8.1 (b)
FUND PARTICIPATION AGREEMENT
----------------------------
This Fund Participation Agreement (the "Agreement"), effective as of
_______________, is made by and among _________________________ ("Company"), One
Group(R) Investment Trust (the "Trust"), the Trust's investment advisor, Banc
One Investment Advisors Corporation (the "Adviser"), and the Trust's
administrator, One Group Administrative Services, Inc. (the "Administrator").
WHEREAS, the Trust engages in business as an open-end management
investment company and is available to act as the investment vehicle
for separate accounts established by insurance companies for
individual and group life insurance policies and annuity contracts
with variable accumulation and/or pay-out provisions (hereinafter
referred to individually and/or collectively as "Variable Insurance
Products");
WHEREAS, insurance companies desiring to utilize the Trust as an
investment vehicle under their Variable Insurance Products are
required to enter into participation agreements with the Trust and the
Administrator (the "Participating Insurance Companies");
WHEREAS, shares of the Trust are divided into several series of
shares, each representing the interest in a particular managed
portfolio of securities and other assets, any one or more of which may
be made available for Variable Insurance Products of Participating
Insurance Companies;
WHEREAS, the Trust intends to offer shares of the series set
forth on Schedule B (each such series hereinafter referred to as a
"Portfolio") as may be amended from time to time by mutual agreement
of the parties hereto under this Agreement to the accounts of the
Company specified on Schedule A (hereinafter referred to individually
as an "Account," collectively, the "Accounts");
WHEREAS, the Trust has obtained an order from the Securities and
Exchange Commission, granting the Trust exemptions from the provisions
of Sections 9(a), 13(a), 15(a), and 15(b) of the Investment Company
Act of 1940, as amended (hereinafter 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 Trust to be sold to and held by Variable
Insurance Product separate accounts of both affiliated and
unaffiliated insurance companies (hereinafter the "Shared Funding
Exemptive Order");
WHEREAS, the Trust is registered as an open-end management
investment company under the 1940 Act and its shares are registered
under the Securities Act of 1933, as amended (hereinafter the "1933
Act");
WHEREAS, the Adviser is duly registered as an investment adviser
under the Investment Advisers Act of 1940, as amended, and any
applicable state securities laws;
WHEREAS, the Adviser is the investment adviser of the Portfolios
of the Trust;
WHEREAS, the Company has registered certain Variable Insurance
Products under the 1933 Act; and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, each Account intends to purchase shares of the Portfolios
to fund certain of the aforesaid Variable Insurance Products and the
Trust is authorized to sell such shares to each such Account at net
asset value.
NOW, THEREFORE, in consideration of their mutual promises, the
Company, the Trust, the Adviser, and the Administrator agree as
follows:
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Article 1
The Contracts
-------------
1. The Company represents that it has established each of the Accounts
specified on Schedule A as a separate account under _____ law, and has
registered each such Account as a unit investment trust under the 1940 Act to
serve as an investment vehicle for variable annuity contracts and/ or variable
life contracts offered by the Company (the "Contracts"). The Contracts provide
for the allocation of net amounts received by the Company to separate divisions
of the Account for investment in the shares of the Portfolios. Selection of a
particular division is made by the Contract owner who may change such selection
from time to time in accordance with the terms of the applicable Contract. The
Company agrees to make every reasonable effort to market its Contracts. In
marketing its Contracts, the Company will comply with all applicable state or
Federal laws.
Article 2
Trust Shares
------------
2.1. The Trust agrees to make available for purchase by the Company
shares of the Portfolios and shall execute orders placed for each Account on a
daily basis at the net asset value next computed after receipt by the Trust or
its designee of such order. For purposes of this Section 2.1, the Company shall
be the designee of the Trust for receipt of such orders from the Account and
receipt by such designee shall constitute receipt by the Trust; provided that
the Trust's designated transfer agent receives notice of such order by 10:00
a.m. Eastern Time on the next following Business Day ("Trade Date plus 1").
Notwithstanding the foregoing, the Company shall use its best efforts to provide
the Trust's designated transfer agent with notice of such orders by 9:30 a.m.
Eastern Time on Trade Date plus 1. "Business Day" shall mean any day on which
the New York Stock Exchange is open for trading and on which the Trust
calculates its net asset value pursuant to the rules of the Securities and
Exchange Commission, as set forth in the Trust's prospectus and statement of
additional information. Notwithstanding the foregoing, the Board of Trustees of
the Trust (hereinafter the "Board") may refuse to permit the Trust 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 Board
acting in good faith and in light of their fiduciary duties under federal and
any applicable state laws, necessary in the best interests of the shareholders
of such Portfolio.
2.2. The Trust agrees that shares of the Trust will be sold only to
Participating Insurance Companies for their Variable Insurance Products and, in
the Trust's discretion, to qualified pension and retirement plans. No shares of
any Portfolio will be sold to the general public.
2.3. The Trust agrees to redeem for cash, on the Company's request, any
full or fractional shares of the Trust held by an Account, executing such
requests on a daily basis at the net asset value next computed after receipt by
the Trust or its designee of the request for redemption. For purposes of this
Section 2.3, the Company shall be the designee of the Trust for receipt of
requests for redemption from each Account and receipt by such designee shall
constitute receipt by the Trust; provided that the Trust's designated transfer
agent receives notice of such request for redemption on Trade Date plus 1 in
accordance with the timing rules described in Section 2.1.
2.4. The Company agrees that purchases and redemptions of Portfolio
shares offered by the then current prospectus of the Trust shall be made in
accordance with the provisions of such prospectus. The Accounts of the Company,
under which amounts may be invested in the Trust are listed on Schedule A
attached hereto and incorporated herein by reference, as such Schedule A may be
amended from time to time by mutual written agreement of all of the parties
hereto. The Company will give the Trust and the Adviser concurrent written
notice of its intention to make available in the future, as a funding vehicle
under the Contracts, any other investment company.
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2.5. The Company will place separate orders to purchase or redeem shares
of each Portfolio. Each order shall describe the net amount of shares and dollar
amount of each Portfolio to be purchased or redeemed. In the event of net
purchases, the Company shall pay for Portfolio shares on Trade Date plus 1.
Payment shall be in federal funds transmitted by wire. In the event of net
redemptions, the Portfolio shall pay the redemption proceeds in federal funds
transmitted by wire by 2:00 p.m. Eastern Time on Trade Date plus 1.
Notwithstanding the foregoing, if the payment of redemption proceeds on the next
Business Day would require the Portfolio to dispose of Portfolio securities or
otherwise incur substantial additional costs, and if the Portfolio has
determined to settle redemption transactions for all shareholders on a delayed
basis, proceeds shall be wired to the Company within seven (7) days and the
Portfolio shall notify in writing the person designated by the Company as the
recipient for such notice of such delay by 3:00 p.m. Eastern Time on Trade Date
plus 1.
2.6. Issuance and transfer of the Trust's shares will be by book entry
only. Share certificates will not be issued to the Company or any Account.
Shares ordered from the Trust will be recorded in an appropriate title for each
Account or the appropriate subaccount of each Account.
