PARTICIPATION AGREEMENT
THIS
AGREEMENT, dated as of the 1st day of July 2004 by and among each life insurance
company listed on Exhibit A hereto (each a “Company”) and on behalf of each
separate account of the Company set forth on Schedule A hereto as may be amended
from time to time (each separate account hereinafter referred to as the
"Account"), XXXXXXX VARIABLE SERIES I and XXXXXXX VARIABLE SERIES II
(individually, a "Fund"), each a Massachusetts business trust created under
a
Declaration of Trust, as amended, XXXXXXX DISTRIBUTORS, INC. (the
"Underwriter"), a Delaware corporation, and DEUTSCHE INVESTMENT MANAGEMENT
AMERICAS INC., a Delaware corporation (the “Adviser”). The parties
agree that a single document is being used for ease of administration and that
this Agreement shall be treated as if it were a separate agreement with respect
to each Fund (and each series thereof) and each Company, that is a party hereto,
severally and not jointly, as if such entity had entered into a separate
agreement naming only itself as a party. Without limiting the
foregoing, no Fund (or series thereof), shall have any liability under this
Agreement for the obligations of any other Fund, or series thereof and no
Company shall have liability for the obligations of any other
Company.
WHEREAS,
the Fund engages in business as an open-end management investment company and
is
or will be available to act as the investment vehicle for separate accounts
established for variable life insurance and variable annuity contracts (the
"Variable Insurance Products") to be offered by insurance companies which have
entered into participation agreements with the Fund and Underwriter
("Participating Insurance Companies");
WHEREAS,
the beneficial interest in the Fund is divided into several series of shares
of
beneficial interest without par value, and, with respect to certain series,
classes thereof (“Shares”), and additional series of Shares, and classes
thereof, may be established, each such series of Shares designated a "Portfolio"
and representing the interest in a particular managed portfolio of securities
and other assets;
WHEREAS,
the Fund has obtained an order from the Securities and Exchange Commission
(the
"SEC") granting Participating Insurance Companies and variable annuity and
variable life insurance separate accounts exemptions from the provisions of
sections 9(a), 13(a), 15(a), and 15(b) of the Investment Company Act of 1940,
as
amended (the "1940 Act") and Rules 6e-2(b)(15) and 6e-3(T)(b)(15) thereunder,
to
the extent necessary to permit Shares of the Fund to be sold to and held by
variable annuity and variable life insurance separate accounts of both
affiliated and unaffiliated life insurance companies (the "Mixed and Shared
Funding Exemptive Order");
WHEREAS,
the Fund is registered as an open-end management investment company under the
1940 Act and Shares of the Portfolios are registered under the Securities Act
of
1933, as amended (the "1933 Act");
WHEREAS,
the Adviser, which serves as investment adviser to the Fund, is duly registered
as an investment adviser under the Investment Advisers Act of 1940, as amended,
and any applicable state securities laws;
WHEREAS,
the Company has issued or will issue certain variable life insurance and/or
variable annuity contracts supported wholly or partially by the Account (the
"Contracts"), and said Contracts are listed in Schedule A hereto, as it may
be
amended from time to time by mutual written agreement;
WHEREAS,
the Company provides administrative and/or recordkeeping services for the
Contracts and in all other respects provides operational support in connection
with the offering and maintenance of the Contracts;
WHEREAS,
selection of investment options is made by owners of the Contracts
and
such owners may reallocate their investments among the investment options in
accordance with the terms of the Contracts;
WHEREAS,
the Account is duly established and maintained as a separate account,
established by resolution of the Board of Directors of the Company to set aside
and invest assets attributable to the aforesaid Contracts;
WHEREAS,
the Underwriter, which serves as distributor to the Fund, is registered as
a
broker dealer with the 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,
to the extent permitted by applicable insurance laws and regulations, the
Company intends to purchase shares in the Portfolios, and classes thereof,
listed in Schedule B hereto, as it may be amended from time to time by mutual
written agreement (the "Designated Portfolios") on behalf of the Account to
fund
the aforesaid Contracts, and the Underwriter is authorized to sell such Shares
to the Account at net asset value;
NOW,
THEREFORE, in consideration of their mutual promises, the Company, the Fund,
the
Adviser and the Underwriter agree as follows:
ARTICLE
I. Sale
of Fund Shares
1.1. The
Fund has granted to the Underwriter exclusive authority to distribute the Fund's
Shares, and has agreed to instruct, and has so instructed, the Underwriter
to
make available to the Company for purchase, on behalf of the Account, Fund
Shares of those Designated Portfolios selected by the
Underwriter. Pursuant to such authority and instructions, and subject
to Article X hereof, the Underwriter agrees to make available to the Company
for
purchase on behalf of the Account, Shares of those Designated Portfolios listed
on Schedule B to this Agreement, such purchases to be effected at net asset
value in accordance with Section 1.3 of this
Agreement. Notwithstanding the foregoing, (i) Fund series (other than
those listed on Schedule B) in existence now or that may be established in
the
future will be made available to the Company only as the Underwriter may so
provide, and (ii) the Board of Trustees of the Fund (the "Board") may refuse
to
sell shares of any Designated Portfolio to any person, or suspend or terminate
the offering of Fund Shares of any Designated Portfolio or class thereof, if
such action is required by law or by regulatory authorities having jurisdiction,
or if, in the sole discretion of the Board acting in good faith and in light
of
its fiduciary duties under federal and any applicable state laws, suspension
or
termination is in the best interests of shareholders of such Designated
Portfolios.
1.2. The
Fund shall redeem, at the Company's request, any full or fractional Designated
Portfolio Shares held by the Company on behalf of the Account, such redemptions
to be effected at net asset value in accordance with Section 1.3 of this
Agreement. Notwithstanding the foregoing, (i) the Company shall not
redeem Fund Shares attributable to Contract owners except in the circumstances
permitted in Section 10.3 of this Agreement, and (ii) the Fund may suspend
the
right of redemption or postpone the date of payment or satisfaction
upon redemption of Fund Shares of any Designated Portfolio to the
extent permitted by the 1940 Act, any rules, regulations or orders
thereunder.
1.3. Purchase
and Redemption Procedures
(a) The
Fund
hereby appoints the Company as an agent of the Fund for the limited purpose
of
receiving purchase and redemption requests on behalf of the
Account for Shares of those Designated Portfolios made available
hereunder, based on allocations of amounts to the Account or subaccounts thereof
under the Contracts and other transactions relating to the Contracts or the
Account. Receipt of any such request (or relevant transactional
information therefore) on any day the New York Stock Exchange is open for
trading and on which the Fund calculates its net asset value pursuant to the
rules of the SEC (a "Business Day") by the Company as such limited agent of
the
Fund prior to the time that the Fund calculates its net asset value as described
from time to time in the Fund Prospectus (which as of the date of execution
of
this Agreement is 4:00 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 9:30 a.m. Eastern Time on the next following Business
Day.
(b) The
Company shall pay for Shares of each Designated Portfolio on the same day that
it notifies the Fund of a purchase request for such Shares. Payment
for Designated Portfolio Shares shall be made in federal funds transmitted
to
the Fund by wire to be received by the Fund by the end of the Business Day
(normally 5:00 p.m. Eastern time) on, the same Business Day the Fund is notified
of the purchase request for Designated Portfolio Shares pursuant to
Section 1.3(a) (unless the Fund determines and so advises the Company that
sufficient proceeds are available from redemption of Shares of other Designated
Portfolios effected pursuant to redemption requests tendered by the Company
on
behalf of the Account).
