8(mm)
PARTICIPATION AGREEMENT
AMONG
XXXX XXXXX PARTNERS VARIABLE EQUITY TRUST,
XXXX XXXXX INVESTOR SERVICES, LLC,
XXXX XXXXX PARTNERS FUND ADVISOR, LLC
AND
MINNESOTA LIFE INSURANCE COMPANY
THIS AGREEMENT, made and entered into this 19/th/ day of March, 2015 by and
among MINNESOTA LIFE INSURANCE COMPANY, a Minnesota corporation (the
"Company"), on its own behalf and on behalf of each segregated asset account of
the Company set forth on Schedule A hereto as may be amended from time to time
(each such account hereinafter referred to as the "Account"), XXXX XXXXX
PARTNERS VARIABLE EQUITY TRUST, a Maryland Corporation (a "Fund"), XXXX XXXXX
INVESTOR SERVICES, LLC, a Maryland limited liability company (the
"Distributor"), and XXXX XXXXX PARTNERS FUND ADVISOR, LLC, a Maryland limited
liability company (the "Adviser").
WHEREAS, the Fund engages in business as an open-end management investment
company and is available to act as (i) the investment vehicle for separate
accounts established for variable life insurance policies and variable annuity
contracts (collectively, the "Contracts") to be offered by insurance companies
that have entered into participation agreements with the Fund, the Adviser and
the Distributor (each, a "Participating Insurance Company" and collectively,
the "Participating Insurance Companies"), and (ii) the investment vehicle for
certain qualified pension and retirement plans ("Qualified Plans") for which
the shares of the Fund are either held by Participating Insurance Companies on
behalf of the Qualified Plans through omnibus accounts or are held by Qualified
Plans without any financial intermediary through direct accounts on the books
of the Fund;
WHEREAS, the beneficial interests in the Fund are divided into several series
of shares, (each designated a "Portfolio") and, in certain cases classes of
shares, which represent the interest in a particular managed portfolio of
securities and other assets;
WHEREAS, the Fund has obtained an order from the Securities and Exchange
Commission (the "SEC"), granting the Participating Insurance Companies and
variable annuity and variable insurance separate accounts exemptions from the
provisions of Sections 9(a), 13(a), 15(a), and 15(b) of the Investment Company
Act of 1940, (the "1940 Act" which for the purposes of this Agreement includes
the rules and regulations thereunder, all as amended from time to time, as may
apply to a Fund or any Portfolio or Class thereof, including pursuant to any
exemptive, interpretive or other relief or guidance issued by the Commission or
the staff of the Commission under such Act ) and Rules 6e-2(b)(15) and
6e-3(T)(b)(15) thereunder, to the extent necessary to permit shares of the Fund
to be sold to and held by variable annuity and variable life insurance separate
accounts of both affiliated and unaffiliated life insurance companies (the
"Mixed and Shared Funding Exemptive Order");
WHEREAS, the Fund is registered as an open-end management investment company
under the 1940 Act and its shares are registered under the Securities Act of
1933, as amended (the "1933 Act");
WHEREAS, the Distributor is duly registered as a broker-dealer under the
Securities Exchange Act of 1934 and any applicable state securities law;
WHEREAS, the Adviser is duly registered as an investment adviser under the
Investment Advisers Act of 1940, as amended;
WHEREAS, the Distributor is a distributor of shares of the Portfolios of the
Fund;
WHEREAS, the Company has registered or will register certain Contracts under
the 1933 Act, or such Contracts are or will be exempt from registration
thereunder;
WHEREAS, each Account is a duly organized, validly existing segregated asset
account, established by resolution of the Board of Directors of the Company to
set aside and invest assets attributable to one or more Contracts;
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WHEREAS, each Account is or will be registered as an investment company under
the 1940 Act, or the Account is or will be exempt from registration under the
1940 Act;
WHEREAS, to the extent permitted by applicable insurance laws and regulations,
the Company intends to purchase shares in the Portfolios on behalf of each
Account to fund certain of the aforesaid Contracts, and
WHEREAS, the parties intend that this agreement will supersede all prior
agreements among the parties or their predecessor entities with respect to the
subject matter of this agreement.
NOW, THEREFORE, in consideration of their mutual promises the Company, the Fund
and the Distributor agree as follows:
ARTICLE I.
SALE OF FUND SHARES
1.1 The Fund agrees to sell to the Company those shares of the Fund which
each Account orders, executing such orders on a daily basis at the net asset
value next computed after receipt by the Fund or its designee of the order for
Fund shares. 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: (i) the
orders are received by the Company (or their designee) in good order prior to
the time the net asset value of each Portfolio is priced in accordance with its
Prospectus1 (generally at the close of regular trading on the New York Stock
Exchange (the "NYSE") at 4:00 p.m. Eastern Time), and (ii) the Fund receives
notice of such order by 10:00 a.m. Eastern Time on the next following "Business
Day." "Business Day" shall mean any day on which the NYSE is open for regular
trading and on which the Fund calculates its net asset value pursuant to the
rules of the SEC.
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1 The term "Prospectus" as used herein, refers to the prospectus and related
statement of additional information (the "Statement of Additional
Information") incorporated therein by reference (each as amended or
supplemented) on file with the SEC at the time in question.
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1.2 The Fund 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 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 (the "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 any regulatory
authority 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 interest of the shareholders of
such Portfolio.
1.3 The Fund, the Adviser and the Distributor agree that shares of the Fund
will be sold only to Participating Insurance Companies and their separate
accounts and, in accordance with the terms of the Mixed and Shared Funding
Exemptive Order, certain Qualified Plans. No shares of any Portfolio will be
sold to the general public.
1.4 The Fund will not sell Fund shares to any insurance company or separate
account unless an agreement containing provisions substantially the same as
Articles I, III, V, VI and Section 2.5 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 the Company, executing such requests
on a daily basis at the net asset value next computed after receipt by the Fund
or its designee of the request for redemption. For purposes of this
Section 1.5, the Company shall be the designee of the Fund for receipt of
requests for redemption from the Account and receipt by such designee shall
constitute receipt by the Fund, provided that: (i) the orders are received by
the Company (or its designee) in good order prior to the time the net asset
value of each Portfolio is priced in accordance with its Prospectus (generally
at the close of regular trading on the NYSE at 4:00 p.m. Eastern Time), and
(ii) provided that the Fund receives notice of such request for redemption by
10:00 a.m. Eastern Time on the next following "Business Day." The Fund may
impose redemption fees, as described in the Prospectus.
