EXHIBIT (8)(B) PARTICIPATION AGREEMENT WITH THE INSURANCE MANAGEMENT SERIES
FUND PARTICIPATION AGREEMENT
This AGREEMENT is made this 25th day of May , 1995, by and
between United of Omaha Life Insurance Company (the 'Insurer'), a life
insurance company domiciled in Nebraska, on its behalf and on behalf of
the segregated asset accounts of the Insurer listed on Exhibit A to this
Agreement (the "Separate Accounts"); Insurance Management Series (the
"Fund"), a Massachusetts business trust; and Federated Securities Corp.
(the "Distributor"), a Pennsylvania corporation.
WITNESSETH
WHEREAS, the Fund is registered with the Securities and Exchange
Commission ("SEC") as an open-end management investment company under
the Investment Company Act of 1940, as amended ("1940 Act") and the Fund
is authorized to issue separate classes of shares of beneficial interest
("shares"), each representing an interest in a separate portfolio of
assets known as a "portfolio" and each portfolio has its own investment
objective, policies, and limitations; and
WHEREAS, the Fund is available to offer shares of one or more of
its portfolios to separate accounts of insurance companies that fund
variable annuity contracts ("Variable Contracts") and to serve as an
investment medium for Variable Contracts offered by insurance companies
that have entered into participation agreements substantially similar to
this agreement ("Participating Insurance Companies"), and the Fund will
be made available in the future to offer shares of one or more of its
portfolios to separate accounts of insurance companies that fund
variable life insurance policies (at which time such policies would also
be "Variable Contracts" hereunder), and
WHEREAS, the Fund is currently comprised of five separate
portfolios, and other portfolios may be established in the future; and
WHEREAS, the Fund has obtained an order from the SEC dated
December 29, 1993 (File No. 812-8620), granting Participating insurance
Companies and variable annuity and variable life insurance separate
accounts exemptions from the provisions of sections 9(a), 13(a), 1~(a),
and 15(b) of the 1940 Act and Rules 6e-2(b)(15) and 6e-3(T)(b)(15)
thereunder, to the extent necessary to permit shares of the Fund to be
sold to and held by variable annuity and variable life insurance
separate accounts of life insurance companies that may or may not be
affiliated with one another (hereinafter the "Mixed and Shared Funding
Exemptive Order"); and
WHEREAS, the Distributor is registered as a broker-clearer with
the SEC under the Securities Exchange Act of 1934, as amended ("1934
Act"), and is a member in good standing of the National Association of
Securities Dealers, Inc. ("NASD"), and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Insurer wishes to purchase shares of one or more of the
Fund's portfolios on behalf of its Separate Accounts to serve as an
investment medium for Variable Contracts funded by the Separate
Accounts, and the Distributor is authorized to sell shares of the Fund's
portfolios;
NOW', THEREFORE. in consideration of the foregoing and the mutual
promises and covenants hereinafter set forth, the parties hereby agree
as follows:
ARTICLE I. Sale of Fund Shares
1.1 The Distributor agrees to sell to the Insurer those shares of
the portfolios offered and made available by the Fund and identified on
Exhibit B ("Portfolios") that the Insurer orders on behalf of its
Separate Accounts, and agrees to execute such orders on each day on
which the Fund calculates its net asset value pursuant to rules of the
SEC ("business day") at the net asset value next computed after receipt
and acceptance by the Fund or its agent of the order for the shares of
the Fund.
1.2 The Fund agrees to make available on each business dew shares
of the Portfolios for purchase at the applicable net asset value per
share by the Insurer on behalf of its Separate Accounts; provided,
however, that the Board of Trustees of the Fund may refuse to sell
shares of any Portfolio to any person, or suspend or terminate the
offering of shares of any Portfolio, if such action is required by law
or by regulatory authorities having jurisdiction or is, in the sole
discretion of the Trustees, acting in good faith and in light of the
Trustees' fiduciary duties under applicable law, necessary in the best
interests of the shareholders of any Portfolio.
1.3 The Fund and the Distributor agree that shares or the
Portfolios of the Fund will be sold only to Participating Insurance
Companies, their separate accounts, and other persons consistent with
each Portfolio being adequately diversified pursuant to Section 817(h)
of the Internal Revenue Code of 1986, as amended ("Code"), and the
regulations thereunder. No shares of any Portfolio will be sold directly
to the general public to the extent not permitted by applicable tax law.
1.4 The Fund and the Distributor will not sell shares of the
Portfolios to any insurance company or separate account unless an
agreement containing provisions substantially the same as the provisions
in Article IV of this Agreement is in effect to govern such sales.
1.5 Upon receipt of a request for redemption in proper form from
the Insurer, the Fund agrees to redeem any full or fractional shares of
the Portfolios held by the Insurer, ordinarily executing such requests
on each business day at the net asset value next computed after receipt
and acceptance by the Fund or its agent of the request for redemption,
except that the Fund reserves the right to suspend the right of
redemption, consistent with Section 22(e) of the 1940 Act and any rules
thereunder. Such redemption shall be paid consistent with applicable
rules of the SEC and procedures and policies of the Fund as described in
the current prospectus.
