PARTICIPATION AGREEMENT
BY AND AMONG
SUMMIT MUTUAL FUNDS, INC.,
AMERITAS INVESTMENT CORP.
PHOENIX LIFE AND ANNUITY COMPANY,
ON BEHALF OF ITSELF AND
ITS SEPARATE ACCOUNTS,
AND
PHOENIX EQUITY PLANNING CORPORATION
TABLE OF CONTENTS
Description
Section 1. Available Funds
1.1 Availability
1.2 Addition, Deletion or Modification of Funds
1.3 No Sales to the General Public
Section 2. Processing Transactions
2.1 Timely Pricing and Orders
2.2 Timely Payments
2.3 Applicable Price
2.4 Dividends and Distributions
2.5 Book Entry
Section 3. Costs and Expenses
3.1 General
3.2 Parties To Cooperate
Section 4. Legal Compliance
4.1 Tax Laws
4.2 Insurance and Certain Other Laws
4.3 Securities Laws
4.4 Notice of Certain Proceedings and Other Circumstances
4.5 LIFE COMPANY To Provide Documents; Information About SMFI
4.6 SMFI To Provide Documents; Information About LIFE COMPANY
Section 5. Mixed and Shared Funding
5.1 General
5.2 Disinterested Directors
5.3 Monitoring for Material Irreconcilable Conflicts
5.4 Conflict Remedies
5.5 Notice to LIFE COMPANY
5.6 Information Requested by Board of Directors
5.7 Compliance with SEC Rules
5.8 Other Requirements
Section 6. Termination
6.1 Events of Termination
6.2 Notice Requirement for Termination
6.3 Funds To Remain Available
Description
6.4
Survival of Warranties and Indemnifications
6.5 Continuance of Agreement for Certain Purposes
Section 7. Parties To Cooperate Respecting Termination
Section 8. Assignment.......................................
Section 9. Notices
Section 10. Voting Procedures
Section 11. Foreign Tax Credits
Section 12. Indemnification
12.1 Of SMFI and AIC by LIFE COMPANY and UNDERWRITER
12.2 Of LIFE COMPANY and UNDERWRITER by SMFI and AIC
12.3 Effect of Notice
12.4 Successors
Section 13. Applicable Law
Section 14. Execution in Counterparts
Section 15. Severability
Section 16. Rights Cumulative
Section 17. Headings
Section 18. Confidentiality
Section 19. Trademarks and Fund Names
Section 20. Parties to Cooperate
Section 21. Excessive Trading
PARTICIPATION AGREEMENT
THIS AGREEMENT, made and entered into as of the 1st day of February , 2008
("Agreement"), by and among Summit Mutual Funds, Inc., a Maryland corporation
("SMFI"), Ameritas Investment Corp., a Nebraska Corporation ("AIC"), Phoenix
Life and Annuity Company, a Connecticut life insurance company ("LIFE
COMPANY"), on behalf of itself and each of its segregated asset accounts listed
in Schedule A hereto, as the parties hereto may amend from time to time (each,
an "Account," and collectively, the "Accounts"); and Phoenix Equity Planning
Corporation, an affiliate of LIFE COMPANY and the principal underwriter of the
Contracts ("UNDERWRITER") (collectively, the "Parties").
