Exhibit 99B9.(c)(i)
Participation Agreement
THIS AGREEMENT is made as of May 1, 1998, by and among Annuity Investors Life
Insurance Company ("Company"), on its own behalf and on behalf of each separate
account of the Company set forth on Exhibit A-1 to this Agreement as it may be
amended from time to time (collectively, "Account"), The Xxxxxxx Plan Variable
Series ("Fund") on its own behalf and on behalf of the portfolios listed on
Exhibit A to this Agreement as it may be amended from time to time
("Portfolios"), and Xxxxxxx Partners, Ltd. (the "Advisor" and "Distributor"),
who serves as both advisor and distributor for The Xxxxxxx Plan Variable Series
(each, a "Party" and collectively, the "Parties").
WHEREAS, to the extent permitted by applicable insurance laws and regulations,
the Company intends to purchase shares of the Fund, on behalf of the Account to
fund the variable annuity contracts that use the Fund as an underlying
investment medium (the "Contracts");
WHEREAS, the Company, Adviser and Distributor desires to facilitate the purchase
and redemption of shares of the Fund by the Company for the Account through one
account in the Fund (an "Omnibus Account") to be maintained of record by the
Company, subject to the terms and conditions of this Agreement;
WHEREAS, the Company desires to provide administrative services and functions
(the "Services") for purchasers of Contracts ("Owners") on the terms and
conditions set forth herein;
WHEREAS, the Company has registered or will register certain variable life
insurance policies and/or variable annuity contracts under the Securities Act of
1933, as amended (the "1933 Act");
WHEREAS, the Company has registered or will register the Account as a unit
investment trust under the Investment Company Act of 1940, as amended (the "1940
Act"); and
WHEREAS, the Company desires to utilize the Fund and/or one or more Portfolios
as an investment vehicle of the Account.
NOW, THEREFORE, in consideration of the mutual promises set forth herein, the
Company, Fund, Adviser and Distributor agree as follows:
1. PERFORMANCE OF SERVICES. Company agrees to perform the administrative
functions and services specified in Exhibit B attached hereto with respect
to the shares of the Fund included in the Account.
2. THE OMNIBUS ACCOUNTS.
2:1 The Omnibus Account will be opened based upon the information contained
in Exhibit C hereto: In connection with the Omnibus Account, Company
represents and warrants that it is authorized to act on behalf of each
Owner effecting transactions in the Omnibus Account and that the
information specified on Exhibit C hereto is correct.
2:2 The Fund shall designate the Omnibus Account with an account number.
This account number will be the means of identification when the
Parties are transacting in the Omnibus Account. The assets in the
Account are segregated from the Company's own assets. The Adviser
agrees to cause the Omnibus Account to be kept open on the Fund's
books, as applicable, regardless of a lack of activity or small
position size except to the extent the Company takes specific action to
close an Omnibus Account or to the extent the Fund's prospectus
reserves the right to close accounts which are inactive or of a small
position size. In the latter two cases, the Adviser will give prior
notice to the Company before closing an Omnibus Account.
2.3 The Company agrees to provide Adviser such information as Adviser or
Distributor may reasonably request concerning Owners as may be
necessary or advisable to enable Company
and Distributor to comply with applicable laws, including state "Blue
Sky" laws relating to the sales of shares of the Fund to the Accounts.
3. FUND SHARES TRANSACTIONS.
3:1 IN GENERAL. Shares of the Fund shall be sold on behalf of the Fund by
Distributor and purchased by Company for the Account and' indirectly
for the appropriate subaccount thereof at the net asset value next
computed after receipt by Distributor of each order of the Company or
its designee, in accordance with the provisions of this Agreement, the
then current prospectus of the Fund, and the Contracts. The Board of
Directors of the Fund ("Directors") may refuse to sell shares of the
applicable Fund to any person, or suspend or terminate the offering of
shares of the Fund if such action is required by law or by regulatory
authorities having jurisdiction. Company agrees to purchase and redeem
the shares of the Fund in accordance with the provisions of this
Agreement, of the Contract and of the then current prospectus for the
Contract and Fund. Except as necessary to implement transactions as
specified in the Contracts or as initiated by the Owners, or as
otherwise permitted by state or federal laws or regulations, Company
shall not redeem shares of Fund attributable to the contract.
3.2 PURCHASE AND REDEMPTION ORDERS. On each day that the Fund is open for
business (a "Business Day"), the Company shall aggregate and calculate
the net purchase or redemption order resulting from investment in and
redemptions under the Contracts for shares of the Fund that it received
prior to the close of trading on the New York Stock Exchange (the
"NYSE") (i.e. 4:00 p.m., Eastern time, unless the NYSE closes at an
earlier time in which case such earlier time shall apply) and
communicate to Distributor, by telephone or facsimile (or by such other
means as the Parties hereto may agree to in writing), the net aggregate
purchase or redemption order (if any) for the Omnibus Account for such
Business Day (such Business Day is sometimes referred to herein as the
"Trade Date"). The Company will communicate such orders to Distributor
prior to 9:00 a.m., Eastern Time, on the next Business Day following
the Trade Date. All trades communicated to Distributor by the foregoing
deadline shall be treated by Distributor as if they were received by
Distributor prior to the close of trading on the Trade Date.
3.3 SETTLEMENT OF TRANSACTIONS.
(a) PURCHASES. Company will wire, or arrange for the wire of the
purchase price of each purchase order to the custodian for the
Fund in accordance with written instructions provided by
Distributor to the Company so that either (1) such funds are
received by the custodian for the Fund prior to 1:00 p.m.,
Eastern time, on the next Business Day following the Trade Date,
or (2) Distributor is provided with a Federal Funds wire system
reference number prior to such 1:00 p.m. deadline evidencing the
entry of the wire transfer of the purchase price to the
applicable custodian into the Federal Funds wire system prior to
such time. Company agrees that if it fails to provide funds to
the Fund's custodian by the close of business on the next
Business Day following the Trade Date, then, at the option of
Distributor, (i) the transaction may be canceled, or (ii) the
transaction may be processed at the next-determined net asset
value for the applicable Fund after purchase order funds are
received. In such event, the Company shall indemnity and hold
harmless Distributor, Adviser, and the Fund from any liabilities,
costs and damages either may suffer as a result of such failure.
(b) REDEMPTIONS. The Adviser will use its best efforts to cause to be
transmitted to such custodial account as Company shall direct in
writing, the proceeds of all redemption orders placed by Company
by 9:00 a.m., Eastern time, on the Business Day immediately
following the Trade Date, by wire transfer on that Business Day.
