PARTICIPATION AGREEMENT
Among
SYMETRA LIFE INSURANCE COMPANY,
PIMCO EQUITY SERIES VIT,
and
PIMCO INVESTMENTS LLC
THIS AGREEMENT, dated as of the ___ day of March 2012, by and among
Symetra Life Insurance Company, (the "Company"), a Washington life insurance
company, on its own behalf and on behalf of each segregated asset account of
the Company set forth on Schedule A hereto as may be amended from time to time
(each account hereinafter referred to as the "Account"), PIMCO Equity Series
VIT (the "Fund"), a Delaware statutory trust, and PIMCO Investments LLC (the
"Underwriter"), a Delaware limited liability company.
WHEREAS, the Fund engages in business as an open-end management
investment company and is available to act as the investment vehicle for
separate accounts established for variable life insurance and variable annuity
contracts (the "Variable Insurance Products") to be offered by insurance
companies which have entered into participation agreements with the Fund and
Underwriter ("Participating Insurance Companies");
WHEREAS, the shares of beneficial interest of the Fund are divided
into several separate series of shares, each designated a "Portfolio" and
representing the interest in a particular managed portfolio of securities
and other assets;
WHEREAS, the Fund may rely on an order (PIMCO Variable Insurance Trust,
et al., Investment Company Act Rel. Nos. 22994 (Jan. 7, 1998) (Notice) and
23022 (Feb. 9, 1998)(Order)) from the Securities and Exchange Commission (the
"SEC") granting Participating Insurance Companies and variable annuity and
variable life insurance separate accounts exemptions from the provisions of
sections 9(a), 13(a), 15(a), and 15(b) of the Investment Company Act of 1940,
as amended, (the "1940 Act") and Rules 6e-2(b)(15) and 6e-3(T)(b)(15)
thereunder, if and to the extent necessary to permit shares of the Fund to be
sold to and held by variable annuity and variable life insurance separate
accounts of both affiliated and unaffiliated life insurance companies (the
"Mixed and Shared Funding Exemptive Order");
WHEREAS, the Fund is registered as an open-end management investment
company under the 1940 Act and shares of the Portfolios are registered under
the Securities Act of 1933, as amended (the "1933 Act");
WHEREAS, Pacific Investment Management Company LLC (the "Adviser"),
which serves as investment adviser to the Fund, is duly registered as an
investment adviser under the federal Investment Advisers Act of 1940, as
amended;
WHEREAS, the Company has issued or will issue certain variable life
insurance and/or variable annuity contracts supported wholly or partially by
the Account (the "Contracts"), and said Contracts are listed in Schedule A
hereto, as it may be amended from time to time by mutual written agreement;
WHEREAS, the Account is duly established and maintained as a segregated
asset account, duly established by the Company, on the date shown for such
Account on Schedule A hereto, to set aside and invest assets attributable to
the aforesaid Contracts;
WHEREAS, the Underwriter, which serves as distributor to the Fund, is
registered as a broker dealer with the SEC under the Securities Exchange Act
of 1934, as amended (the "1934 Act"), and is a member of the Financial Industry
Regulatory Authority ("FINRA"); and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase Institutional Class shares in the
Portfolios listed in Schedule A hereto, as it may be amended from time to time
by mutual written agreement (the "Designated Portfolios") on behalf of the
Account to fund the aforesaid Contracts, and the Underwriter is authorized to
sell such shares to the Account at net asset value;
NOW, THEREFORE, in consideration of their mutual promises, the Company,
the Fund and the Underwriter agree as follows:
ARTICLE I.
SALE OF FUND SHARES
-------------------
1.1. The Fund has granted to the Underwriter exclusive authority to
distribute the Fund's shares, and has agreed to instruct, and has so
instructed, the Underwriter to make available to the Company for purchase on
behalf of the Account Fund shares of those Designated Portfolios selected by
the Underwriter. Pursuant to such authority and instructions, and subject to
Article IX hereof, the Underwriter agrees to make available to the Company for
purchase on behalf of the Account, shares of those Designated Portfolios, such
purchases to be effected at net asset value in accordance with Section 1.3 of
this Agreement. Notwithstanding the foregoing, the Board of Trustees of the
Fund (the "Board") may suspend or terminate the offering of Fund shares of any
Designated Portfolio or class thereof, or liquidate any Designated Portfolio
or class thereof, if such action is required by law or by regulatory
authorities having jurisdiction or if, in the sole discretion of the Board
acting in good faith, suspension, termination or liquidation is necessary in
the best interests of the shareholders of such Designated Portfolio.
1.2. The Fund shall redeem, at the Company's request, any full or
fractional Designated Portfolio shares held by the Company on behalf of the
Account, such redemptions to be effected at net asset value in accordance with
Section 1.3 of this Agreement. Notwithstanding the foregoing, (i) the Company
shall not redeem Fund shares attributable to Contract owners except in the
circumstances permitted in Section 1.3 of this Agreement, and (ii) the Fund
may delay redemption of Fund shares of any Designated Portfolio to the extent
permitted by the 1940 Act, and any rules, regulations or orders thereunder.
1.3. Purchase and Redemption Procedures
(a) The Fund hereby appoints the Company as an agent of the
Fund for the limited purpose of receiving purchase and redemption requests on
behalf of the Account (but not with respect to any Fund shares that may be held
in the general account of the Company) for shares of those Designated
Portfolios made available hereunder, based on allocations of amounts to the
Account or subaccounts thereof under the Contracts and other transactions
relating to the Contracts or the Account. Receipt and acceptance of any such
request (or relevant transactional information therefore) on any day the New
York Stock Exchange is open for trading and on which the Fund calculates its
net asset value pursuant to the rules of the SEC (a "Business Day") by the
Company as such limited agent of the Fund prior to the time that the Fund
ordinarily calculates its net asset value as described from time to time in
the Fund's statutory prospectus, as such term is defined in Rule 498 under the
1933 Act (which as of the date of execution of this Agreement is 4:00 p.m.
Eastern Time) shall constitute receipt and acceptance by the Fund on that same
Business Day, provided that the Fund or its designated agent receives notice
of such request by 9:00 a.m. Eastern Time on the next following Business Day.
(b) The Company shall pay for shares of each Designated
Portfolio on the same day that it notifies the Fund of a purchase request for
such shares. Payment for Designated Portfolio shares shall be made in federal
funds transmitted to the Fund by wire to be received by the Fund by 4:00 p.m.
Eastern Time on the Business Day the Fund is notified of the purchase request
for Designated Portfolio shares (which request may be net of redemptions of
shares). If federal funds are not received on time, such funds will be
invested, and Designated Portfolio shares purchased thereby will be issued, as
soon as practicable and the Company shall promptly, upon the Fund's request,
reimburse the Fund for any charges, costs, fees, interest or other expenses
incurred by the Fund in connection with any advances to, or borrowing or
overdrafts by, the Fund, or any similar expenses incurred by the Fund, as a
result of portfolio transactions effected by the Fund based upon such purchase
request. Upon receipt of federal funds so wired, such funds shall cease to be
the responsibility of the Company and shall become the responsibility of the
Fund.
(c) Payment for Designated Portfolio shares redeemed by
the Account or the Company shall be made in federal funds transmitted by wire
to the Company or any other designated person on the next Business Day after
the Fund is properly notified of the redemption order of such shares (which
order shall be net of any purchase orders) except that the Fund reserves the
right to redeem Designated Portfolio shares in assets other than cash and to
delay payment of redemption proceeds to the extent permitted under Section
22(e) of the 1940 Act and any Rules thereunder, and in accordance with the
procedures and policies of the Fund as described in the then current statutory
prospectus and/or statement of additional information ("SAI"). The Fund shall
not bear any responsibility whatsoever for the proper disbursement or crediting
of redemption proceeds by the Company; the Company alone shall be responsible
for such action.