2.7. On each record date, the Administrator shall use its best efforts
to furnish same day notice by 6:30 p.m. Eastern Time (by wire, telephone,
electronic media or by fax) to the Company of any dividends or capital gain
distributions payable on the Trust's shares. The Company hereby elects to
receive all such dividends and capital gain distributions as are payable on the
Portfolio shares in additional shares of that Portfolio. The Company reserves
the right to revoke this election and to receive all such dividends and capital
gain distributions in cash. The Trust shall notify the Company of the number of
shares so issued as payment of such dividends and distributions.
2.8. The Administrator shall make the net asset value per share of each
Portfolio available to the Company on a daily basis 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 6:30 p.m.
Eastern Time. In the event that the Administrator is unable to meet the 6:30
p.m. time stated immediately above, then the Administrator shall provide the
Company with additional time to notify the Administrator of purchase or
redemption orders pursuant to Sections 2.1 and 2.3, respectively, above. Such
additional time shall be equal to the additional time that the Administrator
takes to make the net asset values available to the Company.
2.9. If the Administrator provides materially incorrect share net asset
value information through no fault of the Company, the Company shall be entitled
to an adjustment with respect to the Trust shares purchased or redeemed to
reflect the correct net asset value per share as subsequently determined by the
Administrator. The determination of the materiality of any net asset value
pricing error shall be based on the Trust's policy for correction of pricing
errors (the "Pricing Policy"). The Company shall correct such error in its
records and in the records prepared by it for Contract owners in accordance with
information provided by the Administrator. Any material error in the calculation
or reporting of net asset value per share, dividend or capital gain information
shall be reported promptly upon discovery to the Company.
2.10. The Administrator shall provide information to the Company of the
amount of shares traded and the associated cost per share (NAV) total trade
amount and the outstanding share balances held by the Account in each Portfolio
as of the end of each Business Day. Such information will be furnished
(electronically or by fax) by 1:00 p.m. Eastern time on the next Business Day.
Article 3
Prospectuses, Reports to Shareholders and Proxy Statements, Voting
------------------------------------------------------------------
3.1. The Trust shall provide the Company with as many printed copies of
the Trust's current prospectus as the Company may reasonably request. The
Administrator will provide the Company with a copy of the statement of
additional information suitable for duplication. If requested by the Company, in
lieu of providing printed copies, the Trust shall provide camera-ready film or
computer diskettes containing the Trust's prospectus and statement of additional
information in order for the Company once each year (or more frequently if the
prospectus and/or statement of additional information for the Trust is amended
during the
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year) to have the prospectus for the Contracts and the Trust's prospectus
printed together in one document or separately. The Company may elect to print
the Trust's prospectus and/or its statement of additional information in
combination with other investment companies' prospectuses and statements of
additional information.
3.2(a). Except as otherwise provided in this Section 3.2, all expenses of
preparing, setting in type and printing and distributing Trust prospectuses and
statements of additional information shall be the expense of the Company. For
prospectuses and statements of additional information provided by the Company to
its existing owners of Contracts in order to update disclosure as required by
the 1933 Act and/or the 1940 Act, the cost of setting in type, printing and
distributing shall be borne by the Trust. If the Company chooses to receive
camera-ready film or computer diskettes in lieu of receiving printed copies of
the Trust's prospectus and/or statement of additional information, the Trust
shall bear the cost of typesetting to provide the Trust's prospectus and/or
statement of additional information to the Company in the format in which the
Trust is accustomed to formatting prospectuses and statements of additional
information, respectively, and the Company shall bear the expense of adjusting
or changing the format to conform with any of its prospectuses and/or statements
of additional information. In such event, the Trust will reimburse the Company
in an amount equal to the product of x and y where x is the number of such
prospectuses distributed to owners of the Contracts, and y is the Trust's per
unit cost of printing the Trust's prospectuses. The same procedures shall be
followed with respect to the Trust's statement of additional information. The
Trust shall not pay any costs of typesetting, printing and distributing the
Trust's prospectus and/or statement of additional information to prospective
Contract owners.
3.2(b). The Trust, at the Company's expense, shall provide the Company with
copies of Annual and Semi-Annual Reports (the "Reports") in such quantity as the
Company shall reasonably require for distributing to Contract owners. The Trust,
at its expense, shall provide the Contract owners designated by the Company with
copies of its proxy statements and other communications to shareholders (except
for prospectuses and statements of additional information, which are covered in
Section 3.2(a) above, and Reports). The Trust shall not pay any costs of
distributing Reports and other communications to prospective Contract owners.
3.2(c). The Company agrees to provide the Trust or its designee with such
information as may be reasonably requested by the Trust to assure that the
Trust's expenses do not include the cost of typesetting, printing or
distributing any of the foregoing documents other than those actually
distributed to existing Contract owners.
3.2(d). The Trust shall pay no fee or other compensation to the Company
under this Agreement, except that if the Trust or any Portfolio adopts and
implements a plan pursuant to Rule 12b-1 to finance distribution expenses, then
the Trust may make payments to the Company or to the underwriter for the
Contracts if and in amounts agreed to by the Trust in writing.
3.2(e). All expenses, including expenses to be borne by the Trust pursuant
to Section 3.2 hereof, incident to performance by the Trust under this Agreement
shall be paid by the Trust. The Trust 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 Trust, in accordance with
applicable state laws prior to their sale. The Trust shall bear the expenses for
the cost of registration and qualification of the Trust's shares.
3.3. If and to the extent required by law, the Company shall with
respect to proxy material distributed by the Trust to Contract owners designated
by the Company to whom voting privileges are required to be extended:
(i) solicit voting instructions from Contract owners;
(ii) vote the Trust shares in accordance with instructions
received from Contract owners; and
(iii) vote Trust shares for which no instructions have been
received in the same proportion
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as Trust shares of such Portfolio for which instructions have
been received, so long as and to the extent that the
Securities and Exchange Commission continues to interpret the
1940 Act to require pass-through voting privileges for
variable contract owners.
The Company reserves the right to vote Trust shares held in any segregated asset
account in its own right, to the extent permitted by law.
Article 4
Sales Material and Information
------------------------------
4.1. The Company shall furnish, or shall cause to be furnished, to the
Trust, the Adviser or their designee, drafts of the separate accounts
prospectuses and statements of additional information and each piece of sales
literature or other promotional material prepared by the Company or any person
contracting with the Company to prepare such material in which the Trust, the
Adviser or the Administrator is described, at least ten Business Days prior to
its use. No such material shall be used if the Trust, the Adviser, the
Administrator or their designee reasonably objects to such use within ten
Business Days after receipt of such material.
4.2. Neither the Company nor any person contracting with the Company to
prepare sales literature or other promotional material shall give any
information or make any representations or statements on behalf of the Trust or
concerning the Trust in connection with the sale of the Contracts other than the
information or representations contained in the registration statement or Trust
prospectus, as such registration statement or Trust prospectus may be amended or
supplemented from time to time, or in reports to shareholders or proxy
statements for the Trust, or in sales literature or other promotional material
approved by the Trust or its designee, except with the permission of the Trust
or its designee.
4.3. The Administrator shall furnish, or shall cause to be furnished, to
the Company or its designee, each piece of sales literature or other promotional
material prepared by the Trust in which the Company or its Accounts, are
described at least ten Business Days prior to its use. No such material shall be
used if the Company or its designee reasonably objects to such use within ten
Business Days after receipt of such material.