1.6 For purposes of Sections 1.2 and 1.5., the Insurer shall be
the agent of the Fund for the limited purpose of receiving and accepting
purchase and redemption orders from each Separate Account and receipt of
such orders by 4:00 p.m. Eastern time by the Insurer shall be deemed to
be receipt by the Fund for purposes of Rule 22c-1 of the 1940 Act;
provided that the Fund receives notice of such orders on the next
following business day prior to 4:00 p.m. Eastern time on such day,
although the insurer will use its best efforts to provide such notice by
12:00 noon Eastern time.
1.7 The Insurer agrees to purchase and redeem the shares of each
Portfolio in accordance with the provisions of the current prospectus
for the Fund.
1.8 The Insurer shall pay for shares of the Portfolio on the next
business day after it places an order to purchase shares of the
Portfolio. Payment shall be in federal funds transmitted by wire.
1.9 Issuance and transfer of shares of the Portfolios will be by
book entry only unless otherwise agreed by the Fund. Stock certificates
will not be issued to the Insurer or the Separate Accounts unless
otherwise agreed by the Fund. Shares ordered from the Fund will be
recorded in an appropriate title for the Separate Accounts or the
appropriate subaccounts of the Separate Accounts.
1.10 The Fund shall furnish same Xxxx notice (by wire or
telephone, followed by written confirmation) to the Insurer of any
income dividends or capital gain distributions payable on the shares of
the Portfolios. The Insurer hereby elects to reinvest in the Portfolio
all such dividends and distributions as are payable on a Portfolio's
shares and to receive such dividends and distributions in additional
shares of that Portfolio. The Insurer reserves the right to revoke this
election in writing and to receive all such dividends and distributions
in cash. The Fund shall notify the Insurer of the number of shares so
issued as payment of such dividends and distributions.
1.11 The Fund shall instruct its recordkeeping agent to advise
the Insurer on each business day of the net asset value per share for
each Portfolio as soon as reasonably practical after the net asset value
per share is calculated and shall use its best efforts to make such net
asset value per share available by 7:00 p.m. Eastern time.
ARTICLE II. Representations and Warranties
2.1 The Insurer represents and warrants that it is an insurance
company duly organized and in good standing under applicable law and
that it is taxed as an insurance company under Subchapter L of the Code.
2.2 The Insurer represents and warrants that it has legally and
validly established each of the Separate Accounts as a segregated asset
account under the Nebraska Insurance Code, and that each of the Separate
Accounts is a validly existing segregated asset account under applicable
federal and state law.
2.3 The Insurer represents and warrants that the Variable
Contracts issued by the Insurer or interests in the Separate Accounts
under such Variable Contracts (1) are or, prior to issuance, will be
registered as securities under the Securities Act of 1933 ("1933 Act')
or, alternatively, (2) 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 0000 Xxx.
2.4 The Insurer represents and warrants that each or the Separate
Accounts (1) has been registered as a unit investment trust in
accordance with the provisions of the 1940 Act or, alternatively, (2)
has not been registered in proper reliance upon an exclusion from
registration under the 0000 Xxx.
2.5 The Insurer represents that it believes, in good faith, that
the Variable Contracts issued by the Insurer are currently treated as
annuity; contracts or life insurance policies (which may include
modified endowment contracts), whichever is appropriate, under
applicable provisions of the Code.
2.6 The Fund represents and warrants that it is duly organized as
a business trust under the laws of the Commonwealth of Massachusetts,
and is in good standing under applicable law.
2.7 The Fund represents and warrants that the shares of the
Portfolios are duly authorized for issuance in accordance with
applicable law and that the Fund is registered as an open-end management
investment company under the 0000 Xxx.
2.8 The Fund represents that it believes. in good faith, that the
Portfolios currently comply with the diversification provisions of
Section 817(h) of the Code and the regulations issued thereunder
relating to the diversification requirements for variable life insurance
policies and variable annuity contracts.
2.9 The Distributor represents and warrants that it is a member
in good standing of the NASD and is registered as a broker-dealer with
the SEC.
ARTICLE III. Central Duties
3.1 The Fund shall take all such actions as are necessary to
permit the sale of the shares of each Portfolio to the Separate
Accounts, including maintaining its registration as an investment
company under the 1940 Act, and registering the shares of the Portfolios
sold to the Separate Accounts under the 1933 Act for so long as required
by applicable law. The Fund shall amend its Registration Statement filed
with the SEC 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
Portfolios. The Fund shall register and qualify the shares for sale in
accordance with the laws of the various states to the extent deemed
necessary by the Fund or the Distributor.
3.2 The Fund shall make every effort to maintain qualification of
each Portfolio as a Regulated Investment Company under Subchapter M of
the Code (or any successor or similar provision) and shall notify the
Insurer immediately upon having a reasonable basis for believing that a
Portfolio has ceased to so qualify or that it might not so qualify in
the future.
3.3 The Fund shall make every effort to enable each Portfolio to
comply with the diversification provisions of Section 817(h) of the Code
and the regulations issued thereunder relating to the diversification of
requirements for variable life insurance policies and variable annuity
contracts and any prospective amendments or other modifications to
Section 817 or regulations thereunder, and shall notify the Insurer
immediately upon having reasonable basis for believing that any
Portfolio has ceased to comply.