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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. The Company agrees to comply with the terms of
the Rule 12b-1 Plan described in Section 2.8 hereof. The Company agrees to
comply with the provisions of Rule 22c-2 under the 1940 Act as applicable to
the Fund (including reporting procedures adopted to comply with the Rule).
1.7 The Company shall pay for Fund shares on the next "Business Day" after
an order to purchase Fund shares is made in accordance with the provisions of
Section 1.1 hereof. Payment shall be in federal funds transmitted by wire. For
purpose of Sections 2.10 and 2.11, 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.
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 any Account. Shares
ordered from the Fund will be recorded in an appropriate title for each Account
or the appropriate subaccount of each Account.
1.9 The Fund shall furnish same day notice by wire, telephone (followed by
written confirmation), electronic media or fax to the Company of any income,
dividends or capital gain distributions payable on the Fund's shares. The
Company hereby elects to receive all such income dividends and capital gain
distributions as are payable on Portfolio shares in additional shares of the
applicable 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 such dividends and distributions.
1.10 The Fund shall provide (electronically or by fax) the closing net asset
value per share for each Portfolio to the Company on a daily basis as soon as
reasonably practical after the closing net asset value per share is calculated
(normally 6:30 p.m. Eastern Time) and shall use its best efforts to make such
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net asset value per share available by 7:00 p.m. Eastern Time. In the event
that the Fund is unable to meet the 7:00 p.m. time stated immediately above,
then the Fund shall immediately notify the Company and provide the Company with
additional time to notify the Fund of purchase or redemption orders pursuant to
Sections 1.1 and 1.5, respectively, above. Such additional time shall be equal
to the additional time that the Fund takes to make the closing net asset values
available to the Company. If the Fund provides the Company with the incorrect
closing share net asset value information, the Company, on behalf of the
Account, shall be entitled to a prompt adjustment to the number of shares
purchased or redeemed to reflect the correct share net asset value, and the
Fund or the Distributor shall bear the cost of correcting such errors. Upon a
final determination that there has been an error in the calculation of the
closing net asset value, dividend or capital gain, the Fund shall promptly
report such error to the Company.
1.11 The Fund shall, upon request of the Company, provide a manual daily
confirmation of trade activity from the previous "Business Day." Such
confirmation shall include the dollar amount of purchases or redemptions
submitted by the Company for each Portfolio, price per share of each Portfolio,
and the corresponding total share amount of such purchase or redemption, and
shall be transmitted to the Company on the Business Day following the request.
1.12 The Fund shall, upon request of the Company, provide on a monthly
basis, a screen printed report of the monthly trade activity for the Account
which shall be transmitted to the Company on the "Business Day" following the
request.
ARTICLE II.
REPRESENTATIONS AND WARRANTIES
2.1 The Company represents and warrants that the Contracts are or will be
registered under the 1933 Act, unless exempt from such registration, and that
the Contracts will be issued and sold in compliance in all material respects
with all applicable Federal and State laws and regulations. The Company shall
amend the registration statements for its Contracts under the 1933 Act and 1940
Act from time to time as required to effect the continuous offering of its
Contracts. The Company represents and
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warrants that it is an insurance company duly organized and in good standing
under applicable law and that it has legally and validly established each
Account prior to any issuance or sale thereof as a segregated asset account
under their domiciliary state insurance laws and has registered or, prior to
any issuance or sale of the Contracts, will register each Account as a unit
investment trust in accordance with the provisions of the 1940 Act to serve as
a segregated investment account for the Contracts, unless exempt from such
registration. The Company represents and warrants that the Company and the
Account are in compliance with Rule 38a-1 under the 1940 Act pursuant to the
requirements of federal law or of any state insurance department. The Company
represents and warrants that it has implemented controls designed to prevent,
and will provide any reasonable assistance requested by the Fund related to the
deterrence of, market timing and/or late trading of shares of the Fund.
Further, the Company represents and warrants that:
(a) The Company has in place an anti-money laundering program ("AML
program") that does now and will continue to comply with applicable laws and
regulations, including the relevant provisions of the Bank Secrecy Act and the
USA PATRIOT Act (Pub. L. No. 107-56 (2001)), as they may be amended, and the
regulations issued thereunder by duly vested regulatory authority and the Rules
of Conduct of the Financial Industry Regulatory Authority ("FINRA")
("Anti-Money Laundering Law and Regulation").
(b) The Company has, after undertaking reasonable inquiry, no
information or knowledge that (i) any Contract owners of all separate accounts
investing in the Fund, or (ii) any person or entity controlling, controlled by
or under common control with such Contract owners is an individual or entity or
in a country or territory that is on an Office of Foreign Assets Control
("OFAC") list or similar list of sanctioned or prohibited persons maintained by
a U.S. governmental or regulatory body.
(c) The Company has in place policies, procedures and internal controls
reasonably designed (i) to verify the identity of Contract owners, and (ii) to
identify those Contract owners' sources of funds, and has no reason to believe
that any of the invested funds were derived from illegal activities.
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(d) The Company will provide the Fund or the Distributor (or their
respective service providers) upon reasonable request any information regarding
specific accounts that may be reasonably necessary for the Fund and its service
providers to fulfill their responsibilities relating to their anti-money
laundering programs or any other information reasonably requested by the Fund
or the Distributor (or their respective service providers) to assist with
compliance with the Anti-Money Laundering Law and Regulation, as may be
permitted by law or regulation.
(e) The Company will promptly notify the Fund and the Distributor should
the Company become aware of any change in the above representations and
warranties to the extent that the change relates to the relationship between
the Company and the Fund and/or Distributor. In addition, the Fund and the
Distributor hereby provide notice to the Company that the Fund and/or the
Distributor reserve the right to make inquires of and request additional
information from the Company regarding its AML program.
(f) That the Company understands the requirements of all applicable
laws, rules or regulations relating to bribery and corruption both in the
Company's home jurisdiction and in any other jurisdictions which may have a
connection to the services performed by the Company in connection with this
Agreement. The Company further represents and warrants that it will fully and
faithfully comply with all requirements of such laws, rules or regulations in
connection with all activities under or in any way connected with this
Agreement and such requirements that the Fund or the Distributor may notify to
Company.
