EXHIBIT 8 (b)
FUND PARTICIPATION AGREEMENT
THIS AGREEMENT, made and entered into this 26th day of January, 2007 (the
"Agreement") by and among OM Financial Life Insurance Company, organized under
the laws of Maryland (the "Company"), on behalf of itself and each separate
account of the Company named in Schedule A to this Agreement, as may be amended
from time to time (each account referred to as the "Account" and collectively
as the "Accounts") American Century Variable Portfolios, Inc. an open-end
management investment company (the "Fund"); American Century Investment
Management, Inc., a corporation organized under the laws of the State of
Delaware and investment adviser to the Fund (the "Adviser"); and American
Century Investment Services, Inc., a corporation organized under the laws of
the State of Missouri and principal underwriter/distributor of the American
Century family of mutual funds (the "Distributor").
WHEREAS, the Fund engages in business as an open-end management investment
company and was established for the purpose of serving as the investment
vehicle for separate accounts established for variable life insurance contracts
and variable annuity contracts to be offered by insurance companies which have
entered into participation agreements substantially similar to this Agreement
(the "Participating Insurance Companies"), and
WHEREAS, beneficial interests in the Fund are divided into several series of
shares, each representing the interest in a particular managed portfolio of
securities and other assets (the "Portfolios"); and
WHEREAS, the Company, as depositor, has established the Accounts to serve as
investment vehicles for certain variable annuity contracts and variable life
insurance policies and funding agreements offered by the Company set forth on
Schedule A (the "Contracts"); and
WHEREAS, the Accounts are duly organized, validly existing segregated asset
accounts, established by resolutions of the Board of Directors of the Company
under the insurance laws of the State of Maryland, to set aside and invest
assets attributable to the Contracts; and
WHEREAS, to the extent permitted by applicable insurance laws and regulations,
the Company intends to purchase shares of the Portfolios named in Schedule B,
as such schedule may be amended from time to time (the "Designated Portfolios")
on behalf of the Accounts to fund the Contracts;
NOW, THEREFORE, in consideration of their mutual promises, the Company, the
Fund, the Adviser and the Distributor agree as follows:
ARTICLE I: SALE OF FUND SHARES
1.1 Distributor agrees to cause the Fund to sell to the Company those shares of
the Designated Portfolios which each Account orders (based on orders placed by
Contract owners on that Business Day, as defined below), executing such orders
on a daily basis at the net asset value (and with no sales charges) next
computed after receipt by the Fund or its designee of the order for the shares
of the Fund. For purposes of this Section 1.1, the Company will be the designee
of the Fund for receipt of such orders from each Account and receipt by such
designee will constitute receipt by the Fund; provided that the Fund receives
notice of such order by 10:00 a.m. Eastern Time on the next following Business
Day or such later time as permitted by Section 1.10 hereof. "Business Day" will
mean any day on which the New York Stock Exchange is open for trading and on
which the Portfolios calculate their net asset value pursuant to the rules of
the Securities and Exchange Commission (the "Commission").
1.2 Distributor agrees to cause the Fund to redeem for cash, in accordance with
the terms of the applicable Portfolio's prospectus and, upon the Company's
request, any full or fractional shares of the Fund held by the Company (based on
orders placed by Contract owners on that Business Day), executing such requests
on a daily basis at the net asset value next computed after receipt and
acceptance by the Fund or its agent of the request for redemption. For purposes
of this Section 1.2, the Company will be the designee of the Fund for receipt of
requests for redemption from each Account and receipt by such designee will
constitute receipt by the Fund; provided the Fund receives notice of such
requests for redemption by 10:00 a.m. Eastern Time on the next following
Business Day or such later time as permitted by Section 1.10 hereof. The Fund
reserves the right to delay payment of redemption proceeds, but in no event may
any such delay by the Fund in paying redemption proceeds cause Company or any
Account to fail to meet its obligations under Section 22( e) of the Investment
Company Act of 1940 (the" 1940 Act"). Distributor will notify the Company as
soon as reasonably practical if a decision is made to delay any such payments.
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1.3 The Company will place separate orders to purchase or redeem shares of each
Designated Portfolio. Each order shall describe the net amount of shares and
dollar amount of each Designated Portfolio to be purchased or redeemed. In the
event of net purchases, the Company shall pay for net purchase orders by wiring
federal funds to Fund or its designated custodial account (by 2:00 pm EST) on
the next Business Day after an order to purchase Designated Portfolio shares is
made in accordance with the provisions of Section 1.1 hereof(or such later time
as permitted by Section 1.10 hereof). Upon receipt by the Fund of the payment,
such funds shall cease to be the responsibility of the Company and shall become
the responsibility of the Fund. In the event of net redemptions, the Fund shall
pay the net redemption proceeds by wiring federal funds to the Company or its
designated custodial account (by 4:00 pm EST) on the next Business Day after an
order to redeem a Designated Portfolio's shares is made in accordance with the
provision of and subject to the reservation of rights in Section 1.2 hereof.
Upon receipt by the Company of the payment, such funds shall cease to be the
responsibility of the Fund and shall become the responsibility of the Company.
1.4 Distributor agrees to cause the Fund to make shares of the Designated
Portfolios available continuously for purchase at the applicable net asset value
per share by Participating Insurance Companies and their separate accounts on
those days on which each Designated Portfolio calculates its net asset value
pursuant to rules of the Commission and each Designated Portfolio shall
calculate such net asset value on each day which the NYSE is open for regular
trading in accordance with the terms of its then-current prospectus; provided,
however, that the Board of Directors of the Fund (the "Fund Board") may refuse
to sell shares of any Portfolio to any person, or suspend or terminate the
offering of shares of any Portfolio if such action is required by law or by
regulatory authorities having jurisdiction or is, in the sole discretion of the
Fund Board, acting in good faith and in light of its fiduciary duties under
federal and any applicable state laws, necessary in the best interests of the
shareholders of such Portfolio.
1.5 Distributor agrees that shares of the Fund will be sold only to
Participating Insurance Companies and their separate accounts, qualified pension
and retirement plans. No shares of any Portfolio will be sold directly to the
general public.
1.6 The Distributor agrees that shares of the Fund will be sold only to
Participating Insurance Companies and their separate accounts, qualified pension
and retirement plans that represent and warrant to the Fund that they qualify to
purchase shares of the Fund under Section 817(h) of the Code and the regulations
thereunder without impairing the ability of the Accounts to consider the
portfolio investments of the Fund as constituting investments of the Accounts
for the purpose of satisfying the diversification requirements of Section
817(h). No Fund shares shall be sold to any insurance company or separate
account unless an agreement substantially complying with Article VII of this
Agreement is in effect to govern such sales, to the extent required.