WITNESSETH THAT:
WHEREAS, SMFI is registered with the Securities and Exchange Commission
("SEC") as an open-end management investment company under the Investment
Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, SMFI currently consists of seven separate series ("Series") within
its Pinnacle series of funds, shares ("Shares") of each of which are registered
under the Securities Act of 1933, as amended (the "1933 Act") and are currently
sold to one or more separate accounts of life insurance companies to fund
benefits under variable annuity contracts and variable life insurance
contracts; and
WHEREAS, SMFI will make Shares of each Series listed on Schedule A hereto as
the Parties hereto may amend from time to time (each a "Fund"; references
herein to "SMFI" includes reference to each Fund, to the extent the context
requires) available for purchase by the Accounts; and
WHEREAS, LIFE COMPANY will be the issuer of certain variable annuity
contracts and/or variable life insurance contracts ("Contracts") as set forth
on Schedule A hereto, as the Parties hereto may amend from time to time, which
Contracts (hereinafter collectively, the "Contracts"), if required by
applicable law, will be registered under the 1933 Act; and
WHEREAS, LIFE COMPANY will fund the Contracts through the Accounts, each of
which may be divided into two or more subaccounts ("Subaccounts"; references
herein to an "Account" includes reference to each Subaccount thereof to the
extent the context requires); and
WHEREAS, Each of the Accounts is registered as a unit investment trust
investment company under the 1940 Act (or exempt therefrom), and the security
interests deemed to be issued by the Accounts under the Contracts will be
registered as securities under the 1933 Act (or exempt therefrom); and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, LIFE COMPANY intends to purchase Shares in one or more of the
Funds on behalf of the Accounts to fund the Contracts; and
WHEREAS, UNDERWRITER is a broker-dealer registered with the SEC under the
Securities Exchange Act of 1934 ("1934 Act") and a member in good standing of
the Financial Industry Regulatory Authority ("FINRA");
WHEREAS, AIC is a broker-dealer registered with the SEC under the 1934 Act
and a member in good standing of FINRA;
NOW, THEREFORE, in consideration of the mutual benefits and promises
contained herein, the Parties hereto agree as follows:
Section 1. Available Funds
1.1 Availability.
SMFI will make Shares of each Fund available to LIFE COMPANY for purchase
and redemption at net asset value and with no sales charges, subject to the
terms and conditions of this Agreement. Shares of a Fund may be subject to
distribution expenses under Rule 12b-1 under the 1940 Act. The Board of
Directors of SMFI may refuse to sell Shares of any Fund to any person, or
suspend or terminate the offering of Shares of any Fund if such action is
required by law or by regulatory authorities having jurisdiction or if, in the
sole discretion of the Directors acting in good faith and in light of their
fiduciary duties under federal and any applicable state laws, such action is
deemed in the best interests of the shareholders of such Fund.
1.2 Addition, Deletion or Modification of Funds.
The Parties hereto may agree, from time to time, to add other Funds to
provide additional funding media for the Contracts, or to delete, combine, or
modify existing Funds, by amending Schedule A hereto. Upon such amendment to
Schedule A, any applicable reference to a Fund, SMFI, or its Shares herein
shall include a reference to any such additional Fund. Schedule A, as amended
from time to time, is incorporated herein by reference and is a part hereof.
1.3 No Sales to the General Public.
SMFI represents and warrants that no Shares of any Fund have been or will be
sold to the general public, it being understood by the Parties that SMFI may
sell shares of any Fund to any insurance companies and their separate accounts
and to qualified persons or plans ("Qualified Persons") that qualify and are
eligible to invest in that Fund in accordance with applicable provisions of
Section 817(h) of the Code and the regulations thereunder.
Section 2 Processing Transactions
2.1 Timely Pricing and Orders.
(a) SMFI or its designated agent will use its best efforts to provide LIFE
COMPANY with the net asset value per Share for each Fund by 6:30 p.m. Eastern
Standard Time on each Business Day. As used herein, "Business Day" shall mean
any day on which (i) the New York Stock Exchange is open for regular trading
(ii) SMFI calculates the Fund's net asset value, and (iii) LIFE COMPANY is open
for business.
(b) LIFE COMPANY will use the data provided by SMFI each Business Day
pursuant to paragraph (a) immediately above to calculate Account unit values
and to process transactions that receive that same Business Day's Account unit
values. LIFE COMPANY will perform such Account processing the same Business
Day, and will place corresponding orders to purchase or redeem Shares with SMFI
by 9:30 a.m. Eastern Standard Time the following Business Day; provided,
however, that SMFI shall provide additional time to LIFE COMPANY in the event
that SMFI is unable to meet the 6:30 p.m. time stated in paragraph
(a) immediately above. Such additional time shall be equal to the additional
time that SMFI takes to make the net asset values available to LIFE COMPANY.