Should Company need to extend the settlement on a trade, it will
contact Adviser to discuss the extension. For purposes of
determining the length of settlement, Adviser agrees to treat the
Account no less favorably than other shareholders of the Fund.
Each wire transfer of redemption proceeds shall indicate, on the
Federal Funds wire
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system, the amount thereof attributable to the Fund; provided,
however, that if the number of entries would be too great to be
transmitted through the Federal Funds wire system, the Adviser
shall, on the day the wire is sent, fax such entries to Company
or, if possible, send via direct or indirect systems access until
otherwise directed by the Company in writing.
(c) AUTHORIZED PERSONS. The following persons are each duly
authorized to act on behalf of the Company and the Account under
this Agreement. The Fund, Adviser and Distributor are entitled to
conclusively rely on verbal or written instructions that Adviser
or Distributor reasonably believes were originated by any one of
said persons. The Company shall inform Adviser and Distributor of
additions to or subtractions from this list of authorized persons
pursuant to Section 13, hereof:
Xxxx Xxxxxxx Xxxxx Xxxxx
Xxxx Xxxxxxx Xxxxxxx Xxxxxx
Xxxxx Xxxxxxxxx Xxxx Xxxxxxx
Xxxxxx Xxxxxxx
3.4 BOOK ENTRY ONLY. Issuance and transfer of shares of the Fund will be by
book entry only. Stock certificates will not be issued to the Company
or the Account. Shares of the Fund ordered from Distributor will he
recorded in the appropriate book entry title for the Account.
3.5 DISTRIBUTION INFORMATION. The Adviser or Distributor shall provide the
Company with all distribution announcement information as soon as it is
announced by the Fund. The distribution information shall set forth, as
applicable, ex-date, record date, payable date, distribution rate per
share, record date share balances, cash and reinvested payment amounts
and all other information reasonably requested by the Company. Where
possible, the Adviser or Distributor shall provide the Company with
direct or indirect systems access to the Adviser's systems for
obtaining such distribution information.
3.6 REINVESTMENT. All dividends and capital gains distributions will be
automatically reinvested on the payable date in additional shares of
the Fund at net asset value in accordance with the Fund's then current
prospectus.
3.7 PRICING INFORMATION. Distributor shall use its best efforts to furnish
to the Company prior to 7:00 p.m., Eastern time, on each Business Day
the Fund's closing net asset value for that day, and if appropriate,
the daily accrual for interest rate factor, (mil rate). Such
information shall be communicated via fax, or indirect or direct
systems access acceptable to the Company.
3.8 PRICE ERRORS.
(a) In the event adjustments are required to correct any error in the
computation of the net asset value of shares of the Fund, the
Fund or Adviser shall promptly notify Company after discovering
the need for those adjustments which result in a reimbursement to
an Account in accordance with such Fund's then current policies
on reimbursement. Notification may be made orally or via direct
or indirect systems access. Any such notification shall be
promptly followed by a letter written on Fund or Adviser
letterhead and shall state for each day for which an error
occurred the incorrect price, the correct price, and, to the
extent communicated to the Fund's shareholder, the reason for the
price change. Fund and Adviser agree that Company may send this
writing, or derivation thereof (so long as such derivation is
approved in advance by Fund or Adviser, which approval shall not
be unreasonably withheld) to Owners that are affected by the
price change.
(b) If the Account received amounts in excess of the amounts to which
it otherwise would have been entitled prior to an adjustment for
an error, Company, when requested by Fund or Adviser, will use
its best efforts to collect such excess amounts from the Account.
In no event, however, shall Company be liable to Fund or Adviser
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for any such amounts.
(c) If an adjustment is to be made in accordance with subsection (a)
above to correct an error which has caused the Account to receive
an amount less than that to which it is entitled, Fund or Adviser
shall make all necessary adjustments (within the parameters
specified in subsection (a)) to the number of shares owned in the
Account and distribute to the Company the amount of such
underpayment for credit to the Account.
3.9 AGENCY. Distributor hereby appoints the Company as its agent for the
limited purpose of accepting purchase and redemption instructions
pursuant to Sections 3.1,3.2 and 3.3..
3.10 QUARTERLY REPORTS. Adviser agrees to provide Company a statement of Fund
assets as soon as practicable and in any event within 30 days after the
end of each fiscal year quarter, and a statement certifying the
compliance by the Fund during that fiscal quarter with the
diversification requirements and qualification as a regulated investment
company. In the event of a breach of Section 6.4(a), Adviser will take
all reasonable steps (a) to notify Company of such breach and (b) to
adequately diversify the Fund so as to achieve compliance within the
grace period afforded by Treasury Regulation 1.8 i 7-5.
4. PROXY SOLICITATIONS AND VOTING. The Company shall, at its expense, distribute
or arrange for the distribution of all proxy materials furnished by the Fund
to the Account and shall: (i) solicit voting instructions from Owners; (ii)
vote the Fund shares in accordance with instructions received from Owners;
and (iii) vote the Fund shares for which no instructions have been received,
as well as shares attributable to it, in the same proportion as Fund shares
for which instructions have been received from Owners, so long as and to the
extent that the Securities and Exchange Commission (the "SEC") continues to
interpret the 1940 Act, to require pass-through voting privileges for various
contract owners. The Company and its agents will not recommend action in
connection with, or oppose or interfere with, the solicitation of proxies for
the Fund shares held for Owners.
5. CUSTOMER COMMUNICATIONS.
5.1 PROSPECTUSES. "The Adviser or Distributor, at its expense, will provide
the Company with as many printed copies of the current prospectus(es) for
the Fund and/or Portfolios as the Company may reasonably request for
distribution to existing or prospective Owners, and/or, at the Company's
request, a single camera ready copy of each such prospectus, which the
Company will print at its expense, and/or, at the Company's request, a
single digital copy of each such prospectus, which the Company will
reproduce in digital format at its expense. The Company will distribute
the Fund and/or Portfolio prospectus(es) to existing and prospective
Owners at its expense."
5.2 SHAREHOLDER MATERIALS. The Adviser and Distributor shall, as applicable,
provide in bulk to the Company or its authorized representative, at a
single address and at no expense to the Company, the following
shareholder communications materials prepared for circulation to Owners
in quantities requested by the Company which are sufficient to allow
mailing thereof by the Company and, to the extent required by applicable
law, to all Owners: proxy or information statements, annual reports,
semi-annual reports, and all updated prospectuses, supplements and
amendments thereof. Neither the Fund, the Advisor nor Distributor shall
be responsible for the cost of distributing such materials to Owners.