(d) Any purchase or redemption request for Designated
Portfolio shares held or to be held in the Company's general account shall be
effected at the net asset value per share next determined after the Fund's
receipt of such request, provided that, in the case of a purchase request,
payment for Fund shares so requested is received by the Fund in federal funds
prior to close of business for determination of such value, as defined from
time to time in the Fund's statutory prospectus.
(e) The Company shall not redeem Fund shares attributable
to the Contracts (as opposed to Fund shares attributable to the Company's
assets held in the Account) except (i) as necessary to implement Contract
owner initiated or approved transactions, (ii) as required by state and/or
federal laws or regulations or judicial or other legal precedent of general
application (hereinafter referred to as a "Legally Required Redemption"),
(iii) upon 45 days prior written notice to the Fund and the Underwriter, as
permitted by an order of the SEC pursuant to Section 26(c) of the 1940 Act,
but only if a substitution of other securities for the shares of the Designated
Portfolios is consistent with the terms of the Contracts, or (iv) as permitted
under the terms of the Contracts. Upon request, the Company will promptly
furnish to the Fund reasonable assurance that any redemption pursuant to clause
(ii) above is a Legally Required Redemption. Furthermore, except in cases
where permitted under the terms of the Contracts, the Company shall not
prevent Contract owners from allocating payments to a Designated Portfolio
that was otherwise available under the Contracts without first giving the Fund
45 days notice of its intention to do so.
1.4. The Fund shall use its best efforts to make the net asset value
per share for each Designated Portfolio available to the Company by 7:00 p.m.
Eastern Time each Business Day, and in any event, as soon as reasonably
practicable after the net asset value per share for such Designated Portfolio
is calculated, and shall calculate such net asset value in accordance with the
Fund's statutory prospectus. Neither the Fund, any Designated Portfolio, the
Underwriter, nor any of their affiliates shall be liable for any information
provided to the Company pursuant to this Agreement which information is based
on incorrect information supplied by the Company or any other Participating
Insurance Company to the Fund or the Underwriter.
In the event of an error in the computation of a Designated Portfolio's net
asset value or any dividend or capital gain distribution, the Fund shall
notify the Company as soon as reasonably practicable after the discovery of
the error. Such notification may be verbal, but shall be confirmed promptly
in writing. An net asset value pricing error shall be corrected in accordance
with the Fund's net asset value pricing error correction procedures.
1.5. The Fund shall furnish notice (by wire or telephone followed by
written confirmation) to the Company as soon as reasonably practicable of any
income dividends or capital gain distributions payable on any Designated
Portfolio shares. The Company, on its behalf and on behalf of the Account,
hereby elects to receive all such dividends and distributions as are payable
on any Designated Portfolio shares in the form of additional shares of that
Designated Portfolio. The Company reserves the right, on its behalf and on
behalf of the Account, to revoke this election and to receive all such
dividends and capital gain distributions in cash. The Fund shall notify the
Company promptly of the number of Designated Portfolio shares so issued as
payment of such dividends and distributions.
1.6. Issuance and transfer of Fund shares shall be by book entry
only. Share certificates will not be issued to the Company or the Account.
Purchase and redemption orders for Fund shares shall be recorded in an
appropriate ledger for the Account or the appropriate subaccount of the
Account.
1.7. (a) The parties hereto acknowledge that the arrangement
contemplated by this Agreement is not exclusive; the Fund's shares may be sold
to other insurance companies (subject to Section 2.2(ii) hereof) and the cash
value of the Contracts may be invested in other investment companies, provided,
however, that until this Agreement is terminated pursuant to Article IX, the
Company shall promote the Designated Portfolios on the same basis as other
funding vehicles available under the Contracts. Funding vehicles other than
those listed on Schedule A to this Agreement may be available for the
investment of the cash value of the Contracts, provided, however, that if any
such vehicle or series thereof, has investment objectives or policies that are
substantially comparable to the investment objectives and policies of a
Designated Portfolio available hereunder, the Company gives the Fund and
the Underwriter 45 days written notice of its intention to make such other
investment vehicle available as a funding vehicle for the Contracts.
(b) The Company shall not, without prior notice to the
Fund (unless otherwise required by applicable law), take any action to operate
the Account as a management investment company under the 1940 Act.
(c) The Company shall not, without prior notice to the
Fund (unless otherwise required by applicable law), induce or encourage
Contract owners to change or modify the Fund or remove or otherwise change the
Fund's distributor or investment adviser.
(d) The Company shall not, without prior notice to the
Fund, induce or encourage Contract owners to vote on any matter submitted for
consideration by the shareholders of the Fund in a manner other than as
recommended by the Board of Trustees of the Fund.
1.8. The Company acknowledges that, pursuant to Form 24F-2, the
Fund is not required to pay fees to the SEC for registration of its shares
under the 1933 Act with respect to its shares issued to an Account that is a
unit investment trust that offers interests that are registered under the 1933
Act and on which a registration fee has been or will be paid to the SEC (a
"Registered Account"). The Company agrees to provide the Fund or its agent
each year within 60 days of the end of the Fund's fiscal year, or when
reasonably requested by the Fund, information as to the number of shares
purchased by a Registered Account and any other Account the interests of which
are not registered under the 0000 Xxx. The Company acknowledges that the Fund
intends to rely on the information so provided.
ARTICLE II.
REPRESENTATIONS AND WARRANTIES
--------------------------------
2.1. The Fund represents and warrants that (i) the Fund is lawfully
organized and validly existing under the laws of the State of Delaware,
(ii) the Fund is and shall remain registered under the 1940 Act,
(iii) Designated Portfolio shares sold pursuant to this Agreement are
registered under the 1933 Act (to the extent required by that Act) and are
duly authorized for issuance, (iv) the Fund shall amend the registration
statement for the shares of the Designated Portfolios under the 1933 Act and
the 1940 Act from time to time as required in order to effect the continuous
offering of such shares, and (v) the Board has elected for each Designated
Portfolio to be taxed as a Regulated Investment Company under Subchapter M of
the Internal Revenue Code of 1986, as amended (the "Code"). The Fund makes no
representations or warranties as to whether any aspect of the Designated
Portfolios' operations, including, but not limited to, investment policies,
fees and expenses, complies with the insurance laws and other applicable laws
of the various states. The Company agrees to promptly notify the Fund of any
investment restrictions imposed by state insurance law applicable to the Fund
or a Designated Portfolio. The Fund shall not be responsible, and the Company
shall take full responsibility, for determining any jurisdiction in which any
qualification or registration of Fund shares or the Fund by the Fund may be
required in connection with the sale of the Contracts or the indirect interest
of any Contract in any shares of the Fund and shall advise the Fund at such
time and in such manner as is necessary to permit the Fund to comply.
2.2. The Underwriter represents and warrants that shares of the
Designated Portfolios (i) shall be offered and sold in compliance in all
material respects with applicable federal securities laws, (ii) are offered
and sold only to Participating Insurance Companies and their separate accounts
and to persons or plans that communicate to the Fund that they qualify to
purchase shares of the Designated Portfolios under Section 817(h) of the
Code and the regulations thereunder without impairing the ability of the
Account to consider the portfolio investments of the Designated Portfolios as
constituting investments of the Account for the purpose of satisfying the
diversification requirements of Section 817(h) ("Qualified Persons"), and
(iii) are registered and qualified for sale in accordance with the laws of
the various states to the extent required by applicable law.