4.4. Neither the Trust, the Administrator, nor the Adviser shall give
any information or make any representations on behalf of the Company or
concerning the Company, each Account, or the Contracts, other than the
information or representations contained in a registration statement or
prospectus for the Contracts, as such registration statement or prospectus may
be amended or supplemented from time to time, or in published reports or
solicitations for voting instruction for each 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. The Trust will provide to the Company at least one complete copy of
all registration statements, prospectuses, statements of additional information,
reports, proxy statements, applications for exemptions, requests for no-action
letters, and all amendments to any of the above, that relate to the Trust or its
shares, promptly after the filing of such document with the Securities and
Exchange Commission or other regulatory authorities.
4.6. The Company will provide to the Trust, upon the Trust's request, at
least one complete copy of all registration statements, prospectuses, statements
of additional information, reports, solicitations for voting instructions, sales
literature and other promotional materials, applications for exemptions,
requests for no action letters, and all amendments to any of the above, that
relate to the investment in an Account or Contract, contemporaneously with the
filing of such documents with the Securities and Exchange Commission or other
regulatory authorities.
4.7. For purposes of this Article 4, the phrase "sales literature or
other promotional material" includes, but is not limited to, any of the
following: advertisements (such as material published, or designed for use in, a
newspaper, magazine, or other periodical, radio, television, internet, telephone
or tape recording, videotape, display, signs or billboards, motion pictures, or
other public media), sales literature (i.e., any
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written communication 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), and educational or training materials
or other communications distributed or made generally available to some or all
agents or employees.
4.8. The Company and its agents shall make no representations concerning
the Trust except those contained in the then-current prospectus and Statement of
Additional Information of the Trust and in current printed sales literature of
the Trust.
Article 5
Administrative Services to Contract Owners
------------------------------------------
5. Administrative services to Contract owners shall be the
responsibility of the Company and shall not be the responsibility of the Trust,
the Adviser or the Administrator. The Trust and the Administrator recognize that
the Account(s) will be the sole shareholder(s) of Trust shares issued pursuant
to the Contracts.
Article 6
Representations and Warranties
------------------------------
6.1. The Trust represents that it believes, in good faith, that each
Portfolio is currently qualified as a regulated investment company under
Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code") and
that it will make every effort to maintain such qualification of the Trust and
that it will notify the Company 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.
6.2. The Company represents that it believes, in good faith, that the
Contracts will at all times be treated as annuity contracts under applicable
provisions of the Code, and that it will make every effort to maintain such
treatment and that it will notify the Trust immediately upon having a reasonable
basis for believing that the Contracts have ceased to be so treated or that they
might not be so treated in the future.
6.3. The Trust represents that it believes, in good faith, that the
Portfolios will at all times comply with the diversification requirements set
forth in Section 817(h) of the Code and Section 1.817-5(b) of the regulations
under the Code, and that it will make every effort to maintain the Trust's
compliance with such diversification requirements, and that it will notify the
Company immediately upon having a reasonable basis for believing that a Fund has
ceased to so qualify or that a Portfolio might not so qualify in the future.
6.4. The Company represents and warrants that the interests of the
Contracts are or will be registered unless exempt and that it will maintain such
registration under the 1933 Act and the regulations thereunder to the extent
required by the 1933 Act and that the Contracts will be issued and sold in
compliance with all applicable federal and state laws and regulations. The
Company further represents and warrants that it is an insurance company duly
organized and in good standing under applicable law and that it has legally and
validly established each Account prior to any issuance or sale thereof as a
segregated asset account under the _____________ Insurance Code and the
regulations thereunder and has registered or, prior to any issuance or sale of
the Contracts, will maintain the registration of each Account as a unit
investment trust in accordance with and to the extent required by the provisions
of the 1940 Act and the regulations thereunder, unless exempt therefrom, to
serve as a segregated investment account for the Contracts. The Company shall
amend its registration statement for its contracts under the 1933 Act and the
1940 Act from time to time as required in order to effect the continuous
offering of its Contracts.
6.5. The Company represents that it believes, in good faith, that the
Account is a "segregated asset account" and that interests in the Account are
offered exclusively through the purchase of a "variable contract," within the
meaning of such terms under Section 1.817-5(f)(2) of the regulations under the
Code, and that it will make every effort to continue to meet such definitional
requirements, and that it will notify the Trust 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.
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6.6. The Trust represents and warrants that it is and shall continue to
be at all times covered by a blanket fidelity bond or similar coverage for the
benefit of the Trust in an amount no less than the minimal coverage as required
currently by Rule 17g-(1) of the 1940 Act or related provisions as may be
promulgated from time to time. Such bond shall include coverage for larceny and
embezzlement and shall be issued by a reputable bonding company. The Trust will
notify the Company immediately upon having a reasonable basis for believing that
the Trust no longer has the coverage required by this Section 6.6.
6.7. The Company represents and warrants that all of its directors,
officers, employees, investment advisers, and other entities dealing with the
money or securities of the Trust are and shall continue to be at all times
covered by a blanket fidelity bond or similar coverage for the benefit of the
Trust, in an amount not less than five million dollars ($5,000,000). Such bond
shall include coverage for larceny and embezzlement and shall be issued by a
reputable bonding company. 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 Trust immediately upon having a reasonable basis
for believing that the Company no longer has the coverage required by this
Section 6.7.
6.8. The Trust represents that to the extent that it decides to finance
distribution expenses pursuant to Rule 12b-1 under the 1940 Act, the Trust
undertakes to have a majority of the disinterested members of the Board
formulate and approve any plan under Rule 12b-1 to finance distribution
expenses.
6.9. The Adviser and the Administrator each represents and warrants that
it complies with all applicable federal and state laws and regulations and that
it will perform its obligations for the Trust and the Company in compliance with
the laws and regulations of its state of domicile and any applicable state and
federal laws and regulations.
Article 7
Statements and Reports
----------------------
7.1. The Administrator or its designee will make available
electronically to the Company within five (5) business days after the end of
each month a monthly statement of account confirming all transactions made
during that month in the Account.
7.2. The Trust and Administrator agree to provide the Company no later
than March 1 of each year with the investment advisory and other expenses of the
Trust incurred during the Trust's most recently completed fiscal year, to permit
the Company to fulfill its prospectus disclosure obligations under the SEC's
variable annuity fee table requirements.
Article 8
Potential Conflicts
-------------------
8.1. The Board will monitor the Trust for the existence of any material
irreconcilable conflict between the interests of the contract owners of all
separate accounts investing in the Trust. An irreconcilable material conflict
may arise for a variety of reasons, including: (a) an action by any state
insurance regulatory authority; (b) a change in applicable federal or state
insurance, tax, or securities laws or regulations, or a public ruling, private
letter ruling, no-action or interpretative 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 are being managed; (e) a difference in voting
instructions given by variable annuity contract owners and variable life
insurance contract owners; or (f) a decision by a Participating Insurance
Company to disregard the voting instructions of contract owners. The Board shall
promptly inform the Company if it determines that an irreconcilable material
conflict exists and the implications thereof.
8.2. The Company will report in writing any potential or existing
material irreconcilable conflict of which it is aware to the Administrator. Upon
receipt of such report, the Administrator shall report the
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potential or existing material irreconcilable conflict to the Board. The
Administrator shall also report to the Board on a quarterly basis whether the
Company has reported any potential or existing material irreconcilable conflicts
during the previous calendar quarter. The Company will assist the Board in
carrying out its responsibilities under the Shared Funding Exemptive Order, by
providing the Board with all information reasonably necessary for the Board to
consider any issues raised. This includes, but is not limited to, an obligation
by the Company to inform the Board whenever Contract owner voting instructions
are disregarded.