2.2 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 Minnesota as applicable,
and all applicable federal and state securities laws. Further, the Fund
represents and warrants that the Fund is in compliance with Rule 38a-1 under
the 1940 Act. 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
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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 or the Distributor. The Fund shall provide to the
Company a list of the various jurisdictions in which the Portfolios are
registered.
2.3 The Fund represents that it is currently qualified as a Regulated
Investment Company under Subchapter M of the Internal Revenue Code of 1986, as
amended, (the "Code") and that it will make every effort to maintain such
qualification (under Subchapter M or any successor or similar provision) and
that it will notify the Company immediately upon having a reasonable basis for
believing that it has ceased to so qualify or that it might not so qualify in
the future. The parties acknowledge that compliance with Subchapter M is an
essential element of compliance with Section 817(h) of the Code.
2.4 The Company represents that the Contracts are currently treated as
endowment, annuity 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 Distributor 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.
2.5 The Company represents that the Company does not make the Fund available
as an investment vehicle for any clients of the Company other than through
Contracts.
2.6 The Fund represents and warrants that it has adopted, or has caused to
be adopted, written procedures under which (i) financial intermediaries may
only make the Fund available to its Qualified Plan clients if any such
financial intermediary is a Participating Insurance Company, (ii) if any such
Participating Insurance Company requests that the Fund be made available as an
investment vehicle for its Qualified Plan clients (other than through
Contracts), such Participating Insurance Company will be required to represent
in writing that it has adopted Procedures for Qualified Plan Clients, and
(iii) shares of the Fund may only be held by Qualified Plans without a
financial intermediary through direct accounts on the books of the Fund if the
Fund has adopted Procedures for Qualified Plans.
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2.7 The Fund represents and warrants that each Fund:
(i) qualifies as a look-through entity within the meaning of
Treas.Reg. section 1.817-5(f), and (ii) shall at all times invest money
from the Contracts and conduct its operations to ensure that: (a) the
assets of the Fund are diversified within the meaning of Treas. Reg.
section 1.817-5(b), (b) the Contracts shall be treated as variable
contracts under the Code and the regulations issued thereunder, and(c)
no Contract owner shall be treated as the owner of the assets of an
Account solely due to purchase of shares of a Fund by an Account.
The Fund will notify the Company immediately upon having a reasonable basis
for believing that a Fund is in breach of the foregoing representation and
warranty or that a Fund might be in breach in the future. In addition, the Fund
will immediately take all steps necessary to cure any breach to achieve
compliance with the foregoing representations and warranties.
2.8 The Fund has adopted a Rule 12b-1 Plan under which it makes payments to
finance administrative, service, and distribution expenses with respect to
certain Portfolios. The Fund represents and warrants that its Board, a majority
of whom are not interested persons of the Fund, has approved such Rule 12b-1
Plan to finance administrative, service, and distribution expenses of the
Fund's Portfolios that are subject to a 12b-1 fee, and that any changes to the
Fund's Rule 12b-1 Plan will be approved, in accordance with Rule 12b-1 under
the 0000 Xxx.
2.9 If Distributor's payments to Company under Section 2.8 hereof in whole
or in part are financed by a Fund in accordance with a Fund's plan of
distribution adopted pursuant to Rule 12b-1 under the 1940 Act, then in the
event of the termination, cancellation or modification of such 12b-1 plan by a
Fund's board of directors or trustees or shareholders, Company agrees upon
notification at the Distributor's option to waive its right to receive such
compensation pursuant to Section 2.8 hereof until such time, if ever, as
Distributor receives payment.
2.10 The Fund makes no representation as to whether any aspect of its
operations (including, but not limited to, fees, expenses and investment
policies) complies with the insurance laws or regulations of 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 its
state of domicile, and the Fund represents that its respective operations are
and shall at all times remain in material compliance with the laws of its state
of domicile, to the extent required to perform this Agreement.
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2.11 The Fund represents that it is lawfully organized and validly existing
under the laws of the Commonwealth of Maryland and that it does and will comply
in all material respects with the 1940 Act.
2.12 The Distributor represents and warrants that the Distributor is a
member in good standing with FINRA and shall remain duly registered in all
material respects under all applicable federal and state laws and regulations
and that the Distributor shall perform its obligations for the Fund in
compliance in all material respects with the laws of the State of Maryland, and
any applicable state and federal laws and regulations.
2.13 The Adviser represents and warrants that the Adviser is and shall
remain duly registered in all material respects under all applicable federal
and state laws and regulations and that the Adviser shall perform its
obligations for the Fund in compliance in all material respects with the laws
of the State of Maryland, and any applicable state and federal laws and
regulations.
2.14 The Fund and Distributor represent and warrant that their directors,
trustees, officers, employees, investment advisors, 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
minimal coverage as required currently by Rule 17g-1 of the 1940 Act or related
provisions as may be promulgated from time to time. The aforesaid bond shall
include coverage for larceny and embezzlement and shall be issued by a
reputable bonding company.
2.15 The Company represents and warrants that all of its 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 minimal coverage as
required currently by entities subject to the requirements of Rule 17g-1 of the
1940 Act or related provisions as may be promulgated from time to time. The
aforesaid bond shall include coverage for larceny and embezzlement and shall be
issued by a reputable bonding company.
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2.16 Each party to this Agreement will maintain all records required by law,
including records detailing the services it provides. Such records will be
preserved, maintained and made available to the extent required by law and in
accordance with the 1940 Act and the rules thereunder. Upon request by the
Fund, the Adviser or the Distributor, the Company agrees promptly to make
copies or, if required, originals of all records pertaining to the performance
of services under this Agreement available to the Fund, the Adviser or the
Distributor, as the case may be. The Fund agrees that the Company will have the
right to inspect, audit and copy all records pertaining to the performance of
services under this Agreement pursuant to the requirements of any state
insurance department. Each party also agrees promptly to notify the other
parties if it experiences any difficulty in maintaining the records in an
accurate and complete manner. This provision shall survive termination of the
Agreement.
ARTICLE III.
PROSPECTUSES AND PROXY STATEMENTS; VOTING
3.1 The Distributor shall provide the Company (at the Company's expense)
with as many printed copies of the Fund's current Prospectus as the Company may
reasonably request. If requested by the Company in lieu thereof, the Fund shall
provide such documentation (including a final copy of the new Prospectus as set
in type at the Fund's expense - in lieu thereof, such final copy may be
provided, if requested by the Company, electronically or through camera ready
film) 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
during the year) to have the prospectus for each Contract 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 Distributor (or in the Fund's
discretion, the Prospectus shall state that such Statement is available from
the Fund), and the Distributor (or the Fund), at its expense, shall print and
provide such Statement free of charge to the Company and to any owner of a
Contract or prospective owner who requests such Statement.