3.4 The Insurer shall take all such actions as are necessary
under applicable federal and state law to permit the sale of the
Variable Contracts issued by the Insurer, including registering each
Separate Account as an investment company to the extent required under
the 1940 Act, and registering the Variable Contracts or interests in the
Separate Accounts under the Variable Contracts to the extent required
under the 1933 Act, and obtaining all necessary approvals to offer the
Variable Contracts from state insurance commissioners
3.5 The Insurer shall make every effort to maintain the treatment
of the Variable Contracts issued by the Insurer as annuity contracts or
life insurance policies, whichever is appropriate, under applicable
provisions of the Code, and shall notify the Fund and the Distributor
immediately upon having a reasonable basis for believing that such
Variable Contracts have ceased to be so treated or that they might not
be so treated in the future.
3.6 The Insurer shall offer and sell the Variable Contracts
issued by the Insurer in accordance with applicable provisions of the
1933 Act, the 1934 Act, the 1940 Act, the NASD Rules of Fair Practice,
and state law respecting the offering of variable life insurance
policies and variable annuity contracts.
3.7 The Distributor shall sell and distribute the shares of the
Portfolios of the Fund in accordance with the applicable provisions to
the 1933 Act, the 1934 Act, the 1940 Act, the NASD Rules of Fair
practice, and state law.
3.8 During such time as the Fund engages in Mixed Funding or
Shared Funding, a majority of the Board of Trustees of the Fund shall
consist of persons who are not "interested persons" of the Fund
("disinterested Trustees"), as defined by Section 2(a)(19) of the 1940
Act and the rules thereunder, and as modified by any applicable orders
of the SEC, except that if this provision of this Section 3.8 is not met
by reason of the death, disqualification, or bona fide resignation of
any Trustee or Trustees, then the operation of this provision shall be
suspended (a) for a period of 45 days if the vacancy or vacancies may be
filled by the Fund's Board; (b) for a period of 60 days if a vote of
shareholders is required to fill the vacancy or vacancies; or (c) for
such longer period as the SEC may prescribe by order upon application.
3.9 The Insurer and its agents will not in any way recommend any
proposal or oppose or interfere with any proposal submitted by the Fund
at a meeting of owners of Variable Contracts or shareholders of the
Fund, and will in no way recommend, oppose, or interfere with the
solicitation of proxies for Fund shares held by Contract Owners, without
the prior written consent of the Fund, which consent may be withheld in
the Fund's sole discretion.
3.10 Each party hereto shall cooperate with each other party and
all appropriate governmental authorities having jurisdiction (including,
without limitation, the SEC, the NASD, and state insurance regulators)
and shall permit such authorities reasonable access to its books and
records in connection with any investigation or inquiry relating to this
Agreement or the transactions contemplated hereby.
ARTICLE IV. Potential Conflicts
4.1 During such time as the Fund engages in Mixed Funding or
Shared Funding, the parties hereto shall comply with the conditions in
this Article IV.
4.2 The Fund's Board of Trustees shall monitor the Fund for the
existence of any material irreconcilable conflict (1) between the
interests of owners of variable annuity contracts and variable life
insurance policies, and (2) between the interests of owners of Variable
Contracts ("Variable Contract Owners") issued by different Participating
Life Insurance Companies that invest in the Fund. A material
irreconcilable conflict may arise for a variety of reasons, including:
(a) an action by any state insurance regulatory authority; (b) a change
in applicable federal or state insurance, tax, or securities laws or
regulations, or a public ruling, private letter ruling, no-action or
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 any Portfolio of the Fund are being managed; (e) a
difference in voting instructions given by variable annuity and variable
life insurance contract owners; or (f) a decision by a Participating
Insurance Company to disregard the voting instructions of Variable
Contract Owners.
4.3 The Insurer agrees that it shall report any potential or
existing conflicts of which it is aware to the Fund's Board of Trustees.
The Insurer will be responsible for assisting the Board of Trustees of
the Fund in carrying out its responsibilities under the Mixed and Shared
Funding Exemptive Order, or, if the Fund is engaged in Mixed Funding or
Shared Funding in reliance on Rule 6e-2, 63-3(T), or any other
regulation under the 1940 Act, the Insurer will be responsible for
assisting the Board of Trustees of the Fund in carrying out its
responsibilities under such regulation, 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
Insurer to inform the Board whenever Variable Contract Owner Voting
instructions are disregarded. The Insurer shall carry out its
responsibility under this Section 4.3 with a view only to the interests
of the Variable Contract Owners.