8.3. If it is determined by a majority of the Board, or a majority of
its disinterested trustees, that a material irreconcilable conflict exists, the
Company and other Participating Insurance Companies shall, at their expense and
to the extent reasonably practicable (as determined by a majority of the
disinterested trustees), 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 Trust or any Portfolio and reinvesting such assets in a different investment
medium, including (but not limited to) another Portfolio of the Trust, or
submitting the question whether such segregation should be implemented to a vote
of all affected Contract owners and, as appropriate, segregating the assets of
any appropriate group (i.e., annuity contract owners, life insurance policy
owners, or variable contract owners of one or more Participating Insurance
Companies) that votes in favor of such segregation, or offering to the affected
Contract owners the option of making such a change; and (2) establishing a new
registered management investment company or managed separate account. No charge
or penalty will be imposed as a result of such withdrawal. The Company agrees
that it bears the responsibility to take remedial action in the event of a Board
determination of an irreconcilable material conflict and the cost of such
remedial action, and these responsibilities will be carried out with a view only
to the interests of Contract owners.
8.4. If a material irreconcilable conflict arises because of a decision
by the Company to disregard Contract owner voting instructions and that decision
represents a minority position or would preclude a majority vote, the Company
may be required, at the Trust's election, to withdraw the affected Account's
investment in the Trust and terminate this Agreement with respect to such
Account (at the Company's expense); provided, however that such withdrawal and
termination shall be limited to the extent required by the foregoing material
irreconcilable conflict as determined by a majority of the disinterested members
of the Board. No charge or penalty will be imposed as a result of such
withdrawal. The Company agrees that it bears the responsibility to take remedial
action in the event of a Board determination of an irreconcilable material
conflict and the cost of such remedial action, and these responsibilities will
be carried out with a view only to the interests of Contract owners.
8.5. For purposes of Sections 8.3 through 8.4 of this Agreement, a
majority of the disinterested members of the Board shall determine whether any
proposed action adequately remedies any irreconcilable material conflict, but in
no event will the Trust be required to establish a new funding medium for the
Contracts. The Company shall not be required by Section 8.3 through 8.4 to
establish a new funding medium for the Contracts if an offer to do so has been
declined by vote of a majority of Contract owners materially adversely affected
by the irreconcilable material conflict.
8.6. 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 Shared Funding Exemptive Order) on terms and
conditions materially different from those contained in the Shared Funding
Exemptive Order, then the Trust and/or the Participating Insurance Companies, as
appropriate, shall take such steps as may be necessary to comply with Rules 6e-2
and 6e-3(T), as amended, and Rule 6e-3, as adopted, to the extent such rules are
applicable.
8.7. Each of the Company and the Adviser shall at least annually submit
to the Board such reports, materials or data as the Board may reasonably request
so that the Board may fully carry out the obligations imposed upon them by the
provisions hereof and in the Shared Funding Exemptive Order, and said reports,
materials and data shall be submitted more frequently if deemed appropriate by
the Board. Without limiting the generality of the foregoing or the Company's
obligations under Section 8.2, the Company shall provide to the Administrator a
written report to the Board no later than January 15/th/ of each year indicating
whether any material irreconcilable conflicts have arisen during the prior
fiscal year of the Trust. All reports received by the Board of potential or
existing conflicts, and all Board action with regard to determining the
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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 or other
appropriate records, and such minutes or other records shall be made available
to the Securities and Exchange Commission upon request.
Article 9
Indemnification
---------------
9.1. Indemnification By The Company
9.1(a). The Company agrees to indemnify and hold harmless the Trust, the
Administrator, the Adviser, and each member of their respective Boards and
officers and each person, if any, who controls the Trust within the meaning of
Section 15 of the 1933 Act (collectively, the "Indemnified Parties" for purposes
of this Section 9.1) 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, regulation, at common law or
otherwise, insofar as such losses, claims, damages, liabilities or expenses (or
actions in respect thereof) or settlements are related to the sale or
acquisition of the Trust's shares or the Contracts and:
(i) arise out of or are based upon any untrue statements or alleged
untrue statements of any material fact contained in the
registration statement or prospectus 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 Trust for use in
the registration statement or prospectus 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 Trust 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 or sales literature of the Trust not supplied
by the Company, or persons under its control and other than
statements or representations authorized by the Trust) or unlawful
conduct of the Company or persons under its control, with respect
to the sale or distribution of the Contracts or Trust shares; or
(iii) arise out of or as a result of any untrue statement or alleged
untrue statement of a material fact contained in a registration
statement, prospectus, or sales literature of the Trust 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 and in
conformity with information furnished to the Trust by or on behalf
of the Company; or
(iv) arise as a result of any failure by the Company to provide the
services and furnish the materials under the terms 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 Section 9.1(b) and 9.1(c) hereof.
9.1(b). The Company shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
incurred or assessed against an Indemnified Party as such may arise from such
Indemnified Party's willful misfeasance, bad faith, or gross negligence in the
performance of
- 9 -
such Indemnified Party's duties or by reason of such Indemnified Party's
reckless disregard of obligations or duties under this Agreement.
9.1(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 the Indemnified Parties, the Company shall be entitled to participate,
at as own expense, in the defense of such action. The Company also shall be
entitled to assume the defense thereof, with counsel satisfactory to the
Indemnified Party named in the action. After notice from the Company to such
Indemnified 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 shall not be liable to such Indemnified Party
under this Agreement for any legal or other expenses subsequently incurred by
such Indemnified Party independently in connection with the defense thereof
other than reasonable costs of investigation.
9.1(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 Trust shares or the Contracts or the operation of
the Trust.
9.2. Indemnification by Administrator
9.2(a). The Administrator 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 9.2) against any and all
losses, claims, damages, liabilities (including amounts paid in settlement with
the written consent of the Administrator) or litigation (including legal and
other expenses) to which the Indemnified Parties may become subject under any
statute, 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 sales literature of the Trust (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 Trust or the Administrator by or on behalf of the
Company, the Adviser, Counsel for the Trust, the independent public
accountant to the Trust, or any person or entity that is not acting
as agent for or controlled by the Administrator for use in the
registration statement or prospectus for the Trust or in sales
literature (or any amendment or supplement) or otherwise for use in
connection with the sale of the Contracts or Portfolio shares; or
(ii) arise out of or as a result of any untrue statement or alleged
untrue statement of a material fact contained in a registration
statement, prospectus, or sales literature covering the Contracts,
or any amendment thereof or supplement thereto, or the omission or
alleged omission to state therein a material fact required to be
stated therein or necessary to make the 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 Administrator; or
(iii) arise as a result of any failure by the Administrator to provide
the services and furnish the materials under the terms of this
Agreement; or
- 10 -
(iv) arise out of or result from any material breach of any
representation and/or warranty made by the Administrator in this
Agreement or arise out of or result from any other material breach
of this Agreement by the Administrator; as limited by and in
accordance with the provisions of Section 9.2(b) and 9.2(c) hereof.
9.2(b). The Administrator shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
incurred or assessed against an Indemnified Party as such may arise from such
Indemnified Party's willful misfeasance, bad faith, or gross negligence in the
performance of such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations and duties under this Agreement.
