PARTICIPATION AGREEMENT
Among
VANGUARD VARIABLE INSURANCE FUND
and
THE VANGUARD GROUP, INC.
and
VANGUARD MARKETING CORPORATION
and
SENTRY LIFE INSURANCE COMPANY OF NEW YORK
THIS AGREEMENT, made and entered into as of the 28th day of February, 2002, by
and among VANGUARD VARIABLE INSURANCE FUND (hereinafter the "Fund"), a Delaware
business trust, THE VANGUARD GROUP, INC. (hereinafter the "Sponsor"), a
Pennsylvania corporation, VANGUARD MARKETING CORPORATION (hereinafter the
"Distributor"), a Delaware corporation, and SENTRY LIFE INSURANCE COMPANY OF NEW
YORK (hereinafter the "Company"), a Wisconsin corporation, on its own behalf and
on behalf of each segregated asset account of the Company named in Schedule A
hereto as may be amended from time to time (each such account hereinafter
referred to as the "Account").
WHEREAS, the Fund was organized to act as the investment vehicle for
variable life insurance policies and variable annuity contracts to be offered by
separate accounts of insurance companies which have entered into participation
agreements with the Fund and the Sponsor (hereinafter "Participating Insurance
Companies"); and
WHEREAS, the beneficial interest in the Fund is divided into several
series of shares, each designated a "Portfolio," and representing the interest
in a particular managed portfolio of securities and other assets; and
WHEREAS, the Fund is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act")
and its shares are registered under the Securities Act of 1933, as amended (the
"1933 Act"); and
WHEREAS, the assets of each Portfolio of the Fund are managed by
several entities (the "Advisers"), each of which is duly registered as an
investment adviser under the federal Investment Advisers Act of 1940 and any
applicable state securities laws; and
WHEREAS, the Company has established or will establish one or more
Accounts to fund certain variable annuity contracts (the "Variable Insurance
Products"), which Accounts and Variable Insurance Products are registered under
the 1940 Act and the 1933 Act, respectively; and
WHEREAS, each Account is a duly organized, validly existing segregated
asset account, established by resolution of the Board of Directors of the
Company, on the date shown for each Account on Schedule A hereto, to set aside
and invest assets attributable to the Variable Insurance Products; and
WHEREAS, the Distributor is a wholly-owned subsidiary of the Sponsor,
is registered as a broker dealer with the Securities and Exchange Commission
("SEC") under the Securities Exchange Act of 1934, as amended (the "1934 Act")
and is a member in good standing of the National Association of Securities
Dealers, Inc. (the "NASD"); and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares of the Portfolios on behalf
of each Account to fund the Variable Insurance Products and the Sponsor is
authorized to sell such shares to the Accounts at net asset value;
NOW, THEREFORE, in consideration of their mutual promises, the Company,
the Fund, the Sponsor and the Distributor agree as follows:
ARTICLE I. Sale of Fund Shares
1.1 The Sponsor and the Distributor agree to sell to the Company those
shares of the Portfolios of the Fund listed on Schedule B which each Account
orders. In the case of any such order received by the Fund or its designee on
any Business Day prior to the time the net asset value of shares of the Fund is
determined (the close of trading on the New York Stock Exchange, generally 4:00
p.m. Eastern time) (the "market close"), the order shall be accorded a trade
date on the Fund's accounting system that is the date of receipt of the order by
the Fund or its designee. In the case of any such order received by the Fund or
its designee on any Business Day after the market close, the order shall be
accorded a trade date on the Fund's accounting system that is the next Business
Day. For purposes of this Section 1.1, the Company shall be the designee of the
Fund for receipt of such orders from each Account and receipt by such designee
shall constitute receipt by the Fund; provided that the Company transmits such
order to the Fund by 5:00 a.m. Eastern time on the next following calendar day
(including Saturdays and holidays). "Business Day" shall mean any day on which
the New York Stock Exchange ("NYSE") is open for trading and on which the Fund
calculates its net asset value pursuant to the rules of the SEC.
1.2 The Fund, subject to the provisions of Article IX of this Agreement, agrees
to make its shares available indefinitely for purchase at the applicable net
asset value per share by the Company and its Accounts on those days on which
the Fund calculates its net asset value pursuant to the rules of the SEC and
the Fund shall use its best efforts to calculate such net asset value on each
day which the NYSE is open for trading. Notwithstanding the foregoing, the
Board of Trustees of the Fund (hereinafter the "Board") may refuse to sell
shares of any Portfolio to any person including, but not limited to, the
Company, 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. Further,
it is acknowledged and agreed that the availability of shares of the Fund shall
be subject to the Fund's then current prospectus and statement of additional
information, federal and state securities laws and applicable rules and
regulations of the SEC and the NASD.
1.3 The Fund and the Sponsor agree that shares of the Fund will be sold only to
Participating Insurance Companies and their separate accounts. No shares of any
Portfolio will be sold to the general public.
1.4 The Fund and the Sponsor will not sell Fund shares to any
Participating Insurance Company or its separate account unless an agreement
containing a provision substantially the same as Section 2.4 of Article II of
this Agreement is in effect to govern such sales.
1.5 The Fund agrees to redeem for cash, on the Company's request, any full or
fractional shares of the Fund held by an Account. In the case of any such
request for redemption received by the Fund or its designee on any Business Day
prior to the market close, the request shall be accorded a trade date on the
Fund's accounting system that is the date of receipt of the request by the Fund
or its designee. In the case of any such request for redemption received by the
Fund or its designee on any Business Day after the market close, the request
shall be accorded a trade date on the Fund's accounting system that is the next
Business Day. For purposes of this Section 1.5, the Company shall be the
designee of the Fund for receipt of requests for redemption from each Account
and receipt by such designee shall constitute receipt by the Fund; provided that
the Company transmits such request for redemption to the Fund by 5:00 a.m.