2.3. Subject to Company's representations and warranties in Sections
2.5 and 2.6, the Fund represents and warrants that it will invest the assets of
each Designated Portfolio in such a manner as to ensure that the Contracts will
be treated as annuity or life insurance contracts, whichever is appropriate,
under the Code and the regulations issued thereunder (or any successor
provisions). Without limiting the scope of the foregoing, the Fund represents
and warrants that each Designated Portfolio has complied and will continue to
comply with Section 817(h) of the Code and Treasury Regulation [section sign]
1.817-5, and any Treasury interpretations thereof, relating to the
diversification requirements for variable annuity, endowment, or life
insurance contracts, and any amendments or other modifications or successor
provisions to such Section or Regulation. The Fund will make every reasonable
effort (a) to notify the Company immediately upon having a reasonable basis
for believing that a breach of this Section 2.3 has occurred, and (b) in the
event of such a breach, to adequately diversify the Designated Portfolio so
as to achieve compliance within the grace period afforded by Treasury
Regulation [section sign]1.817-5.
2.4. The Fund represents and warrants that each Designated Portfolio
is or will be qualified as a Regulated Investment Company under Subchapter M
of the Code, that the Fund will make every reasonable effort to maintain such
qualification (under Subchapter M or any successor or similar provisions) and
that the Fund will notify the Company immediately upon having a reasonable
basis for believing that a Designated Portfolio has ceased to so qualify or
that it might not so qualify in the future.
2.5. The Company represents and warrants that the Contracts (a)
are, or prior to issuance will be, registered under the 1933 Act, or (b) are
not registered because they are properly exempt from registration under the
1933 Act or will be offered exclusively in transactions that are properly
exempt from registration under the 1933 Act. The Company also represents and
warrants that it is an insurance company duly organized and in good standing
under applicable law, that it has legally and validly established the Account
prior to any issuance or sale thereof as a segregated asset account under
applicable state insurance laws, and that it (a) has registered or, prior to
any issuance or sale of the Contracts, will register the Account as a unit
investment trust in accordance with the provisions of the 1940 Act to serve as
a segregated investment account for the Contracts, or alternatively (b) has
not registered the Account in proper reliance upon an exclusion from
registration under the 1940 Act. The Company further represents and warrants
that (i) the Contracts will be issued and sold in compliance in all material
respects with all applicable federal securities and state securities and
insurance laws, (ii) the sale of the Contracts shall comply in all material
respects with state insurance suitability requirements; (iii) the information
provided pursuant to Section 1.8 shall be accurate in all material respects;
and (iv) it and the Account are Qualified Persons. The Company shall register
and qualify the Contracts or interests therein as securities in accordance
with the laws of the various states only if and to the extent required by
applicable law. The Company represents and warrants that it shall comply with
the requirements of Rule 498 and any applicable guidance received from the
SEC or from the SEC staff thereunder in connection with the delivery of the
Fund's summary prospectus, as defined in Rule 498 under the 1933 Act, and any
other duties assumed by the Company in this Agreement. The Company represents
and warrants that it has reasonable policies and procedures in place to ensure
that it can appropriately meet its obligations under this Agreement.
2.6. The Company represents and warrants that the Contracts are
currently, and at the time of issuance shall be, treated as life insurance or
annuity contracts, under applicable provisions of the Code, and that it will
make every reasonable effort to maintain such treatment, and that it will
notify the Fund and the Underwriter immediately upon having a reasonable basis
for believing the Contracts have ceased to be so treated or that they might
not be so treated in the future. In addition, the Company represents and
warrants that each of its Accounts is a "segregated asset account" and that
interests in the Accounts are offered exclusively through the purchase of or
transfer into a "variable contract" within the meaning of such terms under
Section 817 of the Code and the regulations thereunder. Company will use
every reasonable effort to continue to meet such definitional requirements,
and it will notify the Fund and the Underwriter immediately upon having a
reasonable basis for believing that such requirements have ceased to be met
or that they might not be met in the future.
2.7. The Underwriter represents and warrants that it is a member in
good standing of the FINRA and is registered as a broker-dealer with the SEC.
2.8. The Fund and the Underwriter represent and warrant that all of
their trustees/directors, officers, employees, investment advisers, and other
individuals or entities dealing with the money and/or securities of the Fund
are and shall continue to be at all times covered by a blanket fidelity bond
or similar coverage for the benefit of the Fund in an amount not less than the
minimum coverage as required currently by Rule 17g-1 of the 1940 Act or related
provisions as may be promulgated from time to time. The aforesaid bond shall
include coverage for larceny and embezzlement and shall be issued by a
reputable bonding company.
2.9. The Company represents and warrants that all of its directors,
officers, employees, and other individuals/entities employed or controlled by
the Company dealing with the money and/or securities of the Account are covered
by a blanket fidelity bond or similar coverage for the benefit of the Account,
in an amount not less than $5 million. The aforesaid bond includes coverage
for larceny and embezzlement and is issued by a reputable bonding company.
The Company agrees to hold for the benefit of the Fund and to pay to the Fund
any amounts lost from larceny, embezzlement or other events covered by the
aforesaid bond to the extent such amounts properly belong to the Fund pursuant
to the terms of this Agreement. The Company agrees to make all reasonable
efforts to see that this bond or another bond containing these provisions is
always in effect, and agrees to notify the Fund and the Underwriter in the
event that such coverage no longer applies.
2.10. The Company represents and warrants that it shall comply with
any applicable privacy and notice provisions of 15 U.S.C. [sections sign]
6801-6827 and any applicable regulations promulgated thereunder (including
but not limited to 17 C.F.R. Part 248), and any other applicable federal and
state privacy law, as they may be amended from time to time.
2.11. The Company represents and warrants that it has in place an
anti-money laundering program ("AML program") that does now and will continue
to comply with applicable laws and regulations, including the relevant
provisions of the USA PATRIOT Act (Pub. L. No. 107-56 (2001)) and the
regulations issued thereunder (the "Patriot Act"). The Company hereby
certifies that it has established and maintains an AML program that includes
written policies, procedures and internal controls reasonably designed to
identify its Contract owners. The Company hereby certifies that it has
conducted due diligence consistent with its policies and procedures to
ensure that its AML Program is being implemented effectively and the selling
broker dealers and its agents have undertaken appropriate due diligence
efforts to "know its customers" in accordance with all applicable anti-money
laundering regulations in its jurisdiction including, where applicable, the
Patriot Act. The Company further confirms that it will monitor for suspicious
activity in accordance with the requirements of the Patriot Act. In
addition, the Company represents and warrants that it has adopted and
implemented policies and procedures reasonably designed to achieve compliance
with the applicable requirements administered by the Office of Foreign Assets
Control of the U.S. Department of the Treasury. The Company agrees to provide
the Underwriter with such information as it may reasonably request, including
but not limited to the filling out of questionnaires, attestations and other
documents, to enable the Underwriter to fulfill its obligations under
applicable law, and, upon its request, to file a notice pursuant to Section
314 of the Patriot Act and the implementing regulations related thereto to
permit the voluntary sharing of information between the parties hereto. Upon
filing such a notice, the Company agrees to forward a copy to the Underwriter,
and further agrees to comply with all requirements under the Patriot Act and
implementing regulations concerning the use, disclosure, and security of any
information that is shared.