6. REPRESENTATIONS AND WARRANTIES.
6.1 THE COMPANY REPRESENTS AND WARRANTS THAT:
(a) It is an insurance company duly organized and in good standing under
the laws of the State of Ohio and that it has legally and validly
established the Account prior to any issuance or sale thereof as a
segregated asset account and that the Company
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has and will maintain the capacity to issue all Contracts that may
be sold; and that it is and will remain duly registered, licensed,
qualified and in good standing to sell the Contracts in all the
jurisdictions in which such Contracts are to be offered or sold;
(b) It is and will remain duly registered and licensed in all material
respects under all applicable federal and state securities and
insurance laws and shall perform its obligations hereunder in
compliance in all material respects with any applicable state and
federal laws;
(c) The Contracts are and will be registered under the 1933 Act, and are
and will be registered and qualified for sale in the states where so
required; and the Account is and will be registered as a unit
investment trust in accordance with the 1940 Act and shall be a
segregated investment account for the Contracts;
(d) The Contracts are currently treated as annuity contracts, under
applicable provisions of the Internal Revenue Code of 1986, as
amended (the "Code"), and the Company will maintain such treatment
and will notify Adviser, Distributor and Fund promptly 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;
(e) It is registered as a transfer agent pursuant to Section 17A of the
Securities Exchange Act of 1934, as amended (the "1934 Act") unless
it is not required to be registered as such.
(f) The arrangements provided for in this Agreement will be disclosed to
the Owners; and
(g) It or its subsidiary is registered as a broker-dealer under the 1934
Act and any applicable state securities laws, including as a result
of entering into and performing the Services set forth in this
Agreement, unless it is not required to be registered as such.
6.2 The Fund represents and warrants that Fund shares sold pursuant to this
Agreement are and will be registered under the 1933 Act and the Fund is
and will be registered as a registered investment company under the
Investment Company Act of 1940, in each case, except to the extent the
Company is so notified in writing.
6.3 DISTRIBUTOR REPRESENTS AND WARRANTS THAT:
(a) It is and will be a member in good standing of the NASD and is and
will be registered as a broker-dealer with the SEC; and
(b) It will sell and distribute Fund shares in accordance with all
applicable state and federal laws and regulations.
6.4 ADVISER REPRESENTS AND WARRANTS THAT:
(a) It will cause each Fund to invest money from the Contracts in such a
manner as to ensure that the Contracts will be treated as variable
annuity contracts under the Code and the regulations issued
thereunder, and that each Fund will comply with Section 817(h) of
the Code as amended from time to time and with all applicable
regulations promulgated thereunder;
(b) It is and will remain duly registered and licensed in all material
respects under all applicable federal and state securities and
insurance laws and shall perform its obligations hereunder in
compliance in all material respects with any applicable state and
federal laws; and
6.5 EACH OF THE PARTIES HERETO REPRESENTS AND WARRANTS TO THE OTHERS THAT:
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(a) It has full power and authority under applicable law and has taken
all action necessary, to enter into and perform this Agreement and
the person executing this Agreement on its behalf is duly authorized
and empowered to execute and deliver this Agreement;
(b) This Agreement constitutes its legal, valid and binding obligation,
enforceable against it in accordance with its terms and it shall
comply in all material respects with all laws, rules and regulations
applicable to it by virtue of entering into this Agreement;
(c) Except for the effectiveness of the Registration Statement filed by
the Fund under the 1933 Act and 1940 Act, no consent or
authorization of, filing with, or other act by or in respect of any
governmental authority, is required in connection with the
execution, delivery, performance, validity or enforceability of this
Agreement.
(d) The execution, performance and delivery of this Agreement will not
result in it violating any applicable law or breaching or otherwise
impairing any of its contractual obligations;
(e) Each Party hereto is entitled to rely on any written records or
instructions provided to it by another Party; and
(f) Its directors, officers, employees. and investment advisers, and
other individuals/entities dealing with the money 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 amount required by the
applicable rules of the National Association of Securities Dealers,
Inc. ("NASD") and the federal securities laws, which bond shall
include coverage for larceny and embezzlement and shall be issued by
a reputable bonding company.
7. SALES MATERIAL AND INFORMATION.
7.1 NASD FILINGS. The Company shall promptly inform Distributor as to the
status of all sales literature filings pertaining to the Fund and
shall promptly notify Distributor of all approvals or disapprovals of
sales literature filings with the NASD. For purposes of this Section
7, the phrase "sales literature or other promotional material" shall
be construed in accordance with all applicable securities laws and
regulations.
7.2 COMPANY REPRESENTATIONS. The Company shall not make any material
representations concerning the Adviser, the Distributor or the Fund
other than the information or representations contained in: (a) a
registration statement of the Fund or prospectus of the Fund, as
amended or supplemented from time to time; (b) published reports or
statements of the Fund which are in the public domain or approved by
Distributor or the Fund; or (c) sales literature or, other promotional
material of the Fund.
7.3 THE ADVISOR. DISTRIBUTOR AND FUND REPRESENTATIONS. None of Adviser,
Distributor or the Fund shall make any material representations
concerning the Company other than the information or representations
contained in: (a) a registration statement or prospectus for the
Contracts, as amended or supplemented from time to time; (b) published
reports or statements of the Contracts or the Account which are in the
public domain or are approved by the Company; or (c) sales literature
or other promotional material of the Company.
7.4 TRADEMARKS ETC. Except to the extent required by applicable law, no
Party shall use any other Party's names, logos, trademarks or service
marks, whether registered or unregistered, without the prior consent
of such Party.
7.5 INFORMATION FROM DISTRIBUTOR AND ADVISER. Upon request, Distributor or
Adviser will provide to Company at least one complete copy of all
registration statements, prospectuses, Statements of Additional
Information, reports, proxy statements, solicitations for voting
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instructions, applications for exemptions, requests for no action
letters, and all amendments to any of the above, that relate to the
Fund, in final form as filed with the SEC, NASD and other regulatory
authorities.
7.6 INFORMATION FROM COMPANY. Company will provide to Distributor at least
one complete copy of all registration statements, prospectuses,
Statements of Additional Information, reports, solicitations for
voting instructions, sales literature and other promotional materials,
applications for exemptions, requests for no action letters and all
amendments to any of the above, that relate to the Fund and the
Contracts, in final form as filed with the SEC, NASD and other
regulatory authorities.