Eastern time on the next following calendar day. In the event that an account in
a Portfolio of the Fund is redeemed in full, the Company shall not transmit such
order to the Fund pursuant to the foregoing but instead shall, not later than
4:00 p.m. Eastern time on the trade date, either fax such order to (610)
000-0000 or call the Company's assigned Vanguard associate. Notwithstanding the
foregoing, if the payment of redemption proceeds on the next Business Day would
require the Fund to dispose of Portfolio securities or otherwise incur
substantial additional costs, the Fund may determine to settle one or more
redemption transactions on a delayed basis, in which case proceeds shall be
wired to the Company within seven (7) days and the Fund shall notify the Company
of such a delay by 3:00 Eastern time on the same Business Day that the Company
transmits the redemption order the Fund. Furthermore, notwithstanding the
foregoing, the Fund reserves the right to suspend redemption privileges or pay
redemptions in kind, as disclosed in the Fund's prospectus or statement of
additional information. The Fund agrees to treat the Company like any other
shareholder in similar circumstances in making these determinations.
1.6 The Company agrees to purchase and redeem the shares of each Portfolio
offered by the then current prospectus of the Fund and in accordance with the
provisions of such prospectus and the accompanying statement of additional
information.
1.7 With respect to payment of the purchase price by the Company and of
redemption proceeds by the Fund, the Company and the Fund shall net all purchase
and redemption orders on a given Business Day and shall transmit one net payment
for all of the Portfolios in accordance with Section 1.8 hereof.
1.8 In the event of net purchases, the Company shall pay for Fund shares by
4:00 p.m. Eastern time on the next Business Day after an order to purchase the
shares is received by the Company in accordance with the provisions of Section
1.1 hereof. In the event of net redemptions, the Fund shall pay the redemption
proceeds by 4:00 p.m. Eastern time on the next Business Day after an order to
redeem the shares is received by the Company in accordance with the provisions
of Section 1.5 hereof. If net redemption proceeds are not received by 4:00 p.m.
Eastern time on the next Business Day, the Fund will reimburse the Company for
all costs reasonable incurred as a result of the delay. Payment shall be in
federal funds transmitted by wire. For purposes of Section 2.10, upon receipt by
the Fund of the federal funds so wired, such funds shall cease to be the
responsibility of the Company and shall become the responsibility of the Fund.
If the Company fails to pay for Fund shares as required by this Section 1.8,
then the Fund shall be entitled to redeem the shares to cover the cost. The
Company shall be responsible for any shortfall between the purchase and the
redemption; the Fund shall be entitled to retain any gain.
1.9 Issuance and transfer of a Fund's shares will be by book entry only.
Stock certificates will not be issued to the Company or any Account. Shares
ordered from the Fund will be recorded in an appropriate title for each Account
or the appropriate subaccount of each Account. The Fund shall furnish to the
Company the CUSIP number assigned to each Portfolio of the Fund identified in
Schedule B hereto.
1.10 The Fund shall furnish advance notice, as practicable, but at the
latest same day notice (by wire or telephone, followed by written confirmation)
to the Company of any income, dividends or capital gain distributions on the
Fund's shares. The Company hereby elects to receive all such income, 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 income dividends and capital gain
distributions in cash. The Fund shall notify the Company of the number of
shares so issued as payment of dividends and distributions.
1.11 The Fund shall make the daily net asset value, dividend and capital
gain information for each Portfolio available on a per share basis to the
Company as soon as reasonably practical after the information is calculated
(normally by 6:30 p.m. Eastern time) and shall use its best efforts to make
such net asset value per share available by 7:00 p.m. Eastern time on each
Business Day. Related to this obligation, the Fund shall provide a contact name
or names and telephone numbers of the persons responsible for providing daily
net asset value, dividend and capital gain information to the Company. In the
event of an error in the computation of the Fund's net asset value per share
which, in accordance with procedures adopted by the Fund's Board of Trustees
consistent with views expressed by the staff of the Securities and Exchange
Commission regarding appropriate error correction standards, as shall be in
effect or amended from time to time, requires adjustment to transactions
previously effected on behalf of an Account (a "Pricing Error"), Vanguard shall
notify the Company as soon as possible after discovery of the Pricing Error.
Such notification may be oral, but shall be confirmed promptly in writing. In
such event, Vanguard shall reimburse the Fund for any loss (without taking into
consideration any positive effect of such Pricing Error) and shall make
appropriate adjustments to the Accounts' accounts, which adjustments shall net
the impact of individual gains and losses; this will result in either a net
payment to an Account from Vanguard (in the event of net Account losses) or from
an Account to Vanguard (in the event of net Account gains). In addition, in the
event that the Pricing Error causes the Company to incur any direct costs for
re-processing accounts under an Account, such as preparing and mailing revised
statements, Vanguard shall reimburse the Company for all such reasonable costs
upon receipt from the Company of an invoice or other statement documenting such
costs in reasonable detail.
1.12 The Fund shall transmit to the Company by 8:30 a.m. Eastern time on each
Business Day a confirmation of any net purchase or redemption orders of shares
of the Fund with a trade date of the second preceding Business Day. However, on
any Business Day that is the first Business Day of the month, Vanguard shall
transmit such confirmation by 11:00 a.m. Eastern time.
1.13 In the event a communication, systems or other failure occurs, and the
Company is unable to transmit, or the Fund is unable to receive, purchase or
redemption orders through the normal procedures, the Company agrees to comply
with the Contingency Procedures set forth on Schedule C, attached hereto and
incorporated herein. The Fund and the Sponsor reserve the right, in their sole
discretion, to amend the Contingency Procedures from time to time and shall
provide 48 hours' advance notice of such amendment to the Company.