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1.7 The Company agrees to purchase and redeem the shares of the Designated
Portfolios offered by their then current prospectuses in accordance with the
provisions of such prospectuses; provided that in no event shall the Company be
required to receive purchase and redemption orders any earlier than prior to the
close of regular trading on the New York Stock Exchange in order to receive the
net asset value next computed on that Business Day to the extent permitted by
applicable law, including the Commission staffs no-action letter to New York
Life Fund Incorporated (publicly available May 7, 1971), and provided that no
such provision shall limit Company's right to purchase and redeem Fund shares as
set forth in this Agreement except as required by law.
1.8 Issuance and transfer of the Fund's shares will be by book entry only. Stock
certificates will not be issued to the Company or to any Account. Purchase and
redemption orders for Fund shares will be recorded in an appropriate title for
each Account or the appropriate sub-account of each Account.
1.9 Distributor or its designee will furnish same day notice (by facsimile) to
the Company of the declaration of any income, dividends or capital gain
distributions payable on each Designated Portfolio's shares. The Company hereby
elects to receive all such dividends and distributions as are payable on the
Portfolio shares in the form of additional shares of that Portfolio at the
ex-dividend date net asset values. The Company reserves the right to revoke this
election and to receive all such dividends and distributions in cash.
Distributor or its designee will notify the Company of the number of shares so
issued as payment of such income, dividends and distributions.
1.10 Distributor or its designee will make the net asset value per share for
each Designated Portfolio available to the Company via electronic means on each
Business Day as soon as reasonably practical after the net asset value per share
is calculated and will use its best efforts to make such net asset value per
share available by 6:30 p.m., Eastern Time, each Business Day. In the event that
Distributor or its designee provides the closing net asset value later than
10:00 p.m. Eastern Time on any Business Day, Distributor shall work with the
Company to provide the Company sufficient additional time under Sections 1.2 and
1.3 above to place orders for the purchase and redemption of shares. If the
Company places its purchase or redemption order within the additional time
afforded under the preceding sentence, the Company on behalf of the Account,
shall be entitled to the share net asset value computed as of the close of the
prior Business Day regardless of whether the Distributor is able to process
these orders within its regular daily processing cycle for such prior Business
Day. If materially incorrect net asset value per share information (as
determined under the Fund's guidelines attached hereto as Exhibit D) is provided
to the Company, the Fund shall make an adjustment to the number of shares
purchased or redeemed for the Accounts to reflect the correct net asset value
per share, and the Distributor shall bear the cost of correcting such errors and
shall reimburse the Company for any reasonable out-of-pocket expenses incurred
related to correction of the net asset value (including correcting Contract
owner accounts). Any material error in the calculation or reporting of net asset
value per share, dividend or capital gain information shall be reported to the
Company upon discovery by Distributor.
ARTICLE II: REPRESENTATIONS AND WARRANTIES
2.1 The Company represents and warrants that interests under the Contracts are
or prior to sale will be registered under the Securities Act of 1933 (the "1933
Act"), or are exempt from registration thereunder, and that the Contracts will
be issued and sold and distributed in compliance with all applicable federal and
state laws. 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 as a separate account under
applicable law and that each Account is or will be registered as a unit
investment trust in accordance with the provisions of the Investment Company Act
of 1940 (the "1940 Act") to serve as a segregated investment account for the
Contracts, or is exempt from registration thereunder, and that it will
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maintain such registration for so long as any Contracts are outstanding, as
applicable. The Company will amend the registration statement under the 1933 Act
for the Contracts and the registration statement under the 1940 Act for the
Account from time to time as required in order to effect the continuous offering
of the Contracts or as may otherwise be required by applicable law. The Company
will register and qualify the Contracts for sale in accordance with the
securities laws of the various states only if and to the extent deemed necessary
by the Company.
2.2 The Company represents that the Contracts are currently and at the time of
issuance will be treated as life insurance, endowment or annuity contracts (as
applicable) under applicable provisions of the Internal Revenue Code of 1986, as
amended (the "Code"), and that it will make every effort to maintain such
treatment and that it will notify the Fund and the Adviser 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; provided, however,
that the Company makes no representation or undertaking regarding any Contract
to the extent such representation or undertaking is dependent on compliance by
any investment vehicle in which the Company or an Account may invest with the
requirements of Subchapter M or Section 817(h) of the Code, the regulations
thereunder, or any successor provision.
2.3 The Company represents and warrants that it will not purchase shares of the
Designated Portfolio(s) with assets derived from tax-qualified retirement plans
except, indirectly, through Contracts purchased in connection with such plans.
2.4 Adviser and Distributor represent and warrant that shares of the Designated
Portfolio(s) sold pursuant to this Agreement will be registered under the 1933
Act and duly authorized for issuance in accordance with applicable law and that
the Fund is and will remain registered as an open-end management investment
company under the 1940 Act for as long as such shares of the Designated
Portfolio(s) are sold. Distributor will amend the Fund's registration statement
for its shares under the 1933 Act and the 1940 Act from time to time as
required in order to effect the continuous offering of its shares. Distributor
will register and qualify the shares of the Designated Portfolio(s) for sale in
accordance with the laws of the various states only if and to the extent deemed
advisable by Distributor.
2.5 Adviser and Distributor represent that the Fund will use its best efforts
to comply with the laws of its state of domicile, and, to the extent
specifically requested in writing by the Company, any other applicable state
insurance laws or regulations as they may apply to the investment objectives,
policies and restrictions of the Designated Portfolios, as they may apply to
the Fund. If the Fund cannot comply with any of the state insurance laws or
regulations of which it is notified in writing by the Company, it will so
notify the Company in writing. The Fund makes no other representation as to
whether any aspect of its operations (including, but not limited to, fees and
expenses, and investment policies) complies with the insurance laws or
regulations of any state. The Company represents that it will use its best
efforts to notify the Fund of any restrictions imposed by state insurance laws
that may become applicable to the Fund as a result of the Accounts' investments
therein. Adviser and Distributor agree that they will furnish the information
required by state insurance laws to assist the Company in obtaining the
authority needed to issue the Contracts in various states.
2.6 Adviser and Distributor represent and warrant that the Fund is lawfully
organized and validly existing under the laws of the state of its organization
and. that the Fund does and will comply in all material respects with
applicable provisions of the 1940 Act and any applicable regulations
thereunder. Distributor represents and warrants that the Fund's operations, and
that of each Designated Portfolio, does and will comply with applicable federal
and state law.
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2.7 Adviser and Distributor represent and warrant that all of the Fund's
directors, officers, employees, investment advisers, and other
individuals/entities having access to the funds and/or securities of the Fund
are and 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
minimal coverage as required currently by Rule 17 g-( 1) of the 1940 Act or
related provisions as may be promulgated from time to time. The aforesaid bond
includes coverage for larceny and embezzlement and is issued by a reputable
bonding company.