7.7 REVIEW OF MARKETING MATERIALS. If so requested by Company, the Adviser
or Distributor will use its best efforts to review sales literature
and other marketing materials prepared by Company which relate to the
Fund, the Adviser or Distributor for factual accuracy as to such
entities, provided that the Adviser or Distributor is provided at
least five (5) Business Days to review such materials. Neither the
Adviser nor Distributor will review such materials for compliance with
applicable laws. Company shall provide the Adviser with copies of all
sales literature and other marketing materials which refer to the
Fund, the Company or Distributor within five (5) Business Days after
their first use, regardless of whether the Adviser or Distributor has
previously reviewed such materials. If so requested by the Adviser or
Distributor, Company shall cease to use any sales literature or
marketing materials which refer to the Fund, the Adviser or
Distributor that the Adviser or Distributor determines to be
inaccurate, misleading or otherwise unacceptable.
8. FEES AND EXPENSES.
8.1 FUND REGISTRATION EXPENSES. Fund or Distributor shall bear the cost of
registration and qualification of Fund shares; preparation and filing
of Fund prospectuses and registration statements, proxy materials and
reports; preparation of all other statements and notices relating to
the Fund or Distributor required by any federal or state law; payment
of all applicable fees, including, without limitation, any fees due
under Rule 24f-2 of the 1940 Act, relating to the Fund; and all taxes
on the issuance or transfer of Fund shares on the Fund's records.
8.2 CONTRACT REGISTRATION EXPENSES. The Company shall bear the expenses
for the costs of preparation and filing of the Company's prospectus
and registration statement with respect to the Contracts; preparation
of all other statements and notices relating to the Account or the
Contracts required by any federal or state law; expenses for the
solicitation and sale of the Contracts including all costs of printing
and distributing all copies of advertisements, prospectuses,
Statements of Additional Information, proxy materials, and reports to
Owners or potential purchasers of the Contracts as required by
applicable state and federal law; payment of all applicable fees
relating to the Contracts; all costs of drafting, filing and obtaining
approvals of the Contracts in the various states under applicable
insurance laws; filing of annual reports on form N-SAR, and all other
costs associated with ongoing compliance with all such laws and its
obligations hereunder.
9. INDEMNIFICATION.
9.1 INDEMNIFICATION BY COMPANY.
(a) Company agrees to indemnify and hold harmless the Fund, Adviser and
Distributor and each of their directors, officers, employees and
agents, and each person, if any, who controls any of them within the
meaning of Section 15 of the 1933 Act (each, an "Indemnified Party"
and collectively, the "Indemnified Parties" for purposes of this
Section 9.1) from and against any and all losses, claims, damages,
liabilities (including amounts paid in settlement with the written
consent of Company), and expenses (including reasonable legal fees
and expenses), to which the Indemnified Parties may become subject
under any statute, regulation, at common law or
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otherwise (collectively, hereinafter "Losses"), insofar as such
Losses:
(i) arise out of or are based upon any untrue statements or alleged
untrue statements of any material fact contained in the
registration statement, prospectus or sales literature for the
Contracts or contained in 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 paragraph 9.1(a) 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 written information furnished to Company by or
on behalf of the Fund, Distributor or Adviser for use in the
registration statement or prospectus for the Contracts or in
the Contracts (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, statements or representations
or wrongful conduct of Company or its agents, 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, or sales literature covering 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 written information furnished to the Fund,
Adviser or Distributor or on behalf of Company; or
(iv) arise out of, or as a result of, any failure by Company or
persons under its control to provide the Services and furnish
the materials contemplated under the terms of this Agreement;
or
(v) arise out of, or result from, any material breach of any
representation or warranty made by Company or persons under its
control in this Agreement or arise out of or result from any
other material breach of this Agreement by Company or persons
under its control: as limited by and in accordance with the
provisions of Sections 9.1(b) and 9.1(c) hereof; or
(vi) arise out of, or as a result of, adherence by Adviser or
Distributor to instructions that it reasonably believes were
originated by persons specified in Section 32(c), hereof
This indemnification provision is in addition to any liability, which
the Company may otherwise have.
(b) Company shall not be liable under this indemnification provision with
respect to any Losses 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 or duties under this Agreement.
(c) Company shall not be liable under this indemnification provision with
respect to any claim made against an Indemnified Party unless such
Indemnified Party shall have notified 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
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upon such Indemnified Party (or after such Indemnified Party shall
have received notice of such service on any designated agent), but
failure to notify Company of any such claim shall not relieve Company
from any liability which it may have to the Indemnified Party
otherwise than on account of this indemnification provision. In case
any such action is brought against any Indemnified Party, and it
notified the Indemnifying Party of the commencement thereof, the
Indemnifying Party will be entitled to participate therein and, to the
extent that it may wish, assume the defense thereof, with counsel
satisfactory to such Indemnified Party. After notice from the
Indemnifying Party of its intention to assume the defense of an
action, the Indemnified Party shall bear the expenses of any
additional counsel obtained by it, and the Indemnifying Party shall
not be liable to such Indemnified Party under this Section for any
legal or other expenses subsequently incurred by such Indemnified
Party in connection with the defense thereof other than reasonable
costs of investigation. The Indemnified Party may not settle any
action without the written consent of the Indemnifying Party. The
Indemnifying Party may not settle any action without the written
consent of the Indemnified Party unless such settlement completely and
finally releases the Indemnified Party from any and all liability. In
either event, consent shall not be unreasonably withheld
(d) The Indemnified Parties will promptly notify Company of the
commencement of any litigation or proceedings against the Indemnified
Parties in connection with the issuance or sale of Fund shares or the
Contracts or the operation of the Fund.
9.2 INDEMNIFICATION BY ADVISER AND DISTRIBUTOR.
(a) Adviser and Distributor agrees to indemnify and hold harmless Company
and each of its directors, officers, employees and agents and each
person, if any, who controls Company within the meaning of Section 15
of the 1933 Act ("Indemnified Party" and collectively, the
"Indemnified Parties" for purposes of this Section 9.2) against any
and all Losses to which the Indemnified Parties may become subject
under any statute, regulation, at common law or otherwise, insofar as
such Losses:
(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 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 Section 9.2(a) 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 written information furnished to the Fund,
Adviser or Distributor by or on behalf of Company for use in the
registration statement or prospectus 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, statements or representations
or wrongful conduct of Adviser or Distributor or persons under
its control, with respect to the sale or distribution of Fund
shares; or
(iii) arise out of any untrue statement or alleged untrue statement
of a material fact contained in a registration statement,
prospectus, 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 statements therein not
misleading, if such statement or omission was made in reliance
upon written information furnished to Company by or on behalf of
Adviser or Distributor; or
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(iv) arise out of, or as a result of, any failure by Adviser or
Distributor or persons under its control to provide the services
and furnish the materials contemplated under the terms of this
Agreement; or
(v) arise out of or result from any material breach of any
representation or warranty made by Adviser or Distributor or
persons under its control in this Agreement or arise out of or
result from any other material breach of this Agreement by
Adviser or Distributor or persons under its control; as limited
by and in accordance with the provisions of Sections 9.2(b) and
9.2(c) hereof.