ARTICLE II. Representations and Warranties
2.1 The Company represents and warrants that it is an insurance company duly
organized and in good standing under applicable law; that it has legally and
validly established each Account prior to any issuance or sale thereof as a
segregated asset account under Section 611.24 of the Wisconsin Insurance Code;
that it has and will maintain the capacity to issue all Variable Insurance
Products that may be sold; and that it is properly licensed, qualified and in
good standing to sell the Variable Insurance Products in all states in which
such products will be offered and sold by the Company.
2.2 The Company represents and warrants that the Variable Insurance Products
are registered under the 0000 Xxx.
2.3 The Company represents and warrants it has registered each Account as a unit
investment trust in accordance with the provisions of the 1940 Act to serve as
segregated investment accounts for the Variable Insurance Products.
2.4 The Fund represents and warrants that Fund shares sold pursuant to this
Agreement shall be registered under the 1933 Act, duly authorized for issuance
and sold in compliance with the laws of the State of Wisconsin and all
applicable federal and state securities laws and that the Fund is and shall
remain registered under the 0000 Xxx. The Fund shall amend the 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. The Fund
shall register and qualify the shares for sale in accordance with the laws of
the various states only if and to the extent deemed advisable by the Fund, the
Distributor, or the Sponsor.
2.5 The Fund represents that it is 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 qualification (under
Subchapter M or any successor or similar provision) and (ii) it will notify the
Company immediately upon having a reasonable basis for believing that it ceased
to so qualify or that it might not so qualify in the future. The Fund
acknowledges that any failure to qualify as a Regulated Investment Company will
eliminate the ability of the subaccounts to avail themselves of the "look
through" provisions of Section 817(h) of the Code, and that as a result the
Variable Insurance Products will almost certainly fail to qualify as endowment
or life insurance contracts under Section 817(h) of the Code.
2.6 The Company represents that the Variable Insurance Products will be treated
as endowment or life insurance contracts under applicable provisions of the Code
and that it will make every effort to maintain such treatment and that it will
notify the Fund and the Sponsor immediately upon having a reasonable basis for
believing that the Variable Insurance Products have ceased to be so treated or
that they might not be so treated in the future.
2.7 The Fund currently does not intend to make any payments to finance
distribution expenses pursuant to Rule 12b-1 under the 1940 Act or otherwise
2.8 The Fund makes no 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 the various states except
that the Fund represents that the Fund's investment policies, fees and expenses
are and shall at all times remain in compliance with the laws of the State of
Wisconsin and the Fund and the Sponsor represent that their respective
operations are and shall at all times remain in material compliance with the
laws of the State of Wisconsin to the extent required to perform this Agreement.
2.9 The Distributor represents and warrants that it is a member in good standing
of the NASD and is registered as a broker-dealer with the SEC. The Distributor
further represents that it will sell and distribute the Fund shares in
accordance with the laws of the State of Wisconsin and all applicable state and
federal securities laws, including without limitation the 1933 Act, the 1934
Act, and the 0000 Xxx.
2.10 The Fund represents that it is lawfully organized and validly existing
under the laws of the State of Delaware and that it does and will comply in all
material respects with the 1940 Act and any applicable regulations thereunder.
2.11 The Sponsor represents and warrants that the Advisers to the Fund are, and
the Sponsor shall use its best effort to cause the Advisers to remain, duly
registered in all material respects under all applicable federal and state
securities laws and to perform their obligations for the Fund in compliance in
all material respects with the laws of the State of Wisconsin and any applicable
state and federal securities laws.
2.12 The Fund and the Sponsor represent and warrant that all of their trustees,
directors, officers, employees, investment advisers, and other
individuals/entities dealing with the money and/or securities of the Fund are
and shall continue to be at all times covered by a blanket fidelity bond or
similar coverage for the benefit of the Fund in an amount not less than the
minimum coverage required currently by Rule 17g-1 under the 1940 Act or other
applicable laws or regulations as may be promulgated from time to time. The
aforesaid bond shall include coverage for larceny and embezzlement and shall be
issued by a reputable bonding company.
2.13 With respect to the Variable Insurance Products, which are registered under
the 1933 Act, the Company represents and warrants that:
(a) Sentry Equity Services Inc. is the principal underwriter for each such
Account and any subaccounts thereof and is a registered broker-dealer with
the SEC under the 1934 Act;
(b) the shares of the Portfolios of the Fund are and will continue to be the
only investment securities held by the corresponding subaccounts;
(c) the number of Portfolios of the Fund available for investment
by the Accounts will not constitute a majority of the total
number of mutual funds or portfolio selections available for
investment by the Accounts in any Variable Insurance Product;
and
(d) with regard to each Portfolio, the Company, if permitted by law, on behalf
of the corresponding subaccount, will:
(i) vote such shares held by it in the same proportion as the vote of all
other holders of such shares; and
(ii) refrain from substituting shares of another security for such shares
unless the SEC has approved such substitution in the manner provided
in Section 26 of the 0000 Xxx.
2.14 The Fund represents that it will comply with all provisions of the 1940 Act
requiring voting by shareholders, and in particular the Fund will either provide
for annual meetings or comply with Section 16(c) of the 1940 Act (although the
Fund is not one of the trusts described in Section 16(c) of that Act) as well as
with Sections 16(a) and, if an when applicable, 16(b). Further, the Fund will
act in accordance with the SEC's interpretation of the requirements of Section
16(a) with respect to periodic elections of trustees and with whatever rules the
SEC may promulgate with respect thereto.