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3.3 The Fund, at its expense, shall provide the Company with copies of its
proxy material, reports to shareholders, and other communications to
shareholders in such quantity as the Company shall reasonably require for
distributing to Contract owners.
3.4 If and to the extent required by the 1940 Act or other applicable law
the Company shall:
(a) solicit voting instructions from Contract owners;
(b) vote Fund shares in accordance with instructions received from
Contract owners; and
vote Fund shares for which no instructions have been received in the same
proportion as Fund shares of such Portfolio for which instructions have been
received. 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. Each
Participating Insurance Company shall be responsible for assuring that each of
its separate accounts participating in the Fund calculates voting privileges in
a manner consistent with this Section.
3.5 The Fund will comply with all provisions of the 1940 Act requiring
voting by shareholders.
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 or its investment adviser or any of its underwriters is
named, at least ten (10) "Business Days" prior to its use. No such material
shall be used if the Fund or its designee objects to such use within ten
(10) "Business Days" after receipt of such material.
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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 Contracts 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 the
Distributor or the designee of either, except with the permission of the Fund
or the Distributor or the designee of either.
4.3 The Fund and the Distributor, or the designee of either 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 and/or its
Account(s), is named at least ten (10) "Business Days" prior to its use. No
such material shall be used if the Company or its designee objects to such use
within ten (10) "Business Days" after receipt of such material.
4.4 The Fund and the Distributor shall not give any information or make any
representations on behalf of the Company or concerning the Company, an Account,
or the Contracts other than the information or representations contained in a
registration statement or prospectus for the Contracts, as such registration
statement and 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 Contract owners, or in sales
literature or other promotional material approved by the Company or its
designee, except with the permission of the Company.
4.5 The 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, promptly after the
filing of such document with the SEC or other regulatory authorities.
4.6 Upon request, the Company will provide to the Fund at least one complete
copy of all registration statements, prospectuses, Statements of Additional
Information, reports, solicitations for voting instructions, sales literature
and other promotional materials, applications for exemptions, requests for no
action letters, and all amendments to any of the above, that relate to the
Contracts or the Account.
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4.7 For purposes of this Article IV, the phrase "sales literature or other
promotional material" includes, but is not limited to, advertisements (such as
materials published, or designed for use, in a newspaper, magazine, or other
periodical, radio, television, telephone or tape recording, videotape display,
signs or billboards, motion pictures, or other public media), sales literature,
(I.E., any written communication distributed or made generally available to
customers or the public, including brochures, circulars, 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, and registration statements, prospectuses,
statements of additional information, shareholder reports, and proxy materials
and any other material constituting sales literature or advertising under the
FINRA rules, the 1940 Act, the 1933 Act, or rules thereunder.
4.8 Except as otherwise expressly provided in this Agreement, neither the
Fund, the Distributor or any affiliates thereof shall use any trademark, trade
name, service xxxx or logo of the Company, or any of their affiliates, or any
variation of any such trademark, trade name, service xxxx or logo, without
Company's prior written consent, the granting of which shall be at Company's
sole option.
ARTICLE V.
FEES AND EXPENSES
5.1 All expenses incident to performance by the Fund under this Agreement
shall be paid by the Fund. The Fund shall see to it that all its shares are
registered and authorized for issuance in accordance with applicable federal
law and, if and to the extent deemed advisable by the Fund, in accordance with
applicable state laws prior to their sale. The Fund shall bear the expenses for
the cost of registration and qualification of the Fund's shares, preparation
and filing of the Fund's Prospectus and registration statement, proxy material,
information statements and reports, setting the Fund's Prospectus for printing,
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setting in type and printing the proxy material, information statements and
reports to shareholders, and the preparation of all statements and notices
required by any federal or state law, and all taxes on the issuance or transfer
of the Fund's shares The Fund shall bear the cost of printing and distributing
the Fund's Prospectus, periodic reports to shareholders, proxy materials and
other shareholder communications to existing Contract owners. The Company shall
see to it that each of the Contracts and the Accounts are registered and are
authorized for issuance in accordance with applicable federal law. The Company
shall bear the expenses for the cost of registration and qualification of the
Contracts and the Accounts, preparation and filing of the applicable prospectus
and registration statements, setting each Contract prospectus for printing, and
the preparation of all statements and notices required by any federal or state
law. In addition, the Company shall bear the cost of printing and distributing
the Fund's Prospectus to be delivered to prospective Contract owners.
5.2 Except as otherwise provided in Section 5.1, the Company shall bear the
expenses of printing and distributing the Fund's Prospectus to owners of
Contracts issued by the Company and of distributing the Fund's proxy materials
and reports to such Contract owners.
ARTICLE VI.
POTENTIAL CONFLICTS
6.1 The Board will monitor the Fund for the existence of any material
irreconcilable conflict among the interests of the Contract owners of all
separate accounts investing in the Fund. An irreconcilable material conflict
may arise for a variety of reasons, including: (a) an action by any state
insurance regulatory authority; (b) a change in applicable federal or state
insurance, tax or securities laws or regulations, or a public ruling, private
letter ruling, no-action or interpretive letter, or any similar action by
insurance, tax, or securities regulatory authorities; (c) an administrative or
judicial decision in any relevant proceeding; (d) the manner in which the
investments of any Portfolio are being managed; (e) a difference in voting
instructions given by variable annuity contract owners and variable life
insurance contract owners; or (f) a decision by an insurer to disregard the
voting instructions of Contract owners. The Board shall promptly inform the
Company if they determine that an irreconcilable material conflict exists and
the implications thereof.
16
6.2 The Company will report any potential or existing conflicts of which it
is aware to the Board. The Company will assist the Board in carrying out its
responsibilities under the Mixed and Shared Funding Exemptive Order, by
providing the Board with all information reasonably necessary for the Board to
consider any issues raised. This includes, but is not limited to, an obligation
by the Company to inform the Board whenever Contract owners' voting
instructions are disregarded.