This indemnification provision is in addition to any liability which
Adviser and Distributor may otherwise have.
(b) Adviser and Distributor shall not be liable under this
indemnification provision with respect to any Losses 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 Company.
(c) Adviser and Distributor shall not be liable under this
indemnification provision with respect to any claim made against an
Indemnified Party unless such Indemnified Party shall have notified
Adviser and Distribution 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 Adviser and
Distributor of any such claim shall not relieve Adviser and
Distributor from any liability which it may have to the Indemnified
Party otherwise than on account of this indemnification provision. In
case any such action is brought against any Indemnified Party, and it
notified the Indemnifying Party of the commencement thereof, the
Indemnifying Party will be entitled to participate therein and, to the
extent that it may wish, assume the defense thereof, with counsel
satisfactory to such Indemnified Party. After notice from the
Indemnifying Party of its intention to assume the defense of an
action, the Indemnified Party shall bear the expenses of any
additional counsel obtained by it, and the Indemnifying Party shall
not be liable to such Indemnified Party under this Section for any
legal or other expenses subsequently incurred by such Indemnified
Party in connection with the defense thereof other than reasonable
costs of investigation. The Indemnified Party may not settle any
action without the written consent of the Indemnifying Party. The
Indemnifying Party may not settle any action without the written
consent of the Indemnified Party unless such settlement completely and
finally releases the Indemnified Party from any and all liability. In
either event, consent shall not be unreasonably withheld.
(d) The Indemnified Parties will promptly notify Adviser and Distributor
of the commencement of any litigation or proceedings against the
Indemnified Parties in connection with the issuance or sale of the
Contracts or the operation of the Account.
10. POTENTIAL CONFLICTS.
10.1 MONITORING BY DIRECTORS FOR CONFLICTS OF INTEREST. The Directors of
each Fund will monitor the Fund for any potential or existing material
irreconcilable conflict of interest between 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 federal or state insurance, tax, or
securities laws or regulations, or a public ruling, private letter
10
ruling, no-action or interpretive letter, or any similar action by
insurance, tax or securities regulatory authorities; (c) an
administrative or judicial decision in any relevant proceeding; (d)
the manner in which the investments of the Fund are being managed; (e)
a difference in voting instructions given by variable annuity contract
owners; or (f) a decision by Company to disregard the voting
instructions of Owners. The Directors shall promptly inform the
company, in writing, if they determine that an irreconcilable material
conflict exists and the implications thereof.
10.2 MONITORING BY THE COMPANY FOR CONFLICTS OF INTEREST. The Company will
promptly notify the Directors, in writing, of any potential or
existing material irreconcilable conflicts of interest, as described
in Section 10.1 above, of which it is aware. The Company will assist
the Directors in carrying out their responsibilities under any
applicable provisions of the federal securities laws and any exemptive
orders granted by the SEC ("Exemptive Order") by providing the
Directors, in a timely manner, with all information reasonably
necessary for the Directors to consider any issues raised. This
includes, but is not limited to, an obligation by the Company to
inform the Directors whenever Owner voting instructions are
disregarded.
10.3 REMEDIES. If it is determined by a majority of the Directors, or a
majority of disinterested Directors, that a material irreconcilable
conflict exists, as described in Section 10.1 above, the Company
shall, at its own expense take whatever steps are necessary to remedy
or eliminate the irreconcilable material conflict, up to and
including, but not limited to: (a) withdrawing the assets allocable to
some or all of the separate accounts from the applicable Fund and
reinvesting such assets in a different investment medium, including
(but not limited to) another fund managed by the Adviser, or
submitting the question whether such segregation should be implemented
to a vote of all affected owners and, as appropriate, the assets of
any particular group that votes in favor of such segregation, or
offering to the affected owners the option of making such a change;
and (b) establishing a new registered management investment company or
managed separate account.
10.4 CAUSES OF CONFLICTS OF INTEREST.
(a) STATE INSURANCE REGULATORS. 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 applicable
Fund and terminate this Agreement with respect to such
Account within the period of time permitted by such decision,
but in no event later than six months after the Directors
inform 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 Directors. Until the end of the
foregoing period, the Distributor and Fund shall continue to
accept and implement orders by the Company for the purchase
(and redemption) of shares of the Fund to the extent such
actions do not violate applicable law.
(b) DISREGARD OF OWNER VOTING. If a material irreconcilable
conflict arises because of Company's decision to disregard
Owner voting instructions and that decision represents a
minority position or would preclude a majority vote, Company
may be required, at the applicable Fund's election, 10
withdraw the Account's investment in said Fund. No charge or
penalty will be imposed against the Account as a result of
such withdrawal.
10.5 LIMITATIONS ON CONSEQUENCES. For purposes of Sections 10.3
through 10.5 of this Agreement, a majority of the disinterested
Directors shall determine whether any proposed action adequately
remedies any irreconcilable material conflict. In no event will
the Fund, the Adviser or the Distributors be required to
establish a new funding medium for any of the Contracts. The
Company shall not be required by Section 10.3 to establish a new
funding medium
11
for the Contracts if an offer to do so has been declined by vote of a
majority of Owners affected by the irreconcilable material conflict.
In the event that the Directors determine that any proposed action
does not adequately remedy any irreconcilable material conflict, then
the Company will withdraw the Account's investment in the applicable
Fund and terminate this Agreement as quickly as may be required to
comply with applicable law, but in no event later than six (6) months
after the Directors inform 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.
10.6 CHANGES IN LAWS. If and to the extent that Rule 6e-2 and Rule 6e-
3(T) are amended, or Rule 6e-3 is adopted, to provide exemptive
relief from any provision of the Act or the rules promulgated
thereunder with respect to mixed or shared funding, (as defined
in the Exemptive Order, if any) on terms and conditions
materially different from those contained in the Exemptive Order,
if any, then (a) the Funds and/or the Company, as appropriate,
shall take such steps as may be necessary to comply with Rules
6e-2 and 6e-3(T), as amended, and Rule 6e-3, as adopted, to the
extent such rules are applicable; and (b) Sections 10.1, 10.2,
10.3 and 10.4 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.