2.8 Distributor represents and warrants that it is lawfully organized and
validly existing under the laws of its state of organization; it is registered
as a broker-dealer under the Securities Exchange Act of 1934, as amended (the
"1934 Act") and will remain duly registered under all applicable federal and
state securities laws, and is a member in good standing of the National
Association of Securities Dealers, Inc. ("NASD") and serves as principal
underwriter/distributor of the Fund and that it will perform its obligations for
the Fund in accordance in all material respects with the laws of the state of
its organization and any applicable state and federal securities laws.
2.9 The Fund represents and warrants that the Fund has entered into an agreement
with the Distributor on behalf of each Designated Portfolio, under which the
Distributor has the right and obligation to make arrangements for the
distribution of each Designated Portfolio's shares. The Fund further represents
and warrants that it has authorized the Distributor and Adviser to enter into
agreements with Participating Insurance Companies, including this Agreement, for
the distribution of Fund shares. The Fund further warrants that, should its
agreement with either the Distributor or the Adviser be terminated for any
reason, it will use good faith efforts to cause the replacement distributor or
investment adviser, as appropriate, to enter into an agreement with the Company
substantially similar to this Agreement.
ARTICLE III: FUND COMPLIANCE
3.1 Adviser and Distributor acknowledge that any failure (whether intentional or
in good faith or otherwise) to comply with the requirements of Subchapter M of
the Code or the diversification requirements of Section 8l7(h) of the Code may
result in the Contracts not being treated as variable contracts for federal
income tax purposes, which would have adverse tax consequences for Contract
owners and could also adversely affect the Company's corporate tax liability.
Distributor further acknowledges that any such failure may result in costs and
expenses being incurred by the Company in obtaining whatever regulatory
authorizations are required to substitute shares of another investment company
for those of the failed Fund as well as fees and expenses of legal counsel and
other advisors to the Company and any federal income taxes, interest or tax
penalties incurred by the Company in connection with any such failure.
3.2 Adviser and Distributor represent and warrant that each Designated Portfolio
is currently qualified as a Regulated Investment Company under Subchapter M of
the Code, and that they will maintain such qualification (under Subchapter M or
any successor or similar provision) and that no other Participating Insurance
Company will purchase shares in any Designated Portfolio for any purpose or
under any circumstances that would preclude the Company from "looking through"
to the investments of each Designated Portfolio in which it invests, pursuant to
the "look through" rules found in Treasury Regulation 1.817-5. Distributor will
notify the Company immediately upon having a reasonable basis for believing that
any Designated Portfolio has ceased to so qualify or that any might not so
qualify in the future.
3.3 Adviser and Distributor represent and warrant that for each quarter each
Designated Portfolio of the Fund does and will at all times invest money from
the Contracts in such a manner as to ensure that the Contracts will be treated
as variable contracts under the Code and the regulations issued thereunder;
including, but not limited to, that the Fund will at all times comply with the
diversification requirements of Section 8l7(h) of the Code and any regulations
thereunder applicable to variable contracts as defined in Section 8l7( d) of the
Code and any amendments or other modifications or successor provisions to such.
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Sections or regulations (and any revenue rulings, revenue procedures, notices,
and other published announcements of the Internal Revenue Service interpreting
those Sections or regulations), as if those requirements applied directly to
each such Portfolio. Distributor will notify the Company immediately upon having
a reasonable basis for believing that the Fund or a Portfolio thereunder has
ceased to comply with the diversification requirements or that the Fund or
Portfolio might not comply with the diversification requirements in the future.
In the event of a breach of this representation and warranty the Fund will take
all reasonable necessary steps to adequately diversify the Fund so as to achieve
compliance within the grace period afforded by Treasury Regulation 1.817-5.
3.4 Distributor agrees to provide the Company with a certificate or statement
indicating compliance by each Portfolio of the Fund with Section 817(h) of the
Code, such certificate or statement to be sent to the Company no later than
thirty (30) days following the Company's reasonable written request.
3.5 Adviser and Distributor represent and warrant that the Fund is in and
shall maintain compliance with Rule 38a-1 under the 1940 Act, and Adviser
represents and warrants that the Adviser is and shall remain in compliance
with Rule 206(4)-7 under the Advisers Act.
ARTICLE IV: PROSPECTUS AND PROXY STATEMENTSNOTING
4.1 At least annually (or in the case of a prospectus supplement, when that
supplement is issued), Distributor or its designee will timely provide the
Company with as many copies of the current prospectuses for the Designated
Portfolios and any supplements thereto as the Company may reasonably request for
distribution to Contract owners at the time of Contract fulfillment and
confirmation. To the extent that the Designated Portfolio( s) are one or more of
several Portfolios of the Fund, Distributor shall bear the cost of providing the
Company only with disclosure related to the Designated Portfolio(s). Distributor
or its designee will provide, at its expense, as many copies of said prospectus
as necessary for distribution, to existing Contract owners. Distributor or its
designee will provide the copies of said prospectus to the Company or to its
mailing agent. Distributor or its designee shall provide the Company, at the
Company's expense, with as many copies of the current prospectuses for the
Designated Portfolio and any supplement thereto, as the Company may reasonably
request for distribution to prospective purchasers of Contracts. If requested by
the Company, in lieu thereof, Distributor or its designee will provide such
documentation, including a final copy of a current prospectus set in type at
Distributor's expense, and other assistance as is reasonably necessary in order
for the Company at least annually (or more frequently if any prospectus is
amended more frequently) to have the new prospectus for the Contracts and the
Designated Portfolios' prospectuses printed together, in which case the Fund
agrees to pay its proportionate share of reasonable expenses directly related to
the required disclosure of information concerning the Fund. Distributor or its
designee will, upon request, provide the Company with a copy of the Fund's
prospectus through electronic means to facilitate the Company's efforts to
provide Fund prospectuses via electronic delivery, in which case the Fund agrees
to pay its proportionate share of reasonable expenses related to the required
disclosure of information concerning the Fund.
4.2 Distributor or its designee will provide the Company, at the Company's
expense, with as many copies of the SAI and any supplements thereto as the
Company may reasonably request for distribution, at the Company's expense, to
prospective Contract owners and applicants. Distributor or its designee will
provide as many copies of said SAI as necessary for distribution to any existing
Contract owner who requests such statement or whenever state or federal law
requires that such statement be provided. Distributor or its designee will
provide the copies of said SAI to the Company or to its mailing agent at
Distributor's expense. The Company will distribute the SAI as requested or
required at the Company's expense.
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4.3 Distributor, at its expense, will provide the Company or its mailing agent
with copies of the proxy material for any of the Designated Portfolios, if any,
reports to shareholders/Contract owners and other permissible communications to
shareholders/Contract owners in such quantity as the Company will reasonably
require. The Company will distribute this proxy material, reports and other
communications to existing Contract owners. The Company will xxxx Distributor
for the reasonable cost of distribution of proxy materials, but distribution of
all other materials shall be at the Company's expense.