2.12. The Company represents and warrants that (a) the Company has,
and will maintain, policies and procedures reasonably designed to monitor and
prevent market timing or excessive trading activity by its customers and (b)
the Company will provide the Fund or its agent with assurances regarding the
compliance of its handling of orders with respect to shares of the Designated
Portfolios with the requirements of Rule 22c-1 under the 1940 Act, regulatory
interpretations thereof, and the Fund's market timing and excessive trading
policies upon reasonable request. Additionally, the Company shall comply with
provisions of the Prospectus (the term "Prospectus" to include the summary
prospectuses and statutory prospectuses of the Portfolios of the Fund as
defined in Rule 498 under the 0000 Xxx) and SAI of the Fund, and with
applicable federal and state securities laws. Among other things, and without
limitation of the foregoing, the Company shall be responsible for reasonably
assuring that: (a) only orders to purchase, redeem or exchange Portfolio
shares received by the Company or any Indirect Intermediary (as defined below)
prior to the Valuation Time (as defined below) shall be submitted directly or
indirectly by the Company to the Fund or its transfer agent or other
applicable agent for receipt of a price based on the net asset value per share
calculated for that day in accordance with Rule 22c-1 under the 1940 Act
(Orders to purchase, redeem or exchange Portfolio shares received by the
Company subsequent to the Valuation Time on any given day shall receive a
price based on the next determined net asset value per share in accordance
with Rule 22c-1 under the 1940 Act.); and (b) the Company shall cause to be
imposed and/or waived applicable redemption fees, if any, only in accordance
with the Portfolio's then current Prospectus or SAI and/or as instructed by
the Underwriter. The Company further agrees to make reasonable efforts to
assist the Fund and its service providers (including but not limited to the
Underwriter) to detect, prevent and report market timing or excessive short-
term trading of Portfolio shares. To the extent the Company has actual
knowledge of violations of Fund policies (as set forth in the then current
Prospectus or SAI) regarding (i) the timing of purchase, redemption or
exchange orders and pricing of Portfolio shares, (ii) market timing or
excessive short-term trading, or (iii) the imposition of redemption fees, if
any, the Company agrees to report such known violations to the Underwriter.
For purposes of this provision, the term "Valuation Time" refers to the time
as of which the shares of a Portfolio are valued on each business day,
currently the close of regular trading on the New York Stock Exchange
(normally, 4:00 p.m., Eastern Time) on each day that the New York Stock
Exchange is open for business.
2.13. The Company agrees to provide promptly to the Underwriter,
upon written request, the taxpayer identification number ("TIN"), the
Individual/International Taxpayer Identification Number ("ITIN"), or other
government-issued identifier ("GII") and the Contract number or participant
account number, if known, of any or all Contractholder(s) (as defined below)
of the account, the name or other identifier of any investment professional(s)
associated with the Contractholder(s) or account (if known), and the amount,
date and transaction type (purchase, redemption, transfer, or exchange) of
every purchase, redemption, transfer, or exchange of shares held through an
account maintained by the Company during the period covered by the request.
Unless otherwise specifically requested by the Underwriter, the Company shall
only be required to provide information relating to Contractholder-Initiated
Transfer Purchases or Contractholder-Initiated Transfer Redemptions (each, as
defined below).
(a) Period Covered by Request. Requests must set forth a
specific period, not to exceed 180 days from the date of the request, for
which transaction information is sought. The Underwriter may request
transaction information older than 180 days from the date of the request as
it deems necessary to investigate compliance with policies established or
utilized by the Fund or the Underwriter for the purpose of eliminating or
reducing any dilution of the value of the outstanding shares issued by a
Portfolio (as defined below). If requested by the Underwriter, the Company
will provide the information specified in this Section 2.13 for each trading
day.
(b) Form and Timing of Response. The Company agrees to
provide, promptly upon request of the Underwriter, the requested information
specified in this Section 2.13. The Company agrees to use its best efforts
to determine promptly whether any specific person about whom it has received
the identification and transaction information specified in this Section 2.13
is itself a "financial intermediary," as that term is defined in Rule 22c-2
under the 1940 Act (an "Indirect Intermediary") and, upon request of the
Underwriter, promptly either (i) provide (or arrange to have provided) the
information set forth in this Section 2.13 for those Contractholders who hold
an account with an Indirect Intermediary or (ii) restrict or prohibit the
Indirect Intermediary from purchasing shares in nominee name on behalf of
other persons. The Company additionally agrees to inform the Underwriter
whether it plans to perform (i) or (ii) above. Responses required by this
paragraph must be communicated in writing and in a format mutually agreed upon
by the parties. To the extent practicable, the format for any Contractholder
and transaction information provided to the Underwriter should be consistent
with the NSCC Standardized Data Reporting Format.
(c) Limitations on Use of Information. The Underwriter
agrees not to use the information received under this Section 2.13 for
marketing or any other similar purpose without the prior written consent of
the Company; provided, however, that this provision shall not limit the use of
publicly available information, information already in the possession of the
Underwriter, the Fund or their affiliates at the time the information is
received pursuant to this Section 2.13 or information which comes into the
possession of the Underwriter, the Fund or their affiliates from a third
party.
(d) Agreement to Restrict Trading. The Company agrees to
execute written instructions from the Underwriter to restrict or prohibit
further purchases or exchanges of Portfolio shares by a Contractholder that
has been identified by the Underwriter as having engaged in transactions in
Portfolio shares (directly or indirectly through the Company's account) that
violate policies established or utilized by the Fund or the Underwriter for
the purpose of eliminating or reducing any dilution of the value of the
outstanding shares issued by a Portfolio. Unless otherwise directed by the
Underwriter, any such restrictions or prohibitions shall only apply to
Contractholder-Initiated Transfer Purchases or Contractholder-Initiated
Transfer Redemptions that are effected directly or indirectly through the
Company.
(e) Form of Instructions. Instructions must include the
TIN, ITIN or GII and the specific individual Contract number or participant
account number associated with the Contractholder, if known, and the specific
restriction(s) to be executed. If the TIN, ITIN, GII or the specific
individual Contract number or participant account number associated with the
Contractholder is not known, the instructions must include an equivalent
identifying number of the Contractholder(s) or account(s) or other agreed upon
information to which the instruction relates.
(f) Timing of Response. The Company agrees to execute
instructions from the Underwriter as soon as reasonably practicable, but not
later than five (5) business days after receipt of the instructions by the
Company.
(g) Confirmation by the Company. The Company must provide
written confirmation to the Underwriter that the Underwriter's instructions to
restrict or prohibit trading have been executed. The Company agrees to provide
confirmation as soon as reasonably practicable, but not later than ten (10)
business days after the instructions have been executed.
(h) Definitions. For purposes of this Section 2.13, the
following terms shall have the following meanings, unless a different meaning
is clearly required by the context:
(i) The term "Contractholder" means the holder of
interests in a Contract or a participant in an employee
benefit plan with a beneficial interest in a Contract.
(ii) The term "Contractholder-Initiated Transfer
Purchase" means a transaction that is initiated or directed by
a Contractholder that results in a transfer of assets within a
Contract to a Portfolio, but does not include transactions
that are executed: (i) automatically pursuant to a contractual
or systematic program or enrollment such as a transfer of
assets within a Contract to a Portfolio as a result of "dollar
cost averaging" programs, insurance company approved asset
allocation programs, or automatic rebalancing programs; (ii)
pursuant to a Contract death benefit; (iii) as a result of a
one-time step-up in Contract value pursuant to a Contract
death benefit; (iv) as a result of an allocation of assets to
a Portfolio through a Contract as a result of payments such as
loan repayments, scheduled contributions, retirement plan
salary reduction contributions, or planned premium payments to
the Contract; or (v) pre-arranged transfers at the conclusion
of a required "free look" period.