(c) The
Fund
will redeem Designated Portfolio Shares requested on behalf of the Account,
and
make payment therefore, in accordance with the provisions of the then current
registration statement of the Fund. Payment for Designated Portfolio
Shares redeemed by the Account or the Company normally shall be made in federal
funds transmitted by wire to the Company or any other designated person by
the
end of the Business Day (normally 5:00 p.m. Eastern time) on the same Business
Day the Fund is notified of the redemption order of such Shares pursuant to
Section 1.3(a) (unless redemption proceeds are to be applied to the
purchase of Shares of other Designated Portfolios in accordance with Section
1.3(b) of this Agreement). The Fund shall not bear any responsibility
whatsoever for the proper disbursement or crediting of redemption proceeds
by
the Company, the Company alone shall be responsible for such
action.
1.4. The
Fund shall use its best efforts to make the net asset value per share for each
Designated Portfolio available to the Company by 6:30 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 Designated Portfolio is calculated, and shall
calculate such net asset value in accordance with the Fund's
Prospectus. Neither the Fund, any Designated Portfolio, the
Underwriter, nor any of their affiliates shall be liable for any information
provided to the Company pursuant to this Agreement which information is based
on
incorrect information supplied by the Company or any other Participating
Insurance Company to the Fund or the Underwriter.
1.5. The
Fund shall furnish notice (by wire or telephone followed by written
confirmation) to the Company as soon as reasonably practicable of any income
dividends or capital gain distributions payable on any Designated Portfolio
Shares. The Company, on its behalf and on behalf of the Account,
hereby elects to receive all such dividends and distributions as are payable
on
any Designated Portfolio Shares in the form of additional Shares of that
Designated Portfolio. The Company reserves the right, on its behalf
and on behalf of the Account, to revoke this election and to receive all such
dividends and capital gain distributions in cash. The Fund shall
notify the Company of the number of Designated Portfolio Shares so issued as
payment of such dividends and distributions.
1.6. Issuance
and transfer of Fund Shares shall be by book entry only. Stock
certificates will not be issued to the Company or the
Account. Purchase and redemption orders for Fund Shares shall be
recorded in an appropriate ledger for the Account or the appropriate subaccount
of the Account.
1.7. The
parties hereto acknowledge that the arrangement contemplated by this Agreement
is not exclusive; the Fund's Shares may be sold to other insurance companies
(subject to Section 1.8 hereof) and to certain qualified retirement plans,
and
the cash value of the Contracts may be invested in other investment
companies.
1.8. The
Underwriter and 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 Shares of the Fund under Section 817(h)
of
the Internal Revenue Code of 1986, as amended (the “Code”), and the regulations
thereunder without impairing the ability of the Account to consider the
portfolio investments of the Fund as constituting investments of the Account
for
the purpose of satisfying the diversification requirements of Section
817(h). The Underwriter and the Fund shall not sell Fund Shares to
any insurance company or separate account unless an agreement complying with
Article VI of this Agreement is in effect to govern such sales. The
Company hereby represents and warrants that it and the Account are Qualified
Persons. The Fund reserves the right to cease offering Shares of any
Designated Portfolio in the discretion of the Fund.
ARTICLE
II. Representations
and Warranties
2.1. The
Company represents and warrants that the Contracts (a) are or, prior to
issuance, will be registered under the 1933 Act or, alternatively (b) are not
registered because they are properly exempt from registration under the 1933
Act
or will be offered exclusively in transactions that are properly exempt from
registration under the 1933 Act. The Company further represents and
warrants that the Contracts will be issued in compliance in all material
respects with all applicable federal securities and state securities and
insurance laws and that the sale of the Contracts shall comply in all material
respects with state insurance requirements. The Company further
represents and warrants that it is duly organized and in good standing under
applicable law, that it has legally and validly established the Account prior
to
any issuance or sale thereof as a separate account under applicable insurance
laws, and that it (a) has registered or, prior to any issuance or sale of the
Contracts, will register the Account as a unit investment trust in accordance
with the provisions of the 1940 Act to serve as a segregated investment account
for the Contracts, or alternatively (b) has not registered the Account in proper
reliance upon an exclusion from registration under the 1940 Act. The
Company shall register and qualify the Contracts or interests therein as
securities in accordance with the laws of the various states only if and to
the
extent deemed advisable by the Company.
2.2. The
Fund 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 in all material respects with all applicable federal securities
laws
and that the Fund is and shall remain registered under the 0000
Xxx. The Fund 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 the shares of the Designated
Portfolios. The Fund shall register and qualify such Shares for sale
in accordance with the laws of the various states only if and to the extent
deemed advisable by the Fund or the Underwriter after taking into consideration
any state insurance law requirements that the Company advises the Fund may
be
applicable.
2.3. The
provisions of this Section 2.3 apply to Class B Shares. The Company
agrees to provide distribution services (“Distribution Services”) for the Class
B Shares of the Designated Portfolios including the following types
of services:
(1) Mailing
of Fund prospectuses, statements of additional information, any supplements
thereto and shareholder reports for prospective Contract owners.
(2) Developing,
preparing, printing and mailing of Fund advertisements, sales literature and
other promotional materials describing and/or relating to the Fund and including
materials intended for use within the Company, or for broker-dealer only use
or
retail use.
(3) Holding
seminars and sales meetings designed to promote the distribution of Fund
Shares.
(4) Obtaining
information and providing explanations to Contract owners regarding
Fund investment objectives and policies and other information about the Fund
and
its Portfolios, including the performance of the Portfolios.
(5) Training
sales personnel regarding the Fund.
(6) Compensating
sales personnel and financial services firms in connection with the allocation
of cash values and premiums of the Contracts to the
Fund.
(7) Personal
service with respect to Fund Shares attributable to Contract
accounts.
In
consideration of the Company performing the Distribution Services, the
Underwriter will make quarterly payments to the Company pursuant to the Fund’s
Master Distribution Plan for Class B Shares, as amended from time to time,
at
the annual rate of [X.XX%] of the average daily net asset value of the Class
B
shares of each Designated Portfolio held by the Company pursuant to this
Agreement.
The
Company shall perform all record keeping services (the "Record
Keeping Services") with respect to the Contracts, including, without limitation,
the following:
(a) Maintaining
separate records for each Contract owner , which shall reflect the Designated
Portfolio shares purchased and redeemed and Designated Portfolio
share balances of such Contract owners. The Company will maintain
omnibus accounts with each Designated Portfolio on behalf of Contract owners,
and such accounts shall be in the name of the Company (or its
nominee) as the record owner of shares owned by such Contract
owners.
(b) Disbursing
or crediting to Contract owners all proceeds of redemptions of shares
of the Designated Portfolios and processing all dividends and other
distributions.
(c) Preparing
and transmitting to Contract owners , as required by law, periodic statements
showing the total number of shares owned by Contract owners as of the statement
closing date, purchases and redemptions of Designated Portfolio shares by
Contract owners during the period covered by the statement and
dividends and other distributions paid during the statement period (whether
paid
in cash or reinvested in Designated Portfolio shares), and such other
information as may be required, from time to time, by Contract
owners.
(d) Supporting
and responding to service inquiries from Contract owners.
(e) Maintaining
and preserving all records required by law to be maintained and preserved in
connection with providing the foregoing services for Contract
owners.
(f) Generating
written confirmations and quarterly statements to Contract owners, to the extent
required by law.
(g) To
the extent required by applicable law, administering the distribution to
existing Contract owners of Fund prospectuses, proxy materials,
periodic reports to shareholders and other materials that the
Designated Portfolios provide to their shareholders (the printing and
distribution expense to be borne as set forth on Schedule C).
(h) Aggregating
and transmitting purchase and redemption orders to the
Designated Portfolios on behalf of the Contract owners.