ARTICLE III. Offering Documents and Reports
3.1 The Fund, the Sponsor or their designee shall provide the Company (at the
Sponsor's expense) with as many copies of the Fund's current prospectus as the
Company may reasonably request. The Company shall provide a copy of the Fund's
prospectus to each Variable Insurance Product owner. If requested by the Company
in lieu thereof, the Fund or the Sponsor shall provide such documentation
(including a final copy of the new prospectus as set in type at the Fund's or
the Sponsor's expense) and other assistance as is reasonably necessary in order
for the Company once each year (or more frequently if the prospectus for the
Fund is amended) to have the prospectus for the Variable Insurance Products and
the Fund's prospectus printed together in one document (such printing to be at
the Company's expense).
3.2 The Fund's prospectus shall state that the statement of additional
information for the Fund is available from the Sponsor (or in the Fund's
discretion, the prospectus shall state that the statement of additional
information is available from the Fund) and the Sponsor (or the Fund), at its
expense, shall print and provide such statement free of charge to the Company
and to any owner of a Variable Insurance Product or prospective owner who
requests such statement.
3.3 The Fund, at its own expense, shall provide the Company with copies of its
reports to shareholders, other communications to shareholders, and, if required
by applicable law, proxy material, in such quantity as the Company shall
reasonably require for distributing to Variable Insurance Product owners. The
Fund shall provide to the Company the prospectuses and annual reports referenced
in this Agreement within fifteen (15) days prior to the Company's obligation to
mail, and the Company agrees to provide the Fund with advance notice of such
date. If the documents are not delivered to the Company within ten (10) days of
the Company's obligation to mail, the Fund shall reimburse the Company for any
extraordinary out-of-pocket costs (including, but not limited to, overtime for
printing and mailing).
ARTICLE IV. Sales Material and Information
4.1 The Company shall furnish, or shall cause to be furnished, to the Fund or
its designee, each piece of sales literature or other promotional material in
which the Fund, its Advisers or the Sponsor is named, at least ten Business
Days prior to its use. The Company may use such material in fewer than ten
Business Days if it receives the written consent of the Fund or its designee.
No such material shall be used if the Fund or its designee reasonably objects
to such use within ten Business Days after receipt of such material. In
connection with the identification of the Portfolios in any such material, the
use of the Sponsor's name or identification of the Portfolios shall be given no
greater prominence than any other mutual fund or portfolio selection offered in
a Variable Insurance Product.
4.2 The Company shall 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 Variable Insurance Products other than the information or
representations contained in the registration statement or prospectus for the
Fund shares, as such registration statement and prospectus may be amended or
supplemented from time to time, or in reports or proxy statements for the Fund,
or in sales literature or other promotional material approved by the Fund or its
designee or by the Sponsor, except with the permission of the Fund or the
Sponsor or the designee of either.
4.3 The Fund, Sponsor, Distributor or their designee shall furnish, or shall
cause to be furnished, to the Company or its designee, each piece of sales
literature or other promotional material in which the Company or an Account is
named 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 The Fund, the Distributor and the Sponsor shall not give any information or
make any representations on behalf of the Company or concerning the Company,
each Account, or the Variable Insurance Products other than the information or
representations contained in a prospectus for the Variable Insurance Products,
as such prospectus may be amended or supplemented from time to time, or in
published reports for each Account which are in the public domain or approved by
the Company for distribution to Variable Insurance Product 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 Fund will provide to the Company at least one complete copy of all
registration statements, prospectuses, statements of additional information,
reports, proxy statements, sales literature and other promotional materials,
applications for exemptions, requests for no-action letters, and all amendments
to any of the above, that relate to the Fund or its shares, prior to or
contemporaneously with the filing of each document with the SEC or other
regulatory authorities.
4.6 he Company will provide to the Fund at least one complete copy of all
prospectuses, reports, solicitations for voting instructions, sales literature
and other promotional materials, applications for exemption, requests for
no-action letters, and all amendments to any of the above, that relate to the
Variable Insurance Products or each Account, prior to or contemporaneously with
the filing of such document with the SEC or other regulatory authorities.
4.7 The Company and the Fund shall also each promptly inform the other of the
results of any examination by the SEC (or other regulatory authorities) that
relates to the Variable Insurance Products, the Fund or its shares, and the
party that was the subject of the examination shall provide the other party with
a copy of relevant portions of any "deficiency letter" or other correspondence
or written report regarding any such examination.
4.8 The Fund and the Sponsor will provide the Company with as much notice as
is reasonably practicable of any proxy solicitation for any Portfolio, and of
any material change in the Fund's registration statement, particularly any
change resulting in a change to the prospectus for any Account. The Fund and the
Sponsor will cooperate with the Company so as to enable the Company to solicit
voting instructions from owners of Variable Insurance Products, to the extent a
solicitation is required by applicable law, or to make changes to its prospectus
in an orderly manner.
4.9 For purposes of this Article IV, the phrase "sales literature and other
promotional material" includes, but is not limited to, sales literature (i.e.,
any written communication distributed or made generally available to customers,
including brochures, circulars, research reports, market letters, form letters,
seminar texts, reprints or excerpts of any other advertisement, sales
literature, or published articles), educational or training materials or other
communications distributed or made generally available to some or all agents or
employees, and prospectuses, shareholder reports, and proxy materials.
ARTICLE V. Fees and Expenses
5.1 The Fund and Sponsor shall pay no fee or other compensation to the Company
under this Agreement. Nothing herein shall prevent the parties hereto from
otherwise agreeing to perform, and arranging for appropriate compensation for,
other services relating to the Fund and or to the Accounts.
5.2 All expenses incident to performance by the Fund under this Agreement shall
be paid by the Fund. The Fund shall see to it that all its shares are registered
and authorized for issuance in accordance with applicable federal law and, if
and to the extent deemed advisable by the Fund, in accordance with applicable
state laws prior to their sale. The Fund shall bear the fees and expenses for
the cost of registration and qualification of the Fund's shares, preparation and
filing of the Fund's prospectus and registration statement, proxy materials and
reports, setting the prospectus in type, setting in type and printing the proxy
materials and reports to shareholders (including the costs of printing a
prospectus that constitutes an annual report), 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.