(iii) The term "Contractholder-Initiated Transfer
Redemption" means a transaction that is initiated or directed
by a Contractholder that results in a transfer of assets
within a Contract out of a Portfolio, but does not include
transactions that are executed: (i) automatically pursuant to
a contractual or systematic program or enrollments such as
transfers of assets within a Contract out of a Portfolio as a
result of annuity payouts, loans, systematic withdrawal
programs, insurance company approved asset allocation programs
and automatic rebalancing programs; (ii) as a result of any
deduction of charges or fees under a Contract; (iii) within a
Contract out of a Portfolio as a result of scheduled
withdrawals or surrenders from a Contract; or (iv) as a result
of payment of a death benefit from a Contract.
(iv) The term "Portfolios" shall mean the
constituent series of the Fund, but for purposes of this
Section 2.13 shall not include Portfolios excepted from the
requirements of paragraph (a) of Rule 22c-2 by paragraph (b)
of Rule 22c-2.
(v) The term "promptly" shall mean as soon as
practicable but in no event later than five (5) business days
from the Company's receipt of the request for information from
the Underwriter.
(vi) The term "written" includes electronic
writings and facsimile transmissions.
(vii) In addition, for purposes of this Section
2.13, the term "purchase" does not include the automatic
reinvestment of dividends or distributions.
ARTICLE III.
PROSPECTUSES AND PROXY STATEMENTS; VOTING
------------------------------------------
3.1. Subject to Section 6.1 and the Fund's determination to use
summary prospectuses, as such term is defined in Rule 498 under the 1933 Act,
the Underwriter shall provide the Company with as many copies of the Fund's
current Prospectuses as the Company may reasonably request. The Company shall
bear the expense of printing copies of the current summary prospectus and
statutory prospectus, if requested by Contract owners, for the Contracts that
will be distributed to existing Contract owners, and the Company shall bear
the expense of printing copies of the Fund's Prospectuses that are used in
connection with offering the Contracts issued by the Company. If requested by
the Company in lieu thereof, the Fund shall provide such documentation
(including a final copy of the new summary and/or statutory prospectus in
electronic format at the Fund's expense) and other assistance as is reasonably
necessary in order for the Company once each year (or more frequently if the
summary prospectus for the Fund is amended) to have the prospectus for the
Contracts and the Fund's summary prospectus bound together in one document in
accordance with applicable law, including but not limited to, Rule 498 under
the 1933 Act (such printing to be at the Company's expense). The Company
shall deliver the summary prospectus to existing Contract owners and potential
investors as required by, and in accordance with, Rule 498 and all other
applicable laws.
3.2. The Underwriter (or the Fund), at its expense, shall provide a
reasonable number of copies of the current SAI for the Fund free of charge to
the Company for itself and for any owner of a Contract who requests such SAI.
3.3. The Fund shall provide the Company with information regarding
the Fund's expenses, which information may include a table of fees and related
narrative disclosure for use in any prospectus or other descriptive document
relating to a Contract. The Company agrees that it will use such information
in the form provided. The Company shall provide prior written notice of any
proposed modification of such information, which notice will describe in
detail the manner in which the Company proposes to modify the information, and
agrees that it may not modify such information in any way without the prior
consent of the Fund.
3.4. The Fund, at its expense, or at the expense of its designee,
shall provide the Company with copies of its proxy material, reports to
shareholders, and other communications to shareholders in such quantity as the
Company shall reasonably require for distributing to Contract owners and pay
for mailing costs associated with the Company soliciting proxy votes as
required in Section 3.5 below.
3.5. The Company shall:
(i) solicit voting instructions from Contract
owners;
(ii) vote the Fund shares in accordance with
instructions received from Contract owners; and
(iii) vote Fund shares for which no instructions
have been received in the same proportion as Fund shares of
such portfolio for which instructions have been received,
so long as and to the extent that the SEC continues to
interpret the 1940 Act to require pass-through voting
privileges for variable contract owners or to the extent
otherwise required by law. The Company will vote Fund shares
held in any segregated asset account in the same proportion as
Fund shares of such portfolio for which voting instructions
have been received from Contract owners, to the extent
permitted by law.
3.6. Participating Insurance Companies shall be responsible for
assuring that each of their separate accounts participating in a Designated
Portfolio calculates voting privileges as required by the Mixed and Shared
Funding Exemptive Order and consistent with any reasonable standards that the
Fund may adopt and provide in writing.
ARTICLE IV.
SALES MATERIAL AND INFORMATION
-------------------------------
4.1. The Company shall furnish, or shall cause to be furnished, to
the Fund or its designee, each piece of sales literature or other promotional
material that the Company develops and in which the Fund (or a Designated
Portfolio thereof) or the Adviser or the Underwriter is named. No such
material shall be used until approved by the Fund or its designee, and the
Fund will use its best efforts for it or its designee to review such sales
literature or promotional material within five Business Days after receipt of
such material. The Fund or its designee reserves the right to reasonably
object to the continued use of any such sales literature or other promotional
material in which the Fund (or a Designated Portfolio thereof) or the Adviser
or the Underwriter is named, and no such material shall be used if the Fund or
its designee so object.
4.2. The Company shall not give any information or make any
representations or statements on behalf of the Fund or concerning the Fund or
the Adviser or the Underwriter in connection with the sale of the Contracts
other than the information or representations contained in the registration
statement or Prospectus or SAI for the Fund shares, as such registration
statement and Prospectus or SAI may be amended or supplemented from time to
time, or in reports or proxy statements for the Fund, or in sales literature
or other promotional material approved by the Fund or its designee or by the
Underwriter, except with the permission of the Fund or the Underwriter or the
designee of either. The Company shall comply with all applicable laws,
including Rule 498 under the 1933 Act, when composing, compiling and delivering
sales literature or other promotional material. The Fund shall be entitled to
review Company's placement of sales materials with the summary prospectus in
order to review Company's compliance with applicable laws.
4.3. The Fund and the Underwriter, or their designee, shall furnish,
or cause to be furnished, to the Company, each piece of sales literature or
other promotional material that it develops and in which the Company, and/or
its Account, is named. No such material shall be used until approved by the
Company, and the Company will use its best efforts to review such sales
literature or promotional material within ten Business Days after receipt of
such material. The Company reserves the right to reasonably object to the
continued use of any such sales literature or other promotional material in
which the Company and/or its Account is named, and no such material shall be
used if the Company so objects.
4.4. The Fund and the Underwriter shall not give any information or
make any representations on behalf of the Company or concerning the Company,
the Account, or the Contracts other than the information or representations
contained in a registration statement, prospectus (which shall include an
offering memorandum, if any, if the Contracts issued by the Company or
interests therein are not registered under the 1933 Act), or SAI for the
Contracts, as such registration statement, prospectus, or SAI may be amended
or supplemented from time to time, or in published reports for the Account
which are in the public domain or approved by the Company for distribution to
Contract owners, or in sales literature or other promotional material approved
by the Company or its designee, except with the permission of the Company.
4.5. Upon request, the Fund will provide to the Company at least
one complete copy of all registration statements, reports, proxy statements,
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 or its shares, promptly after the filing of such document(s)
with the SEC or other regulatory authorities.
4.6. Upon request, the Company will provide to the Fund at least
one complete copy of all registration statements, prospectuses (which shall
include an offering memorandum, if any, if the Contracts issued by the Company
or interests therein are not registered under the 1933 Act), SAIs, reports,
solicitations for voting instructions, sales literature and other promotional
materials, applications for exemptions, requests for no-action letters, and
all amendments to any of the above, that relate to the Contracts or the Account,
promptly after the filing of such document(s) with the SEC or other regulatory
authorities. The Company shall provide to the Fund and the Underwriter any
complaints received from the Contract owners pertaining to the Fund or the
Designated Portfolio.