9.2(c). The Administrator 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 Administrator 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 Administrator
of any such claim shall not relieve the Administrator 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 Administrator will be
entitled to participate, at its own expense, in the defense thereof. The
Administrator also shall be entitled to assume the defense thereof, with counsel
satisfactory to the Indemnified Party named in the action. After notice from the
Administrator to such Indemnified Party of the Administrator'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 Administrator will
not be liable to such Indemnified Party under this Agreement for any legal or
other expenses subsequently incurred by such Indemnified Party independently in
connection with the defense thereof other than reasonable costs of
investigation.
9.2(d). The Company agrees promptly to notify the Administrator 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 each Account in which the Portfolios are made available.
9.3. Indemnification by the Adviser
9.3(a). The Adviser agrees to indemnify and hold harmless the Company and
its directors and officers and each person, if any, who controls the Company
within the meaning of Section 15 of the 1933 Act (hereinafter collectively, the
"Indemnified Parties" and individually, "Indemnified Party," for purposes of
this Section 9.3) against any and all losses, claims, damages, liabilities
(including amounts paid in settlement with the written consent of the Adviser)
or litigation (including legal and other expenses) to which the Indemnified
Parties may become subject under any statute, 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 sales literature of the Trust (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 Adviser or the Trust by or on behalf of the
Company, the Administrator, Counsel for the Trust, the independent
public accountant to the Trust, or any person or entity that is not
acting as agent for or controlled by the Adviser for use in the
registration statement or prospectus for the Trust or in sales
literature (or any amendment or supplement) or otherwise for use in
connection with the sale of the Contracts or Portfolio shares; or
- 11 -
(ii) arise out of or as a result of any untrue statement or alleged
untrue statement of a material fact contained in a registration
statement, prospectus, or sales literature covering the Contracts,
or any amendment thereof or supplement thereto, or the omission or
alleged omission to state therein a material fact required to be
stated therein or necessary to make the 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 Adviser; or
(iii) arise as a result of any failure by the Adviser to provide the
services and furnish the materials under the terms of this
Agreement; or
(iv) arise out of or result from any material breach of any
representation and/or warranty made by the Adviser in this
Agreement or arise out of or result from any other material breach
of this Agreement by the Adviser; as limited by and in accordance
with the provisions of Section 9.3(b) and 9.3(c) hereof.
9.3(b). The Adviser shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
incurred or assessed against an Indemnified Party as may arise from such
Indemnified Party's willful misfeasance, bad faith, or gross negligence in the
performance of such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations and duties under this Agreement.
9.3(c). The Adviser 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 Adviser 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 Adviser of any
such claim shall not relieve the Adviser 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 Adviser will be entitled to participate, at
its own expense, in the defense thereof. The Adviser also shall be entitled to
assume the defense thereof, with counsel satisfactory to the Indemnified Party
named in the action. After notice from the Adviser to such Indemnified Party of
the Adviser'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 Adviser will not be liable to such Indemnified Party under this Agreement
for any legal or other expenses subsequently incurred by such Indemnified Party
independently in connection with the defense thereof other then reasonable costs
of investigation.
9.3(d). The Company agrees to promptly notify the Adviser of the
commencement of any litigation or proceedings against it or any of its
respective officers or directors in connection with this Agreement, the issuance
or sale of the Contracts, with respect to the operation of each Account, or the
sale or acquisition of shares of the Trust.
9.4. Indemnification by the Trust
9.4(a). The Trust agrees to indemnify and hold harmless the Company and its
directors and officers and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act (hereinafter collectively, the
"Indemnified Parties" and individually, "Indemnified Party," for purposes of
this Section 9.4) against any and all losses, claims, damages, liabilities
(including amounts paid in settlement with the written consent of the Trust) or
litigation (including legal and other expenses) to which the Indemnified Parties
may become subject under any statute, 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 sales literature of the Trust (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
- 12 -
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 the Trust by or on behalf of the Adviser, the Company, or
the Administrator for use in the registration statement or
prospectus for the Trust or in sales literature (or any amendment
or supplement) or otherwise for use in connection with the sale of
the Contracts or Portfolio shares; or
(ii) arise out of or as a result of any untrue statement or alleged
untrue statement of a material fact contained in a registration
statement, prospectus, or sales literature covering the Contracts,
or any amendment thereof or supplement thereto, or the omission or
alleged omission to state therein a material fact required to be
stated therein or necessary to make the 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 Trust; or
(iii) arise as a result of any failure by the Trust to provide the
services and furnish the materials under the terms of this
Agreement; or
(iv) arise out of or result from any material breach of any
representation and/or warranty made by the Trust in this Agreement
or arise out of or result from any other material breach of this
Agreement by the Trust; as limited by and in accordance with the
provisions of Section 9.4(b) and 9.4(c) hereof.
9.4(b). The Trust shall not be liable under this indemnification provision
with respect to any losses, claims, damages, liabilities or litigation incurred
or assessed against an Indemnified Party as may arise from such Indemnified
Party's willful misfeasance, bad faith, or gross negligence in the performance
of such Indemnified Party's duties or by reason of such Indemnified Party's
reckless disregard of obligations and duties under this Agreement.
9.4(c). The Trust 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 Trust 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 Trust of any such claim shall not
relieve the Trust 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 Trust will be entitled to participate, at its own
expense, in the defense thereof. The Trust also shall be entitled to assume the
defense thereof, with counsel satisfactory to the Indemnified Party named in the
action. After notice from the Trust to such Indemnified Party of the Trust'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 Trust will
not be liable to such Indemnified Party under this Agreement for any legal or
other expenses subsequently incurred by such Indemnified Party independently in
connection with the defense thereof other then reasonable costs of
investigation.
9.4(d). The Company agrees to promptly notify the Trust of the commencement
of any litigation or proceedings against it or any of its respective officers or
directors in connection with this Agreement, the issuance or sale of the
Contracts, with respect to the operation of each Account, or the sale or
acquisition of shares of the Trust.
Article 10
Applicable Law
--------------
10.1. This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the State of Massachusetts.
10.2. 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
- 13 -
regulations as the Securities and Exchange Commission may grant (including, but
not limited to, the Shared Funding Exemptive Order) and the terms hereof shall
be interpreted and construed in accordance therewith.
Article 11
Termination
-----------
11.1. This Agreement shall continue in full force and effect until the
first to occur of:
(a) termination by any party for any reason upon ninety days advance
written notice delivered to the other parties; or
(b) termination by the Company by written notice to the Trust, the
Adviser, and the Administrator with respect to any Portfolio based
upon the Company's determination that shares of such Portfolio are
not reasonably available to meet the requirements of the Contracts.