In
consideration of the Company performing the Record Keeping Services, the Fund
agrees to pay the Company, quarterly, a record keeping fee at the annual rate
of
0.05% of the average daily net assets of the Class B Shares of each Designated
Portfolio held by the Company pursuant to this
Agreement. The Company represents and agrees that no
charge imposed by it on Contract owners is specifically intended or designed
to
compensate the Company for the Record Keeping Services as described
herein.
2.4. The
Fund makes no representations as to whether any aspect of its operations,
including, but not limited to, investment policies, fees and expenses, complies
with the insurance and other applicable laws of the various states, except
that
the Fund represents that the investment policies, fees, and expenses of the
Designated Portfolio are and shall at all times remain in compliance with the
insurance laws of the state of organization of the Company to the extent that
the Fund is notified in writing of the requirements of such laws.
2.5. The
Fund represents that it is a Massachusetts business trust duly organized and
validly existing under the laws of the Commonwealth of Massachusetts and that
the Designated Portfolios do and will comply in all material respects with
all
applicable provisions of the 1940 Act.
2.6. The
Underwriter 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
Underwriter further represents that it will sell and distribute the shares
of
the Designated Portfolios in accordance with any applicable state and federal
securities laws.
2.7. The
Adviser represents and warrants that it is and shall remain duly registered
as
an investment adviser under all applicable federal and state securities laws
and
that it shall perform its obligations for the Fund in compliance in all material
respects with any applicable state and federal securities laws.
2.8. The
Fund, the Adviser and the Underwriter represent and warrant that all of their
trustees, directors, officers, employees, investment advisers, and other
individuals or entities 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
minimum coverage as required currently by Rule 17g-1 of the 1940 Act or such
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.
2.9. The
Company represents and warrants that all of its directors, officers, employees,
and other individuals or entities employed or controlled by the Company dealing
with the money and/or securities of the Account are covered by a blanket
fidelity bond or similar coverage for the benefit of the Account, in an amount
not less than $20 million. The aforesaid bond includes coverage for
larceny and embezzlement and is issued by a reputable bonding
company. The Company agrees to hold for the benefit of the Fund and
to pay to the Fund any amounts lost from larceny, embezzlement or other events
covered by the aforesaid bond to the extent such amounts properly belong to
the
Fund pursuant to the terms of this Agreement. 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 Fund and the
Underwriter in the event that such coverage no longer applies.
2.10. The
Company represents and warrants that all shares of the Designated Portfolios
purchased by the Company will be purchased on behalf of one or more unit
investment trust separate accounts that offer interests therein that are
registered under the 1933 Act and upon which a registration fee has been or
will
be paid or that are unregistered because the interests are exempt from
registration under the 1933 Act, and the Company acknowledges that the Fund
intends to rely upon this representation and warranty for purposes of
calculating SEC registration fees payable with respect to such Shares of the
Designated Portfolios pursuant to Form 24F-2 or any similar form or SEC
registration fee calculation procedure that allows the Fund to exclude Shares
so
sold for purposes of calculating its SEC registration fee. The
Company will certify the amount of any Shares of the Designated Portfolios
purchased by the Company on behalf of any separate account offering interests
not subject to registration under the 1933 Act. The Company agrees to
cooperate with the Fund on no less than an annual basis to certify as to its
continuing compliance with this representation and warranty.
2.11. The
Company represents and warrants as follows:
(a) The
Company will maintain an anti-money laundering program ("AML program") that
will
comply with applicable and effective laws and regulations, including the
relevant provisions of the USA PATRIOT Act (Pub. L. No. 107-56 (2001)) and
the
regulations issued thereunder by the U.S. Treasury Department.
(b) The
Company has in place and will maintain a compliance program that will comply
with the laws and regulations administered by the Office of Foreign Assets
Control (“OFAC”).
ARTICLE
III. Prospectuses
and Proxy Statements; Voting
3.1. The
Underwriter shall provide the Company with as many copies of the Fund's current
prospectus (describing only the Designated Portfolios listed on Schedule B)
as
the Company may reasonably request. If requested by the Company in
lieu thereof, the Fund shall provide such documentation (including a final
copy
of the new prospectus on computer diskette or other electronic means at the
Fund's expense) and other assistance as is reasonably necessary in order for
the
Company once each year (or more frequently if the prospectus for a Designated
Portfolio is amended) to have the prospectus for the Contracts and the
prospectus for the Designated Portfolios printed together in one
document. Expenses with respect to the foregoing shall be borne as
provided under Article V.
3.2. The
Fund's prospectus shall state that the current Statement of Additional
Information ("SAI") for the Fund is available from the Company (or in the Fund’s
discretion, from the Fund), and the Fund shall provide a copy of such SAI to
any
owner of a Contract who requests such SAI and to the Company in such quantities
as the Company may reasonably request. Expenses with respect to the
foregoing shall be borne as provided under Article V.
3.3. The
Fund shall provide the Company with copies of its proxy material, reports to
shareholders, and other communications to shareholders of the Designated
Portfolios in such quantity as the Company shall reasonably require for
distributing to Contract owners. The Company shall distribute all
proxy material furnished by the Fund (provided that such material is received
by
the Company or its designated agent at least ten (10) Business Days prior to
the
date scheduled for mailing to Contract owners). Expenses with respect
to the foregoing shall be borne as provided under Article V.
3.4. For
so long as and to the extent that the Securities and Exchange Commission
continues to interpret the 1940 Act to require pass-through voting privileges
for Variable Products, the Company shall distribute all proxy material furnished
by the Fund (provided that such material is received by the Company or its
designated agent at least ten (10) Business Days prior to the date scheduled
for
mailing to Contract owners) and shall vote Fund shares in accordance with
instructions received from the Contract owners who have interests in such Fund
shares. The Company shall vote the Fund shares for which no
instructions have been received in the same proportion as Fund shares for which
said instructions have been received from the Contract owners provided that
such
proportional voting is not prohibited by a Contract owner’s qualified retirement
plan document, if applicable. The Company and its agents will in no
way recommend an action in connection with or oppose or interfere with the
solicitation of proxies in the Fund shares.
3.5. The
Fund reserves the right, upon prior written notice to the Company (given at
the
earliest practicable time), to take all actions, including but not limited
to,
the dissolution, termination, merger and sale of all assets of the Fund or
any
Designated Portfolio upon the sole authorization of the Board, to the extent
permitted by the laws of the Commonwealth of Massachusetts and the 1940
Act.
3.6. It
is understood and agreed that, except with respect to information regarding
the
Fund, the Underwriter, the Adviser or Designated Portfolios provided in writing
by any such party, none of the Fund, the Underwriter or the Adviser is
responsible for the content of the prospectus or statement of additional
information for the Contracts.
3.7. For
purposes of this Article, “Customer Information” means non-public personally
identifiable information as defined in the Xxxxx-Xxxxx-Xxxxxx Act and the rules
and regulations promulgated thereunder, and each party agrees not to use,
disclose or distribute to others any such information except as necessary to
perform the terms of this Agreement and each party agrees to comply with all
applicable provisions of the Xxxxx-Xxxxx-Xxxxxx Act.
For
purposes of this Article, “Confidential Information” means any data or
information regarding proprietary or confidential information concerning each
of
the parties. Confidential Information does not include information
that (a) was in the public domain prior to the date of this Agreement or
subsequently came into the public domain through no fault of the Receiving
Party
or by violation of this Agreement; (b) was lawfully received by the Receiving
Party from a third party free of any obligation of confidence of such third
party; (c) was already in the possession of the Receiving Party prior to receipt
thereof directly or indirectly from the Disclosing Party; (d) is required to
be
disclosed pursuant to applicable laws, regulatory or legal process, subpoena
or
court order; or, (e) is subsequently and independently developed by employees,
consultants or agents of the Receiving Party without reference to or use of
the
Confidential Information disclosed under this Agreement. Each of the
parties warrants to the other that it shall not disclose to any person any
Confidential Information which it may acquire in the performance of this
Agreement; nor shall it use such Confidential Information for any purposes
other
than to fulfill its contractual obligations under this Agreement and it will
maintain the other party’s Customer and Confidential Information with reasonable
care, which shall not be less than the degree of care it would use for its
own
such information.