6.3 If it is determined by a majority of the Board, or a majority of its
disinterested trustees, that a material irreconcilable conflict exists, the
Company and other Participating Insurance Companies shall, at their expense and
to the extent reasonably practicable (as determined by a majority of the
disinterested directors), take whatever steps are necessary to remedy or
eliminate the irreconcilable material conflict, up to and including:
(1) withdrawing the assets allocable to some or all of the separate accounts
from the Fund or any Portfolio and reinvesting such assets in a different
investment medium, including (but not limited to) another Portfolio of the
Fund, or submitting the question whether such segregation should be implemented
to a vote of all affected Contract owners and, as appropriate, segregating the
assets of any appropriate group, (I.E., annuity Contract owners, life insurance
Contract owners, or Contract owners of one or more Participating Insurance
Companies) that votes in favor of such segregation, or offering to the affected
contract owners the option of making such a change; and (2) establishing a new
registered management investment company or managed separate account.
6.4 If a material irreconcilable conflict arises because of a decision by
the Company to disregard Contract owners' voting instructions and that decision
represents a minority position or would preclude a majority vote, the Company
may be required, at the Fund's election, to withdraw the affected Account's
investment in the Fund and terminate this Agreement with respect to such
Account; provided, however that such withdrawal and termination shall be
limited to the extent required by the foregoing material irreconcilable
conflict as determined by a majority of the disinterested members of the Board.
Any such
17
withdrawal and termination must take place within six (6) months after the Fund
gives written notice that this provision is being implemented, and until the
end of that six-month period the Fund and the Distributor shall continue to
accept and implement orders by the Company for the purchase (and redemption) of
Fund shares.
6.5 If a material irreconcilable conflict arises because a particular state
insurance regulator's decision applicable to the Company conflicts with the
majority of other state regulators, then the Company will withdraw the affected
Account's investment in the Fund and terminate this Agreement with respect to
such Account within six (6) months after the Board informs the Company in
writing that it has determined that such decision has created an irreconcilable
material conflict; provided, however, that such withdrawal and termination
shall be limited to the extent required by the foregoing material
irreconcilable conflict as determined by a majority of the disinterested
members of the Board. Until the end of the foregoing six-month period, the Fund
and the Distributor shall continue to accept and implement orders by the
Company for the purchase (and redemption) of Fund shares.
6.6 For purposes of Sections 6.3 through 6.6 of this Agreement, a majority
of the disinterested members of the Board shall determine whether any proposed
action adequately remedies any irreconcilable material conflict, but in no
event will the Fund be required to establish a new funding medium for the
Contracts. The Company shall not be required by Section 6.3 to establish a new
funding medium for the Contracts if an offer to do so has been declined by vote
of a majority of Contract owners materially adversely affected by the
irreconcilable material conflict. In the event that the Board determines that
any proposed action does not adequately remedy any irreconcilable material
conflict, then the Company will withdraw the Account's investment in the Fund
and terminate this Agreement within six (6) months after the Board informs the
Company in writing of the foregoing determination, provided, however, that such
withdrawal and termination shall be limited to the extent required by any such
material irreconcilable conflict as determined by a majority of the
disinterested members of the Board.
18
6.7 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 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
Company, as appropriate, shall take such steps as may be necessary to comply
with Rules 6e-2 and 6e-3(T) as amended, and Rule 6e-3, as adopted, to the
extent such rules are applicable; and (b) Sections 6.1, 6.2, 6.3, 6.4 and 6.5
of this Agreement shall continue in effect only to the extent that terms and
conditions substantially identical to such Sections are contained in such
Rule(s) as so amended or adopted.
ARTICLE VII.
INDEMNIFICATION
7.1 Indemnification by the Company
(a) The Company agrees to indemnify and hold harmless the Fund, the
Adviser and the Distributor and each of its directors, trustees and officers
and each person, if any, who controls the Fund within the meaning of Section 15
of the 1933 Act (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,
which consent will not be unreasonably withheld) 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
Contracts and:
(i) arise out of or are based upon any untrue statements or alleged
untrue statements of any material fact contained in the registration
statement or prospectus for the Contracts or contained in the Contracts
or sales literature for the Contracts (or any amendment or supplement to
any of
19
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, the
Adviser or the Distributor for use in the registration statement or
prospectus for the Contracts or in the Contracts or sales literature (or
any amendment or supplement) or otherwise for use in connection with the
sale of the Contracts or 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 their control) or wrongful conduct of the
Company or persons under their control, with respect to the sale or
distribution of the Contracts or Fund Shares; or
(iii) arise out of any untrue statement or alleged untrue statement
of a material fact contained in the registration statement, Prospectus,
or sales literature of the Fund or any amendment thereof or supplement
thereto or the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein not misleading if such a statement or omission was made in
reliance upon information furnished to the Fund by or on behalf of the
Company; or
(iv) arise as a result of any failure by the Company to provide the
services and furnish the materials under the terms of this Agreement; or
(v) arise out of or result from any material breach of any
representation and/or warranty made by the Company in this Agreement or
arise out of or result from any other material breach of this Agreement
by the Company, as limited by and in accordance with the provisions of
Sections 7.1(b) and 7.1(c) hereof.
20
(b) The Company shall not be liable under this indemnification provision
with respect to any losses, claims, damages, liabilities or litigation incurred
or assessed against an Indemnified Party as such may arise from such
Indemnified Party's willful misfeasance, bad faith, or gross negligence in the
performance of such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations or 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 any designated agent), but failure to notify the Company of
any such claim shall not relieve the Company from any liability which it may
have to the Indemnified Party against whom such action is brought otherwise
than on account of this indemnification provision. In case any such action is
brought against the Indemnified Parties, the Company shall be entitled to
participate, at its own expense, in the defense of such action. The Company
also shall be entitled to assume the defense thereof, with counsel satisfactory
to the party named in the action. After notice from the Company to such party
of the Company's election to assume the defense thereof, the Indemnified Party
shall bear the fees and expenses of any additional counsel retained by it, and
the Company will not be liable to such party under this Agreement for any legal
or other expenses subsequently incurred by such party independently in
connection with the defense thereof other than reasonable costs of
investigation.
(d) The Indemnified Parties will promptly notify the Company of the
commencement of any litigation or proceedings against them in connection with
the issuance or sale of the Fund Shares or the Contracts or the operations of
the Fund.