5.3 The Fund shall bear the expenses of printing, and the Company shall bear the
expenses of distributing, the Fund's prospectus to owners of Variable Insurance
Products issued by the Company. The Company shall bear the expenses of
distributing the Fund's proxy materials (to the extent such proxy solicitation
is required by law) and reports to owners of Variable Insurance Products.
ARTICLE VI. Diversification
6.1 The Fund will at all times invest money from the Variable Insurance Products
in such a manner as to ensure that the Variable Insurance Products will be
treated as variable contracts under the Code and the regulations issued
thereunder. Without limiting the scope of the foregoing, the Fund and the
Sponsor represent and warrant that each Portfolio of the Fund will meet the
diversification requirements of Section 817(h) of the Code and Treasury
Regulation 1.817-5, relating to the diversification requirements for endowment
or life insurance contracts and any amendments or other modifications to such
Section or Regulations, as if those requirements applied directly to each such
Portfolio. In the event of a breach of this Article VI by the Fund, it will take
all reasonable steps (a) to notify Company of such breach and (b) to adequately
diversify, each Portfolio of the Fund so as to achieve compliance within the
grace period afforded by Regulation 817-5.
6.2 The Fund and the Sponsor represent that each Portfolio will elect to be
qualified as a Regulated Investment Company under Subchapter M of the Code and
they will maintain such qualification (under Subchapter M or any successor or
similar provision).
ARTICLE VII. Indemnification
7.1 Indemnification by the Company
(a) The Company agrees to indemnify and hold harmless the Fund
and each trustee of the Board and officers and each person, if any, who
controls the Fund within the meaning of Section 15 of the 1933 Act, the
Sponsor and the Distributor (collectively, the "Indemnified Parties"
for purposes of this Section 7.1) against any and all losses, claims,
damages, liabilities (including amounts paid in settlement with the
written consent of the 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 Fund's shares or the Variable Insurance Products 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 Variable Insurance Products or
contained in the contract or policy or sales literature for the
Variable Insurance Products (or any amendment or supplement to any
of the foregoing), or arise out of or are based upon the omission or
the alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading, provided that this agreement to indemnify shall not
apply as to any Indemnified Party if such statement or omission or
such alleged statement or omission was made in reliance upon and in
conformity with information furnished to the Company by or on behalf
of the Fund for use in the registration statement or prospectus for
the Variable Insurance Products or in the contract or policy sales
literature (or any amendment or supplement) or otherwise for use in
connection with the sale of the Variable Insurance Products or the
Fund shares; or
(ii) arise out of or as a result of statements or
representations (other than statements or
representations contained in the
registration statement, prospectus or sales
literature of the Fund not supplied by the
Company, or persons under its control) or
unlawful conduct of the Company or persons
under its control, with respect to the sale
or distribution of the Variable Insurance
Products or Fund shares; or
(iii) arise out of any untrue statement or alleged
untrue statement of a material fact
contained in a registration statement,
prospectus, or sales literature of the Fund
(or any amendment or supplement thereto), or
the omission or alleged omission to state
therein a material fact required to be
stated therein or necessary to make the
statements therein not misleading, if such
statement or omission was made in reliance
upon information furnished to the Fund by or
on behalf of the Company; or
(iv) result from 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 material
breach of this Agreement by the Company;
as limited by and in accordance with the provisions of Section 7.1(b) and
7.1(c) hereof.
(b) The Company shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or
litigation to which an Indemnified Party would otherwise be subject by
reason of such Indemnified Party's willful misfeasance, bad faith, or
gross negligence in the performance of such Indemnified Party's duties
or by reason of such Indemnified Party's reckless disregard of
obligations and duties under this Agreement or to the Fund, whichever
is applicable.
(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 a 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 its own expense, in the defense of such action. The Company also
shall be entitled to assume the defense thereof, with counsel
satisfactory to the party named in the action. After notice from the
Company to such a party of the Company's election to assume the defense
thereof, the Indemnified Party shall bear the fees and expenses of any
additional counsel retained by it, and the Company will not be liable
to such party under this agreement for any legal or other expenses
subsequently incurred by such party independently in connection with
the defense thereof other than reasonable costs of investigation.
(d) The Indemnified Parties will promptly notify the Company
of the commencement of any litigation or proceedings against them in
connection with the issuance or sale of the Fund shares or the Variable
Insurance Products or the operation of the Fund.
7.2 Indemnification by the Sponsor
(a) The Sponsor 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
1933Act (collectively, the "Indemnified Parties" for purposes of this
Section 7.2) against any and all losses, claims, damages, liabilities
(including amounts paid in settlement with the written consent of the
Sponsor) 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 are related
to the sale or acquisition of the Fund's shares or the Variable
Insurance Products and:
(i) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the registration
statement or prospectus or sales literature of the Fund (or any
amendment or supplement to any of the foregoing), or arise out of or
are based upon the omission or the alleged omission to state
therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, provided that this
agreement to indemnify shall not apply as to any Indemnified Party
if such statement or omission or such alleged statement or omission
was made in reliance upon and in conformity with information
furnished to the Sponsor or Fund by or on behalf of the Company for
use in the registration statement or prospectus for the Fund or in
sales literature (or any amendment or supplement thereto) or
otherwise for use in connection with the sale of the Variable
Insurance Products or Fund shares; or
(ii) arise out of or as a result of statements or
representations (other than statements or
representations contained in the
registration statement, prospectus or sales
literature for the Variable Insurance
Products not supplied by the Sponsor or
persons under its control) or unlawful
conduct of the Fund, the Advisers or persons
under their control, with respect to the
sale or distribution of the Variable
Insurance Products or Fund shares; or
(iii) arise out of any untrue statement or alleged
untrue statement of a material fact
contained in a registration statement,
prospectus or sales literature covering the
Variable Insurance Products (or any
amendment or supplement thereto), or the
omission or alleged omission to state
therein a material fact required to be
stated therein or necessary to make the
statement or statements therein not
misleading, if such statement or omission
was made in reliance upon information
furnished to the Company by or on behalf of
the Fund; or
(iv) result from any failure by the Sponsor or
the Fund to provide the services and furnish
the materials under the terms of this
Agreement (including a failure to comply
with the diversification requirements
specified in Article VI of this Agreement);
or
(v) arise out of or result from any material
breach of any representation and/or warranty
made by the Sponsor or the Fund in this
Agreement or arise out of or result from any
other material breach of this Agreement by
the Sponsor or the Fund;
as limited by and in accordance with the provisions of Sections 7.2(b) and
7.2(c) hereof.
