounts)
By:
------------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Chairman and President