(c) With respect to payment of the purchase price by LIFE COMPANY and of
redemption proceeds by SMFI, LIFE COMPANY and SMFI shall net purchase and
redemption orders with respect to each Fund and shall transmit one net payment
per Fund in accordance with Section 2.2, below.
(d) If SMFI provides materially incorrect Share net asset value information
(as determined under SEC guidelines), LIFE COMPANY shall be entitled to an
adjustment to the number of Shares purchased or redeemed to reflect the correct
net asset value per Share, and any reasonable out-of-pocket expenses incurred
by the LIFE COMPANY in adjusting the Share net asset value. Any material error
in the calculation or reporting of net asset value per Share, dividend or
capital gain information shall be reported promptly upon discovery to LIFE
COMPANY.
2.2 Timely Payments.
LIFE COMPANY will wire payment for net purchases to a custodial account
designated by SMFI by 2:00 p.m. Eastern Standard Time on the same day as the
order for Shares is placed, to the extent practicable. SMFI will wire payment
for net redemptions to an account designated by LIFE COMPANY by 2:00 p.m.
Eastern Standard Time on the same day as the Order is placed, to the extent
practicable, but in any event within five (5) calendar days after the date the
order is placed in order to enable LIFE COMPANY to pay redemption proceeds
within the time specified in Section 22(e) of the 1940 Act or such shorter
period of time as may be required by law.
2.3 Applicable Price.
(a) Share purchase payments and redemption orders that result from purchase
payments, premium payments, surrenders and other transactions under Contracts
(collectively, "Contract transactions") and that LIFE COMPANY receives prior to
the close of regular trading on the New York Stock Exchange on a Business Day
will be executed at the net asset values of the appropriate Funds next computed
after receipt by SMFI or its designated agent of the orders. For purposes of
this Section 2.3(a), LIFE COMPANY shall be the designated agent of SMFI for
receipt of orders relating to Contract transactions on each Business Day and
receipt by such designated agent shall constitute receipt by SMFI; provided
that SMFI receives notice of such orders by 9:30 a.m. Eastern Standard Time on
the next following Business Day or such later time as computed in accordance
with Section 2.1 (b) hereof.
(b) All other Share purchases and redemptions by LIFE COMPANY will be
effected at the net asset values of the appropriate Funds next computed after
receipt by SMFI or its designated agent of the order therefor, and such orders
will be irrevocable.
2.4 Dividends and Distributions.
SMFI will furnish notice by wire or telephone (followed by written
confirmation) on or prior to the payment date to LIFE COMPANY of any income
dividends or capital gain distributions payable on the Shares of any Fund. LIFE
COMPANY hereby elects to reinvest all dividends and capital gains distributions
in additional Shares of the corresponding Fund at the ex-dividend date net
asset values until LIFE COMPANY otherwise notifies SMFI in writing, it being
agreed by the Parties that the ex-dividend date and the payment date with
respect to any dividend or distribution will be the same Business Day. LIFE
COMPANY reserves the right to revoke this election and to receive all such
income dividends and capital gain distributions in cash.
2.5 Book Entry.
Issuance and transfer of SMFI Shares will be by book entry only. Stock
certificates will not be issued to LIFE COMPANY. Shares ordered from SMFI will
be recorded in an appropriate title for LIFE COMPANY, on behalf of its Account.
Section 3. Costs and Expenses
3.1 General.
Except as otherwise specifically provided in Schedule C, attached hereto and
made a part hereof, each Party will bear all expenses incident to its
performance under this Agreement.
3.2 Parties To Cooperate.
Each Party agrees to cooperate with the others, as applicable, in arranging
to print, mail and/or deliver, in a timely manner, combined or coordinated
prospectuses or other materials of SMFI and the Accounts.