In
the event Confidential Information includes Customer Information, the Customer
Information clause controls.
3.8. Both
Parties will maintain and enforce safety and physical security procedures with
respect to its access and maintenance of Confidential Information (in electronic
and paper format) that are in accordance with reasonable policies in these
regards, and provide reasonably appropriate safeguards against accidental or
unlawful destruction, loss, alteration or unauthorized disclosure or access
of
Confidential Information under this Agreement.
ARTICLE
IV. Sales
Material and Information
4.1. The
Company shall furnish, or shall cause to be furnished, to the Fund or its
designee, each piece of sales literature or other promotional material that
the
Company develops or uses and in which the Fund (or a Designated Portfolio
thereof) or the Adviser or the Underwriter is named, at least five (5) Business
Days before its use. No such material shall be used until approved by
the Fund or its designee, and the Fund or its designee will review such sales
literature or promotional material within five (5) Business Days after receipt
of such material. The Fund or its designee reserves the right to
reasonably object to the continued use of any such sales literature or other
promotional material in which the Fund (or a Designated Portfolio thereof)
or
the Adviser or the Underwriter is named, and no such material shall be used
if
the Fund or its designee so objects. Failure to provide comments or
affirmatively decline to provide comments within five (5) business days after
receipt of sales literature or promotional material shall constitute a waiver
of
the right to review such material before its use as provided above.
4.2. The
Company shall not give any information or make any representations or statements
on behalf of the Fund or concerning the Fund in connection with the sale of
the
Contracts other than the information or representations contained in the
registration statement or prospectus or SAI for the Fund Shares, as such
registration statement and prospectus or SAI 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 by the Fund or its designee
or
by the Underwriter, or such other information provided in writing, except with
the permission of the Fund or the Underwriter or the designee of
either.
4.3. The
Fund and the Underwriter, or their designee, shall furnish, or shall cause
to
be, furnished, to the Company, each piece of sales literature or other
promotional material that it develops or uses and in which the Company, and/or
its Account, is named, at least five (5) Business Days before its
use. No such material shall be used until approved by the Company,
and the Company will review such sales literature or promotional material within
five (5) Business Days after receipt of such material. The Company
reserves the right to reasonably object to the continued use of any such sales
literature or other promotional material in which the Company and/or its Account
is named, and no such material shall be used if the Company so
objects. Failure to provide comments or affirmatively decline to
provide comments within five (5) Business Days after receipt of sales literature
or promotional material shall constitute a waiver of the right to review such
material before its use as provided above.
4.4. The
Fund and the Underwriter shall not give any information or make any
representations on behalf of the Company or concerning the Company, the Account,
or the Contracts other than the information or representations contained in
a
registration statement, prospectus (which shall include the portions of an
offering memorandum that contain information regarding the Fund, the Underwriter
or the Advisor, if any, if the Contracts issued by the Company or interests
therein are not registered under the 1933 Act), or SAI for the Contracts, as
such registration statement, prospectus, or SAI may be amended or supplemented
from time to time, or in published reports for the 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, or such other information provided in writing, except with the
permission of the Company.
4.5. Upon
request, the Fund will provide to the Company at least one complete copy of
all
registration statements, prospectuses, SAIs, reports, proxy statements, sales
literature and other promotional materials, applications for exemptions,
requests for no-action letters, and all material amendments to any of the above,
that relate to the Fund or its Shares, contemporaneously with the filing of
such
document(s) with the SEC or other regulatory authorities.
4.6. Upon
request, the Company will provide to the Fund at least one complete copy of
all
registration statements, prospectuses (which shall include the portions of
an
offering memorandum that contain information regarding the Fund, the Underwriter
or the Advisor, if any, if the Contracts issued by the Company or interests
therein are not registered under the 1933 Act), SAIs, reports, solicitations
for
voting instructions, sales literature and other promotional materials,
applications for exemptions or substitutions, requests for no-action letters,
and all material amendments to any of the above, that relate to the Contracts
or
the Account, contemporaneously with the filing of such document(s) with the
SEC
or other regulatory authorities. The Company shall provide to the
Fund and the Underwriter any material complaints received from the Contract
owners pertaining to the Fund or the Designated Portfolio.
4.7. The
Fund will provide the Company with as much notice as is reasonably practicable
(but at least ten (10) Business Days prior to the date scheduled for mailing
to
contract owners) of any proxy solicitation for any Designated Portfolio, and
of
any material change in the Fund's registration statement, particularly any
change resulting in a change to the registration statement or prospectus for
any
Account. The Fund will work with the Company so as to enable the
Company to solicit proxies from Contract owners, or to make changes to its
prospectus or registration statement, in an orderly manner. The Fund
will make reasonable efforts to attempt to have changes affecting Contract
prospectuses become effective simultaneously with the annual updates for such
prospectuses.
4.8. For
purposes of this Article IV, the phrase "sales literature and other promotional
materials" includes, but is not limited to, any of the following that refer
to
the Fund or any affiliate of the Fund: advertisements (such as
material published, or designed for use in, a newspaper, magazine, or other
periodical, radio, television, internet website (or other electronic media),
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, 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, SAIs, shareholder reports,
proxy materials, and any other communications distributed or made generally
available with regard to the Fund.
ARTICLE
V. Fees
and Expenses
5.1. The
Fund, the Adviser and the Underwriter shall pay no fee or other compensation
to
the Company under this Agreement, although the parties hereto will bear certain
expenses in accordance with Schedule C and other provisions of this
Agreement.
5.2. All
expenses incident to performance by the Fund under this Agreement shall be
paid
by the Fund, except and as further provided in Schedule C. The cost
of setting the Fund’s prospectus in type, setting in type and printing the
Fund’s 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 relating to the Fund required by any federal or state
law, and all taxes on the issuance or transfer of the Fund's Shares shall be
borne by the parties hereto as set forth in Schedule C.
5.3. The
expenses of distributing the Fund's prospectus to new and existing owners of
Contracts issued by the Company and of distributing the Fund's proxy materials
and reports to Contract owners shall be borne by the parties hereto as set
forth
in Schedule C.
ARTICLE
VI. Diversification
and Qualification
6.1. The
Fund will invest the assets of each Designated Portfolio in such a manner as
to
ensure that the Contracts will be treated as variable contracts as defined
in
sections 817(d) and (g) of the Code and the regulations issued thereunder (or
any successor provisions). Without limiting the scope of the
foregoing, the Fund will, with respect to each Designated Portfolio, comply
with
Section 817(h) of the Code and Treasury Regulation §1.817-5, and any Treasury
interpretations thereof, relating to the diversification requirements for
variable annuity, endowment, or life insurance contracts, and any amendments
or
other modifications or successor provisions to such Section or Regulations,
if
required. In the event of a breach of this Article VI by the Fund, it
will take all reasonable steps (a) to promptly notify the Company of such breach
and (b) to adequately diversify the affected Designated Portfolio so as to
achieve compliance within the grace period afforded by Treasury Regulation
§1.817-5.
6.2. The
Fund represents that each Designated Portfolio is or will be qualified as a
Regulated Investment Company under Subchapter M of the Code, and that it will
make every effort to maintain such qualification (under Subchapter M or any
successor or similar provisions) and that it will notify the Company immediately
upon having a reasonable basis for believing that a Designated Portfolio has
ceased to so qualify or that it might not so qualify in the future.