11. MAINTENANCE OF RECORDS.
(a) Recordkeeping and other administrative services to Owners shall be the
responsibility of the Company and shall not be the responsibility of
the Fund, Adviser or Distributor. None of the Fund, the Adviser or
Distributor shall maintain separate accounts or records for Owners.
Company shall maintain and preserve all records as required by law to
be maintained and preserved in connection with providing the Services
and in making shares of the Fund available to the Account.
(b) Upon the request of the Adviser or Distributor, the Company shall
provide copies of all the historical records relating to transactions
between the Fund and the Account, written communications regarding the
Fund to or from the Account and other materials, in each case (1) as
are maintained by the Company in the ordinary course of its business
and in compliance with applicable law, and (2) as may reasonably be
requested to enable the Adviser and Distributor, or its
representatives, including without limitation its auditors or legal
counsel, to (A) monitor and review the Services, (B) comply with any
request of a governmental body or self-regulatory organization or the
Owners, (C) verify compliance by the Company with the terms of this
Agreement, (D) make required regulatory reports, or (E) perform general
customer supervision. The Company agrees that it will permit the
Adviser and Distributor or such representatives of either to have
reasonable access to its personnel and records in order to facilitate
the monitoring of the quality of the Services.
(c) Upon the request of the Company, the Adviser and Distributor shall
provide copies of all the historical records relating to transactions
between the Fund and the Account, written communications regarding the
Fund to or from the Account and other materials, in each case (1) as
are maintained by the Adviser and Distributor, as the case may be, in
the ordinary course of its business and in compliance with applicable
law, and (2) as may reasonably be requested to enable the Company, or
its representatives, including without limitation its auditors or legal
counsel, to (A) comply with any request of a governmental body or self-
regulatory organization or the Owners, (B) verify compliance by the
Adviser and Distributor with the terms of this Agreement, (C) make
required regulatory reports, or (D) perform general customer
supervision.
(d) The Parties agree to cooperate in good faith in providing records to
one another pursuant to this Section 11.
12
12. TERM AND TERMINATION.
12.1 TERM AND TERMINATION WITHOUT CAUSE. The initial term of this Agreement
shall be for a period of one year from the date hereof. Unless
terminated by any Party upon not less than thirty (30) days prior written
notice to the other Parties, this Agreement shall thereafter
automatically renew from year to year, subject to termination at the
next applicable renewal date upon not less than 30 days prior written
notice. Any Party may terminate this Agreement following the initial
term upon six (6) months advance written notice to the other Parties.
12.2 TERMINATION BY FUND, DISTRIBUTOR OR ADVISER FOR CAUSE. Adviser, Fund or
Distributor may terminate this Agreement immediately by written notice to
the Company, if any of them shall determine, in its sole judgment
exercised in good faith, that (a) the Company has suffered a material
adverse change in its business, operations, financial condition or
prospectus since the date of this Agreement or is the subject of material
adverse publicity; or (b) any of the Contracts are not registered, issued
or sold in accordance with applicable state and federal law or such law
precludes the use of Fund shares as the underlying investment media of
the Contracts issued or to be issued by the Company.
12.3 TERMINATION BY COMPANY FOR CAUSE. Company may terminate this Agreement by
written notice to the Adviser, Fund and Distributor in the event that (a)
the Fund shares are not registered, issued or sold in accordance with
applicable state or federal law or such law precludes the use of such
shares as the underlying investment media of the Contracts issued or to
be issued by the Company; (b) the Fund ceases to qualify as a Regulated
Investment Company under Subchapter M of the Code or under any successor
or similar provision, or if the Company reasonably believes that the Fund
may fail to so qualify; or (c) the Fund fails to meet the diversification
requirements specified in Section 6.4(a).
12.4 TERMINATION BY ANY PARTY. This Agreement may be terminated by any Party
at any time (A) by giving 30 days' written notice to the other Parties in
the event of an material breach of this Agreement by the other Party or
Parties that is not cured during such 30-day period, and (B) (i) upon
institution of formal proceedings relating to the legality of the terms
and conditions of this Agreement against the Account, Company, Fund,
Adviser or Distributor by the NASD, the SEC or any other regulatory body
provided that the terminating Xxxxx has a reasonable belief that the
institution of formal proceedings is not without foundation and will have
a material adverse impact on the terminating Party, (ii) by the non-
assigning Party upon the assignment of this Agreement in contravention of
the terms hereof, or (iii) as is required by law, order or instruction by
a court of competent jurisdiction or a regulatory body or self-regulatory
organization with jurisdiction over the terminating Party.
12.5 LIMIT ON TERMINATION. Notwithstanding the termination of this Agreement
with respect to the Fund, for so long as any Contracts remain outstanding
and Invested in the Fund each Party hereto shall continue to perform such
of its duties hereunder as are necessary to ensure the continued tax
deferred status thereof and the payment of benefits thereunder, except to
the extent proscribed by law, the SEC or other regulatory body.
Notwithstanding the foregoing, nothing in this Section 12.5 obligates the
Fund to continue in existence. In the event that the Fund elects to
terminate its operations, the Company shall, as soon as practicable,
obtain an exemptive order or order of substitution from the SEC to remove
all Owners from the Fund.
13. NOTICES.
All notices hereunder shall be given in writing (and shall be deemed to
have been duly given upon receipt) by delivery in person, by facsimile, by
registered or certified mail or by overnight delivery (postage prepaid,
return receipt requested) to the respective Parties as follows:
13
IF TO XXXXXXX VARIABLE:
The Xxxxxxx Plan Variable Series
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxx Xxxx, XX 00000
Facsimile: (000) 000-0000
e-mail: xxxx@xxxxxxxxxxx.xxx
IF TO ADVISER:
Xxxxxxx Partners,
Ltd.
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxx Xxxx, XX 00000
Facsimile: (000) 000-0000
e-mail: xxxx@xxxxxxxxxxx.xxx
IF TO DISTRIBUTOR:
Xxxxxxx Partners, Ltd.
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxx Xxxx, XX 00000
Facsimile: (000) 000-0000
e-mail: xxxx@xxxxxxxxxxx.xxx
IF TO COMPANY:
Annuity Investors Life Insurance Company
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxxx
Facsimile No.: (000) 000-0000
14. MISCELLANEOUS.
14.1 CAPTIONS. The captions in this Agreement are included for convenience
of reference only and in no way affect the construction or effect of
any provisions hereof.