(b) The Sponsor shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or
litigation to which an Indemnified Party would otherwise be subject by
reason of such Indemnified Party's willful misfeasance, bad faith, or
gross negligence in the performance of such Indemnified Party's duties
or by reason of such Indemnified Party's reckless disregard of
obligations and duties under this Agreement or to the Company or the
Accounts, whichever is applicable.
(c) The Sponsor 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 Sponsor 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 any such service on any designated
agent), but failure to notify the Sponsor of any such claim shall not
relieve the Sponsor 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 any case any such action
is brought against the Indemnified Parties, the Sponsor will be
entitled to participate, at its own expense, in the defense thereof.
The Sponsor also shall be entitled to assume the defense thereof, with
counsel satisfactory to the party named in the action. After notice
from the Sponsor to such party of the Sponsor'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 Sponsor will not be
liable to such party under this Agreement for any legal or other
expenses subsequently incurred by each party independently in
connection with the defense thereof other than reasonable costs of
investigation.
(d) The Company agrees promptly to notify the Sponsor of the
commencement of any litigation or proceedings against it or any of its
officers or directors in connection with the issuance or sale of the
Variable Insurance Products or the operation of each Account.
7.3 Indemnification by the Fund
(a) The Fund agrees to indemnify and hold harmless the
Company, and each of its directors and officers and each person, if
any, who controls the Company within the meaning of Section 15 of the
1933 Act (collectively, the "Indemnified Parties" for purposes of this
Section 7.3) against any and all losses, claims, damages, liabilities
(including amounts paid in settlement with the written consent of the
Fund) 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 action in respect thereof) or settlements resulting from
the gross negligence, bad faith or willful misconduct of the Board or
any member thereof, are related to the operations of the Fund and:
(i) arise as a result of any failure by the Fund
to provide the services and furnish the
materials under the terms of this Agreement
(including a failure to comply with the
diversification requirements specified in
Article VI of this Agreement); or
(ii) arise out of or result from any material
breach of any representation and/or warranty
made by the Fund in this Agreement or arise
out of or result from any other material
breach of this Agreement by the Fund;
as limited by and in accordance with the provisions of Sections 7.3(b) and
7.3(c) hereof.
(b) The Fund shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or
litigation to which an Indemnified Party would otherwise be subject by
reason of such Indemnified Party's willful misfeasance, bad faith, or
gross negligence in the performance of such Indemnified Party's duties
or by reason of such Indemnified Party's reckless disregard of
obligations and duties under this Agreement or to the Company, the
Fund, the Sponsor or each Account, whichever is applicable.
(c) The Fund 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 Fund in writing
within a reasonable time after the summons or other first legal process
giving information of the nature of the claim shall have been served
upon such Indemnified Party (or after such Indemnified Party shall have
received notice of such service on any designated agent), but failure
to notify the Fund of any such claim shall not relieve the Fund from
any liability which it may have to the Indemnified Party against whom
such action is brought otherwise than on account of this
indemnification provision. In case any such action is brought against
the Indemnified Parties, the Fund will be entitled to participate, at
its own expense, in the defense thereof. The Fund also shall be
entitled to assume the defense thereof, with counsel satisfactory to
the party named in the action. After notice from the Fund to such party
or the Fund's election to assume the defense thereof, the Indemnified
Party shall bear the fees and expenses of any additional counsel
retained by it, and the Fund will not be liable to such party
independently in connection with the defense thereof other than
reasonable costs of litigation.
(d) The Company and the Sponsor agree promptly to notify the
Fund 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 Variable Insurance Products,
with respect to the operation of an Account, or the sale or acquisition
of shares of the Fund.
7.4 Indemnification by the Distributor
(a) The Distributor agrees to indemnify and hold harmless the
Company and each of its directors and officers and each person, if any,
who controls the Company within the meaning of Section 15 of the 1933
Act (collectively, the "Indemnified Parties" for purposes of this
Section 7.4) against any and all losses, claims, damages, liabilities
(including amounts paid in settlement with the written consent of the
Sponsor) 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 are related
to the sale or acquisition of the Fund's shares or the Variable
Insurance Products and:
(i) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the registration
statement or prospectus or sales literature of the Fund (or any
amendment or supplement to any of the foregoing), or arise out of or
are based upon the omission or the alleged omission to state therein
a material fact required to be stated therein or necessary to make
the statements therein not misleading, provided that this agreement
to indemnify shall not apply as to any Indemnified Party if such
statement or omission or such alleged statement or omission was made
in reliance upon and in conformity with information furnished to the
Distributor or the Fund by or on behalf of the Company for use in
the registration statement or prospectus for the Fund or in sales
literature (or any amendment or supplement thereto) or otherwise for
use in connection with the sale of the Variable Insurance Products
or Fund shares; or
(ii) arise out of or as a result of statements or
representations (other than statements or
representations contained in the
registration statement, prospectus or sales
literature for the Variable Insurance
Products not supplied by the Distributor or
persons under its control) or unlawful
conduct of the Fund, the Advisers or persons
under their control, with respect to the
sale or distribution of the Variable
Insurance Products or Fund shares; or
(iii) arise out of any untrue statement or alleged
untrue statement of a material fact
contained in a registration statement,
prospectus or sales literature covering the
Variable Insurance Products (or any
amendment or supplement thereto), or the
omission or alleged omission to state
therein a material fact required to be
stated therein or necessary to make the
statement or statements therein not
misleading, if such statement or omission
was made in reliance upon information
furnished to the Company by or on behalf of
the Fund; or
(iv) result from any failure by the Distributor or the Fund 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 Distributor or the Fund in this
Agreement or arise out of or result from any
other material breach of this Agreement by
the Distributor of the Fund;
as limited by and in accordance with the provisions of Sections 7.4(b) and
7.4(c) hereof.