Reasonable advance notice of election to terminate shall be
furnished by the Company, said termination to be effective ten (10)
days after receipt of notice unless the Trust makes available a
sufficient number of shares to reasonably meet the requirements of
the Account within said ten (10) day period; or
(c) termination by the Company upon written notice to the Trust, the
Adviser, and the Administrator with respect to any Portfolio in the
event any of the 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
medium of the Contracts issued or to be issued by the Company. The
terminating party shall give prompt notice to the other parties of
its decision to terminate; or
(d) termination by the Company upon written notice to the Trust, the
Adviser and the Administrator with respect to any Portfolio in the
event that such portfolio ceases to qualify as a Regulated
Investment Company under Subchapter M of the Code or under any
successor or similar provision; or
(e) termination by the Company upon written notice to the Trust, the
Adviser, and the Administrator with respect to any Portfolio in the
event that such Portfolio fails to meet the diversification
requirements specified in Section 6.3 hereof; or
(f) termination by either the Trust, the Adviser, or the Administrator
by written notice to the Company, if either one or more of the
Trust, the Adviser, or the Administrator, shall determine, in its
or their sole judgment exercised in good faith, that the Company
and/or their affiliated companies 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, provided that the Trust, the Adviser,
or the Administrator will give the Company sixty (60) days' advance
written notice of such determination of its intent to terminate
this Agreement, and provided further that after consideration of
the actions taken by the Company and any other changes in
circumstances since the giving of such notice, the determination of
the Trust, the Adviser, or the Administrator shall continue to
apply on the 60th day since giving of such notice, then such 60th
day shall be the effective date of termination; or
(g) termination by the Company by written notice to the Trust, the
Adviser, and the Administrator, if the Company shall determine, in
its sole judgment exercised in good faith, that either the Trust,
the Adviser, or the Administrator 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, provided that the Company will give the
Trust, the Adviser, and the Administrator sixty (60) days' advance
written notice of such determination of its intent to terminate
this Agreement, and provided further that after consideration of
the actions taken by the Trust, the Adviser, or the Administrator
and any
- 14 -
other changes in circumstances since the giving of such notice, the
determination of the Company shall continue to apply on the 60th
day since giving of such notice, then such 60th day shall be the
effective date of termination; or
(h) termination by the Trust, the Adviser, or the Administrator by
written notice to the Company, if the Company gives the Trust, the
Adviser, and the Administrator the written notice specified in
Section 2.4 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 11.1(h) shall be effective sixty (60) days after the notice
specified in Section 2.4 was given; or
(i) termination by any party upon the other party's breach of any
representation in Article 6 or any material provision of this
Agreement, which breach has not been cured to the satisfaction of
the terminating party within ten (10) days after written notice of
such breach is delivered to the Trust or the Company, as the case
may be; or
(j) termination by the Trust, the Adviser, or Administrator by written
notice to the Company in the event an Account or Contract is not
registered (unless exempt from registration) or sold in accordance
with applicable federal or state law or regulation, or the Company
fails to provide pass-through voting privileges as specified in
Section 3.3.
11.2. Effect of Termination. Notwithstanding any termination of this
Agreement, the Trust shall at the option of the Company, continue to make
available additional shares of the Trust pursuant to the terms and conditions of
this Agreement, for all Contracts in effect on the effective date of termination
of this Agreement (hereinafter referred to as "Existing Contracts") unless such
further sale of Trust shares is proscribed by law, regulation or applicable
regulatory body, or unless the Trust determines that liquidation of the Trust
following termination of this Agreement is in the best interests of the Trust
and its shareholders. Specifically, without limitation, the owners of the
Existing Contracts shall be permitted to direct reallocation of investments in
the Trust, redemption of investments in the Trust and/or investment in the Trust
upon the making of additional purchase payments under the Existing Contracts.
The parties agree that this Section 11.2 shall not apply to any terminations
under Article 8 and the effect of such Article 8 terminations shall be governed
by Article 8 of this Agreement.
11.3. The Company shall not redeem Trust shares attributable to the
Contracts (as distinct from Trust shares attributable to the Company's assets
held in the Account) except (i) as necessary to implement Contract owner
initiated or approved transactions, or (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") or (iii) as
permitted by an order of the SEC pursuant to Section 26(b) of the 1940 Act. Upon
request, the Company will promptly furnish to the Trust, the Adviser and the
Administrator the opinion of counsel for the Company (which counsel shall be
reasonably satisfactory to the Trust and the Adviser) to the effect 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
Portfolio that was otherwise available under the Contracts without first giving
the Trust or the Adviser 30 days notice of its intention to do so.
Article 12
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.
- 15 -
If to the Trust:
One Group Investment Trust
0000 Xxxxxxx Xxxxxxx, Xxxxx X0
Xxxxxxxx, Xxxx 00000-0000
Attn: Fund President
If to the Administrator:
One Group Administrative Services, Inc.
0000 Xxxxxxx Xxxxxxx, Xxxxx X0
Xxxxxxxx, Xxxx 00000-0000
Attention: President
If to the Adviser:
Banc One Investment Advisors Corporation
0000 Xxxxxxx Xxxxxxx, Xxxxx X0
Xxxxxxxx, Xxxx 00000-0000
Attn: Xxxxx Xxxxxxx
If to the Company:
----------
Article 13
Miscellaneous
-------------
13.1. All persons dealing with the Trust must look solely to the property
of the Trust for the enforcement of any claims against the Trust as neither the
Board, officers, agents or shareholders assume any personal liability for
obligations entered into on behalf of the Trust. Each of the Company, the
Adviser, and the Administrator acknowledges and agrees that, as provided by the
Trust's Amended and Restated Declaration of Trust, the shareholders, trustees,
officers, employees and other agents of the Trust and the Portfolios shall not
personally be bound by or liable for matters set forth hereunder, nor shall
resort be had to their private property for the satisfaction of any obligation
or claim hereunder. The Trust's Amended and Restated Declaration of Trust is on
file with the Secretary of State of Massachusetts.
13.2. The Company will comply with all applicable laws and regulations
aimed at preventing, detecting, and reporting money laundering and suspicious
transactions. Without limiting the generality of the foregoing, the Company
shall take all necessary and appropriate steps, consistent with applicable
regulations and generally accepted industry practices, to: (i) obtain, verify,
and retain information with regard to Contract owner identification and source
of Contract owner funds, and (ii) maintain records of all Contract owner
transactions. The Company will (but only to the extent consistent with
applicable law) take all steps necessary and appropriate to provide the Trust
with any requested information about Contract owners and their accounts in the
event that the Trust shall request such information due to an inquiry or
investigation by any law enforcement, regulatory, or administrative authority.
To the extent permitted by applicable law and regulations, the Company will
notify the Trust of any concerns that the Company may have in connection with
any Contract owner in the context of relevant anti-money laundering laws or
regulations.
13.3. Subject to the requirements of legal process and regulatory
authority, each party hereto shall treat as confidential the names and addresses
of the owners of the Contracts and all information reasonably identified as
confidential in writing by any other party hereto and, except as permitted by
this Agreement, shall
- 16 -
not disclose, disseminate or utilize such names and addresses and other
confidential information until such time as it may come into the public domain
without the express written consent of the affected party.
134. The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions hereof or
otherwise affect their construction or effect.
13.5. This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
13.6. If any provision of this Agreement shall be held or made invalid by
a court decision, statute, rule or otherwise, the remainder of this Agreement
shall not be affected thereby.
13.7. Each party hereto shall cooperate with each other party and all
appropriate governmental authorities (including without limitation the
Securities and Exchange Commission, the National Association of Securities
Dealers and state insurance regulators) and shall permit such authorities (and
other parties hereto) reasonable access to its books and records in connection
with any investigation or inquiry relating to this Agreement or the transactions
contemplated hereby.
13.8. 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.
139. 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; provided, however, that the Adviser may, with advance written notice to
the other parties hereto, assign this Agreement or any rights or obligations
hereunder to any affiliate of or company under common control with the Adviser
if such assignee is duly licensed and registered to perform the obligations of
the Adviser under this Agreement.