4.4 The Insurer agrees that in the event that it is determined by
a majority of the Board of Trustees of the Fund or a majority, of the
Fund's disinterested Trustees that a material irreconcilable conflict
exists, the Insurer shall, at its expense and to the extent reasonably
practicable (as determined by a majority of the disinterested Trustees
of the Board of the Fund), 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 Portfolio and reinvesting such assets in a
different investment medium, including another portfolio of the Fund, or
submitting the question as to whether such segregation should be
implemented to a vote of all affected Variable Contract Owners and, as
appropriate, segregating the assets of any appropriate group (i.e.,
annuity contract owners or life insurance contract owners of contracts
issued by one or more Participating Insurance Companies), that votes if
favor of such segregation, or offering to the affected Variable Contract
Owners the option of making such a change; and (2) establishing a new
registered management investment company or managed separate account. If
a material irreconcilable conflict arises because of the Insurer's
decision to disregard Variable Contract Owners' voting instructions and
that decision represents a minority position or would preclude a
majority vote, the Insurer shall be required, at the Fund's election, to
withdraw the Separate Accounts' investment in the Fund, provided,
however, that such withdrawal and termination shall be limited to the
extent required by the foregoing material irreconcilable conflict as
determined by a majority of the disinterested Trustees, and no charge or
penalty will be imposed as a result of such withdrawal. These
responsibilities shall be carried out with a view only to the interests
of the Variable Contract Owners. A majority of the disinterested
Trustees of the Fund shall determine whether or not any proposed action
adequately remedies any material irreconcilable conflict, but in no
event will the Fund or its investment adviser or the Distributor be
required to establish a new funding medium for any Variable Contract.
The Insurer shall not be required by this Section 4.4 to establish a new
funding medium for any Variable Contract if any offer to do so has been
declined by vote of a majority of Variable Contract Owners materially
adversely affected by the material irreconcilable conflict.
4.5 The Insurer, at least annually, shall submit to the Fund's
Board of Trustees such reports, materials, or data as the Board
reasonably may request so that the Trustees of the Fund may fully carry
out the obligations imposed upon the Board by the conditions contained
in the application for the Mixed and Shared Funding Exemptive Order and
said reports, materials, and data shall be submitted more frequently if
deemed appropriate by the Board.
4.6 All reports of potential or existing conflicts received by
the Fund's Board of Trustees, and all Board action with regard to
determining the existence of a conflict, notifying Participating
Insurance Companies of a conflict, and determining whether any proposed
action adequately remedies a conflict, shall be properly recorded in the
minutes of the Board of Trustees of the Fund or other appropriate
records, and such minutes or other records shall be made available to
the SEC upon request.
4.7 The Board of Trustees of the Fund shall promptly notify the
Insurer in writing of its determination of the existence of an
irreconcilable material conflict and its implications.
ARTICLE V. Prospectuses and Proxy Statements; Voting
5.1 The Insurer shall distribute such prospectuses, proxy
statements and periodic reports of the Fund to the owners of Variable
Contracts issued by the Insurer as required to be distributed to such
Variable Contract Owners under applicable federal or state law.
5.2 The Distributor shall provide the Insurer with as many copies
of the current prospectus of the Fund as the Insurer may reasonably
request. If requested by the Insurer in lieu thereof, the Fund shall
provide such documentation (including a final copy of the Fund's
prospectus as set in type or in camera-ready copy) and other assistance
as is reasonably necessary in order for the Insurer to either print a
stand-alone document or print together in one document the current
prospectus for the Variable Contracts issued by the Insurer and the
current prospectus for the Fund, or a document combining the Fund
prospectus with prospectuses of other funds in which the Variable
Contracts may be invested. The Fund shall bear the expense of printing
copies of its current prospectus that will be distributed to existing
Variable Contract Owners, and the Insurer shall bear the expense of
printing copies of the Fund's prospectus that are used in connection
with offering the variable Contracts issued by the Insurer.
5.3 The Fund and the Distributor shall provide, at the Fund's
expense, such copies of the Fund's current Statement of Additional
Information ("SAI") as may reasonably be requested, to the Insurer and
to any owner of a Variable Contract issued by the Insurer who requests
such SAI.
5.4 The Fund, at its expense, shall provide the Insurer with
copies of its proxy materials, periodic reports to shareholders, all
other communications to shareholders in such quantity as the Insurer
shall reasonably require for purposes of distributing to owners of
Variable Contracts issued by the Insurer. The Fund, at the Insurer's
expense, shall provide the Insurer with copies of its periodic reports
to shareholders and other communications to shareholders in such
quantity as the Insurer shall reasonably request for use in connection
with offering the Variable Contracts issued by the Insurer. If requested
by the Insurer in lieu thereof, the Fund shall provide such
documentation (including a final copy of the Fund's proxy materials,
periodic reports to shareholders, and other communications to
shareholders, as set in type or in camera-ready copy) and other
assistance as reasonably necessary in order for the Insurer to print
such shareholder communications for distribution to owners of Variable
Contracts issued by the Insurer.
5.5 For so long as the SEC interprets the 1940 Act to require
pass-through voting by Participating Insurance Companies whose Separate
Accounts are registered as investment companies under the 1940 Act, the
Insurer shall vote shares of each Portfolio of the Fund held in a
Separate Account or a subaccount thereof, whether or not registered
under the 1940 Act, at regular and special meetings of the Fund in
accordance with instructions timely received by the Insurer (or its
designated agent) from owners of Variable Contracts funded by such
Separate Account or subaccount thereof having a voting interest in the
Portfolio. The Insurer shall vote shares of a Portfolio of the Fund held
in a Separate Account or a subaccount thereof that are attributable to
the Variable Contracts as to which no timely instructions are received,
as well as shares held in such Separate Account or subaccount thereof
that are not attributable to the Variable Contracts and owned
beneficially by the Insurer (resulting from charges against the Variable
Contracts or otherwise), in the same proportion as the votes cast by
owners of the Variable Contracts funded by that Separate Account or
subaccount thereof having a voting interest in the Portfolio from whom
instructions have been timely received. The Insurer shall vote shares of
each Portfolio of the Fund held in its general account, if any, in the
same proportion as the votes cast with respect to shares of the
Portfolio held in all Separate Accounts of the Insurer or subaccounts
thereof, in the aggregate.