Section 4. Legal Compliance
4.1 Tax Laws.
(a) SMFI represents and warrants that each Fund is currently qualified as a
regulated investment company ("RIC") under Subchapter M of the Internal Revenue
Code of 1986, as amended (the "Code"), and represents that it will use its best
efforts to qualify and to maintain qualification of each Fund as a RIC. SMFI
will notify LIFE COMPANY immediately upon having a reasonable basis for
believing that a Fund has ceased to so qualify or that it might not so qualify
in the future.
(b) SMFI represents that it will use its best efforts to comply and to
maintain each Fund's compliance with the diversification requirements set forth
in Section 817(h) of the Code and Section 1.817-5(b) of the regulations under
the Code. SMFI will notify LIFE COMPANY immediately upon having a reasonable
basis for believing that a Fund has ceased to so comply or that a Fund might
not so comply in the future. In the event of a breach of this Section 4.1(b) by
SMFI, it will use its best efforts to adequately diversify the Fund so as to
achieve compliance within the grace period afforded by Section 1.817-5 of the
regulations under the Code.
(c) INSURER agrees that if the Internal Revenue Service ("IRS") asserts in
writing in connection with any governmental audit or review of INSURER or, to
INSURER's knowledge, of any Participant, that any Fund has failed to comply
with the diversification requirements of Section 817(h) of the Code or INSURER
otherwise becomes aware of any facts that could give rise to any claim against
SMFI or its affiliates as a result of such a failure or alleged failure INSURER
will promptly notify SMFI of such assertion or potential claim (subject to the
Confidentiality provisions of Section 18 as to any Participant). Each party
agrees to act in good faith to minimize any liability to the other party that
may arise as a result of such failure or alleged failure to the extent
practicable and except where a party's respective interests are adverse to or
in conflict with the other party's interests.
(d) LIFE COMPANY represents and warrants that the Contracts currently are
and will be treated as annuity contracts or life insurance contracts under
applicable provisions of the Code and that it will use its best efforts to
maintain such treatment; LIFE COMPANY will notify SMFI immediately upon having
a reasonable basis for believing that any of the Contracts have ceased to be so
treated or that they might not be so treated in the future.
(e) LIFE COMPANY represents and warrants that each Account is a "segregated
asset account" and that interests in each Account are offered exclusively
through the purchase of or transfer into a "variable contract," within the
meaning of such terms under Section 817 of the Code and the regulations
thereunder. LIFE COMPANY will use its best efforts to continue to meet such
definitional requirements, and it will notify SMFI immediately upon having a
reasonable basis for believing that such requirements have ceased to be met or
that they might not be met in the future.
4.2 Insurance and Certain Other Laws.
(a) SMFI will use its best efforts to comply with any applicable state
insurance laws or regulations, to the extent specifically requested in writing
by LIFE COMPANY, including, the furnishing of information not otherwise
available to LIFE COMPANY which is required by state insurance law to enable
LIFE COMPANY to obtain the authority needed to issue the Contracts in any
applicable state.
(b) LIFE COMPANY represents and warrants that (i) it is an insurance company
duly organized, validly existing and in good standing under the laws of the
State of Connecticut and has full corporate power, authority and legal right to
execute, deliver and perform its duties and comply with its obligations under
this Agreement, (ii) it has legally and validly established and maintains each
Account as a segregated asset account under Connecticut Insurance Law and the
regulations thereunder, and (iii) the Contracts comply in all material respects
with all other applicable federal and state laws and regulations.
(c) SMFI represents and warrants that it is a corporation duly organized,
validly existing, and in good standing under the laws of the State of Maryland
and has full power, authority, and legal right to execute, deliver, and perform
its duties and comply with its obligations under this Agreement.
(d) Each party represents and warrants that it will comply with all
applicable anti-money laundering laws, regulations, rules and government
guidance, including the reporting, recordkeeping and compliance requirement of
the Bank Secrecy Act and the USA PATRIOT Act. Each party agrees to investigate
any potentially suspicious activity and to take appropriate actions.