4.4 If and to the extent required by law, the Company will:
(a) solicit voting instructions from Contract owners;
(b) vote the shares of the Designated Portfolios held in the Account in
accordance with instructions received from Contract owners; and
(c) vote shares of the Designated Portfolios held in the Account for
which no timely instructions have been received, in the same proportion
as shares of such Designated Portfolio for which instructions have been
received from the Company's Contract owners, so long as and to the
extent that the Commission continues to interpret the 1940 Act to
require pass-through voting privileges for variable contract owners. The
Company reserves the right to vote Fund shares held in any segregated
asset account in its own right, to the extent permitted by law. The
Company will be responsible for assuring that the Accounts participating
in the Fund calculates voting privileges in a manner consistent with all
legal requirements, including the Proxy Voting Procedures set forth in
Schedule C and the Mixed and Shared Funding Exemptive Order, as
described in Section 7.1.
4.5 Distributor will ensure that the Fund will comply with all provisions of the
1940 Act requiring voting by shareholders.
ARTICLE V: SALES MATERIAL AND INFORMATION
5.1 The Company will furnish, or will cause to be furnished, to Distributor each
piece of sales literature or other promotional material in which the Fund or any
affiliate is named, at least ten (10) Business Days prior to its use. No such
material will be used if Distributor reasonably objects to such use within ten
(10) Business Days after receipt of such material.
5.2 The Company will not give any information or make any representations or
statements on behalf of the Fund or concerning the Fund in connection with the
sale of the Contracts other than the information or representations contained in
the registration statement, prospectus or SAI for Fund shares, as such
registration statement, prospectus and SAI may be amended or supplemented from
time to time, or in reports or proxy statements for the Fund, or in published
reports for the Fund which are in the public domain or approved by the Fund,
Adviser or Distributor or Distributor's designee for distribution, or in sales
literature or other material provided by the Fund, Adviser, or Distributor,
except with permission of Distributor or its designee. Distributor agrees to
respond to any request for approval on a prompt and timely basis.
5.3 Distributor will furnish, or will cause to be furnished, to the Company or
its designee, each piece of sales literature or other promotional material in
which the Company, its separate account or any affiliate is named, at least ten
(10) Business Days prior to its use. No such material will be used if the
Company or its designee reasonably objects to such use within ten (10) Business
Days after receipt of such material.
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5.4 Adviser and Distributor will not give any information or make any
representations or statements 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, prospectus or SAI for the
Contracts, as such registration statement, prospectus and SAI may be amended or
supplemented from time to time, or in published reports for each Account or the
Contracts which are in the public domain or approved by the Company for
distribution to Contract owners, or in sales literature or other material
provided by the Company, except with written permission of the Company. The
Company agrees to respond to any request for approval on a prompt and timely
basis.
5.5 Distributor will provide to the Company at least one complete copy of all
prospectuses, SAIs, reports, proxy statements, and all amendments to any of the
above for the Designated Portfolios that relate to the Fund or its shares,
within a reasonable time after filing of each such document with the Commission
or the NASD. Copies of all sales literature and other promotional materials for
the Designated Portfolios are posted on Distributor's institutional-only
website, to which Distributor will ensure that the Company has access.
5.6 The Company will provide to Distributor at least one complete copy of all
definitive prospectuses, definitive SAI, reports, solicitations for voting
instructions, sales literature and other promotional materials in which
Distributor or the Funds are named, and all amendments to any of the above, that
relate to the Contracts or each Account, within a reasonable time after filing
of each such document with the Commission or the NASD (except that with respect
to post-effective amendments to such prospectuses and SAIs and sales literature
and promotional material, only those prospectuses and SAls and sales literature
and promotional material that relate to or refer to the Fund will be provided.)
In addition, the Company will provide to Distributor at least one complete copy
of (i) a registration statement that relates to the Contracts or each Account,
containing representative and relevant disclosure concerning the Fund; and (ii)
any post effective amendments to any registration statements relating to the
Contracts or such Account that refer to or relate to the Fund.
5.7 Distributor 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 or statement
of additional information for any Account. Distributor will cooperate with the
Company so as to enable the Company to solicit proxies from Contract owners or
to make changes to its prospectus, statement of additional information or
registration statement, in an orderly manner. Distributor will make reasonable
efforts to attempt to have changes affecting Contract prospectuses become
effective simultaneously with the annual updates for such prospectuses.
5.8 For purposes of this Article V, the phrase "sales literature or other
promotional material" includes, but is not limited to, advertisements {such as
material published, or designed for use in, a newspaper, magazine, or other
periodical, radio, television, telephone or tape recording, videotape display,
signs or billboards, motion pictures, or other public media, (i.e., on-line
networks such as the Internet or other electronic messages>>, sales literature
(i.e., any 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), educational or training
materials or other communications distributed or made generally available to
some or all agents or employees, registration statements, prospectuses, SAIs,
shareholder reports, and proxy materials and any other material constituting
sales literature or advertising under the NASD rules, the 1933 Act or the 0000
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5.9 Distributor hereby consents to the Company's use of the names of the Fund,
the Fund's adviser and Distributor, as well as the names of the Designated
Portfolios set forth in Schedule B of this Agreement, in
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connection with marketing the Contracts, subject to the terms of Sections 5.1 of
this Agreement. The Company acknowledges and agrees that Distributor and/or its
affiliates own all right, title and interest in and to their names and covenants
not, at any time, to challenge the rights of Distributor and/or their affiliates
to such name or design, or the validity or distinctiveness thereof Such consent
will terminate with the termination of this Agreement, Distributor may withdraw
this consent as to any particular use of any such name or identifying marks at
any time (i) upon Distributor's reasonable determination that such use would
have a material adverse effect on the reputation or marketing efforts of
Distributor or such Funds or (ii) if no investment company, or series or class
of shares of any investment company distributed by Distributor continues to be
offered through variable insurance contracts issued by the Company; provided
however, that the Company may, in its discretion, continue to use materials
prepared or printed prior to the withdrawal of such authorization. The Company
agrees and acknowledges that all use of any designation comprised in whole or in
part of the name, trademark, trade name, service xxxx and logo under this
Agreement shall inure to the benefit of the Fund and/or the Distributor.
5.10 Distributor and the Company agree to adopt and implement procedures
reasonably designed to ensure that information concerning the Company, the Fund1
or the Distributor, respectively, and their respective affiliated companies,
that is intended for use only by brokers or agents selling the Contracts is
properly marked as "Not For Use With The Public" and that such information is
only so used.
ARTICLES VI: FEES, COSTS AND EXPENSES
6.1 Distributor will pay no fee or other compensation to the Company under this
Agreement, except as set forth in the Fund Services Agreement between
Distributor and Old Mutual Financial Network Securities, Inc., an affiliate of
the Company, and the Administrative Services Agreement between the Company and
American Century Services, LLC, the Funds' transfer agent, both agreements of
even date herewith.