5.6 During such time as the Fund engages in Mixed Funding or
Shared Funding, the Fund shall disclose in its prospectus that (l) the
Fund is intended to be a funding, vehicle for variable annuity and
variable life insurance contracts offered by various insurance
companies, (2) material irreconcilable conflicts possibly arise, and (3)
the Board of Trustees of the Fund will monitor events in order to
identify the existence of any material irreconcilable conflicts and to
determine what action, if any, should be taken in response to any such
conflict. The Fund hereby notifies the Insurer that prospectus
disclosure may be appropriate regarding potential risks or offering
shares of the Fund to separate accounts funding both variable annuity
contracts and variable life insurance policies and to separate accounts
funding Variable Contracts of unaffiliated life insurance companies.
ARTICLE VI. Sales Material and Information
6.1 The Insurer shall furnish, or shall cause to be furnished, to
the Fund or its designee, each piece of sales literature or other
promotional material in which the Fund (or any Portfolio thereof) or its
investment adviser or the Distributor is named at least 15 days prior to
the anticipated use of such material, and no such sales literature or
other promotional material shall be used unless the Fund and the
Distributor or the designee of either approve the material or do not
respond with comments on the material within 10 days from receipt of the
material.
6.2 The Insurer agrees that neither it nor any of its affiliates
or agents shall give any information or make any representations or
statements on behalf of the Fund or concerning the Fund other than the
information or representations contained in the Registration Statement
or prospectus for the Fund shares, as such registration statement and
prospectus may be amended or supplemented from time to time, or in
reports or proxy statements for the Fund, or in sales literature or
other promotional material approved by the Fund or its designee and by
the Distributor or its designee, except with the permission of the Fund
or its designee and the Distributor or its designee.
6.3 The Fund or the Distributor or the designee of either shall
furnish to the Insurer or its designee, each piece of sales literature
or other promotional material in which the Insurer or its Separate
Accounts are named at least 15 days prior to the anticipated use of such
material, and no such material shall be used unless the Insurer or its
designee approves the material or does not respond with comments on the
material within 10 days from receipt of the material.
6.4 The Fund and the Distributor agree that each and the
affiliates and agents of each shall not give any information or make any
representations on behalf of the Insurer or concerning the Insurer, the
Separate Accounts, or the Variable Contracts issued by the Insurer,
other than the information or representations contained in a
registration statement or prospectus for such Variable Contracts, as
such registration statement and prospectus may be amended or
supplemented from time to time, or in reports for the Separate Accounts
or prepared for distribution to owners of such Variable Contracts, or in
sales literature or other promotional material approved by the Insurer
or its designee, except with the permission of the Insurer.
6.5 The Fund will provide to the Insurer at least one complete
copy of the Mixed and Shared Funding Exemptive Application and any
amendments thereto, all prospectuses, Statements of Additional
Information, reports, proxy statements and other voting solicitation
materials, and all amendments and supplements to any of the above, that
relate to the Fund or its shares, promptly after the filing of such
document with the SEC or other regulatory authorities.
6.6 The Insurer will provide to the Fund all prospectuses which
shall include an offering memorandum if the Variable Contracts issued by
the Insurer or interests therein are not registered under the 1933 Act),
Statements of Additional Information, reports, solicitations for voting
instructions relating to the Fund, and all amendments or supplements to
any of the above that relate to the Variable Contracts issued by the
Insurer or the Separate Accounts which utilize the Fund as an underlying
investment medium, promptly after the filing of such document with the
SEC or other regulatory authority.
6.7 For purposes of this Article VI, the phrase "sales literature
or other promotional material" includes, but is not limited to,
advertisements (such as material published, or designed for use, in a
newspaper, magazine, or other periodical, radio, television, telephone
or tape recording, videotape display, signs or billboards, motion
pictures, computerized media, or other public media), sales literature
(i.e., any written communications distributed or made generally
available to customers or the public, including brochures, circulars,
research reports, market letters, form letters, seminar texts, reprints
or excerpts of any other advertisement, sales literature, or published
article), educational or training materials or other communications
distributed or made generally available to some or all agents or
employees.