4.3 Securities Laws.
(a) LIFE COMPANY represents and warrants that (i) interests in each Account
pursuant to the Contracts will be registered under the 1933 Act to the extent
required by the 1933 Act, (ii) the Contracts will be duly authorized for
issuance and sold in compliance with all applicable federal and state laws,
including, without limitation, the 1933 Act, the 1934 Act, the 1940 Act and
Connecticut law, (iii) each Account is and will remain registered under the
1940 Act, to the extent required by the 1940 Act, (iv) each Account does and
will comply in all material respects with the requirements of the 1940 Act and
the rules thereunder, to the extent required, (v) each Account's 1933 Act
registration statement relating to the Contracts, together with any amendments
thereto, will at all times comply in all material respects with the
requirements of the 1933 Act and the rules thereunder, (vi) LIFE COMPANY will
amend the registration statement for its Contracts under the 1933 Act and for
its Accounts under the 1940 Act from time to time as required in order to
effect the continuous offering of its Contracts or as may otherwise be required
by applicable law, and (vii) each Contract's prospectus, statement of
additional information, private placement memoranda and other documents
pursuant to which Contracts are offered, and any amendments or supplements
thereto (collectively, the "Account Prospectus"), will at all times comply in
all material respects with all applicable requirements of the 1933 Act and the
rules thereunder.
(b) SMFI represents and warrants that (i) Shares sold pursuant to this
Agreement will be registered under the 1933 Act to the extent required by the
1933 Act and duly authorized for issuance and sold in compliance with Maryland
law, (ii) SMFI is and will remain registered under the 1940 Act to the extent
required by the 1940 Act, (iii) SMFI will amend the registration statement for
its Shares under the 1933 Act and itself under the 1940 Act from time to time
as required in order to effect the continuous offering of its Shares, (iv) SMFI
does and will comply in all material respects with the requirements of the 1940
Act and the rules thereunder, (v) SMFI's 1933 Act registration statement,
together with any amendments thereto, will at all times comply in all material
respects with the requirements of the 1933 Act and rules thereunder, and
(vi) SMFI's prospectus, statement of additional information and any amendments
or supplements thereto (collectively, the "SMFI Prospectus") will at all times
comply in all material respects with all applicable requirements of the 1933
Act and the rules thereunder.
(c) SMFI will at its expense register and qualify its Shares for sale in
accordance with the laws of any state or other jurisdiction if and to the
extent reasonably deemed advisable by SMFI.
(d) To the extent that SMFI finances distribution expenses pursuant to Rule
12b-1 under the 1940 Act, SMFI undertakes to have its Board of Directors, a
majority of whom are not "interested" persons of the Fund, formulate and
approve any plan under Rule 12b-1 to finance distribution expenses.
(e) SMFI represents and warrants that all of its directors, officers,
employees, investment advisers, and other individuals/entities having access to
the funds and/or securities of the Fund are and continue to be at all times
covered by a blanket fidelity bond or similar coverage for the benefit of the
Fund in an amount not less than the minimal coverage as required currently by
Rule 17g-(1) of the 1940 Act or related provisions as may be promulgated from
time to time. The aforesaid bond includes coverage for larceny and embezzlement
and is issued by a reputable bonding company.
4.4 Notice of Certain Proceedings and Other Circumstances.
(a) SMFI will immediately notify LIFE COMPANY of (i) the issuance by any
court or regulatory body of any stop order, cease and desist order, or other
similar order with respect to SMFIs registration statement under the 1933 Act
or SMFI Prospectus, (ii) any request by the SEC for any amendment to such
registration statement or SMFI Prospectus that may affect the offering of
Shares of SMFI, (iii) the initiation of any proceedings for that purpose or for
any other purpose relating to the registration or offering of SMFI's Shares, or
(iv) any other action or circumstances that may prevent the lawful offer or
sale of Shares of any Fund in any state or jurisdiction, including, without
limitation, any circumstances in which (a) such Shares are not registered and,
in all material respects, issued and sold in accordance with applicable state
and federal law, or (b) such law precludes the use of such Shares as an
underlying investment medium of the Contracts issued or to be issued by LIFE
COMPANY. SMFI will make every reasonable effort to prevent the issuance, with
respect to any Fund, of any such stop order, cease and desist order or similar
order and, if any such order is issued, to obtain the lifting thereof at the
earliest possible time.