14.2 ENFORCEABILITY. If any portion 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.
14.3 COUNTERPARTS. This Agreement may be executed simultaneously in two or
more counterparts, each of which taken together shall constitute one
and the same instrument.
14.4 REMEDIES NOT EXCLUSIVE. 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 jaws.
14.5 CONFIDENTIALITY. Subject to the requirements of legal process and
regulatory authority, the Fund and Distributor shall treat as
confidential the names and addresses of the owners of the Contracts
and all information reasonably identified as confidential in writing
by the Company 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 Company until such time as it may come into the public domain.
14
14.6 GOVERNING LAW. This Agreement shall be governed by and interpreted in
accordance with the internal laws of the State of Ohio applicable to
agreements fully executed and to he performed therein; exclusive of
conflicts of laws.
14.7 SURVIVABILITY. Sections 6, 7.2, 7.3, 7.4, 9, 11 and 12.5 hereof shall
survive termination of this Agreement. In addition, all provisions of
this Agreement shall survive termination of this Agreement in the
event that any Contracts are invested in the Fund at the time the
termination becomes effective and shall survive for so long as such
Contracts remain so invested.
14.8 AMENDMENT AND WAIVER. No modification of any provision of this
Agreement will be binding unless in writing and executed by the Party
to be bound thereby. No waiver of any provision of this Agreement will
be binding unless in writing and executed by the Party granting such
waiver. Notwithstanding anything in this Agreement to the contrary,
the Company may unilaterally amend Exhibit A hereto to add additional
series of The Xxxxxxx Plan Variable Funds ("New Funds") as Funds by
sending to the Company a written notice of the New Funds. Any valid
waiver of a provision set forth herein shall not constitute a waiver
of any other provision of this Agreement. In addition, any such waiver
shall constitute a present waiver of such provision and shall not
constitute a permanent fixture waiver of such provision.
14.9 ASSIGNMENT. This Agreement shall be binding upon and shall inure to
the benefit of the Parties and their respective successors and
assigns; provided however that neither this Agreement nor any rights,
privileges, duties or obligations of the Parties may be assigned by
any Party without the written consent of the other Parties or as
expressly contemplated by this Agreement.
14.10 ENTIRE AGREEMENT. This Agreement contains the full and complete
understanding between the Parties with respect to the transactions
covered and contemplated hereunder, and supersedes all prior
agreements and understandings between the Parties relating to the
subject matter hereof, whether oral or written, express or implied.
14.11 RELATIONSHIP OF PARTIES: NO JOINT VENTURE, ETC. Except for the limited
purpose provided in Section 3.8, it is understood and agreed that the
Company shall be acting as an independent contractor and not as an
employee or agent of the Adviser, Distributor or the Fund, and none of
the Parties shall hold itself out as an agent of any other Party with
the authority to bind such Party. Neither the execution nor
performance of this Agreement shall be deemed to create a partnership
or joint venture by and among any of the Company, Fund, Adviser, or
Distributor.
14.12 EXPENSES. All expenses incident to the performance by each Party of
its respective duties under this Agreement shall be paid by that
Party.
14.13 TIME OF ESSENCE. Time shall be of the essence in this Agreement.
14.14 NON-EXCLUSIVITY. Each of the Parties acknowledges and agrees that this
Agreement and the arrangements described herein are intended to be
non-exclusive and that each of the Parties is free to enter into
similar agreements and arrangements with other entities.
14.15 OPERATIONS OF FUNDS. In no way shall the provisions of this Agreement
limit the authority of the Fund, the Company or Distributor to take
such action as it may deem appropriate or advisable in connection with
all matters relating to the operation of such Fund and the sale of its
shares. In no way shall the provisions of this Agreement limit the
authority of the Company to take such action as it may deem
appropriate or advisable in connection with all matters relating to
the provision of Services or the shares of fund other than the Fund
offered to the Account.
15
IN WITNESS WHEREOF, each of the Parties hereto has caused this Agreement to be
duly executed as of the date first above written.
Annuity Investor Life Insurance Company
By: _________________________________
Name: Xxxx X. Xxxxxxxx
Title: Senior Vice President
Xxxxxxx Partners, Ltd. - Adviser
By: _________________________________
Name: Xxxxxx X. Ally
Title: General Partner
Xxxxxxx Partners, Ltd. - Distributor
By: _________________________________
Name: Xxxxxx X. Ally
Title: General Partner
The Xxxxxxx Plan Variable Series
on behalf of the Fund
By: _________________________________
Name: Xxxxxx X. Ally
Title: President
16
Exhibit A
The Fund:
The Xxxxxxx Plan Variable Series
17
Exhibit A-1
Separate Accounts:
Annuity Investors Variable Account B
18
Exhibit B
The Services
Company shall perform the following services. Such services shall be the
responsibility of the Company and shall not be the responsibility of the Fund,
Adviser or Distributor.
1. Maintain separate records for each Account, which records shall reflect Fund
shares ("Shares") purchased and redeemed, including the date and price for
all transactions, Share balances, and the name and address of each Owner,
including zip codes and tax identification numbers.
2. Credit contributions to individual Owner accounts and invest such
contributions in shares of the Funds to the extent so designated by the
Owner.
3. Disburse or credit to the Owners, and maintain records of, all proceeds of
redemptions of Fund shares and all other distributions not reinvested in
shares.
4. Prepare and transmit to the Owners, periodic account statements showing,
among other things, the total number of Fund shares owned as of the
statement closing date, purchases and redemptions of shares during the
period covered by the statement, the net asset value of the Funds as of a
recent date, and the dividends and other distributions paid during the
Statement period (whether paid in cash or reinvested in shares).
5. Transmit to the Owners, as required by applicable law, prospectuses, proxy
materials, shareholder reports, and other information provided by the
Adviser, Distributor or Fund and required to be sent to shareholders under
the Federal securities laws.
6. Transmit to Distributor purchase orders and redemption requests placed by
the Account and arrange for the transmission of funds to and from the Fund.
7. Transmit to Distributor such periodic reports as Distributor shall
reasonably conclude is necessary to enable the Fund to comply with
applicable Federal securities and state Blue-Sky requirements.
8. Transmit to the each Account confirmations of purchase orders and redemption
requests placed by each Account.
9. Maintain all account balance information for the Account and daily and
monthly purchase summaries expressed in shares and dollar amounts.
10. Prepare, transmit and file any Federal, state and local government reports
and returns as required by law with respect to each account maintained on
behalf of the Account.
11. Respond to Owners' inquiries regarding, among other things, share prices,
account balances, dividend options, dividend amounts, and dividend payment
dates.