ARTICLE VII. Indemnification
7.1 Indemnification by the Insurer
7.1(a) The Insurer agrees to indemnify and hold harmless
the Fund, each of its Trustees and officers, any affiliated person of
the Fund within the meaning of Section 2(a)(3) of the 1940 Act, and the
Distributor (collectively, the "Indemnified Parties" for purposes of
this Section 7.1) against any and all losses, claims, damages,
liabilities (including amounts paid in settlement with the written
consent of the Insurer) or litigation expenses (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 litigation expenses are
related to the sale or acquisition of the Fund's shares or the Variable
Contracts issued by the Insurer 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 (which shall include an offering
memorandum) for the Variable Contracts issued by the Insurer or sales
literature for such Variable Contracts (or any amendment or supplement
to any of the foregoing), or arise out of or are based upon the omission
or the alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading, provided that this agreement to indemnify shall not apply as
to any Indemnified Party if such statement or omission or such alleged
statement or omission was made in reliance upon and in conformity with
information furnished to the Insurer by or on behalf of the Fund for use
in the registration statement or prospectus for the Variable Contracts
issued by the Insurer or sales literature (or any amendment or
supplement) or otherwise for use in connection with the sale of such
Variable Contracts or Fund shares; or
(ii) arise out of or as a result of any statement or
representation (other than statements or representations contained in
the registration statement, prospectus or sales literature of the Fund
not supplied by the Insurer or persons under its control) or wrongful
conduct of the Insurer or any of its affiliates, employees or agents
with respect to the sale or distribution of the Variable Contracts
issued by the Insurer or the 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 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 Insurer; or
(iv) arise out of or result from any material breach of any
representation and/or warranty made by the Insurer in this Agreement or
arise out of or result from any other material breach of this Agreement
by the Insurer; except to the extent provided in Sections 7.1(b) and
7.1(c) hereof.
7.1(b) The Insurer shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or
litigation expenses to which an Indemnified Party would otherwise be
subject by reason of willful misfeasance, bad faith, or gross negligence
in the performance of the Indemnified Party's duties or by reason of the
Indemnified Party's reckless disregard of obligations or duties under
this Agreement or to the Fund.
7.1(c) The Insurer shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party
unless such Party shall have notified the Insurance 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 Party shall have received notice of
such service on any designated agent), but failure to notify the Insurer
of any such claim shall not relieve the Insurer from any liability which
it may have to the Indemnified Party against whom such action is brought
otherwise than on account of this indemnification provision. In case any
such action is brought against the Indemnified Parties, the Insurer
shall be entitled to participate, at its own expense, in the defense of
such action. The Insurer also shall be entitled to assume the defense
thereof with counsel satisfactory to the party named in the action.
After notice from the Insurer to such party of the Insurer'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 Insurer
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.
7.1(d) The Indemnified Parties shall promptly notify the Insurer
of the commencement of any Litigation or proceedings against them in
connection with the issuance or sale of the Fund shares or the Variable
Contracts issued by the Insurer or the operation of the Fund.
7.2 Indemnification By the Distributor
7.2(a) The Distributor agrees to indemnify and hold harmless the
Insurer, its affiliated principal underwriter of the Variable Contracts,
and each of their directors and officers and any affiliated person of
the Insurer within the meaning of Section 2(a)(3) of the 1940 Act
(collectively, the "Indemnified Parties" for purposes of this Section
7.2) against any and all losses, claims damages, liabilities (including
amounts paid in settlement with the written consent of the Distributor)
or litigation expenses (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 litigation expenses are related to the sale or
acquisition of the Fund's shares or the Variable Contracts issued by the
Insurer 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 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 Distributor or
the Fund or the designee of either by or on behalf of the Insurer 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 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 Variable Contracts issued by the Insurer or Fund shares;
or
(ii) arise out of or as a result of any statement or
representations (other than statements or representations contained in
the registration statement, prospectus or sales literature for the
Variable Contracts not supplied by the Distributor or any employees or
agents of the Fund or the Distributor with respect to the sale or
distribution of the Variable Contracts issued by the Insurer or Fund
shares; or
(iii) arise out of any untrue statement or alleged untrue
statement of material fact contained in a registration statement,
prospectus, or sales literature covering the Variable Contracts issued
by the Insurer, 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 Insurer by or on behalf of
the Fund; or
(iv) arise out of or result from any material breach of any
representation and/or warranty made by the Distributor in this Agreement
or arise out of or result from any other material breach of this
Agreement by the Distributor; except to the extent provided in Sections
7.2(b) and 7.2(c) hereof.
7.2(b) The Distributor shall not be liable under this
indemnification provision with respect to any losses, claims, damages,
liabilities or litigation expenses to which an Indemnified Party would
otherwise be subject by reason of willful misfeasance, bad faith, or
gross negligence in the performance of the Indemnified Party's duties or
by reason of the Indemnified Party's reckless disregard of obligations
or duties under this Agreement or to the Insurer or the Separate
Accounts.
7.2(c) The Distributor shall not be liable under this
indemnification provision with respect to any claim made against an
Indemnified Party unless such Party shall have notified the Distributor
in writing within a reasonable time after the summons or other first
legal process giving information of the nature of the claim shall have
been served upon such Indemnified Party (or after such Party shall have
received notice of such service on any designated agent), but failure to
notify the Distributor of any such claim shall not relieve the
Distributor from any liability which it may have to the Indemnified
Party against whom such action is brought otherwise than on account of
this indemnification provision. In case any such action is brought
against the Indemnified Parties, the Distributor will be entitled to
participate, at its own expense, in the defense thereof. The Distributor
also shall be entitled to assume the defense thereof, with counsel
satisfactory to the party named in the action. After notice from the
Distributor to such party of the Distributor's election to assume the
defense thereof, the Indemnified Party shall bear the fees and expenses
of any additional counsel retained by it, and the Distributor will not
be liable to such party under this Agreement for any legal or other
expense subsequently incurred by such party independently in connection
with the defense thereof other than reasonable costs of investigation.