4.7. The Fund will provide the Company with as much notice as is
reasonably practicable of any proxy solicitation for any Designated Portfolio,
and of any material change in the Fund's registration statement, particularly
any change resulting in a change to the registration statement or prospectus
for any Account. The Fund will work with the Company so as to enable the
Company to solicit proxies from Contract owners, or to make changes to its
prospectus or registration statement, in an orderly manner. The Fund will make
reasonable efforts to attempt to have changes affecting Contract prospectuses
become effective simultaneously with the annual updates for such prospectuses.
4.8. For purposes of this Article IV, the phrase "sales literature
and other promotional materials" includes, but is not limited to, any of the
following that refer to the Fund or any affiliate of the Fund: advertisements
(such as material published, or designed for use in, a newspaper, magazine, or
other periodical, radio, television, telephone or tape recording, videotape
display, signs or billboards, motion pictures, or other public media), sales
literature (i.e., any written communication distributed or made generally
available to customers or the public, including brochures, circulars, reports,
market letters, form letters, seminar texts, reprints or excerpts of any other
advertisement, sales literature, or published article), educational or training
materials or other communications distributed or made generally available to
some or all agents or employees, and registration statements, prospectuses,
SAIs, shareholder reports, proxy materials, and any other communications
distributed or made generally available with regard to the Fund.
ARTICLE V.
FEES AND EXPENSES
-----------------
5.1. Except as otherwise provided herein, no party to this Agreement
shall pay any fee or other compensation to any other party to this Agreement.
Except as otherwise provided herein, all expenses incident to performance by a
party under this Agreement shall be paid by such party.
5.2. All expenses incident to performance by the Fund under this
Agreement shall be paid by the Fund. The Fund shall see to it that all its
shares are registered and authorized for issuance in accordance with applicable
federal law and, if and to the extent deemed advisable by the Fund, in
accordance with applicable state laws prior to their sale. The Fund shall
bear the expenses for the cost of registration and qualification of the Fund's
shares, preparation and filing of the Fund's Prospectuses and registration
statement, proxy materials and reports, setting the Prospectuses in type,
setting in type and printing the proxy materials and reports to shareholders,
the preparation of all statements and notices required by any federal or state
law, and all taxes on the issuance or transfer of the Fund's shares.
5.3. The Company shall bear the expenses of distributing the Fund's
Prospectuses to owners of Contracts issued by the Company and of distributing
the Fund's proxy materials and reports to such Contract owners.
ARTICLE VI.
POTENTIAL CONFLICTS
-------------------
6.1. The parties to this Agreement agree that the conditions or
undertakings required by the Mixed and Shared Funding Exemptive Order that may
be imposed on the Company, the Fund and/or the Underwriter by virtue of such
order by the SEC: (i) shall apply only upon the sale of shares of the
Designated Portfolios to variable life insurance separate accounts (and then
only to the extent required under the 1940 Act); (ii) shall apply and be
incorporated herein by reference only if any of the Company, any Participating
Insurance Company, the Fund or the Adviser relies on the exemptions from
Sections 9(a), 13(a), 15(a) or 15(b) of the 1940 Act granted by the Mixed and
Shared Funding Exemptive Order; (iii) will be incorporated herein by reference;
and (iv) such parties agree to comply with such conditions and undertakings to
the extent applicable to each such party notwithstanding any provision of this
Agreement to the contrary.
6.2. 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 1940 Act or the rules promulgated thereunder with respect to
mixed or shared funding (as defined in the Mixed and Shared Funding Exemptive
Order) on terms and conditions materially different from those contained in
the Mixed and Shared Funding Exemptive Order, then (a) the parties to this
Agreement 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 3.5 and 3.6 of this Agreement shall continue
in effect only to the extent that terms and conditions substantially identical
to such Sections are contained in such Rule(s) as so amended or adopted.
ARTICLE VII.
INDEMNIFICATION
---------------
7.1. Indemnification By the Company
(a) The Company agrees to indemnify and hold harmless the
Fund and the Underwriter and each of its trustees/directors and officers, and
each person, if any, who controls the Fund or Underwriter within the meaning
of Section 15 of the 1933 Act or who is under common control with the
Underwriter (collectively, the "Indemnified Parties" for purposes of this
Section 7.1) against any and all losses, claims, damages, liabilities
(including amounts paid in settlement with the written consent of the Company)
or litigation (including legal and other expenses), to which the Indemnified
Parties may become subject under any statute or regulation, at common law or
otherwise, insofar as such losses, claims, damages, liabilities or expenses
(or actions in respect thereof) or settlements:
(i) arise out of or are based upon any untrue
statement or alleged untrue statements of any material fact
contained in the registration statement, prospectus (which
shall include a written description of a Contract that is not
registered under the 1933 Act), or SAI for the Contracts or
contained in the Contracts or sales literature for the
Contracts (or any amendment or supplement to any of the
foregoing), or arise out of or are based upon the omission or
the alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements
therein not misleading, provided that this agreement to
indemnify shall not apply as to any Indemnified Party if such
statement or omission or such alleged statement or omission
was made in reliance upon and in conformity with information
furnished to the Company by or on behalf of the Fund for use
in the registration statement, prospectus or SAI for the
Contracts or in the Contracts or sales literature (or any
amendment or supplement) or otherwise for use in connection
with the sale of the Contracts or Fund shares; or
(ii) arise out of or as a result of statements or
representations (other than statements or representations
contained in the registration statement, prospectus, SAI, or
sales literature of the Fund not supplied by the Company or
persons under its control) or wrongful conduct of the Company
or its agents or persons under the Company's authorization or
control, with respect to the sale or distribution of the
Contracts or Fund Shares; or
(iii) arise out of any untrue statement or alleged
untrue statement of a material fact contained in a registration
statement, prospectus, SAI, or sales literature of the Fund or
any amendment thereof or supplement thereto or the omission or
alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein
not misleading if such a statement or omission was made in
reliance upon information furnished to the Fund by or on
behalf of the Company; or
(iv) arise as a result of any material failure by
the Company to provide the services and furnish the materials
under the terms of this Agreement (including a failure,
whether unintentional or in good faith or otherwise, to comply
with the qualification requirements specified in Section 2.6
of this Agreement); or
(v) arise out of or result from any material
breach of any representation and/or warranty made by the
Company in this Agreement or arise out of or result from any
other material breach of this Agreement by the Company;
as limited by and in accordance with the provisions of Sections 7.1(b) and
7.1(c) hereof.
(b) The Company shall not be liable under this
indemnification provision with respect to any losses, claims, damages,
liabilities or litigation to which an Indemnified Party would otherwise be
subject by reason of such Indemnified Party's willful misfeasance, fraud,
bad faith, or gross negligence in the performance of such Indemnified Party's
duties or by reason of such Indemnified Party's reckless disregard of its
obligations or duties under this Agreement.
(c) The Company shall not be liable under this
indemnification provision with respect to any claim made against an
Indemnified Party unless such Indemnified Party shall have notified the
Company in writing within a reasonable time after the summons or other first
legal process giving information of the nature of the claim shall have been
served upon such Indemnified Party (or after such Indemnified Party shall have
received notice of such service on any designated agent), but failure to
notify the Company of any such claim shall not relieve the Company from any
liability 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 an Indemnified Party, the Company
shall be entitled to participate, at its own expense, in the defense of such
action. The Company also shall be entitled to assume the defense thereof,
with counsel satisfactory to the party named in the action. After notice from
the Company to such party of the Company's election to assume the defense
thereof, the Indemnified Party shall bear the fees and expenses of any
additional counsel retained by it, and the Company will not be liable to such
party under this Agreement for any legal or other expenses subsequently
incurred by such party independently in connection with the defense thereof
other than reasonable costs of investigation.
(d) The Indemnified Parties will promptly notify the
Company of the commencement of any litigation or proceedings against them in
connection with the issuance or sale of the Fund shares or the Contracts or
the operation of the Fund.