19
Exhibit C
Account Information
1. Entity in whose name each Account will be opened:
Annuity Investors Life Insurance Company
X.X. Xxx 0000
Xxxxxxxxxx, XX 00000-0000
2. Employer ID number (For internal use only):
31 - 1021738
3. Authorized contact persons: The following persons are authorized on behalf
of the Company to effect transactions in each Account:
Xxxx Xxxxxxx 000-000-0000 Xxxx Xxxxxxx 000-000-0000
Xxxxx Xxxxxxxxx 000-000-0000 Xxxxxxx Xxxxxx 000-000-0000
Xxxx Xxxxxxx 000-000-0000 Xxxxxx Xxxxxxx 000-000-0000
Xxxxx Xxxxx 000-000-0000
4. Will the Accounts have telephone exchange? [ ] Yes [ X ] No
(This option lets Company redeem shares by telephone and apply the proceeds
for purchase in another identically registered Xxxxxxx Funds account.)
5. Will the Accounts have telephone redemption? [ ] Yes [ X ] No
(This option lets Company sell shares by telephone. The proceeds will be
wired to the bank account specified below.)
6. All dividends and capital gains will be reinvested automatically.
7. Instructions for all outgoing wire transfers:
The Provident Bank
Xxxxxxxxxx, XX 00000
ABA # 000000000
For the Account of Annuity Investors
Life Insurance Company Depository
Account
Account # 0697-394
Amount:
Attn.: Wire Transfer Department
8. If this Account information Form contains changed information, the
undersigned authorized officer has executed this amended Account Information
Form as of the date set forth below and acknowledges the agreements and
representations set forth in the Participation Agreement between the Company,
the Fund, Adviser and Distributor:
______________________________________ ___________________
(Signature of Authorized Officer) (Date)
9. Company represents under penalty of perjury that:
(i) The employer ID number on this form is correct; and
20
(ii) Company is not subject to backup withholding because (a) Company is
exempt from backup withholding, (b) Company has not been notified by
the IRS that it is subject to backup withholding as a result of
failure to report all interest or dividends, or (c) the IRS has
notified the Company that it is no longer subject to backup
withholding. (Cross out (ii) if Company has been notified by the IRS
that it is subject to backup withholding because of underreporting
interest or dividends on its tax return.)
Please Note: Distributor employs reasonable procedures to confirm that
instructions communicated by telephone are genuine and may not be liable
for losses due to unauthorized or fraudulent instructions. Please see the
prospectus for the applicable Fund' for more information on the telephone
exchange and redemption privileges.
21
April 25, 1998
Annuity Investors Life insurance Company
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxxx
Dear Xxxx:
Re: Fee letter relating to the Annuity Investors Life Insurance Company
Participation Agreement.
Pursuant to the Participation Agreement by and among The Xxxxxxx Plan Variable
Series (the "Fund"), and Annuity Investors Life Insurance Company (the
"Company") dated May 1, 1998 (the "Participation Agreement"), the Company will
provide certain administrative services on behalf of the registered investment
companies or series thereof specified in Exhibit A.
In recognition of the reduction in administrative expenses that derives from the
performance of said administrative services, The Xxxxxxx Plan Variable Series
Fund agrees to pay the Company the fee specified below.
(a) For average aggregate amounts (as calculated in paragraph (b), below)
invested through variable insurance products issued by the Company with
the Fund, the monthly fee shall equal the percentage (calculated
paragraph (b), below) of the applicable annual fee for each Fund
specified in Exhibit A.
(b) For purposes of computing the fee contemplated in paragraph (a) above,
the Fund shall calculate and pay to the Company an amount equal to the
product of: (a) the product of (i) the number of calendar days in the
applicable month divided by the number of calendar days in that year
(365 or 366 as applicable) and (ii) the applicable percentage specified
in Exhibit A, hereto, multiplied by (b) the average daily market value
of the investments held in such Fund pursuant to the Participation
Agreement computed by totaling the aggregate investment (share net asset
value multiplied by the total number of shares held) on each day during
the calendar month and dividing by the total number of days during such
month.
(c) The Fund shall calculate the amount of the payment to be made pursuant
to this Letter Agreement at the end of each calendar month and will make
such payment to the Company within 30 days after receiving the report
referenced in paragraph (e), below. Fees will be paid by wire transfer
or by check. All payments hereunder shall be considered final unless
disputed by the Company in writing within 60 days of receipt.
(d) The parties agree that the fees contemplated herein are solely for
shareholder servicing and other administrative services provided by the
Company and do not constitute payment in any manner for investment
advisory, distribution, trustee, or custodial services.
(e) The Company agrees to provide the Fund by the 15th day of each month
with a report, which indicates the number of Owners that hold Contract
interests in each Account as of the last day of the prior month.
(f) If requested in writing by the Fund, and at the Fund's expense, the
Company shall provide to the Fund, by February 14th of each year a
"Special Report" from a nationally recognized accounting firm reasonably
acceptable to the Fund which substantiates for each month of the prior
calendar year: (a) the number of Owners that hold, through an Account,
interests in each Account maintained by the Company on the last day of
each month which held shares for which the fee provided or in this
Letter Agreement was received by the Company, (b) that
22
any fees billed to the Fund for such month were accurately determined in
accordance with this Letter Agreement, and (c) such other information in
connection with this Agreement and the Participation Agreement as may be
reasonably requested by the Fund.
(g) The parties hereto agree that the Fund may unilaterally amend Schedule A
hereto to add additional investment companies or series thereof ("New
Funds") as Funds subject to the provisions of this Letter Agreement by
sending to the Company a written notice of the New Funds and indicating
therein the fees to be paid to the Company with respect to the
administrative services provided pursuant to the Participation
Agreement in connection with such New Funds.
(h) This Letter Agreement shall terminate upon termination of the
Participation Agreement. Accordingly, all payments pursuant to this
Letter Agreement shall cease upon termination of the Participation
Agreement.
(i) Capitalized terns not otherwise defined herein shall have the meaning
assigned to herein in the Participation Agreement.
If you are in agreement with the foregoing, please sign and date below where
indicated and return one copy of this signed letter agreement to me.
Very truly yours,
Xxxxxx X. Ally
President
Accepted and agreed as of May 1, 1998 by
Annuity Investors Life Insurance Company
By: _______________________________
Name: Xxxx X. Xxxxxxxx
Title: Senior Vice President
23
Exhibit A to Letter dated April 25, 1998
The Funds subject to this Agreement and applicable annual fees are as follows:
Fund Annual Fee
The Xxxxxxx Plan Variable Series .20%
24