(b) The Distributor shall not be liable under this
indemnification provision with respect to any losses, claims, damages,
liabilities or litigation to which an Indemnified Party would otherwise
be subject by reason of such Indemnified Party's willful misfeasance,
bad faith, or gross negligence in the performance of such Indemnified
Party's duties or by reason of such Indemnified Party's reckless
disregard of obligations and duties under this Agreement or to the
Company or the Accounts, whichever is applicable.
(c) The Distributor shall not be liable under this
indemnification provision with respect to any claim made against an
Indemnified Party unless such Indemnified Party shall have notified the
Distributor in writing within a reasonable time after the summons or
other first legal process giving information of the nature of the claim
shall have been served upon such Indemnified Party (or after such
Indemnified Party shall have received notice of any such service on any
designated agent), but failure to notify the Distributor of any such
claim shall not relieve the Distributor from any liability which it may
have to the Indemnified Party against whom such action is brought
otherwise than on account of this indemnification provision. In any
case any such action is brought against the Indemnified Parties, the
Distributor will be entitled to participate, at its own expense, in the
defense thereof. The Sponsor also shall be entitled to assume the
defense thereof, with counsel satisfactory to the party named in the
action. After notice from the Distributor to such party of the
Distributor's election to assume the defense thereof, the Indemnified
Party shall bear the fees and expenses of any additional counsel
retained by it, and the Distributor will not be liable to such party
under this Agreement for any legal or other expenses subsequently
incurred by each party independently in connection with the defense
thereof other than reasonable costs of investigation.
(d) The Company agrees promptly to notify the Distributor of
the commencement of any litigation or proceedings against it or any of
its officers or directors in connection with the issuance or sale of
the Variable Insurance Products or the operation of each account.
ARTICLE VIII. Applicable Law
8.1 This Agreement shall be construed and the provisions hereof interpreted
under and in accordance with the laws of the State of Wisconsin.
8.2 This Agreement shall be subject to the provisions of the 1933, 1934 and
1940 Acts, and the rules and regulations and rulings thereunder, including such
exemptions from those statutes, rules and regulations as the SEC may grant, and
the terms hereof shall be interpreted and construed in accordance therewith.
ARTICLE IX. Termination
9.1 Agreement shall continue in full force and effect until the first to occur
of:
(a) termination by any party for any reason by sixty (60) days' advance
written notice delivered to the other parties; or
(b) termination by the Company by written notice to the Fund and the
Sponsor 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 Variable Insurance Products;
or
(c) termination by the Company by written notice to the Fund and the
Sponsor 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 Variable
Insurance Products issued or to be issued by the Company; or
(d) termination by the Company by written notice to the Fund and the
Sponsor 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 if the
Company reasonably believes that the Fund may fail to so qualify (in
the event of such termination, the Company shall withdraw all assets
allocable to the separate accounts from the Portfolio and shall
reinvest such assets in a different investment medium, including, but
not limited to, another Portfolio of the Fund); or
(e) termination by the Company by written notice to the Fund and the
Sponsor with respect to any Portfolio in the event that such Portfolio
fails to meet the diversification requirements as specified in Article
VI hereof (in the event of such termination, the Company shall withdraw
all assets allocable to the separate accounts from the Portfolio and
shall reinvest such assets in a different investment medium, including,
but not limited to, another Portfolio of the Fund); or
(f) termination by the Fund, the Sponsor, or the Distributor by written
notice to the Company, if any of the Fund, the Sponsor, or the
Distributor shall determine, in its sole judgment exercised in good
faith, that the Company and/or its affiliated companies 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; or
(g) termination by the Company by written notice to the Fund and the
Sponsor, if the Company shall determine, in its sole judgment exercised
in good faith, that either the Fund, the Sponsor, or the 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.
9.2 Notwithstanding any termination of this Agreement, the Fund and the
Sponsor shall, at the option of the Company, continue to make available shares
of the Fund pursuant to the terms and conditions of this Agreement, for all
Variable Insurance Products 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 shall be permitted to
reallocate investments in the Fund, redeem investments in the Fund and/or invest
in the Fund upon the making of additional purchase payments under the Existing
Contracts.
9.3 The Company shall not redeem Fund shares attributable to the Variable
Insurance Products (as opposed to Fund shares attributable to the Company's
assets held in the Accounts) except (a) as necessary to implement Variable
Insurance Products owner initiated or approved transactions, or (b) 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"). Upon request, the Company will promptly furnish to the Fund and
the Sponsor the opinion of counsel for the Company (which counsel shall be
reasonably satisfactory to the Fund and the Sponsor) to the effect that any
redemption pursuant to clause (b) above is a Legally Required Redemption.