7.2. Indemnification by the Underwriter
(a) The Underwriter agrees to indemnify and hold harmless
the Company and each of its directors and officers and each person, if any,
who controls the Company within the meaning of Section 15 of the 1933 Act
(collectively, the "Indemnified Parties" for purposes of this Section 7.2)
against any and all losses, claims, damages, liabilities (including amounts
paid in settlement with the written consent of the Underwriter) or litigation
(including legal and other expenses) to which the Indemnified Parties may
become subject under any statute or regulation, at common law or otherwise,
insofar as such losses, claims, damages, liabilities or expenses (or actions
in respect thereof) or settlements:
(i) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact
contained in the registration statement or prospectus or SAI
or sales literature of the Fund (or any amendment or supplement
to any of the foregoing), or arise out of or are based upon
the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to
make the statements therein not misleading, provided that this
agreement to indemnify shall not apply as to any Indemnified
Party if such statement or omission or such alleged statement
or omission was made in reliance upon and in conformity with
information furnished to the Underwriter or Fund by or on
behalf of the Company for use in the registration statement,
prospectus or SAI for the Fund or in sales literature (or any
amendment or supplement) or otherwise for use in connection
with the sale of the Contracts or Fund shares; or
(ii) arise out of or as a result of statements or
representations (other than statements or representations
contained in the registration statement, prospectus, SAI or
sales literature for the Contracts not supplied by the
Underwriter or persons under its control) or wrongful conduct
of the Fund or Underwriter or persons under their control,
with respect to the sale or distribution of the Contracts or
Fund shares; or
(iii) arise out of any untrue statement or alleged
untrue statement of a material fact contained in a registration
statement, prospectus, SAI or sales literature covering the
Contracts, or any amendment thereof or supplement thereto, or
the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the
statement or statements therein not misleading, if such
statement or omission was made in reliance upon information
furnished to the Company by or on behalf of the Fund or the
Underwriter; or
(iv) arise as a result of any failure by the Fund
or the Underwriter to provide the services and furnish the
materials under the terms of this Agreement (including a
failure of the Fund, whether unintentional or in good faith or
otherwise, to comply with the diversification and other
qualification requirements specified in Sections 2.3 and 2.4
of this Agreement); or
(v) arise out of or result from any material
breach of any representation and/or warranty made by the
Underwriter or the Fund in this Agreement or arise out of or
result from any other material breach of this Agreement by the
Underwriter or the Fund; as limited by and in accordance with
the provisions of Sections 7.2(b) and 7.2(c) hereof.
(b) The Underwriter shall not be liable under this
indemnification provision with respect to any losses, claims, damages,
liabilities or litigation to which an Indemnified Party would otherwise be
subject by reason of such Indemnified Party's willful misfeasance, fraud, bad
faith, or gross negligence in the performance of such Indemnified Party's
duties or by reason of such Indemnified Party's reckless disregard of
obligations and duties under this Agreement or to the Company or the Account,
whichever is applicable.
(c) The Underwriter 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 the
Underwriter in writing within a reasonable time after the summons or other
first legal process giving information of the nature of the claim shall have
been served upon such Indemnified Party (or after such Indemnified Party shall
have received notice of such service on any designated agent), but failure to
notify the Underwriter of any such claim shall not relieve the Underwriter
from any liability which it may have to the Indemnified Party against whom
such action is brought otherwise than on account of this indemnification
provision. In case any such action is brought against the Indemnified Party,
the Underwriter will be entitled to participate, at its own expense, in the
defense thereof. The Underwriter also shall be entitled to assume the defense
thereof, with counsel satisfactory to the party named in the action. After
notice from the Underwriter to such party of the Underwriter's election to
assume the defense thereof, the Indemnified Party shall bear the fees and
expenses of any additional counsel retained by it, and the Underwriter will
not be liable to such party under this Agreement for any legal or other
expenses subsequently incurred by such party independently in connection with
the defense thereof other than reasonable costs of investigation.
(d) The Company agrees promptly to notify the Underwriter
of the commencement of any litigation or proceedings against it or any of its
officers or directors in connection with the issuance or sale of the Contracts
or the operation of the Account.
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 California.
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, any Mixed and Shared Funding
Exemptive Order) and the terms hereof shall be interpreted and construed in
accordance therewith. If, in the future, the Mixed and Shared Funding
Exemptive Order should no longer be necessary under applicable law, then
Article VI shall no longer apply.
ARTICLE IX.
TERMINATION
-----------
9.1. This Agreement shall continue in full force and effect until
the first to occur of:
(a) termination by any party, for any reason with respect
to some or all Designated Portfolios, by three (3) months advance written
notice delivered to the other parties; or
(b) termination by the Company by written notice to the
Fund and the Underwriter based upon the Company's determination that shares
of the Fund are not reasonably available to meet the requirements of the
Contracts; or
(c) termination by the Company by written notice to the
Fund and the Underwriter in the event any of the Designated Portfolio's shares
are not registered, issued or sold in accordance with applicable state and/or
federal 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; or
(d) termination by the Fund or Underwriter in the event
that formal administrative proceedings are instituted against the Company by
FINRA, the SEC, the insurance commissioner or like official of any state
("Insurance Commissioner") or any other regulatory body regarding the
Company's duties under this Agreement or related to the sale of the Contracts,
the operation of any Account, or the purchase of the Fund's shares; provided,
however, that the Fund or Underwriter determines in its sole judgment
exercised in good faith, that any such administrative proceedings will have a
material adverse effect upon the ability of the Company to perform its
obligations under this Agreement; or
(e) termination by the Company in the event that formal
administrative proceedings are instituted against the Fund or Underwriter by
FINRA, the SEC, or any state securities or insurance department or any other
regulatory body; provided, however, that the Company determines in its sole
judgment exercised in good faith, that any such administrative proceedings
will have a material adverse effect upon the ability of the Fund or Underwriter
to perform its obligations under this Agreement; or
(f) termination by the Company by written notice to the
Fund and the Underwriter with respect to any Designated Portfolio in the event
that such Portfolio ceases to qualify as a Regulated Investment Company under
Subchapter M or fails to comply with the Section 817(h) diversification
requirements specified in Section 2.4 hereof, or if the Company reasonably
believes that such Portfolio may fail to so qualify or comply; or
(g) termination by the Fund or Underwriter by written
notice to the Company in the event that the Contracts fail to meet the
qualifications specified in Section 2.6 hereof; or
(h) termination by either the Fund or the Underwriter by
written notice to the Company, if either one or both of the Fund or the
Underwriter respectively, shall determine, in their sole judgment exercised in
good faith, that the Company has suffered a material adverse change in its
business, operations, financial condition, or prospects since the date of this
Agreement or is the subject of material adverse publicity; or
(i) termination by the Company by written notice to the
Fund and the Underwriter, if the Company shall determine, in its sole judgment
exercised in good faith, that the Fund, Adviser, or the Underwriter has
suffered a material adverse change in its business, operations, financial
condition or prospects since the date of this Agreement or is the subject of
material adverse publicity; or
(j) termination by the Fund or the Underwriter by written
notice to the Company, if the Company gives the Fund and the Underwriter the
written notice specified in Section 1.7(a)( hereof and at the time such notice
was given there was no notice of termination outstanding under any other
provision of this Agreement; provided, however, any termination under this
Section 9.1(j) shall be effective forty-five days after the notice specified
in Section 1.7(a) was given; or
(k) termination by the Company upon any substitution of
the shares of another investment company or series thereof for shares of a
Designated Portfolio of the Fund in accordance with the terms of the Contracts,
provided that the Company has given at least 45 days prior written notice to
the Fund and Underwriter of the date of substitution; or
(l) termination by the Fund if the Board has decided to
(i) refuse to sell shares of any Designated Portfolio to the Company and/or
any of its Accounts; (ii) suspend or terminate the offering of shares of any
Designated Portfolio; or (iii) dissolve, reorganize, liquidate, merge or sell
all assets of the Fund or any Designated Portfolio, subject to the provisions
of Section 1.1; or
(m) termination by any party in the event that the Fund's
Board of Trustees determines that a material irreconcilable conflict exists as
provided in Article VI.