7.2(d) The Insurer shall promptly notify the Distributor of the
commencement of any litigation or proceedings against it or any of its
officers or directors in connection with the issuance or sale of the
Variable Contracts issued by the Insurer or the operation of the
Separate Accounts.
7.3 Indemnification by the Fund
7.3(a) The Fund agrees to indemnify and hold harmless the
Insurer, its affiliated principal underwriter of the Variable Contracts,
and each of their directors and officers and any affiliated person of
the Insurer within the meaning of Section 2(a)(3) of the 1940 Act
(collectively, the "Indemnified Parties" for purposes of this Section
7.3) against any and all losses, claims, damages, liabilities (including
amounts paid in settlement with the written consent of the Fund) or
litigation expenses (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 litigation expenses are related to the sale or
acquisition of the Fund's shares or the Variable Contracts issued by the
Insurer 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 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 Distributor or
the Fund or the designee of either by or on behalf of the Insurer 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 Variable Contracts issued by the Insurer
or Fund shares; or
(ii) arise out of or as a result of any statement or
representation (other than statements or representations contained in
the registration statement, prospectus or sales literature for the
Variable Contracts not supplied by the Distributor or any employees or
agents thereof) or wrongful conduct of the Fund, or the affiliates,
employees, or agents of the Fund, with respect to the sale or
distribution of the Variable Contracts issued by the Insurer 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 Variable Contracts issued by
the Insurer, 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 insurer by or on behalf of
the Fund; or
(iv) 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;
except to the extent provided in Section 7.3(b) and 7.3(c) hereof.
7.3(b) The Fund shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or
litigation expenses to which an Indemnified Party would otherwise be
subject by reason of willful misfeasance, bad faith, or gross negligence
in the performance of the Indemnified Party's duties or by reason of the
Indemnified Party's reckless disregard of obligations or duties under
this Agreement or to the Insurer or the Separate Accounts.
7.3(c) The Fund shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party
unless such 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 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
otherwise than on account of this indemnification provision. 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. 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.
7.3(d) The Insurer shall promptly notify the Fund 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
Variable Contracts issued by the Insurer or the sale of the Fund's
shares.
ARTICLE VIII. Applicable Law
8.1 This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the State of
Pennsylvania.
8.2 This Agreement shall be subject to the provisions of the
1933, 1934, and 1940 Acts, and the rules and regulations and rulings
thereunder, including such exemptions from those statutes, rules and
regulations as the SEC may grant (including, but not limited to, the
Mixed and Shared Funding Exemptive Order), and the terms hereof shall be
interpreted and construed in accordance therewith.
ARTICLE IX. Termination
9.1 This Agreement shall terminate:
(a) at the option of any party with respect to some or all
Portfolios upon 180 days advance written notice to the other parties; or
(b) at the option of the Insurer with respect to any Portfolio if
shares of the Portfolios are not reasonably available to meet the
requirements of the Variable Contracts issued by the Insurer, as
determined by the insurer, and upon prompt notice by the Insurer to the
other parties; or
(c) at the option of the Fund or the Distributor upon institution
of formal proceedings against the Insurer or its agent by the NASD, the
SEC, or any state securities or insurance department or any other
regulatory body regarding the Insurer's duties under this Agreement or
related to the sale of the Variable Contracts issued by the Insurer, the
operation of the Separate Accounts, or the purchase of the Fund shares;
or
(d) at the option of the Insurer upon institution of formal
proceedings against the Fund or the Distributor by the NASD, the SEC, or
any state securities or insurance department or any other regulatory
body; or
(e) upon requisite vote of the Variable Contract Owners having an
interest in the Separate Accounts (or any subaccounts thereof) to
substitute the shares of another investment company for the
corresponding shares of the Fund or a Portfolio in accordance with the
terms of the Variable Contracts for which those shares had been selected
or serve as the underlying investment media; or
(f) in the event any of the shares of a Portfolio are not
registered, issued or sold in accordance with applicable state and/or
federal law, or such law precludes the use of such shares as the
underlying investment media of the Variable Contracts issued or to be
issued by the insurer; or
(g) by any party to the Agreement upon a determination by a
majority of the Trustees of the Fund, or a majority or its disinterested
Trustees, that an irreconcilable conflict, as described in Article IV
hereof, exists; or
(h) at the option of the Insurer if the Fund or a Portfolio fails
to meet the requirements under Subchapter M of the Code for
qualification as a Regulated Investment Company specified in Section 3.2
hereof or the diversification requirements specified in Section 3.3
hereof, or if the Insurer reasonably believes that the Fund or a
Portfolio may fail to so qualify or comply.
9.2 Each party to this Agreement shall promptly notify the other
parties to the Agreement of the institution against such party of any
such formal proceedings as described in Sections 9.1(c) and (d) hereof.