21
7.2 Indemnification by the Fund, the Adviser and the Distributor
(a) The Fund, the Adviser and the Distributor agree to indemnify and
hold harmless the Company and its directors, employees and officers and each
person, if any, who controls the Company within the meaning of Section 15 of
the 1933 Act (collectively, the "Indemnified Parties" for purposes of this
Section 7.2) against any and all losses, claims, damages, liabilities
(including amounts paid in settlement with the written consent of the Fund,
which consent shall not be unreasonably withheld) 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 Contracts
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,
Adviser 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) or otherwise for use in connection with
the sale of the Contracts or Fund shares; or
(ii) arise out of or as a result of statements or representations
(other than statements or representations contained in the registration
statement, prospectus or sales literature for the Contracts not supplied
by the Distributor or Fund or persons under its control) or wrongful
conduct of the Fund, the Adviser or the Distributor or persons under
their control, with respect to the sale or distribution of the Contracts
or Fund shares; or
(iii) arise out of any untrue statement or alleged untrue statement
of a material fact contained in a registration statement, prospectus or
sales literature covering the Contracts, or any amendment thereof or
supplement thereto, or the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statement or statements therein not misleading, if such statement or
omission was made in reliance upon information furnished to the Company
by or on behalf of the Fund; or
22
(iv) arise as a result of any failure by the Fund, the Adviser or
Distributor to provide the services and furnish the materials under the
terms of this Agreement (including a failure, whether unintentional or
in good faith or otherwise, to comply with the diversification
requirements specified in Article II of this Agreement); or
(v) arise out of or result from any material breach of any
representation and/or warranty made by the Fund, the Adviser or the
Distributor in this Agreement or arise out of or result from any other
material breach of this Agreement by the Fund, the Adviser or the
Distributor; as limited by and in accordance with the provisions of
Sections 7.2(b) and 7.2(c) hereof.
(b) The Fund, the Adviser or 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 Account, whichever is applicable.
(c) The Fund, the Adviser and 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 Fund,
the Adviser and 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 such service on any designated
agent), but failure to notify the Fund, the Adviser and the Distributor of any
such claim shall not relieve the Fund, the Adviser and the Distributor from any
liability which they may have to the Indemnified Party against whom such action
is brought
23
otherwise than on account of this indemnification provision. In case any such
action is brought against the Indemnified Parties, the Fund, the Adviser and
the Distributor will be entitled to participate, at their own expense, in the
defense thereof. The Fund, the Adviser and the Distributor also shall be
entitled to assume the defense thereof with counsel satisfactory to the party
named in the action. After notice from the Fund, the Adviser and the
Distributor to such party of the Fund's, the Adviser's and 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 Fund, the
Adviser and the Distributor will not be liable to such party under this
Agreement for any legal or other expenses subsequently incurred by such party
independently in connection with the defense thereof other than reasonable
costs of investigation.
(d) The Company agrees promptly to notify the Fund, the Adviser and 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
Contracts or the operation of the Account.
ARTICLE VIII.
APPLICABLE LAW
8.1 This Agreement shall be construed and the provisions hereof interpreted
under and in accordance with the laws of Delaware.
8.2 This Agreement shall be subject to the provisions of the federal
securities laws, and the rules, regulations and rulings thereunder, including
such exemptions from those statutes, rules and regulations as the SEC may grant
(including, but not limited to, the Mixed and Shared Funding Exemptive Order)
and the terms hereof shall be interpreted and construed in accordance therewith.
24
ARTICLE IX.
TERMINATION
9.1 This Agreement shall terminate:
(a) at the option of any party upon six months advance written notice
to the other parties unless otherwise agreed in a separate written
agreement among the parties; or
(b) at the option of the Company if shares of the Portfolios
delineated in Schedule B are not reasonably available to meet the
requirements of the Contracts as determined by the Company; or
(c) at the option of the Fund upon institution of formal proceedings
against the Company by the FINRA, the SEC, the insurance commission of
any state or any other regulatory body regarding the Company's duties
under this Agreement that would have a material adverse impact on the
sale of the Contracts, the administration of the Contracts, the
operation of an Account, or the purchase of Fund shares; or
(d) at the option of the Company upon institution of formal
proceedings against the Fund by the FINRA, the SEC, or any state
securities or insurance department or any other regulatory body that
would have a material adverse impact on the Fund; or
(e) at the option of the Company upon receipt of any necessary
regulatory approvals and/or the vote of the Contract owners having an
interest in the Account (or any subaccount) to substitute the shares of
another investment company for the corresponding Portfolio 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 investment
media. The Company will give thirty (30) days' prior written notice to
the Fund of the date of any proposed vote or other action taken to
replace the Fund's shares; or
25
(f) at the option of the Company or the Fund 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 (i) all Contract owners of Contracts of all separate
accounts, or (ii) the interests of the Participating Insurance Company
investing in the Fund as delineated in Article VI of this Agreement; or
(g) at the option of the Company if the Fund 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; or
(h) at the option of the Company if the Fund fails to meet the
diversification requirements specified in Article II hereof or the
Company has a reasonable expectation that the Fund will fail to meet
these diversification requirements in the future; or
(i) at the option of any party to this Agreement, upon another
party's material breach of any provision of this Agreement; or
(j) at the option of the Company, if the Company determines in its
sole judgment exercised in good faith, that either the Fund, the Adviser
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 which is
likely to have a material adverse impact upon the business and
operations of the Company; or
(k) at the option of the Fund, the Adviser or the Distributor, if the
Fund, the Adviser or the Distributor respectively, shall determine 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, the Adviser or the Distributor,
or
26
(l) at the option of the Fund in the event any of the Contracts are
not issued or sold in accordance with applicable federal and/or state
law. Termination shall be effective immediately upon such occurrence
without notice; or
(m) at the option of the Company if with respect to any Portfolio in
the event that such 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 shared as the underling investment media of
the Contracts issued or to be issued by the Company.
9.2 Notice Requirement
(a) In the event that any termination of this Agreement is based upon
the provisions of Article VI, such prior written notice shall be given
in advance of the effective date of termination as required by such
provisions.
(b) In the event that any termination of this Agreement is based upon
the provisions of Sections 9.1(b)--(d) or 9.1(g)--(i), prompt written
notice of the election to terminate this Agreement for cause shall be
furnished by the party terminating the Agreement to the non-terminating
parties, with said termination to be effective upon receipt of such
notice by the non-terminating parties.