9.2. (a) Notwithstanding any termination of this Agreement, and
except as provided in Section 9.2(b), the Fund and the Underwriter shall, at
the option of the Company, continue, until the one year anniversary from the
date of termination, and from year to year thereafter if deemed appropriate by
the Fund and the Underwriter, to make available additional shares of the
Designated Portfolios pursuant to the terms and conditions of this Agreement,
for all Contracts in effect on the effective date of termination of this
Agreement (hereinafter referred to as "Existing Contracts"). Specifically,
based on instructions from the owners of the Existing Contracts, the Accounts
shall be permitted to reallocate investments in the Designated Portfolios of
the Fund and redeem investments in the Designated Portfolios, and shall be
permitted to invest in the Designated Portfolios in the event that owners of
the Existing Contracts make additional premium payments under the Existing
Contracts.
The Company agrees, promptly after any termination of this Agreement,
to take all steps necessary to redeem the investment of the Accounts in the
Designated Portfolios within one year from the date of termination of the
Agreement as provided in Article IX. Such steps shall include, but not be
limited to, obtaining an order pursuant to Section 26(c) of the 1940 Act to
permit the substitution of other securities for the shares of the Designated
Portfolios. The Fund may, in its discretion, permit the Accounts to continue
to invest in the Designated Portfolios beyond such one year anniversary for an
additional year beginning on the first annual anniversary of the date of
termination, and from year to year thereafter; provided that the Fund agrees
in writing to permit the Accounts to continue to invest in the Designated
Portfolios at the beginning of any such year.
(b) In the event (i) the Agreement is terminated pursuant
to Sections 9.1(g) or 9.1(m), at the option of the Fund or the Underwriter;
or (ii) the one year anniversary of the termination of the Agreement is
reached or, after waiver as provided in Section 9.2(a), such subsequent
anniversary is reached (each of (i) and (ii) referred to as a "triggering
event" and the date of termination as provided in (i) or the date of such
anniversary as provided in (ii) referred to as the "request date"), the
parties agree that such triggering event shall be considered as a request for
immediate redemption of shares of the Designated Portfolios held by the
Accounts, received by the Fund and its agents as of the request date, and the
Fund agrees to process such redemption request in accordance with the 1940 Act
and the regulations thereunder and the Fund's registration statement.
(c) The parties agree that this Section 9.2 shall not apply to any
terminations under Article VI and the effect of such Article VI terminations
shall be governed by Article VI of this Agreement. The parties further agree
that, to the extent that all or a portion of the assets of the Accounts
continue to be invested in the Fund or any Designated Portfolio of the Fund,
Articles I, II, VI, VII and VIII will remain in effect after termination.
9.3. Notwithstanding any termination of this Agreement, each
party's obligation under Article VII to indemnify the other parties shall
survive.
ARTICLE X.
NOTICES
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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: PIMCO Equity Series VIT
000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
Attention: Legal Department
With a copy to:
Pacific Investment Management Company LLC
000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
Attention: Legal Department
If to the Company: Symetra Life Insurance Company
000 000xx Xxx XX, Xxxxx 0000
Xxxxxxxx, XX 00000
Attention: Law Department
If to Underwriter: PIMCO Investments LLC
0000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
ARTICLE XI.
MISCELLANEOUS
--------------
11.1. All persons dealing with the Fund must look solely to the
property of the Fund, and in the case of a series company, the respective
applicable Designated Portfolios listed on Schedule A hereto as though each
such Designated Portfolio had separately contracted with the Company and the
Underwriter for the enforcement of any claims against the Fund. The parties
agree that neither the Board, officers, agents or shareholders of the Fund
assume any personal liability or responsibility for obligations entered into
by or on behalf of the Fund.
11.2. Subject to the requirements of legal process and regulatory
authority, each party hereto shall treat as confidential the names and
addresses of the owners of the Contracts and all information reasonably
identified as confidential in writing by any other party hereto and, except as
permitted by this Agreement, shall not disclose, disseminate or utilize such
names and addresses and other confidential information without the express
written consent of the affected party until such time as such information has
come into the public domain.
11.3. 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.
11.4. This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
11.5. 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.
11.6. Each party hereto shall cooperate with each other party and
all appropriate governmental authorities (including without limitation the SEC,
FINRA, and state insurance regulators) and shall permit such authorities
reasonable access to its books and records in connection with any investigation
or inquiry relating to this Agreement or the transactions contemplated hereby.
Notwithstanding the generality of the foregoing, each party hereto further
agrees to furnish the applicable Insurance Commissioner with any information
or reports in connection with services provided under this Agreement which
such Commissioner may request in order to ascertain whether the variable
insurance contract operations of the Company are being conducted in a manner
consistent with the applicable variable insurance contract laws and regulations
and any other applicable law or regulations.
11.7. The rights, remedies and obligations contained in this
Agreement are cumulative and are in addition to any and all rights, remedies,
and obligations, at law or in equity, which the parties hereto are entitled to
under state and federal laws.
11.8. This Agreement or any of the rights and obligations hereunder
may not be assigned by any party without the prior written consent of all
parties hereto.
11.9. Upon request, the Company shall furnish, or shall cause to be
furnished, to the Fund or its designee copies of the following reports:
(a) the Company's annual statement (prepared under
statutory accounting principles) and annual report (prepared under generally
accepted accounting principles) filed with any state or federal regulatory
body or otherwise made available to the public, as soon as practicable and in
any event within 90 days after the end of each fiscal year; and
(b) any registration statement (without exhibits) and
financial reports of the Company filed with the Securities and Exchange
Commission or any state insurance regulatory, as soon as practicable after the
filing thereof.
11.10. Each party may appoint and compensate from their respective
resources one or more other entities (each, a "delegate") to perform any or
all of their respective obligations under this Agreement so long as the party
has undertaken commercially reasonable due diligence to ensure the delegate
possesses the requisite expertise, regulatory licenses and / or registrations,
personnel and resources to perform such obligations. If either party appoints
one or more delegates to perform any or all of their respective obligations
under this Agreement, the appointing party will remain liable to the other
parties for the delegated acts and omissions of such delegates as if the
appointing party itself performed (or failed to perform) such obligations.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed in its name and on its behalf by its duly authorized
representative and its seal to be hereunder affixed hereto as of the date
specified below.
SYMETRA LIFE INSURANCE COMPANY
By: _______________________________
Name: Xxxxxx X. Xxxxxxxx
Title: Executive Vice President
Date: _______________________________
PIMCO EQUITY SERIES VIT
By: ________________________________
Name: _______________________________
Title: _______________________________
Date: _______________________________
PIMCO INVESTMENTS LLC
By: ________________________________
Name: _______________________________
Title: _______________________________
Date: _______________________________
Schedule A
The term "Designated Portfolio" shall include any series of the Fund that
offers Institutional Class shares and that is operating as of the date of this
Agreement or commences operations after the date of this Agreement, other than
any such series that ceases operations.
Segregated Asset Accounts:
Symetra Separate Account C
Symetra Resource Variable Account B
Symetra Separate Account SL
Symetra Separate Account VL (unregistered)