The Insurer shall give 60 days prior written notice to the Fund of the
date of any proposed vote of Variable Contract Owners to replace the
Fund's shares as described in Section 9.1 (e) hereof.
9.3 Except as necessary to implement Variable Contract Owner
initiated transactions, or as required by state insurance laws or
regulations, the Insurer shall not redeem Fund shares attributable to
the Variable Contracts issued by the Insurer (as opposed to Fund shares
attributable to the Insurer's assets held in the Separate Accounts), and
the Insurer shall not prevent Variable Contract Owners from allocating
payments to a Portfolio, until 60 days after the Insurer shall have
notified the Fund or Distributor of its intention to do so.
9.4 Notwithstanding any termination of this Agreement, the Fund
and the Distributor shall at the option of the Insurer continue to make
available additional shares of the Fund pursuant to the terms and
conditions of this Agreement, for all Variable Contracts in effect on
the effective date of termination of this Agreement (hereinafter
referred to as 'Existing Contracts"). Specifically, without limitation,
based upon instructions from the owners of the Existing Contracts, the
Separate Accounts shall be permitted to reallocate investments in the
Portfolios of the Fund and redeem investments in the Portfolios, and
shall be permitted to interest in the Portfolios in the event that
owners of the Existing Contracts make additional purchase payments under
the Existing Contracts. If this Agreement terminates, the parties agree
that Sections 3.10, 7.1, 7.2, 7.S, 8.1, and 8.2, and, to the extent that
all or a portion of the assets of the Separate Accounts continue to be
invested in the Fund or any Portfolio of the Fund, Articles I, II, and
IV and Sections 5.5 and 5.6 will remain in effect after termination.
ARTICLE X. Notices
Any notice shall be sufficiently given when sent by registered or
certified 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:
Insurance Management Series
Federated Investors Tower
0000 Xxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Attn.: Xxxx X. XxXxxxxxx
If to the Distributor:
Federated Securities Corp.
Federated Investors Tower
0000 Xxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Attn.: Xxxx X. XxXxxxxxx
If to the Insurer:
United of Omaha Life Insurance Company
3 - Law Division
Mutual of Xxxxx Xxxxx
Xxxxx, Xxxxxxxx 00000-0000
Attn.: Variable Products Counsel
ARTICLE XI: Miscellaneous
11.1 The Fund and the Insurer agree that if and to the extent
Rule 6e-2 or Rule 6e-3(T) under the 1940 Act is amended or it Rule the-3
is adopted in final form, to the extent applicable, the Fund and the
Insurer shall each take such steps as may be necessary to comply with
the Rule as amended or adopted in final form.
11.2 A copy of the Fund's Agreement and Declaration of Trust is
on file with the Secretary of the Commonwealth of Massachusetts and
notice is hereby given that any agreements that are executed on behalf
of the Fund by any Trustee or officer of the Fund are executed in his or
her capacity as Trustee or officer and not individually. The obligations
to this Agreement shall be binding upon the assets and property of the
Fund and shall not be binding upon any Trustee, officer or shareholder
of the Fund individually.
11.3 Nothing in this Agreement shall impede the Fund's Trustees
or shareholders of the shares of the Fund's Portfolios from exercising
any of the rights provide to such Trustee or shareholders in the Fund's
Agreement and Declaration of Trust, as amended, a copy of which will be
provided to the Insurer upon request.
11.4 Administrative services to Variable Contract Owners shall be
the responsibility of Insurer. Insurer, on behalf of its separate
accounts will be the sole shareholder of record of Fund shares. Fund and
Distributor recognize that they will derive a substantial savings in
administrative expense by virtue of having a sole shareholder rather
than multiple shareholders. In consideration of the administrative
savings resulting from having a sole shareholder rather than multiple
shareholders, Distributor agrees to pay to Insurer an amount computed at
an annual rate of .25 of 1% of the average daily net asset value of
shares held in subaccounts for which Insurer provides administrative
services. Distributor's payments to Insurer are for administrative
services only and do not constitute payment in any manner for investment
advisory services.
11.5 It is understood that the name "Federated" or any derivative
thereof or logo associated with that name is the valuable property of
the Distributor and its affiliates, and that the Insurer has the right
to use such name (or derivative or logo) only so long as this Agreement
is in effect.
11.6 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.
11.7 This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the
same instrument.
11.8 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.
11.9 This Agreement may not be assigned by any party to the
Agreement except with the written consent of the other parties to the
Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed as of the day and year first above written.
INSURANCE MANAGEMENT SERIES
ATTEST: By:
Name: S. Xxxxxxx Xxxxx Name: Xxxx X. XxXxxxxxx
Title: Assistant Secretary Title: Vice President
FEDERATED SECURITIES CORP.
ATTEST: By:
Name: S. Xxxxxxx Xxxxx Name: Xxxx X. XxXxxxxxx
Title: Assistant Secretary Title: Executive Vice
President
UNITED OF OMAHA LIFE INSURANCE
COMPANY
ATTEST: By:
Name: Xxxxxxx X. Xxxxx Name: Xxxxxxx X. Xxxx
Title: 2nd Vice President & Counsel Title: Senior Vice President