6.3. The
Company represents that the Contracts are currently, and at the time of issuance
shall be, treated as life insurance 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 Fund and the Underwriter
immediately upon having a reasonable basis for believing the Contracts have
ceased to be so treated or that they might not be so treated in the
future. The Company agrees that any prospectus offering a contract
that is a "modified endowment contract" as that term is defined in Section
7702A
of the Code (or any successor or similar provision), shall identify such
contract as a modified endowment contract.
ARTICLE
VII. Potential
Conflicts
7.1. The
Board will monitor the Fund for the existence of any material irreconcilable
conflict among the interests of the Contract owners of all separate accounts
investing in the Fund. 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 insurance laws or
regulations; (c) a tax ruling or provision of the Internal Revenue Code or
the
regulations thereunder; (d) any other development relating to the tax treatment
of insurers, Contract or policy owners or beneficiaries of variable annuity
contracts or variable life insurance policies; (e) the manner in which the
investments of any Designated Portfolio are being managed; (f) a difference
in
voting instructions given by variable annuity contract holders, on the one
hand,
and variable life insurance policy owners, on the other hand, or by the contract
holders or policy owners of different Participating Insurance Companies; or
(g)
a decision by a Participating Insurance Company to disregard the voting
instructions of its Contract owners. The Board shall promptly inform
the Company by written notice if it determines that an irreconcilable material
conflict exists and the implications thereof.
7.2. The
Company and the Adviser 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 Mixed and Shared Funding 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. At least annually, and
more frequently if deemed appropriate by the Board, the Company shall submit
to
the Adviser, and the Adviser shall at least annually submit to the Board, such
reports, materials and data as the Board may reasonably request so that the
Board may fully carry out the obligations imposed upon it by the conditions
contained in the Mixed and Shared Funding Exemptive Order; and said reports,
materials and data shall be submitted more frequently if deemed appropriate
by
the Board. The responsibility to report such information and
conflicts to the Board will be carried out with a view only to the interests
of
the Contract owners.
7.3. If
it is determined by a majority of the Board, or a majority of its disinterested
members, that a material irreconcilable conflict exists, the Company and other
Participating Insurance Companies shall, at their expense and to the extent
reasonably practicable (as determined by a majority of the disinterested Board
members), 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 Fund or any Designated Portfolio and reinvesting such assets in a different
investment medium, including (but not limited to) another Designated Portfolio
of the Fund, 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 one
or
more Participating Insurance Companies) 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 investment company or separate
account.
7.4. 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 may be
required, at the Fund's election, to withdraw the affected Account's investment
in any Designated Portfolio 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 members of the
Board. The Company will bear the cost of any remedial action,
including such withdrawal and termination. 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 Fund shall continue to accept and implement orders by the
Company for the purchase (and redemption) of shares of such Designated
Portfolio.
7.5. 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 Fund 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 members of the Board. Until the
end of the foregoing six month period, the Fund shall continue to accept and
implement orders by the Company for the purchase (and redemption) of shares
of
such Designated Portfolios.
7.6. For
purposes of Sections 7.3 through 7.6 of this Agreement, a majority of the
disinterested members of the Board shall determine whether any proposed action
adequately remedies any irreconcilable material conflict, but in no event will
the Fund be required to establish a new funding medium for the
Contracts. The Company shall not be required by Section 7.3 to
establish a new funding medium for the Contract 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 an Account's
investment in any Designated Portfolio 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 members of the Board.
If
and to
the extent the Mixed and Shared Funding Exemption Order or any amendment thereto
contains terms and conditions different from Sections 3.4, 3.6, 7.1, 7.2, 7.3,
7.4, and 7.5 of this Agreement, then the Fund and/or the Participating Insurance
Companies, as appropriate, shall take such steps as may be necessary to comply
with the Mixed and Shared Funding Exemptive Order, and Sections 3.4, 3.6, 7.1,
7.2, 7.3, 7.4 and 7.5 of this Agreement shall continue in effect only to the
extent that terms and conditions substantially identical to such Sections are
contained in the Mixed and Shared Funding Exemptive Order or any amendment
thereto. If and to the extent that Rule 6e-2 and Rule 6e-3(T) are
amended, or Rule 6e-3 or any similar rule 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 Mixed and Shared
Funding Exemptive Order) on terms and conditions materially different from
those
contained in the Mixed and Shared Funding Exemptive Order, then (a) the Fund
and/or the Participating Insurance Companies, as appropriate, shall take such
steps as may be necessary to comply with Rules 6e-2 and 6e-3(T), as amended,
and
Rule 6e-3 or any similar rule, as adopted, to the extent such rules are
applicable; and (b) Sections 3.4, 3.6, 7.1., 7.2, 7.3, 7.4, and 7.5 of this
Agreement shall continue in effect only to the extent that terms and conditions
substantially identical to such Sections are contained in such Rule(s) as so
amended or adopted.
ARTICLE
VIII. Indemnification
8.1. Indemnification
By the Company
(a) The
Company agrees to indemnify and hold harmless the Fund, the Adviser and the
Underwriter and each of its trustees, directors, trustees, officers, employees,
agents and each person, if any, who controls the Fund, the Adviser or
Underwriter within the meaning of Section 15 of the 1933 Act or who is under
common control with the Underwriter (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 or 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 Shares of the Designated Portfolios or the Contracts;
and:
(i) arise
out
of or are based upon any untrue statement or alleged untrue statements of any
material fact contained in the registration statement, prospectus (which shall
include an offering memorandum, if any), or SAI for the Contracts or contained
in the Contracts or sales literature for the Contracts (or any amendment or
supplement to any of the foregoing), or arise out of or are based upon the
omission or the alleged omission to state therein a material fact required
to be
stated therein or necessary to make the statements therein not misleading,
provided that this agreement to indemnify shall not apply as to any Indemnified
Party if such statement or omission or such alleged statement or omission was
made in reliance upon and in conformity with information furnished in writing
to
the Company by or on behalf of the Fund for use in the registration statement,
prospectus or SAI 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 Fund Shares; or
(ii) arise
out
of or are based upon any untrue statement or alleged untrue statements of any
material fact contained in the registration statement, prospectus (which shall
include an offering memorandum, if any), or SAI covering insurance products
sold
by the Company or any insurance company which is an affiliate thereof, or any
amendments or supplements thereto, or arise out of or are based upon the
omission or the alleged omission to state therein a material fact required
to be
stated therein or necessary to make the statements therein not misleading,
provided that this agreement to indemnify shall not apply as to any Indemnified
Party if such statement or omission or such alleged statement or omission was
made in reliance upon and in conformity with information furnished in writing
to
the Company by or on behalf of the Fund for use in the registration statement,
prospectus or SAI covering insurance products sold by the Company or any
insurance company which is an affiliate thereof, or any amendments or
supplements thereto; or
(iii) arise
out
of or as a result of statements or representations (other than statements or
representations contained in the registration statement, prospectus, SAI, or
sales literature of the Fund not supplied by the Company or persons under its
control) or wrongful conduct of the Company or its agents or persons under
the
Company's authorization or control, or any affiliate thereof, with respect
to
the sale or distribution of the Contracts or Fund Shares; or
(iv) arise
out
of any untrue statement or alleged untrue statement of a material fact contained
in a registration statement, prospectus, SAI, or sales literature of the Fund
or
any amendment thereof or supplement thereto or the omission or alleged omission
to state therein a material fact required to be stated therein or necessary
to
make the statements therein not misleading if such a statement or omission
was
made in reliance upon information furnished to the Fund by or on behalf of
the
Company; or
(v) arise
out
of or are based upon any untrue statements or alleged untrue statements of
any
material fact contained in any registration statement, prospectus, statement
of
additional information or sales literature for any fund not affiliated with
the
Fund (“Unaffiliated Fund”), or arise out of or are based upon 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, or otherwise pertain
to or arise in connection with the availability of any Unaffiliated Fund as
an
underlying funding vehicle in respect of the Contracts, or arise out of or
are
based upon any act or omission on the part of the investment adviser or
underwriter of an Unaffiliated Fund; or
(vi) arise
as
a result of any material failure by the Company 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
qualification requirements specified in Article VI of this Agreement);
or
(vii) 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), 8.1(c) and 8.1(d)
hereof.