6.2 All expenses incident to performance by Distributor of this Agreement will
be paid by Distributor to the extent permitted by law. All shares of the
Designated Portfolios will be duly authorized for issuance and registered in
accordance with applicable federal law and, to the extent deemed advisable by
Distributor, in accordance with applicable state law, prior to sale. Distributor
will bear the expenses for the cost of registration and qualification of the
Fund's shares, including without limitation, the preparation of and filing with
the SEC of Forms N-CSR and N-SAR and Rule 24f-2 Notices and payment of all
applicable registration or filing fees with respect to shares of the Fund;
preparation and filing of the Fund's prospectus, SAI and registration statement,
proxy materials and reports; typesetting and printing the Fund's prospectus and
SAI (to the extent provided by and as determined in accordance with Article III
above); typesetting and printing proxy materials and reports to Contract owners
(including the costs of printing a Fund prospectus that constitutes an annual
report) (to the extent provided by and as determined in accordance with Article
III above); the preparation of all statements and notices required by any
federal or state law; all taxes on the issuance or transfer of the Fund's
shares; any expenses permitted to be paid or assumed by the Fund pursuant to a
plan, if any, under Rule 12b-1 under the 1940 Act; and other costs associated
with preparation of prospectuses and SAIs for the Designated Portfolios in
electronic or typeset format, as well as any distribution and other expenses as
set forth in Article III of this Agreement.
ARTICLE VII: MIXED & SHARED FUNDING RELIE;F
7.1 The Fund represents and warrants that it has received an order from the
Commission regarding relief from the provisions of Sections 9(a), 13(a), 15(a),
and 15(b) of the 1940 Act and Rules 6e-2(b)(15) and 6e3 (T)(b)(15) thereunder,
to the extent necessary to permit shares of the Fund to be sold to and held by
variable annuity separate accounts and variable life insurance separate accounts
of both affiliated and
9
unaffiliated Participating Insurance Companies and qualified pension and
retirement plans outside of the separate account context (the "Mixed and Shared
Funding Exemptive Order"). The parties to this Agreement agree that the
conditions or undertakings specified in the Mixed and Shared Funding Exemptive
Order and that may be imposed on the Company, the Fund and/or the Fund's adviser
by virtue of the receipt of such order by the Commission, will be incorporated
herein by reference, and such parties agree to comply with such conditions and
undertakings to the extent applicable to each such party.
7.2 The Fund Board will monitor each Designated Portfolio of the Fund for the
existence of any irreconcilable material conflict among the interests of the
Contract owners of all separate accounts investing in the Fund. The Board shall
have the sole authority to determine if a material irreconcilable conflict
exists, and such determination shall be binding on the Company only if approved
in the form of a resolution by a majority of the Board, or a majority of the
disinterested trustees of the Board. An irreconcilable material conflict may
arise for a variety of reasons, including, but not limited to: (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 and variable life insurance Contract
owners; or (f) a decision by an insurer to disregard the voting instructions of
Contract owners. The Fund Board will promptly inform the Company if it
determines that an irreconcilable material conflict exists and the implications
thereof.
7.3 The Company agrees to assist the Fund Board in carrying out its
responsibilities, as delineated in the Mixed and Shared Funding Exemptive Order,
by providing the Fund Board with all information reasonably necessary for the
Fund Board to consider any issues raised. This includes, but is not limited to,
an obligation by the Company to inform the Fund Board whenever Contract owner
voting instructions are to be disregarded.
7.4 If it is determined by a majority of the Fund Board, or a majority of its
disinterested directors, that an irreconcilable material conflict exists, the
Company and other Participating Insurance Companies will, at their expense and
to the extent reasonably practicable (as determined by a majority of the
disinterested directors), take whatever steps are necessary to remedy or
eliminate the irreconcilable material conflict, up to and including: (a)
withdrawing the assets allocable to some or all of the Accounts from the Fund or
any Portfolio and reinvesting such assets in a different investment medium,
including (but not limited to) another Portfolio of the Fund, or submitting the
question whether such segregation should be submitted to a vote of all affected
Contract owners and, as appropriate, segregating the assets of any appropriate
group (i.e., variable annuity Contract owners or variable life insurance
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 (b) establishing a new registered management
investment company or managed separate account.
7.5 If a material irreconcilable conflict arises because of a decision by the
Company to disregard Contract owner voting instructions, and such disregard of
voting instructions could conflict with the majority of Contract owner voting
instructions, and the Company's judgment represents a minority position or would
preclude a majority vote, the Company may be required, at the Fund's election,
to withdraw the affected sub-account of the Account's investment in the Fund and
terminate this Agreement with respect to such subaccount; provided, however,
that such withdrawal and termination will be limited to the extent required by
the foregoing irreconcilable material conflict as determined by a majority of
the disinterested directors of the Fund Board.
7.6 If an irreconcilable conflict arises because a particular state insurance
regulator's decision applicable to
10
the Company conflicts with the majority of other state insurance regulators,
then the Company will withdraw the affected sub-account of the Account's
investment in the Fund and terminate this Agreement with respect to such
sub-account; provided, however, that such withdrawal and termination will be
limited to the extent required by the foregoing irreconcilable material conflict
as determined by a majority of the disinterested directors of the Fund Board.
7.7 For purposes of Sections 7.4 through 7.7 of this Agreement, a majority of
the disinterested members of the Fund Board will determine whether any proposed
action adequately remedies any irreconcilable material conflict, but in no
event, other than as specified in Section 7.4, will the Fund be required to
establish a new funding medium for the Contracts. The Company will not be
required by Section 7.4 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
affected by the irreconcilable material conflict.
7.8 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 Fund and/or the Participating Insurance
Companies, as appropriate, will 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 4.4, 4.5, 7.1, 7.2, 7.3, 7.4,
and 7.5 of this Agreement will continue in effect only to the extent that terms
and conditions substantially identical to such Sections are contained in such
Rule(s) as so amended or adopted.