13.10. The Company shall furnish, or shall cause to be furnished, to the
Trust or its designee upon request, copies of the following reports:
(a) the Company's annual statement (prepared under statutory accounting
principles) and annual report (prepared under generally accepted accounting
principles ("GAAP"), if any), as soon as practical and in any event within 90
days after the end of each fiscal year;
(b) the Company's June 30th quarterly statements (statutory), as soon
as practical and in any event within 45 days following such period;
(c) any financial statement, proxy statement, notice or report of the
Company sent to stockholders and/or policyholders, as soon as practical after
the delivery thereof to stockholders;
(d) any registration statement (without exhibits) and financial reports
the Company filed with the Securities and Exchange Commission or any state
insurance regulator, as soon as practical after the filing thereof; and
(e) any other public report submitted to the Company by independent
accountants in connection with any annual, interim or special audit made by them
of the books of the Company, as soon as practical after the receipt thereof.
13.11. The names "One Group//(R)// Investment Trust" and 'Trustees of One
Group//(R)// Investment Trust" refer respectively to the Trust created and the
Trustees, as trustees but not individually or personally, acting from time to
time under a Declaration of Trust dated June 7, 1993 to which reference is
hereby made and a copy of which is on file at the office of the Secretary of the
Commonwealth of Massachusetts and elsewhere as required by law, and to any and
all amendments thereto so filed or hereafter filed. The obligations of 'One
Group Investment Trust' entered into in the name or on behalf thereof by any of
the Trustees, representatives or agents are made not individually, but in such
capacities, and are not binding upon any of the Trustees,
- 17 -
Shareholders or representatives of the Trust personally, but bind only the
assets of the Trust, and all persons dealing with any series of Shares of the
Trust must look solely to the assets of the Trust belonging to such series for
the enforcement of any claims against the Trust.
13.12. The Trust and the Administrator agree to consult with the Company
concerning whether any Portfolio of the Trust qualifies to provide a foreign tax
credit pursuant to Section 853 of the Code.
[SIGNATURE PAGES FOLLOW]
- 18 -
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By:
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Title:
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ONE GROUP INVESTMENT TRUST
By:
-------------------------------------
Title:
----------------------------------
BANC ONE INVESTMENT ADVISORS CORPORATION
By:
-------------------------------------
Title:
----------------------------------
ONE GROUP ADMINISTRATIVE SERVICES, INC.
By:
-------------------------------------
Title:
----------------------------------
- 19 -
SCHEDULE A
SEPARATE ACCOUNTS AND CONTRACTS
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Name of Separate Account and Date Form Number
Established by Board of Directors Funded by Separate Account
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- 20 -
Schedule B
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Portfolios of the Trust
-----------------------
One Group Investment Trust Bond Portfolio
One Group Investment Trust Government Bond Portfolio
One Group Investment Trust Balanced Portfolio
One Group Investment Trust Large Cap Growth Portfolio
One Group Investment Trust Equity Index Portfolio
One Group Investment Trust Diversified Equity Portfolio
One Group Investment Trust Mid Cap Growth Portfolio
One Group Investment Trust Diversified Mid Cap Portfolio
One Group Investment Trust Mid Cap Value Portfolio
- 21 -
Fund/SERV Amendment to Fund Participation Agreement
Note: Bracketed language should be deleted if the original Fund Participation
Agreement already contains Anti-Money Laundering Provisions.
This Fund/SERV Amendment (the "Amendment") to Fund Participation Agreement
is made effective ________________ by and between _____________________________
(the "Company"), One Group//(R)// Investment Trust (the "Trust"), Banc One
Investment Advisors Corporation (the "Adviser"), and One Group Administrative
Services, Inc. (the "Services Company").
Background Information
1. The Company, the Trust, the Adviser, and the Services Company are parties
to a Fund Participation Agreement made effective as of
___________________________(the "Participation Agreement"). The
Participation Agreement permits the Company to utilize the Trust as an
investment vehicle for certain variable insurance products.
2. The Company and the Trust or One Group Dealer Services, Inc. ("Agent") are
members of the National Securities Clearing Corporation ("NSCC") or
otherwise have access to the NSCC's Fund/SERV system. The Fund/SERV system
permits the transmission of shareholder trade data as well as trade
settlement between the Company and the Trust.
3. Article 2 of the Participation Agreement contains provisions governing
purchases and sales of shares of the Trust by the Company for the Accounts
governed by the Participation Agreement. The parties desire to supplement
the provisions of Article 2 of the Participation Agreement to permit the
purchase and sale of shares of the Trust electronically through the
Fund/SERV system. [In addition, the parties desire to amend the
Participation Agreement to add anti-money laundering provisions to the
agreement.]
Statement of Agreement
The parties hereby acknowledge the accuracy of the foregoing Background
Information and hereby agree as follows:
Article 1 - General Provisions
1.1. Definition of Terms. Unless otherwise defined herein, all
capitalized terms shall have the meaning ascribed to them in the Participation
Agreement.
1.2. Role of Agent. For purposes of this Amendment, the Agent or such
other designee as may be identified by the Trust to the Company in writing shall
be the designee of the Trust for receipt of instructions, notices, and orders
through the Fund/SERV system. Receipt by the Agent or such designee of such
instructions, notices, and orders shall constitute receipt by the Trust.
22
Article II - Obligations of the Trust
2.1. Transactions Subject to Fund/SERV. On each business day that the
New York Stock Exchange is open for business on which the Portfolios determine
their per share net asset values ("Business Day"), the Trust or its designee
shall accept, and effect changes in the Trust's records upon receipt of purchase
and redemption instructions from the Company electronically through Fund/SERV
("Instructions") without supporting documentation from the Account on whose
behalf the Company is acting. On each Business Day, the Trust or its designee
shall accept for processing any Instructions from the Company and shall process
such Instructions in a timely manner. Notwithstanding the foregoing, nothing in
this Amendment shall be construed as permitting the Company to establish new
accounts through Fund/SERV; it being understood that any new accounts shall be
established in accordance with Article 2 of the Participation Agreement and
after submission of a written application to the Trust.
2.2. Performance of Duties. The Trust or its designee shall perform any
and all duties, functions, procedures and responsibilities assigned to it under
this Amendment and as otherwise established by the NSCC. The Trust or its
designee shall maintain facilities, equipment and skilled personnel sufficient
to perform the foregoing activities and to otherwise comply with the terms of
this Amendment. The Trust or its designee shall conduct each of the foregoing
activities in a competent manner and in compliance with (a) all applicable laws,
rules and regulations, including NSCC rules and procedures relating to
Fund/SERV; (b) the then current prospectus and statement of additional
information of the Portfolios; and (c) any provision relating to Fund/SERV in
any agreement between the Trust and the Agent that would affect the Trust's
duties and obligations pursuant to this Agreement.
2.3. Accuracy of Information, Transmissions Through, and Access to
Fund/SERV. Confirmed trades and any other information provided by the Trust or
its designee to the Company through Fund/SERV and pursuant to this Agreement
shall be accurate, complete, and in the format prescribed by the NSCC. The Trust
or its designee shall adopt, implement and maintain procedures reasonably
designed to ensure the accuracy of all transmissions through Fund/SERV and to
limit the access to, and the inputting of data into, Fund/SERV to persons
specifically authorized by the Trust or its designee.