Furthermore, except in cases where permitted under the terms of the Variable
Insurance Products, the Company shall not prevent owners of Variable Insurance
Products from allocating payments to a Portfolio that was otherwise available
under the Variable Insurance Products without first giving the Fund or the
Sponsor 90 days' notice of its intention to do so.
ARTICLE X. Notices
Any notice shall be sufficiently given when sent by registered or certified
mail, overnight courier or facsimile to the other party at the address of such
party set forth below or at such other address as such party may from time to
time specify in writing to the other party.
If to the Fund: Vanguard Variable Insurance Fund
X.X. Xxx 0000
Xxxxxx Xxxxx, XX 00000
Attn: Xxxxx Xxxx
If to the Sponsor: The Vanguard Group, Inc.
X.X. Xxx 0000
Xxxxxx Xxxxx, XX 00000
Attn: R. Xxxxxxx Xxxxxx
If to the Distributor: Vanguard Marketing Corporation
X.X. Xxx 0000
Xxxxxx Xxxxx, XX 00000
Attn: R. Xxxxxxx Xxxxxx
If to the Company: Sentry Life Insurance Company
0000 Xxxxx Xxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
Attn: Xxxxxxx Xxxxxx
ARTICLE XI. Miscellaneous
11.1 It is understood and stipulated that neither the shareholders of any
Portfolio nor the officers or trustees of the Fund shall be personally liable
hereunder.
11.2 Subject to the requirements of the legal process and regulatory authority,
each party hereto shall treat as confidential the names and addresses of the
owners of the Variable Insurance Products and all information reasonably
identified as confidential in writing by any other party hereto and, except as
permitted by this Agreement, shall not (unless it has obtained the express
written consent of the affected party) disclose, disseminate or utilize such
names and addresses and other confidential information until such time as it may
come into the public domain.
11.3 The captions in this Agreement are included for convenience of reference
only and in no way define or delineate any of the provisions hereof or otherwise
affect their construction or effect.
11.4 This Agreement may be executed simultaneously in two or more counterparts,
each of which taken together shall constitute one and the same instrument.
11.5 If any provision of this Agreement shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement shall not
be affected thereby.
11.6 Each party hereto shall cooperate with each party and all appropriate
governmental authorities (including without limitation the SEC, the NASD and
state insurance regulators) and shall permit such authorities reasonable access
to its books and records in connection with any investigation or inquiry
relating to this Agreement or the transactions contemplated hereby.
11.7 The rights, remedies and obligations contained in this Agreement are
cumulative and are in addition to any and all rights, remedies and obligations,
at law or in equity, which the parties hereto are entitled to under state and
federal laws.
11.8 This Agreement or any of the rights and obligations hereunder may not be
assigned by any party without the prior written consent of all parties hereto.
11.9 The Company shall furnish, or cause to be furnished, to the Fund or its
designee copies of the following reports:
(a) the Company's Annual Financial Statement on Statutory Basis as soon as
practical and in any event within 90 days after the end of each fiscal year; and
(b) any registration statement, prospectus or other materials
distributed in connection with the sale of the Variable Insurance
Products to the extent such registration statement, prospectus or other
materials reference the Fund.
11.10 This Agreement, including any Schedule hereto, may be amended or modified
only by written instrument, executed by duly authorized officers of the parties.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed in its name and on its behalf by its duly authorized
representative as of the date specified above.
VANGUARD VARIABLE INSURANCE FUND
By: s/Xxxxxx X. Xxxxxxxx
Name: Xxxxxx X. Xxxxxxxx
Title: Assistant Secretary
THE VANGUARD GROUP, INC.
By: s/X.X. Xxxxxxxxxx
Name: X.X. Xxxxxxxxxx
Title: Principal
VANGUARD MARKETING CORPORATION
By: s/Xxxxxx X. Xxxxxxxx
Name: Xxxxxx X. Xxxxxxxx
Title: Assistant Secretary
SENTRY LIFE INSURANCE COMPANY OF NEW YORK
By: s/Xxxxxx X. Xxxx
Name: Xxxxxx X. Xxxx
Title: President
SCHEDULE A
SEPARATE ACCOUNTS AND ASSOCIATED CONTRACTS
Name of Separate Account Contracts Funded by Separate Account
Variable Account - Vanguard Variable Patriot Variable Annuity
Insurance Funds
SCHEDULE B
PORTFOLIOS
The following Portfolios of the Vanguard Variable Insurance Funds shall
be made available as investments underlying the Variable Insurance Products,
subject to the limitations set forth in Section 2.13(c) hereof:
High-Yield Bond Portfolio
Balanced Portfolio
Equity Index Portfolio
Mid-Cap Index Portfolio
REIT Index Portfolio
Small Company Growth Portfolio
SCHEDULE C
CONTINGENCY PROCEDURES
The Company can fax and must provide the details on voice-mail for the IIS -
Daily Valuation Administrator at (000) 000-0000. Additionally, the Company must
fax the buy/sell instructions by 6:00 a.m. EST to the following Vanguard
personnel at the numbers listed below:
(a) IIC-Money Movement Unit
(000) 000-0000
(000) 000-0000 (alternate)
(b) IIS-Daily Valuation Unit
(000) 000-0000
(000) 000-0000 (alternate)
The Sponsor cannot guarantee trade date commitments if the buy/sell instructions
are not received by 6:00 a.m. EST in good order.
"Good order" shall mean the following information is on the fax buy/sell
instructions: >> Company name >> Account name >> Contact name >> Contact phone
number between 6 a.m. EST and 9 a.m. EST >> Current date >> Trade date >>
Fund/Portfolio number >> Vanguard account number >> Purchase, redemption,
rebalance redemption, rebalance purchase amount >> Purchase total, redemption
total, rebalance redemption total, rebalance purchase total.