ARTICLE VIII: INDEMNIFICATION
8.1 INDEMNIFICATION BY THE COMPANY
(a) The Company agrees to indemnify and hold harmless the Designated Portfolios,
Adviser, Distributor, and each person, if any, who controls the Designated
Portfolios, Adviser or Distributor within the meaning of such terms under the
federal securities laws and any director, trustee, officer, employee or agent of
the foregoing (collectively, the "Indemnified Parties" for purposes of this
Section 8.1) against any and all losses, claims, expenses, damages, liabilities
(including amounts paid in settlement with the written consent of the Company)
or actions in respect thereof (including reasonable legal and other expenses),
to which the Indemnified Parties may become subject under any statute or
regulation, at common law or otherwise, insofar as such losses, claims, damages,
liabilities or expenses (or actions in respect thereof) or settlements are
related to the sale, acquisition, or holding of the Designated Portfolio shares
in connection with the Contracts, or the sale or acquisition of the Contracts
and:
(1) arise out of or are based upon any untrue statements of any material
fact contained in the registration statement, prospectus or SAI for the
Contracts or contained in the-Contracts or sales literature or other
promotional material for the Contracts (or any amendment or supplement to
any of the foregoing), or arise out of or are based upon the omission to
state therein a material fact required to be stated or necessary to make
such statements not misleading in light of the circumstances in which
they were made; provided that this agreement to indemnify will not apply
as to any Indemnified Party if such statement or omission was made in
reliance upon and in conformity with information furnished to the Company
by or on behalf of the Fund, Adviser or the Distributor 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
11
(2) arise out of or as a result of statements or representations by or
on behalf of the Company (other than statements or representations
contained in the Fund registration statement, prospectus, SAI or sales
literature or other promotional material of the Fund, or any amendment
or supplement to the foregoing, not supplied by the Company or its
designee) or wrongful conduct of the Company or persons under its
control, with respect to the sale or distribution of the Contracts or
Fund shares; or
(3) arise out of untrue statement of a material fact contained in the
Fund registration statement, prospectus, SAI or sales literature or
other promotional material of the Fund (or amendment or supplement) or
the omission to state therein a material fact required to be stated
therein or necessary to make such statements not misleading in light of
the circumstances in which they were made, if such a statement or
omission was made in reliance upon and in conformity with information
furnished to the Fund by or on behalf of the Company or its designee;
or
(4) 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
(5) arise out of 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 by the Company of this Agreement;
except to the extent provided in Sections 8.1(b) and 8.3 hereof. This
indemnification will be in addition to any liability that the Company otherwise
may have. In no event shall the Company be liable for any consequential,
incidental, special or indirect damages resulting to the Designated Portfolios,
Adviser or Distributor hereunder.
(b) No party will be entitled to indemnification under Section 8.1 (a) if such
loss, claim, damage, liability or action is due to the willful misfeasance, bad
faith, or gross negligence in the performance of such party's duties .under
this Agreement, or by reason of such party's reckless disregard of its
obligations or duties under this Agreement.
(c) The Indemnified Parties promptly will notify the Company of the
commencement of any litigation, proceedings, complaints or actions by
regulatory authorities against them in connection with the issuance, holding or
sale of the Fund shares or the Contracts or the operation of the Fund.
8.2 INDEMNIFICATION BY ADVISER AND DISTRIBUTOR
(a) Distributor and Adviser agree to indemnify and hold harmless the Company and
each person, if any, who controls the Company within the meaning of such terms
under the federal securities laws and any director, officer, employee or agent
of the foregoing (collectively, the "Indemnified Parties" for purposes of this
Section 8.2) against any and all losses, claims, expenses, damages, liabilities
(including amounts paid in settlement with the written consent of Distributor
and Adviser) or actions in respect thereof (including reasonable 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, acquisition, or holding of the Fund shares or the Contracts
and:
(1) arise out of or are based upon any untrue statement of any material
fact contained in the registration statement, prospectus or SAI for the
Fund or sales literature or other promotional material of the Fund (or
any amendment or supplement to any of the foregoing), or arise out of or
are
12
based upon the omission to state therein a material fact required to be
stated or necessary to make such statements not misleading in light of
the circumstances in which they were made; provided that this agreement
to indemnify will 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
Distributor, Adviser 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 of the Fund (or any amendment or supplement thereto) or
otherwise for use in connection with the sale of the Contracts or Fund
shares; or
(2) arise out of or as a result of statements or representations (other
than statements or representations contained in the Contracts or in the
Contract or Fund registration statements, prospectuses or statements of
additional information or sales literature or other promotional material
for the Contracts, or any amendment or supplement to the foregoing, not
supplied by the Adviser, Distributor or the Fund or persons under the
control of Adviser, Distributor or the Fund respectively) or wrongful
conduct of Adviser, Distributor or the Fund or persons under the control
of Adviser, Distributor or the Fund respectively, with respect to the
sale or distribution of the Contracts or Fund shares; or
(3) arise out of any untrue statement of a material fact contained in a
registration statement, prospectus, SAI or sales literature or other
promotional material covering the Contracts (or any amendment or
supplement thereto), or the omission to state therein a material fact
required to be stated or necessary to make such statement or statements
not misleading in light of the circumstances in which they were made, if
such statement or omission was made in reliance upon and in conformity
with information furnished to the Company by or on behalf of
Distributor, Adviser or the Fund or persons under the control of
Distributor, Adviser or the Fund; or
(4) arise as a result of any failure by Distributor, Adviser or the Fund
to provide the services and furnish the materials under the terms of
this Agreement; or
(5) arise out of or result from any material breach of any
representation and/or warranty made by Distributor, Adviser in this
Agreement, or arise out of or result from any other material breach of
this Agreement by Distributor or Adviser (including a failure, whether
intentional or in good faith or otherwise, to comply with the
requirements of Subchapter M of the Code specified in Article III,
Section 3.2 of this Agreement and the diversification requirements
specified in Article HI, Section 3.3 of this Agreement;
except to the extent provided in Sections 8.2(b) and 8.3 hereof. This
indemnification will be in addition to any liability that Distributor or
Adviser otherwise may have. In no event shall Distributor or Adviser be liable
for any consequential, incidental, special or indirect damages resulting to the
Company, the Contracts or the Accounts hereunder.
(b) No party will be entitled to indemnification under Section 8.2(a) if such
loss, claim, damage, liability or action is due to the willful misfeasance, bad
faith, or gross negligence in the performance of such party's duties under this
Agreement, or by reason of such party's reckless disregard or its obligations
or duties under this Agreement.
(c) The Indemnified Parties will promptly notify Distributor of the
commencement of any litigation, proceedings, complaints or actions by
regulatory authorities against them in connection with the issuance, holding
or sale of the Contracts or the operation of the Account.
13
8.3 INDEMNIFICATION PROCEDURE
Any person obligated to provide indemnification under this Article VIII
("Indemnifying Party") for the purpose of this Section 8.4) will not be liable
under the indemnification provisions of this Article VIII with respect to any
claim made against a party entitled to indemnification under this Article VIII
("Indemnified Party") for the purpose of this Section 8.4) unless such
Indemnified Party will have notified the Indemnifying Party in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim will have been served upon such
Indemnified Party (or after such party will have received notice of such
service on any designated agent), but failure to notify the Indemnifying Party
of any such claim will not relieve the Indemnifying Party from any liability
which it may have to the Indemnified Party against whom such action is brought
otherwise than on account of the indemnification provision of this Article
VIII, except to the extent that the failure to notify results in the failure of
actual notice to the Indemnifying Party and such Indemnifying Party is damaged
solely as a result of failure to give such notice. In case any such action is
brought against the Indemnified Party, the Indemnifying Party will be entitled
to participate, at its own expense, in the defense thereof. The Indemnifying
Party also will be entitled to assume the defense thereof, with counsel
satisfactory to the party named in the action. After notice from the
Indemnifying Party to the Indemnified Party of the Indemnifying Party's
election to assume the defense thereof, the Indemnified Party will bear the
fees and expenses of any additional counsel retained by it, and the
Indemnifying Party 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, unless:
(a) the Indemnifying Party and the Indemnified Party will have mutually
agreed to the retention of such counsel; or
(b) the named parties to any such proceeding (including any impleaded
parties) include both the Indemnifying Party and the Indemnified Party
and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between
them. The Indemnifying Party will not be liable for any settlement of
any proceeding effected without its written consent but if settled with
such consent or if there is a final judgment for the plaintiff, the
Indemnifying Party agrees to indemnify the Indemnified Party from and
against any loss or liability by reason of such settlement or judgment.