Article III -- Obligations of the Company
3.1. Transactions Subject to Fund/SERV. The Company certifies that all
Instructions delivered to the Trust or its designee on any Business Day shall
have been received by the Company from the Account based on instructions from
Contract owners received by the close of trading (currently 4:00 p.m. New York
time) on the New York Stock Exchange (the "Close of Trading") on such Business
Day and that any Instructions received by the Company after the Close of Trading
on any given Business Day will be transmitted to the Trust or its designee on
the next Business Day. The Company further certifies that all such Instructions
received by it from the Account based on instructions from Contract owners by
the Close of Trading on any Business Day will be delivered to the Trust or its
designee on such Business Day.
23
3.2. Performance of Duties. The Company shall perform any and all
duties, functions, procedures and responsibilities assigned to it under this
Amendment and as otherwise established by the NSCC. The Company shall maintain
facilities, equipment and skilled personnel sufficient to perform the foregoing
activities and to otherwise comply with the terms of this Amendment. The Company
shall conduct each of the forgoing activities in a competent manner and in
compliance with (a) all applicable laws, rules and regulations, including NSCC
rules and procedures relating to Fund/SERV, and; (b) the then current
prospectuses and statements of additional information of the Portfolios and the
Contracts.
3.3. Accuracy of Information, Transmissions Through, and Access to
Fund/SERV. Trade and, if applicable, broker/dealer information provided by the
Company to the Trust or its designee through Fund/SERV and pursuant to this
Amendment shall be accurate, complete and, in the format prescribed by the NSCC.
All instructions by the Company for each Fund/SERV transaction shall be true and
correct and will have been duly authorized. The Company shall adopt, implement
and maintain procedures reasonably designed to ensure the accuracy of all
transmissions through Fund/SERV and to limit the access to, and the inputting of
data into, Fund/SERV to persons specifically authorized by the Company.
3.4. Information Relating to Fund/SERV Transactions. For each Fund/SERV
transaction, the Company shall provide the Trust and its designee with all
information necessary or appropriate to establish and maintain each Fund/SERV
transaction (and any subsequent changes to such information) which the Company
hereby certifies is and shall remain true and correct. The Company shall
maintain documents required by the Trust or by applicable law, rules or
regulations to effect Fund/SERV transactions.
3.5. As-Of Transactions. Processing errors which result from any delay
or error caused by the Company may be adjusted through Fund/SERV by the Company
by the necessary transactions on an as-of basis and the cost to the Trust and
its designee of such transactions shall be borne by the Company; provided
however, prior authorization must be obtained from the Trust if the transaction
is back dated more than five days or to a previous calendar year.
3.6. Trade Confirmation. Any information provided by the Trust or its
designee to the Company electronically through Fund/SERV and pursuant to this
Amendment, shall satisfy the delivery obligations as outlined by SEC Rule 10b-10
and, as such, the Trust and its designee have the informed consent of the
Company to suppress the delivery of this information using paper-media. The
Company will promptly verify accuracy of confirmations of transactions and
records received by the Company through Fund/SERV.
Article IV - Settlement and Overpayment
4.1. Settlement. All settlement of payments with respect to transactions
effected through the Fund/SERV system shall be made as provided in NSCC rules
and procedures relating to Fund/SERV.
4.2. Overpayments to the Company. In the event any overpayment is made
to the Company by the Trust, the Company shall promptly repay such overpayment
to the Trust after the Company receives notice of such overpayment.
24
4.3. Overpayments to the Trust. In the event any overpayment is made to
the Trust by the Company, the Trust or its designee shall promptly repay such
overpayment to the Company after the Trust or its designee receives notice of
such overpayment.
4.4. Conflicting Agreements. Any understanding between the Company and
the Trust relating to Fund/SERV that is inconsistent with this Amendment shall
be null and void. Nothing contained in this Agreement, however, shall be
construed to limit or restrict each Party's compliance with any law, regulation
or order to which the Party is subject or to prevent the Parties from amending
the Participation Agreement by agreeing to additional duties, obligations,
representations, warranties and/or higher standards of care with respect
thereto. Except as otherwise set forth herein, the Participation Agreement shall
remain unchanged in full force and effect and the Company may continue to effect
transactions for the Accounts in accordance with Article I of the Participation
Agreement.
4.5. Notices. ARTICLE 12 of the Participation Agreement is hereby
amended by adding the following address for purposes of sending notices to the
Agent of the Trust:
One Group Dealer Services, Inc.
0000 Xxxxxxx Xxxxxxx
Xxxxxxxx, Xxxx 00000-0000
4.6. No Agency or Sale of Securities. Except as otherwise specifically
provided in the Participation Agreement, none of the parties are authorized to
act for or represent the others or in any way be deemed an agent or partner of
the others. The services contemplated by this agreement do not constitute the
sale of securities between the parties.
4.7. Insurance. At all times, each of the Trust and the Company shall
maintain insurance coverage that is reasonable and customary in light of each of
their responsibilities hereunder. Such coverage shall insure for losses
resulting from the criminal acts or errors and omissions of the applicable
party's employees.
4.8. [Anti-Money Laundering. The Company will comply with all applicable
laws and regulations aimed at preventing, detecting, and reporting money
laundering and suspicious transactions. Without limiting the generality of the
foregoing, the Company will take all necessary and appropriate steps, consistent
with applicable regulations and generally accepted industry practices, to: (i)
obtain, verify, and retain information with regard to Contract owner
identification and source of Contract owner funds, and (ii) maintain records of
all Contract owner transactions. The Company will (but only to the extent
consistent with applicable law) take all steps necessary and appropriate to
provide the Trust with any requested information about Contract owners and
accounts in the event that the Trust shall request such information due to an
inquiry or investigation by any law enforcement, regulatory, or administrative
authority. To the extent permitted by applicable law and regulations, the
Company will notify the Trust of any concerns that the Company may have in
connection with any Contract owner in the context of relevant anti-money
laundering laws or regulations.]
[4.9.] Termination. The Trust or the Company may terminate this Amendment
at any time sending a written notice (the "Termination Notice") to the other
parties hereto indicating that the terminating party no longer will utilize the
Fund SERV System to process and settle
25
Portfolio purchase and redemption orders on an automated basis. Such Termination
Notice shall be given at least 30 days prior to the termination date.
Termination of this Amendment shall not terminate the Participation Agreement
nor shall it affect the payment or repayment of fees on transactions, if any,
prior to the termination date. In addition, the indemnities given under the
Participation Agreement, including any indemnities arising in connection with
this Amendment [and Section 4.8 hereof] shall survive termination of this
Amendment.
IN WITNESS WHEREOF, the undersigned has caused this Amendment to be
executed as of the _____________ day of _________________, _____.
ATTEST:
----------------------------------------
-------------------------------------- ----------------------------------------
By: By:
Title: Title:
ATTEST:
ONE GROUP//(R)// INVESTMENT TRUST
-------------------------------------- ----------------------------------------
By: By:
Title: Title:
ATTEST:
ONE GROUP ADMINISTRATIVE
SERVICES, INC.
-------------------------------------- ----------------------------------------
By: By:
Title: Title:
ATTEST:
BANC ONE INVESTMENT ADVISORS
CORPORATION
-------------------------------------- ----------------------------------------
By: By:
Title: Title:
26