(b) The
Company shall not be liable under this indemnification provision with respect
to
any losses, claims, damages, liabilities, fines 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 its obligations or duties under this
Agreement.
(c) The
Company shall not be liable under this indemnification provision for 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 that it may have to the Indemnified Party against whom such action
is
brought notwithstanding this indemnification provision, except to the extent
that the Company has been materially prejudiced by such failure to give
notice. In case any such action is brought against an Indemnified
Party, 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
and to settle the claim at its own expense; provided, however, that no such
settlement shall, without the Indemnified Parties’ written consent, include any
factual stipulation referring to the Indemnified Parties or their
conduct. 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, but, in case the Company
does not elect to assume the defense of any such suit, the Company will
reimburse the Fund, such officers, trustees and directors or controlling person
or persons, defendant or defendants in such suit, for the reasonable fees and
expenses of any counsel retained by them.
(d) The
Indemnified Parties will promptly notify the Company of the commencement of
any
litigation or proceedings against them in connection with the issuance or sale
of the Fund Shares or the Contracts or the operation of the Fund.
8.2. Indemnification
by the Underwriter
(a) The
Underwriter agrees to indemnify and hold harmless the Company and each of its
directors, officers, employees, agents and each person, if any, who controls
the
Company within the meaning of Section 15 of the 1933 Act (collectively, the
"Indemnified Parties" for purposes of this Section 8.2) against any and all
losses, claims, damages, liabilities (including amounts paid in settlement
with
the written consent of the Underwriter) or litigation (including 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 expenses (or actions in respect thereof) or settlements
are related to the sale or acquisition of Shares of the Designated Portfolios
or
the Contracts; and:
(i) arise
out
of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the registration statement or prospectus or SAI
or
sales literature of the Fund (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 Underwriter or Fund
by
or on behalf of the Company for use in the registration statement, prospectus
or
SAI for the Fund or in sales literature (or any amendment or supplement) or
otherwise for use in connection with the sale of the Contracts or Fund Shares;
or
(ii) arise
out
of or as a result of any untrue statements or misrepresentations (other than
misstatements or misrepresentations contained in the registration statement,
prospectus, SAI or sales literature for the Contracts not supplied by the
Underwriter or persons under its control) or wrongful conduct of the Fund or
Underwriter or persons under their control, with respect to the sale or
distribution of the Contracts or Fund Shares; or
(iii) arise
out
of any untrue statement or alleged untrue statement of a material fact contained
in a registration statement, prospectus, SAI or sales literature covering the
Contracts, or any amendment thereof or supplement thereto, or the omission
or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statement or statements therein not misleading, if
such
statement or omission was made in reliance upon information furnished to the
Company by or on behalf of the Fund or the Underwriter; or
(iv) arise
as
a result of any failure by the Fund or the Underwriter to provide the services
and furnish the materials under the terms of this Agreement (including a failure
of the Fund, whether unintentional or in good faith or otherwise, to comply
with
the diversification and other qualification 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 Underwriter in this Agreement or arise out of or result from any other
material breach of this Agreement by the Underwriter;
as
limited by and in accordance with the provisions of Sections 8.2(b), 8.2(c)
and
8.2(d) hereof.
(b) The
Underwriter shall not be liable under this indemnification provision with
respect to any losses, claims, damages, liabilities, fines 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 or 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 Fund, the Adviser, the Underwriter or the Account, whichever
is
applicable.
(c) The
Underwriter shall not be liable under this indemnification provision for any
claim made against an Indemnified Party unless such Indemnified Party shall
have
notified the Underwriter 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 Underwriter of any such claim shall not relieve the Underwriter
from any liability which it may have to the Indemnified Party against whom
such
action is brought notwithstanding this indemnification provision, except to
the
extent that the Underwriter has been prejudiced by such failure to give
notice. In case any such action is brought against the Indemnified
Party, the Underwriter will be entitled to participate, at its own expense,
in
the defense thereof. The Underwriter also shall be entitled to assume
the defense thereof, with counsel satisfactory to the party named in the action
and to settle the claim at its own expense; provided, however, that no such
settlement shall, without the Indemnified Parties’ written consent, include any
factual stipulation to the Indemnified Parties or their
conduct. After notice from the Underwriter to such party of the
Underwriter'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 Underwriter 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.
(d) The
Company agrees promptly to notify the Underwriter of the commencement of any
litigation or proceedings against it or any of its officers or directors in
connection with the issuance or sale of the Contracts or the operation of the
Account.
8.3. Indemnification
By the Fund
(a) The
Fund
agrees to indemnify and hold harmless the Company and each of its directors,
officers, employees, agents and each person, if any, who controls the Company
within the meaning of Section 15 of the 1933 Act (collectively, the "Indemnified
Parties" for purposes of this Section 8.3) against any and all losses, claims,
expenses, damages, liabilities (including amounts paid in settlement with the
written consent of the Fund) or litigation (including legal and other expenses)
to which the Indemnified Parties may be required to pay or may become subject
under any statute or regulation, at common law or otherwise, insofar as such
losses, claims, expenses, damages, liabilities or expenses (or actions in
respect thereof) or settlements, are related to the operations of the Fund
and:
(i) arise
as
a result of any failure by the Fund 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
and other qualification requirements specified in Article VI of this Agreement);
or
(ii) arise
out
of or result from any material breach of any representation and/or warranty
made
by the Fund in this Agreement or arise out of or result from any other material
breach of this Agreement by the Fund;
as
limited by and in accordance with the provisions of Sections 8.3(b), 8.3(c)
and
8.3(d) hereof.
(b) The
Fund
shall not be liable under this indemnification provision with respect to any
losses, claims, damages, liabilities, fines 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 Fund, the Adviser, the Underwriter or the Account, whichever is
applicable.
(c) The
Fund
shall not be liable under this indemnification provision for any claim made
against an Indemnified Party unless such Indemnified Party shall have notified
the Fund 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 Fund of any such claim shall not relieve the Fund from any liability which
it may have to the Indemnified Party against whom such action is brought
notwithstanding this indemnification provision, except to the extent the Fund
has been prejudiced by such failure to give notice. In case any such
action is brought against the Indemnified Parties, the Fund will be entitled
to
participate, at its own expense, in the defense thereof. The Fund
also shall be entitled to assume the defense thereof, with counsel satisfactory
to the party named in the action and to settle the claim at its own expense;
provided, however, that no such settlement shall, without the Indemnified
Parties’ written consent include any factual stipulation referring to the
Indemnified Parties or their conduct. After notice from the Fund to
such party of the Fund'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 Fund 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.
(d) The
Company, the Adviser and the Underwriter agree promptly to notify the Fund
of
the commencement of any litigation or proceeding against it or any of its
respective officers or trustees in connection with the Agreement, the issuance
or sale of the Contracts, the operation of any Account, or the sale or
acquisition of Shares of the Fund.
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 Commonwealth of Massachusetts.
9.2. This
Agreement shall be subject to the applicable 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, but not limited to, any Mixed and Shared Funding Exemptive Order)
and the terms hereof shall be interpreted and construed in accordance
therewith. If, in the future, the Mixed and Shared Funding Exemptive
Order should no longer be necessary under applicable law, then Article VII
shall
no longer apply.