(c) In the event that any termination of this Agreement is based upon
the provisions of Sections 9.1(i) or 9.1(k), prior written notice of the
election to terminate this Agreement for cause shall be furnished by the
party terminating this Agreement to the non-terminating parties. Such
prior written notice shall be given by the party terminating this
Agreement to the non-terminating parties at least thirty (30) days
before the effective date of termination.
9.3 No Reason Required for Termination. It is understood and agreed that the
right to terminate this Agreement pursuant to Section 9.1 (a) may be exercised
for any reason or for no reason.
27
9.4 Effect of Termination
(a) Notwithstanding any termination pursuant to Section 9.1 of this
Agreement, the Fund may, at its option, or in the event of termination
of this Agreement by the Fund, the Adviser or the Distributor pursuant
to Section 9.1 (a) of this Agreement, the Company may require the Fund,
the Adviser and the Distributor to continue to make available additional
shares of the Fund for so long after the termination of this Agreement
as the Fund or the Company, if the Company so requires, desires pursuant
to the terms and conditions of this Agreement as provided in paragraph
(b) below for all Contracts in effect on the effective date of
termination of this Agreement (hereinafter referred to as "Existing
Contracts"). Specifically, without limitation, if the Fund so elects to
make available additional shares of the Fund, 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. The
parties agree that this Section 9.4 shall not apply to any terminations
under Article VI and the effect of such Article VI terminations shall be
governed by Article VI of this Agreement.
(b) In the event of a termination pursuant to Section 9.1 of this
Agreement, the Fund shall promptly notify the Company whether the Fund
will continue to make available shares of the Fund after such
termination, except that, with respect to a termination by the Fund, the
Adviser or the Distributor pursuant to Section 9.1 (a) of this
Agreement, the Company shall promptly notify the Fund whether it wishes
the Fund to continue to make available additional shares of the Fund. If
shares of the Fund continue to be made available after such termination,
the provisions of this Agreement shall remain in effect except for
Section 9.1(a) and thereafter the Fund or the Company may terminate the
Agreement, as so continued pursuant to this Section 9.4 upon written
notice to the other party, such notice to be for a period that is
reasonable under the circumstances.
28
(c) In the event of termination purusant to Section 9.1(l), or such
laws preclude the use of such shares as the underlying investment medium
for the Contracts issued or to be issued by the Company, and if through
no fault of the Company, the need for substitution of Fund shares for
the shares of another "registered investment company" arises out of this
event, the expenses of obtaining such an order shall be reimbursed by
the Fund. The Fund, the Adviser and the Distributor shall cooperate
fully with the Company in connection with such application.
9.5 Surviving Provisions. Each party's obligations under Section 2.12 and
Article VII will survive and will 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.
9.6. Redemption after Termination. The Company shall not redeem Fund shares
attributable to the Contracts (as opposed to Fund shares attributable to the
Company's assets held in the Account) except (i) as necessary to implement
Contract Owner initiated or approved transactions, or (ii) as required by state
and/or federal laws or regulations or judicial or other legal precedent of
general application (hereinafter referred to as a "Legally Required
Redemption") or (iii) as permitted by an order of the SEC pursuant to
Section 26(b) of the 1940 Act or (iv) in connection with the liquidation of a
Fund a Contract Holder's position may be exchanged into a money market fund in
accordance with SEC guidance. Upon request, the Company will promptly furnish
to the Fund and the Underwriter the opinion of counsel for the Company (which
counsel shall be reasonably satisfactory to the Fund and the Underwriter) to
the effect that any redemption pursuant to clause (ii) above is a Legally
Required Redemption. Furthermore, except in cases where permitted under the
terms of the Contracts, the Company shall not prevent Contract Owners from
allocating payments to a Portfolio that was otherwise available under the
Contracts without first giving the Fund or the Underwriter 90 days notice of
its intention to do so.
29
ARTICLE X.
NOTICES
Any notice shall be sufficiently given when sent by registered or certified
mail to the other party at the address of such party set forth below or at such
other address as such party may from time to time specify in writing to the
other party.
If to the Fund:
Xxxx Xxxxx Partners Variable Equity Trust
000 Xxxxx Xxxxxx - 00/xx/ Xxxxx
Xxx Xxxx, XX 00000
If to the Company:
Minnesota Life Insurance Company
000 Xxxxxx Xxxxxx Xxxxx
Xxxxx Xxxx, XX 00000-0000
Attn: General Counsel - Law
If to the Distributor:
Xxxx Xxxxx Investor Services, LLC
000 Xxxxx Xxxxxxxx Xxxxx - 0/xx/ Xxxxx
Xxxxxxxx, XX 00000
Attn: Business Implementation
If to the Adviser:
Xxxx Xxxxx Partners Fund Adviser, LLC
000 Xxxxx Xxxxxxxx Xxxxx - 0xx Xxxxx
Xxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxx
ARTICLE XI.
INFORMATION SHARING.
11.1 The Distributor and the Company, confirm their Agreement for the
sharing of transaction information relating to any and all of the fund families
that may be offered by the Distributorfrom time to time with respect the
implementation and compliance with SEC Rule 22c-2 under the 1940 Act.
30
(a) The Company agrees to provide to the Distributor and/or its
designee, upon written request, the taxpayer identification number ("TIN"), the
Individual/International Taxpayer Identification Number ("ITIN"), or other
government issued identifier ("GII"), if known, of any or all clients of the
Account. The Company also agrees to provide the number of shares, dollar value,
date, name or other identifier (including broker identification number) of any
investment professional(s) associated with the client(s) or Account (if known),
and transaction type (purchase, redemption, transfer or exchange) of every
purchase, redemption, transfer, or exchange of shares held through an account
maintained by the Company during the period covered by the request. Requests
must set forth a specific period, generally not to exceed 90 days from the date
of the request, for which transaction information is sought. The Fund and/or
its designee may request transaction information older than 90 days from the
date of the request as it deems necessary to investigate compliance with
policies established by the Fund for the purpose of eliminating or reducing any
dilution of the value of the outstanding shares issued by the Fund.