A successor by law of the parties to this Agreement will be entitled to
the benefits of the indemnification contained in this Article VIII. The
indemnification provisions contained in this Article VIII will survive
any termination of this Agreement.
8.4 INDEMNIFICATION FOR FAILURE TO COMPLY WITH DIVERSIFICATION REQUIREMENTS
Distributor and Adviser acknowledge that any failure (whether intentional or in
good faith or otherwise) to comply with the diversification requirements
specified in Article III, Section 3.3 of this Agreement may result in the
Contracts not being treated as variable contracts for federal income tax
purposes, which would have adverse tax consequences for Contract owners and
could also adversely affect the Company's corporate tax liability. Accordingly,
without in any way limiting the effect of Section 8.2( a) hereof and without in
any way limiting or restricting any other remedies available to the Company.
Adviser and Distributor will pay on a joint and several basis all costs
associated with or arising out of any failure, or any anticipated or reasonably
foreseeable failure, of the Fund or any Designated Portfolio to comply with
Section 3.3 of this Agreement, including all costs associated with correcting or
responding to any such failure; such costs may include. but are not limited to,
the costs involved in creating, organizing and registering a new investment
company as a funding medium for the Contracts and/or the costs of obtaining
whatever regulatory authorizations are required to substitute shares of another
investment company for
14
those of the failed Fund or Portfolio (including but not limited to an order
pursuant to Section 26( c) of the 1940 Act); fees and expenses of legal counsel
and other advisors to the Company and any federal income taxes or tax penalties
(or "toll charges" or exactments or amounts paid in settlement) incurred by the
Company in connection with any such failure or anticipated or reasonably
foreseeable failure. Such indemnification and reimbursement obligation shall be
in addition to any other indemnification and reimbursement obligations of
Adviser and/or Distributor under this Agreement.
ARTICLE IX: APPLICABLE LAW
9.1 This Agreement will be subject to the provisions of the 1933 Act, the 1934
Act and the 1940 Act, and the rules and regulations and rulings thereunder,
including such exemptions from those statutes, rules and regulations as the
Commission may grant (including, but not limited to, the Mixed and Shared
Funding Exemptive Order) and the terms hereof will be interpreted and construed
in accordance therewith.
ARTICLE X: TERMINATION
10.1 This Agreement will terminate:
(a) at the option of any party, with or without cause, with respect to one,
some or all of the Designated Portfolios, upon six (6) month's advance written
notice to the other parties or, if later, upon receipt of any required
exemptive relief or orders from the SEC, unless otherwise agreed in a separate
written agreement among the parties; or
(b) at the option of the Company, upon written notice to Distributor and
Adviser with respect to any Portfolio if shares of the Designated Portfolio are
not reasonably available to meet the requirements of the Contracts as
determined in good faith by the Company; or
(c) at the option of the Company, upon written notice to Distributor and
Adviser 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 media of the Contracts issued or to be issued by Company;
or
(d) at the option of Distributor or Adviser, upon written notice to the
Company, upon institution of formal proceedings against the Company by the
NASD, the Commission, the Insurance Commission of any state or any other
regulatory body regarding the Company's duties under this Agreement or related
to the sale of the Contracts, the administration of the Contracts, the
operation of the Account, or the purchase of the Fund shares, provided that
Distributor or Adviser determines in its sole judgment, exercised in good
faith, that any such proceeding would have a material adverse effect on the
Company's ability to perform its obligations under this Agreement; or
(e) at the option of the Company, upon written notice to Distributor and
Adviser, upon institution of formal proceedings against the Fund, Adviser, or
the Distributor by the NASD, the Commission or any state securities or
insurance department or any other regulatory body, provided that the Company
determines in its sole judgment, exercised in good faith, that any such
proceeding would have a material adverse effect on the Fund's, Distributor's or
Adviser's ability to perform its obligations under this Agreement; or
(f) at the option of the Company, upon written notice to the other parties,
with respect to any Designated Portfolio, if a Designated Portfolio
ceases to qualify as a Regulated Investment Company under Subchapter M
of the Code, or under any successor or similar provision, or if the
Company reasonably and in good faith believes that the Designated
Portfolio may fail to so qualify; or 15
(g) at the option of the Company, upon written notice to the other parties,
with respect to any Designated Portfolio if the Designated Portfolio fails to
meet the diversification requirements specified in Section 3.3 hereof or if
the Company reasonably and in good faith believes the Designated Portfolio may
fail to meet such requirements; or
(h) at the option of any party to this Agreement, upon written notice to the
other parties, upon another party's material breach of any provision of this
Agreement; or
(i) at the option of the Company, if the Company determines in its sole
judgment exercised in good faith that the Fund, Adviser or Distributor has
suffered a material adverse change in its business, operations or financial
condition since the date of this Agreement or is the subject of material
adverse publicity which is likely to have a material adverse impact upon the
business and operations of the Fund, Adviser or Distributor and hence to the
Company; or
(j) at the option of Distributor or Adviser, if Distributor or Adviser
determines in its sole judgment exercised in good faith that the Company has
suffered a material adverse change in its business, operations or financial
condition since the date of this Agreement or is the subject of material
adverse publicity which is likely to have a material adverse impact upon the
business and operations of the Fund, Distributor or Adviser, such termination
to be effective sixty (60) days' after receipt by the other parties of written
notice of the election to terminate; or
(k) at the option of the Company, Distributor or Adviser upon receipt of any
necessary regulatory approvals and/or the vote of the Contract owners having an
interest in the Account (or any sub-account) to substitute the shares of
another investment company for the corresponding Portfolio's shares of the Fund
in accordance with the terms of the Contracts for which those Portfolio shares
had been selected to serve as the underlying portfolio. The Company will give
sixty (60) days' prior written notice to Distributor and Adviser of the date of
any proposed vote or other action taken to replace the Fund's shares or of the
filing of any required regulatory approva1(s); or
(1) at the option of the Company, Distributor or Adviser upon a determination
by a majority of the Fund Board, or a majority of the disinterested Fund Board
members, that an irreconcilable material conflict exists among the interests
of: (1) all contract owners of variable insurance products of all separate
accounts; or (2) the interests of the Participating Insurance Companies
investing in the Fund as set forth in Article VII of this Agreement.