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 with respect to some or all Designated Portfolios,
by three (3) months advance written notice delivered to the other parties;
or
(b) termination
by the Company by written notice to the Fund, the Adviser and the Underwriter
based upon the Company's reasonable and good faith determination that Shares
of
any Designated Portfolio are not reasonably available to meet the requirements
of the Contracts; or
(c) termination
by the Company by written notice to the Fund, the Adviser and the Underwriter
in
the event any of the Designated Portfolio's Shares are not registered, issued
or
sold in accordance with applicable state and/or federal securities laws 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 Fund, the Adviser or Underwriter in the event that formal administrative
proceedings are instituted against the Company or any affiliate by the NASD,
the
SEC, the Insurance Commissioner or like official of any state or any other
regulatory body regarding the Company's duties under this Agreement or related
to the sale of the Contracts, the operation of any Account, or the purchase
of
the Fund's Shares; provided, however, that the Fund, the Adviser or Underwriter
determines in its sole judgment exercised in good faith, that any such
administrative proceedings will have a material adverse effect upon the ability
of the Company to perform its obligations under this Agreement; or
(e) termination
by the Company in the event that formal administrative proceedings are
instituted against the Fund, the Adviser or Underwriter by the NASD, the SEC,
or
any state securities or insurance department or any other regulatory body;
provided, however, that the Company determines in its sole judgment exercised
in
good faith, that any such administrative proceedings will have a material
adverse effect upon the ability of the Fund or Underwriter to perform its
obligations under this Agreement; or
(f) termination
by the Company by written notice to the Fund, the Adviser and the Underwriter
with respect to any Designated Portfolio in the event that such Portfolio ceases
to qualify as a Regulated Investment Company under Subchapter M or fails to
comply with the Section 817(h) diversification requirements specified in Article
VI hereof, or if the Company reasonably believes that such Designated Portfolio
may fail to so qualify or comply; or
(g) termination
by the Fund, the Adviser or Underwriter by written notice to the Company in
the
event that the Contracts fail to meet the qualifications specified in Article
VI
hereof; or
(h) termination
by any of the Fund, the Adviser or the Underwriter by written notice to the
Company, if any of the Fund, the Adviser or the Underwriter respectively, shall
determine, in their sole judgment exercised in good faith, that the Company
has
suffered a material adverse change in its business, operations, financial
condition, insurance company rating or prospects since the date of this
Agreement or is the subject of material adverse publicity; or
(i) termination
by the Company by written notice to the Fund, the Adviser and the Underwriter,
if the Company shall determine, in its sole judgment exercised in good faith,
that the Fund, the Adviser or the Underwriter has suffered a material adverse
change in its business, operations, financial condition or prospects since
the
date of this Agreement or is the subject of material adverse publicity, and
that
material adverse change or publicity will have a material effect on the Fund’s
or the Underwriter’s ability to perform its obligation under this Agreement;
or
(j) termination
by the Company upon any substitution of the Shares of another investment company
or series thereof for Shares of a Designated Portfolio of the Fund in accordance
with the terms of the Contracts, provided that the Company has given at least
45
days prior written notice to the Fund and Underwriter of the date of
substitution; or
(k) termination
by any party in the event that the Fund's Board of Trustees determines that
a
material irreconcilable conflict exists as provided in Article VII;
or
(l) at
the
option of the Company, as one party, or the Fund, the Adviser and the
Underwriter, as one party, upon the other party’s material breach of any
provision of this Agreement upon 30 days’ written notice and the opportunity to
cure within such notice period; or
(m) at
the
option of the Fund or the Adviser in the event the Contracts are not treated
as
annuity contracts under applicable provisions of the Code.
10.2. Notwithstanding
any termination of this Agreement, the Fund and the Underwriter shall, at the
option of the Company, continue, for a one year period from the date of
termination and from year to year thereafter if deemed appropriate by the Fund
and the Adviser, to make available additional Shares of a Designated Portfolio
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"), unless the Underwriter elects to compel
a
substitution of other securities for the Shares of the Designated
Portfolios. Specifically, the owners of the Existing Contracts may be
permitted to reallocate investments in the Designated Portfolios, redeem
investments in the Designated Portfolios and/or invest in the Designated
Portfolios upon the making of additional purchase payments under the Existing
Contracts (subject to any such election by the Underwriter). 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. The parties further agree that this
Section 10.2 shall not apply to any terminations under Section 10.1(d),(g)
or
(m) of this Agreement.
10.3. The
Company shall not redeem Fund Shares attributable to the
Contracts except (i) as necessary to implement Contract owner
initiated or approved transactions, (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"), (iii) as permitted
by an order of the SEC pursuant to Section 26(c) of the 1940 Act, but only
if a
substitution of other securities for the Shares of the Designated Portfolios
is
consistent with the terms of the Contracts, or (iv) as permitted under the
terms
of the Contract. Upon request, the Company will promptly furnish to
the Fund and the Underwriter reasonable assurance that any redemption pursuant
to clause (ii) above is a Legally Required Redemption. Furthermore,
except in cases where permitted under the terms of the Contacts, the Company
shall not prevent Contract owners from allocating payments to a Designated
Portfolio that was otherwise available under the Contracts without first giving
the Fund or the Underwriter 45 days notice of its intention to do
so.
10.4. Notwithstanding
any termination of this Agreement, each party's obligation under Article VIII
to
indemnify the other parties shall survive.
ARTICLE
XI. Notices
Any
notice shall be sufficiently given when sent by registered, certified, or
overnight mail to the other party at the address of such party set forth below
or at such other address as such party may from time to time specify in writing
to the other party.
If
to the
Fund:
Xxxxxxx
Variable Series I
Xxxxxxx
Variable Series II
Two
International Place
Boston,
MA 02110-4103
Attn.: Secretary
If
to the
Company:
Nationwide
Life Insurance Company
Nationwide
Life and Annuity Insurance Company
Nationwide
Life Insurance Company of America
Nationwide
Life and Annuity Insurance Company of America
Xxx
Xxxxxxxxxx Xxxxx, 0-00-X0
Xxxxxxxx,
Xxxx 00000
Attention: Securities
Officer
Fax
Number: 000-000-0000
With
a
Copy to:
Nationwide
Financial
Xxx
Xxxxxxxxxx Xxxxx, 0-00-00
Xxxxxxxx,
Xxxx 00000
Attention: Vice
President – Investment Advisory Services
If
to
Underwriter:
Xxxxxxx
Distributors, Inc.
Xxx
Xxxxxxxxxxxxx Xxxxx
Xxxxxx,
XX 00000-0000
Attn.: Secretary
If
to the
Adviser:
Deutsche
Investment Management Americas Inc.
Xxx
Xxxxxxxxxxxxx Xxxxx
Xxxxxx,
XX 00000-0000
Attn.:
Secretary
ARTICLE
XII. Disruptive
Trading Practices
12.1. The
Company represents that the Variable Insurance Products are designed for
long-term investors and the Company has policies and procedures in place to
detect and deter short-term trading or other abusive market timing practices,
which include but are not limited to, monitoring contract owner activity,
imposing transfer restrictions and enforcing redemption fees imposed by funds,
if applicable.
The
Company represents that all purchase orders (including exchanges) accepted
on
behalf of the Fund(s) are subject to the terms of the then current prospectus
and Statement of Additional Information of each Fund, including policies
regarding market timing and excessive trading. The Company shall use
its best efforts, and shall reasonably cooperate with the Fund(s), to enforce
stated prospectus and Statement of Additional Information policies regarding
transactions in the Fund(s), particularly those related to market
timing.