(b) The Company agrees to transmit the requested information that is on
its books and records to the Distributor and/or its designee promptly, but in
any event not later than five (5) business days, or as otherwise agreed to by
the parties, after receipt of a request. If the requested information is not on
the Company's books and records, the Company agrees to (i) provide or arrange
to provide to the Fund and/or its designee the requested information pertaining
to shareholders who hold accounts with an indirect intermediary; or (ii) if
directed by the Distributor, block further purchases of Shares from such
indirect intermediary. In such instance, the Company agrees to inform the
Distributor whether it plans to perform (i) or (ii). Responses required by this
paragraph must be communicated in writing and in a format mutually agreed upon
by the parties. To the extent practicable, the format for any transaction
information provided to the distributor should be consistent with the NSCC
Standardized Data Reporting Format. For purposes of this provision, an
"indirect intermediary" has the same meaning as in SEC Rule 22c-2 under the
1940 Act.
31
(c) The Distributor agrees not to use the information received for
marketing or any other similar purpose without the Company's prior written
consent.
(d) The Company agrees to execute written instructions from the
Distributor to restrict or prohibit further purchases (including shares
acquired by exchanges) of shares by a client that has been identified by the
Distributor as having engaged in transactions of the shares (directly or
indirectly through the intermediary's account) that violates policies
established by the Fund.
(e). Instructions must include the TIN, ITIN or GII if known, and the
specific restriction(s) to be executed. If the TIN, ITIN or GII is not known,
the instructions must include an equivalent identifying number of the client(s)
or account(s) or other agreed upon information to which the instruction relates.
(f). The Company agrees to execute instruction as soon as practicable,
but not later than five (5) business days, or as otherwise agreed to by the
parties, after receipt of the instructions by the intermediary.
(g) The Company must provide written confirmation to the Distributor
that instructions have been executed. The Company agrees to provide
confirmation as soon as reasonably practicable, but not later than ten
(10) business days after the instructions have been executed.
(h) The provisions of this Article 11 shall survive termination of this
Agreement for at least 60 days after the termination date.
32
ARTICLE XII.
MISCELLANEOUS
12.1 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.
12.2 This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
12.3 If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the Agreement
shall not be affected thereby.
12.4 Each party hereto shall cooperate with each other party and all
appropriate governmental authorities (including without limitation the SEC, the
FINRA and state insurance regulators) and shall permit such authorities
reasonable access to its books and records in connection with any investigation
or inquiry relating to this Agreement or the transactions contemplated hereby.
12.5 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.
12.6 Each party will keep confidential any information acquired as a result
of this Agreement regarding the business and affairs of the other parties to
this Agreement and their affiliates.
12.7 Subject to the requirements of legal process and regulatory authority,
each party hereto shall treat as confidential the names and address of owners
of the Contracts and all information reasonably identified as confidential in
writing by any other party hereto and, except as permitted by this Agreement in
order to carry out the specified purposes specified herein, shall not disclose,
disseminate or utilize such names and addresses and other confidential
information until such time as it may come into public domain without express
written consent of the affected party. In addition, each party shall adopt
policies and procedures that address administrative, technical and physical
safeguards for the protection of such customer records.
33
12.8 Each party will comply with all applicable laws and regulations aimed
at preventing, detecting, and reporting money laundering and suspicious
transactions. To the extent required by applicable regulation and generally
accepted industry practices, each party shall take all necessary and
appropriate steps to: (i) obtain, verify, and retain information with regard to
contract owner identification, and (ii) maintain records of all contract owner
transactions. The Company will (but only to the extent consistent with
applicable law) take all steps necessary and appropriate to provide the Fund
with any requested information about Contract owners and their accounts in the
event that the Fund shall request such information due to an inquiry or
investigation by any law enforcement, regulatory, or administrative authority.
To the extent permitted by applicable law and regulations, the Company will
notify the Fund of any concerns that the Company may have in connection with
any Contract owners in the context of relevant anti-money laundering laws or
regulations.
12.9 The Fund agrees to consult with the Company concerning whether any
Portfolio of the Fund qualifies to provide a foreign tax credit pursuant to
Section 853 of the Code.
12.10 The Fund, Distributor and Advisor will use reasonable best efforts to
prevent the Fund from engaging, directly or indirectly, in a transaction that,
as of the date the Fund enters into a binding contract to engage in such
transaction, is a "listed transaction" as defined in Treas. Regs. (S)
1.6011-4(b)(2) or successor provision (a "Listed Transaction"). If the Fund
Distributor or Advisor reasonably determines that the Fund has engaged in a
Listed Transaction, it will (i) provide the Company with prompt notice thereof
and (ii) with respect to any such transaction, the Fund will provide the
Company, upon the Company's request, (A) with all information relating to such
Listed Transaction which the Company would need in order to comply with its
disclosure obligations under the Code and applicable regulations and state
laws. In addition, the Fund will promptly notify the Company if the Fund must
file (or has filed) Form 8886 ("Reportable Transaction Disclosure Statement"),
or successor form.
34
ARTICLE XIII
TERMINATION OF PRIOR AGREEMENTS
13.1 This Agreement supersedes all prior agreements among the parties or
their predecessor entities with respect to the subject matter of this
agreement. The parties agree that all such prior agreements are hereby
terminated in their entirety.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed in its name and on its behalf by its duly authorized representative
and its seal to be hereunder affixed hereto as of the date specified below.
Company:
MINNESOTA LIFE INSURANCE COMPANY
By its authorized officer:
By: /s/ Xxxxxx Xxxxx
----------------------------------
Name: Xxxxxx Xxxxx
Title: Vice President and Actuary
Date: 2/16/2015
Fund:
XXXX XXXXX PARTNERS VARIABLE EQUITY TRUST
By its authorized officer:
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President & CEO
Date: 3/20/15
35
Adviser:
XXXX XXXXX PARTNERS FUND ADVISER, LLC
By its authorized officer:
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President & CEO
Date: 3/20/15
Distributor:
XXXX XXXXX INVESTOR SERVICES, LLC
By its authorized officer:
By: /s/ Xxxxxxx X. Matters
------------------------------
Name: Xxxxxxx X. Matters
Title: Director
Date: 3/19/15
36
SCHEDULE A
SEPARATE ACCOUNTS AND ASSOCIATED PRODCUTS
SEPARATE ACCOUNTS PRODUCTS
----------------- -------------------------------------
ALL SEPARATE ACCOUNTS UTILIZING THE ALL CONTRACTS FUNDED BY THE SEPARATE
FUND ACCOUNTS
37
SCHEDULE B
PORTFOLIOS AVAILABLE UNDER THE CONTRACTS
XXXX XXXXX PARTNERS VARIABLE EQUITY TRUST
ClearBridge Variable Series of Portfolios Class I & II
38