10.2 NOTICE REQUIREMENT
(a) No termination of this Agreement will be effective unless and until the
party terminating this Agreement gives prior written notice to all other
parties of its intent to terminate, which notice will set forth the basis for
the termination.
(b) In the event that any termination of this Agreement is based upon the
provisions of Article VII, such prior written notice will be given in advance
of the effective date of termination as required by such provisions.
10.3 EFFECT OF TERMINATION
Notwithstanding any termination of this Agreement, Distributor will, at the
option of the Company, cause the Fund to continue to make available additional
shares of the Fund pursuant to the terms and conditions of
16
this Agreement, for all Contracts in effect on the effective date of
termination of this Agreement (hereinafter referred to as "Existing
Contracts"). Specifically, without limitation, the owners of the Existing
Contracts will be permitted to reallocate investments in the Designated
Portfolios (as in effect on such date), redeem investments in the Designated
Portfolios and/or invest in the Designated Portfolios upon the making of
additional purchase payments under the Existing Contracts. The parties agree
that this Section 10.3 will not apply to any terminations under Article VII and
the effect of such Article VII terminations will be governed by Article VII of
this Agreement.
10.4 SURVIVING PROVISIONS
Notwithstanding any termination of this Agreement, each party's obligations
under Article VIII to indemnify other parties will survive and not be affected
by any termination of this Agreement. In addition, with respect to Existing
Contracts, all provisions of this Agreement also will survive and not be
affected by any termination of this Agreement.
ARTICLE XI: NOTICES
Any notice will be deemed duly 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 parties.
If to the Company:
OM Financial Life Insurance Company
0000 Xxxxx Xxxxxx - 0xx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attn: Securities Counsel
If to Distributor or the Fund:
American Century Investment Services, Inc.
0000 Xxxx Xxxxxx, 0xx Xxxxx
Xxxxxx Xxxx, XX 00000
Attn: General Counsel
If to Adviser:
American Century Investment Management, Inc.
0000 Xxxx Xxxxxx, 0xx Xxxxx
Xxxxxx Xxxx, XX 00000
Attn: General Counsel
ARTICLE Xii: MISCELLANEOUS
12.1 All persons dealing with the Fund must look solely to the property of the
Fund for the enforcement of any claims against the Fund as neither the
directors, officers, agents or shareholders assume any personal liability for
obligations entered into on behalf of the Fund.
12.2 Distributor acknowledges that the identities of the customers of
the Company or any of its affiliates
17
(collectively the "Protected Parties" for purposes of this Section 12.2),
information maintained regarding those customers, and all computer programs and
procedures developed by the Protected Parties or any of their employees or
agents in connection with the Company's performance of its duties under this
Agreement are the valuable property of the Protected Parties. Distributor
agrees that if it comes into possession of any list or compilation of the
identities of or other information about the Protected Parties' customers, or
any other property of the Protected Parties, other than such information as may
be independently developed or compiled by Distributor from information supplied
to them by the Protected Parties' customers who also maintain accounts directly
with the Fund, Distributor will hold such information or property in confidence
and refrain from using, disclosing or distributing any of such information or
other property except: ( a) with the Company's prior written consent; or (b) as
required by law or judicial process. Distributor acknowledges that any breach
of the agreements in this Section 12.2 would result in immediate and
irreparable harm to the Protected Parties for which there would be no adequate
remedy at law and agree that in the event of such a breach, the Protected
Parties will be entitled to equitable relief by way of temporary and permanent
injunctions, as well as such other relief as any court of competent
jurisdiction deems appropriate.
12.3 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.
12.4 This Agreement may be executed simultaneously in two or more counterparts,
each of which taken together will constitute one and the same instrument.
12.5 If any provision of this Agreement will be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of the Agreement will not
be affected thereby.
12.6 This Agreement will not be assigned by any party hereto without the prior
written consent of all the parties hereto.
12.7 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 law.
12.8 The parties to this Agreement acknowledge and agree that this Agreement
shall not be exclusive in any respect.
12.9 Each party to this Agreement will cooperate with each other party and all
appropriate governmental authorities (including without limitation the
Commission, the NASD and state insurance regulators) and will permit each other
and 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.
12.10 Each party represents that the execution and delivery of this Agreement
and the consummation of the transactions contemplated herein have been duly
authorized by all necessary corporate or board action, as applicable, by such
party and when so executed and delivered this Agreement will be the valid and
binding obligation of such party enforceable in accordance with its terms.
12.11 The schedules to this Agreement (each, a "Schedule," collectively, the
"Schedules") form an integral part hereof and are incorporated herein by
reference. The parties to this Agreement may agree in writing to amend the
Schedules to this Agreement from time to time to reflect changes in or relating
to the Contracts, the Accounts or the Designated Portfolios of the Fund or
other applicable terms of this Agreement. References herein to any Schedule are
to the Schedule then in effect, taking into account any amendments thereto.
12.12 The parties have entered into or shall enter into a Shareholder
Information Agreement as required by Rule 22c-2 under 1940 Act in connection
with the Contracts. This Agreement shall control with regard to the terms of
the business relationship described in this Agreement. To the extent that the
terms of the Shareholder Information Agreement conflict with the terms of this
Agreement, the terms of the Shareholder Information Agreement shall control to
the extent required by Rule 22c-2.
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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed in its name and behalf by its duly authorized representative and its
seal to be hereunder affixed hereto as of the date specified below.
American Century Investment Services, Inc.
By:
Name: Xxxxx X. Xxxxx
Title: President
American Century Investment Management, Inc.
By:
Name: Xxxxxxx X. Xxxxxxxxxxx
Title: Sr. VP
American Century Variable Portfolios, Inc.
(solely with respect to Section 2.9)
By:
Name: Xxxxxxx X. Xxxxxxxxxxx
Title: Sr. VP
OM Financial Life Insurance Company
By:
Name: XXXXXXX X. XXXXXXX
Title: SVP, GENERAL COUNSEL & SECRETARY
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PARTICIPATION AGREEMENT
SCHEDULE A
The following Separate Accounts and Associated Contracts of OM Financial Life
Insurance Company are permitted in accordance with the provisions of this
Agreement to invest in Designated Portfolios of the Fund shown in Schedule B:
NAME OF SEPARATE ACCOUNT CONTRACTS FUNDED BY SEPARATE ACCOUNT
SEPARATE ACCOUNT
Old Mutual Financial Network Separate Account V A
CONTRACTS
Beacon Navigator variable annuity, Form # FGL VPDV A-C 2006, et. al.
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PARTICIPATION AGREEMENT
SCHEDULE B
The Separate Account(s) shown on Schedule A may invest in the following
Portfolio(s) of the Fund:
VP Income and Growth, Class II
VP International, Class II
VP Mid Cap Value, Class II
VP Value, Class II
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