The
Company acknowledges that the Fund(s) reserves the right to reject any purchase
order(s) (including exchanges) that the Fund(s) determines may be disruptive
or
harmful to all shareholders. The Fund acknowledges that rejection of
a purchase order(s) (including exchanges) poses potentially significant
consequences to the Company and Variable Insurance Product contract
holders. Therefore, the Fund(s) represents that purchase order(s)
(including exchanges) normally will be rejected only after attempts to prevent
the activity through the Company have failed.
The
Fund
represents that the risks to shareholders of the Fund resulting from disruptive
trading in the Fund and any policies adopted to deal with such risks, are
disclosed in accordance with applicable law.
ARTICLE
XIII. Miscellaneous
13.1. The
Company agrees that the Fund, the Underwriter and the Adviser shall bear no
responsibility for any act of any unaffiliated fund or the investment adviser
or
underwriter thereof.
13.2. The
Fund’s name is the designation of the Board for the time being under a
Declaration of Trust, as amended, and all persons dealing with the Fund must
look solely to the property of the Fund, and in the case of a series company,
the respective Designated Portfolios listed on Schedule B hereto as though
each
such Designated Portfolio had separately contracted with the Company and the
Underwriter for the enforcement of any claims against the Fund. The
parties agree that neither the Board, officers, agents or shareholders of the
Fund assume any personal liability or responsibility for obligations entered
into by or on behalf of the Fund. No Portfolio shall be liable for
any obligations properly attributable to any other Portfolio.
13.3. Subject
to the requirements of legal process and regulatory authority, each party hereto
shall treat as confidential the names and addresses of the owners of the
Contracts and all information reasonably identified as confidential in writing
by any other party hereto and, except as permitted by this Agreement, shall
not
disclose, disseminate or utilize such names and addresses and other confidential
information without the express written consent of the affected party until
such
time as such information has come into the public domain.
13.4. 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.
13.5. This
Agreement may be executed simultaneously in two or more counterparts, each
of
which taken together shall constitute one and the same instrument.
13.6. This
Agreement incorporates the entire understanding and agreement among the parties
hereto, and supersedes any and all prior understandings and agreements between
the parties hereto with respect to the subject matter hereof.
13.7. 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.
13.8. 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 State 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 variable
annuity operations of the Company are being conducted in a manner consistent
with the State variable annuity laws and regulations and any other applicable
law or regulations.
13.9. 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.
13.10. 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.
13.11. The
Company shall furnish, or shall cause to be furnished, to the Fund or its
designee, upon request, 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) filed
with any state or federal regulatory body or otherwise made available to the
public, as soon as practicable and in any event within 90 days after the end
of
each fiscal year; and
(b) any
registration statement (without exhibits) and financial reports of the Company
filed with the Securities and Exchange Commission or any state insurance
regulatory, as soon as practicable after the filing thereof.
13.12. All
persons are expressly put on notice of the Fund’s Agreement and Declaration of
Trust and all amendments thereto, all of which are on file with the Secretary
of
the Commonwealth of Massachusetts, and the limitation of shareholder and trustee
liability contained therein. This Agreement has been executed by and
on behalf of the Fund by its representatives as such representatives and not
individually, and the obligations of the Fund with respect to a Designated
Portfolio hereunder are not binding upon any of the trustees, officers or
shareholders of the Fund individually, but are binding upon only the assets
and
property of such Designated Portfolio. All parties dealing with the
Fund with respect to a Designated Portfolio shall look solely to the assets
of
such Designated Portfolio for the enforcement of any claims against the Fund
hereunder.
13.13. The
Company is expressly put on notice that prospectus disclosure regarding the
potential risks of mixed and shared funding may be appropriate.
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 first above
written.
FUND: XXXXXXX
VARIABLE SERIES I
By:
Title:
[Vice President & Secretary]
XXXXXXX
VARIABLE SERIES II
By:
Title:
[Vice President]
UNDERWRITER: XXXXXXX
DISTRIBUTORS, INC.
By:
Title:
[Xxxxxxxx X. Xxxx]
[President]
[Xxxxxxx
Distributors, Inc.]
|
ADVISER:
|
DEUTSCHE
INVESTMENT MANAGEMENT AMERICAS INC.
|
|
|
By:
__________________________________
|
Title:
[Xxxxxxxx X. Xxxx]
|
COMPANY:
|
NATIONWIDE
LIFE INSURANCE COMPANY
|
By:
Title:
[Vice President]
|
NATIONWIDE
LIFE AND ANNUITY
|
|
|
INSURANCE
COMPANY
|
By:
Title:
[Vice President]
|
NATIONWIDE
LIFE INSURANCE COMPANY OF AMERICA
|
By:
Title:
[Asst. Treasurer]
|
NATIONWIDE
LIFE AND ANNUITY COMPANY OF AMERICA
|
By:
Title:
[Asst. Treasurer]
EXHIBIT
A
Subsidiary
Life Insurance Companies
Nationwide
Life Insurance Company, an Ohio Corporation
Nationwide
Life and Annuity Insurance Company, an Ohio Corporation
Nationwide
Life Insurance Company of America, a Pennsylvania corporation
Nationwide
Life and Annuity Company of America, a Delaware corporation
SCHEDULE
A
All
current and future separate accounts available for sale through the Variable
Products, including but not limited to any separate accounts listed
below.
SCHEDULE
B
DESIGNATED
PORTFOLIOS
AND
CLASSES THEREOF
X. Xxxxxxx
Variable Series I
Designated
Portfolio Class
1. Capital
Growth
Portfolio B
2. Health
Sciences
Portfolio B
X. Xxxxxxx
Variable Series II
Designated
Portfolio Class
1. Xxxxxxx
Contrarian Value
Portfolio B
2. Xxxxxxx
Global Blue Chip
Portfolio B
3. Xxxxxxx
High Income
Portfolio B
4. Xxxxxxx
International Select Equity
Portfolio B
5. Xxxxxxx
Fixed Income
Portfolio B
6. Xxxxxxx
Small Cap Growth
Portfolio
B
7. Xxxxxxx
Technology Growth
Portfolio
B
8. Xxxxxxx
Total Return
Portfolio
B
9. SVS
Dreman Financial Services
Portfolio B
10. SVS
Dreman High Return Equity
Portfolio
B
11. SVS
Dreman Small Cap Value
Portfolio
B
SCHEDULE
C
EXPENSES
|
ITEM
|
FUNCTION
|
PARTY
RESPONSIBLE FOR EXPENSE
|
|
FUND
PROSPECTUS
|
||
|
Update
|
Typesetting
|
Fund
|
|
New
Sales:
|
Printing
Distribution
|
Adviser
Company
|
|
Existing
Owners:
|
Printing
Distribution
|
Fund
Fund
|
|
STATEMENTS
OF ADDITIONAL INFORMATION
|
Same
as Prospectus
|
|
|
PROXY
MATERIALS OF THE FUND
|
Typesetting
Printing
Distribution
|
Fund
Fund
Fund
|
|
ANNUAL
REPORTS AND OTHER COMMUNICATIONS WITH SHAREHOLDERS OF THE
FUND
|
||
|
All
|
Typesetting
|
Fund
|
|
Marketing1
|
Printing
Distribution
|
Company
Company
|
|
Existing
Owners:
|
Printing
Distribution
|
Fund
Fund
|
|
OPERATIONS
OF FUND
|
All
operations and related expenses, including the cost of registration
and
qualification of the Fund's shares, preparation and filing of the
Fund's
prospectus and registration statement, proxy materials and reports,
the
preparation of all statements and notices required by any federal
or state
law and all taxes on the issuance of the Fund's shares, and all costs
of
management of the business affairs of the Fund.
|
Fund
|
1Solely
as it relates
to the contracts listed on Schedule A, as it is attached to the same
Agreement as this Schedule C.
W:/PJC/AGREEMENTS/PARTICIPATION
AGREEMENT(NATIONWIDE).011204