(b) LIFE COMPANY will immediately notify SMFI of (i) the issuance by any
court or regulatory body of any stop order, cease and desist order, or other
similar order with respect to each Account's registration statement under the
1933 Act relating to the Contracts or each Account Prospectus, (ii) any request
by the SEC for any amendment to such registration statement or Account
Prospectus that may affect the offering of Shares of SMFI, (iii) the initiation
of any proceedings for that purpose or for any other purpose relating to the
registration or offering of each Account's interests pursuant to the Contracts,
or (iv) any other action or circumstances that may prevent the lawful offer or
sale of said interests in any state or jurisdiction, including, without
limitation, any circumstances in which said interests are not registered and,
in all material respects, issued and sold in accordance with applicable state
and federal law. LIFE COMPANY will make every reasonable effort to prevent the
issuance of any such stop order, cease and desist order or similar order and,
if any such order is issued, to obtain the lifting thereof at the earliest
possible time.
4.5 LIFE COMPANY To Provide Documents; Information About SMFI.
(a) LIFE COMPANY will provide to SMFI or its designated agent at least one
(1) complete copy of all SEC registration statements, Contract Prospectuses,
reports, any preliminary and final voting instruction solicitation material,
and all amendments to any of the above, that relate to each Account or the
Contracts, contemporaneously with the filing of such document with the SEC or
other regulatory authorities.
(b) LIFE COMPANY will provide to SMFI or its designated agent at least one
(1) complete copy of each piece of sales literature or other promotional
material in which SMFI or any of its affiliates is named, at least five
(5) Business Days prior to its use or such shorter period as the Parties hereto
may, from time to time, agree upon. No such material shall be used if SMFI or
its designated agent objects to such use within five (5) Business Days after
receipt of such material or such shorter period as the Parties hereto may, from
time to time, agree upon. SMFI hereby designates Summit Investment Partners,
Inc. as the entity to receive such sales literature, until such time as SMFI
appoints another designated agent by giving notice to LIFE COMPANY in the
manner required by Section 9 hereof.
(c) Neither LIFE COMPANY nor any of its affiliates, will give any
information or make any representations or statements on behalf of or
concerning SMFI or its affiliates in connection with the sale of the Contracts
other than (i) the information or representations contained in the registration
statement, including the SMFI Prospectus contained therein, relating to Shares,
as such registration statement and SMFI Prospectus may be amended from time to
time; or (ii) in reports or proxy materials for SMFI; or (iii) in published
reports for SMFI that are in the public domain and approved by SMFI for
distribution; or (iv) in sales literature or other promotional material
approved by SMFI, except with the express written permission of SMFI.
(d) LIFE COMPANY shall adopt and implement procedures reasonably designed to
ensure that information concerning SMFI and its affiliates that is intended for
use only by brokers or agents selling the Contracts (i.e., information that is
not intended for distribution to Contractholders) ("broker only materials") is
so used, and neither SMFI nor any of its affiliates shall be liable for any
losses, damages or expenses relating to the improper use of such broker only
materials.
(e) For the purposes of this Section 4.5, the phrase "sales literature or
other promotional material" includes, but is not limited to, advertisements
(such as material published, or designed for use in, a newspaper, magazine, or
other periodical, radio, television, telephone or tape recording, videotape
display, signs or billboards, motion pictures, or other public media, (e.g.,
on-line networks such as the Internet or other electronic messages), sales
literature (i.e., any written communication distributed or made generally
available to customers or the public, including brochures, circulars, research
reports, market letters, form letters., seminar texts, reprints or excerpts of
any other advertisement, sales literature, or published article), educational
or training materials or other communications distributed or made generally
available to some or all agents or employees, registration statements,
prospectuses, statements of additional information, shareholder reports, and
proxy materials and any other material constituting sales literature or
advertising under the FINRA rules, the 1933 Act or the 0000 Xxx.
4.6 SMFI To Provide Documents; Information About LIFE COMPANY.
(a) SMFI will provide to LIFE COMPANY at least one (1) complete copy of all
SEC registration statements, SMFI Prospectuses, reports, any preliminary and
final proxy material, applications for exemptions, requests for no-action
letters, and all amendments to any of the above, that relate to SMFI or the
Shares of a Fund, contemporaneously with the filing of such document with the
SEC or other regulatory authorities.
(b) SMFI will provide to LIFE COMPANY camera ready copy of all SMFI
prospectuses and printed copies, in an amount specified by LIFE COMPANY, of
SMFI statements of additional information, proxy materials, periodic reports to
shareholders and other materials required by law to be sent to Contractholders
who have allocated any Contract value to a Fund. SMFI will provide such copies
to LIFE COMPANY in a timely manner so as to enable LIFE COMPANY, as the case
may be, to print and distribute such materials within the time required by law
to be furnished to Contractholders. The form of the prospectus and statement of
additional information provided by SMFI to the LIFE COMPANY shall be the final
form of prospectus and statement of additional information as filed with the
Securities and Exchange Commission. The prospectus shall include only those
Funds identified in Schedule A.
(c) SMFI will provide to LIFE COMPANY or its designated agent at least one
(1) complete copy of each piece of sales literature or other promotional
material in which LIFE COMPANY, or any of its respective affiliates is named,
or that refers to the Contracts, at least five (5) Business Days prior to its
use or such shorter period as the Parties hereto may, from time to time, agree
upon. No such material shall be used if LIFE COMPANY or its designated agent
objects to such use within five (5) Business Days after receipt of such
material or such shorter period as the Parties hereto may, from time to time,
agree upon. LIFE COMPANY shall receive all such sales literature until such
time as it appoints a designated agent by giving notice to SMFI in the manner
required by Section 9 hereof.
(d) Neither SMFI nor any of its affiliates will give any information or make
any representations or statements on behalf of or concerning LIFE COMPANY, each
Account, or the Contracts other than (i) the information or representations
contained in the registration statement, including each Account Prospectus
contained therein, relating to the Contracts, as such registration statement
and Account Prospectus may be amended from time to time; or (ii) in published
reports for the Account or the Contracts that are in the public domain and
approved by LIFE COMPANY for distribution; or (iii) in sales literature or
other promotional material approved by LIFE COMPANY or its affiliates, except
with the express written permission of LIFE COMPANY.
(e) For purposes of this Section 4.6, the phrase "sales literature or other
promotional material" includes, but is not limited to, advertisements (such as
material published, or designed for use in, a newspaper, magazine, or other
periodical, radio, television, telephone or tape recording, videotape display,
signs or billboards, motion pictures, or other public media, (e.g., on-line
networks such as the Internet or other electronic messages), sales literature
(i.e., any written communication distributed or made generally available to
customers or the public, including brochures, circulars, research reports,
market letters, form letters, seminar texts, reprints or excerpts of any other
advertisement, sales literature, or published article), educational or training
materials or other communications distributed or made generally available to
some or all agents or employees, registration statements, prospectuses,
statements of additional information, shareholder reports, and proxy materials
and any other material constituting sales literature or advertising under the
FINRA rules, the 1933 Act or the 1940 Act.
Section 5. Mixed and Shared Funding
5.1 General.
SMFI has received an order from the SEC exempting it from certain provisions
of the 1940 Act and rules thereunder so that SMFI may be available for
investment by certain other entities, including, without limitation, separate
accounts funding variable annuity contracts or variable life insurance
contracts, separate accounts of insurance companies unaffiliated with LIFE
COMPANY, and trustees of qualified pension and retirement plans (collectively,
"Mixed and Shared Funding"). The Parties recognize that the SEC has imposed
terms and conditions for such orders that are substantially identical to many
of the provisions of this Section 5. Sections 5.2 through 5.8 below shall apply
pursuant to such an exemptive order granted to SMFI. SMFI hereby notifies LIFE
COMPANY that it may be appropriate to include in the prospectus pursuant to
which a Contract is offered disclosure regarding the potential risks of Mixed
and Shared Funding.
5.2 Disinterested Directors.
SMFI agrees that its Board of Directors shall at all times consist of
directors a majority of whom (the "Disinterested Directors") are not interested
persons of SMFI within the meaning of Section 2(a)(19) of the 1940 Act and the
rules thereunder and as modified by any applicable orders of the SEC, except
that if this condition is not met by reason of the death, disqualification, or
bona fide resignation of any director, then the operation of this condition
shall be suspended (a) for a period of forty-five (45) days if the vacancy or
vacancies may be filled by the Board;(b) for a period of sixty (60) days if a
vote of shareholders is required to fill the vacancy or vacancies; or (c) for
such longer period as the SEC may prescribe by order upon application.
5.3 Monitoring for Material Irreconcilable Conflicts.
SMFI agrees that its Board of Directors will monitor for the existence of
any material irreconcilable conflict between the interests of the
Contractholders in all separate accounts of life insurance companies utilizing
SMFI ("Participating Insurance Companies"), including each Account, and
participants in all qualified retirement and pension plans investing in SMFI
("Participating Plans"). LIFE COMPANY agrees to inform the Board of Directors
of SMFI of the existence of any such material irreconcilable conflict of which
it is aware. The concept of a "material irreconcilable conflict" is not defined
by the 1940 Act or the rules thereunder, but the Parties recognize that such a
conflict may arise for a variety of reasons, including, without limitation:
(a) an action by any state insurance or other regulatory authority;
(b) a change in applicable federal or state insurance, tax or securities
laws or regulations, or a public ruling, private letter ruling, no-action or
interpretative letter, or any similar action by insurance, tax or securities
regulatory authorities;
(c) an administrative or judicial decision in any relevant proceeding;
(d) the manner in which the investments of any Fund are being managed;
(e) a difference in voting instructions given by variable annuity contract
and variable life insurance contract Contractholders or by Contractholders of
different Participating Insurance Companies;
(f) a decision by a Participating Insurance Company to disregard the voting
instructions of Contractholders; or
(g) a decision by a Participating Plan to disregard the voting instructions
of Plan participants.
Consistent with the SEC's requirements in connection with exemptive orders
of the type referred to in Section 5.1 hereof, LIFE COMPANY will assist the
Board of Directors in carrying out its responsibilities by providing the Board
of Directors with all information reasonably necessary for the Board of
Directors to consider any issue raised, including information as to a decision
by LIFE COMPANY to disregard voting instructions of Contractholders. LIFE
COMPANY's responsibilities in connection with the foregoing shall be carried
out with a view only to the interests of Contractholders.
5.4 Conflict Remedies.
(a) It is agreed that if it is determined by a majority of the members of
the Board of Directors or a majority of the Disinterested Directors that a
material irreconcilable conflict exists, LIFE COMPANY will, if it is a
Participating Insurance Company for which a material irreconcilable conflict is
relevant, at its own 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 material irreconcilable conflict,
which steps may include, but are not limited to:
(i)withdrawing the assets allocable to some or all of the Accounts from
SMFI or any Fund and reinvesting such assets in a different investment
medium, including another Fund of SMFI, or submitting the question
whether such segregation should be implemented to a vote of all affected
Contractholders and, as appropriate, segregating the assets of any
particular group (e.g., annuity Contractholders, life insurance
Contractholders) that votes in favor of such segregation, or offering to
the affected Contractholders the option of making such a change; and
(ii)establishing a new registered investment company of the type defined as
a "management company" in Section 4(3) of the 1940 Act or a new separate
account that is operated as a management company.
(b) If the material irreconcilable conflict arises because of LIFE COMPANY's
decision to disregard Contractholders voting instructions and that decision
represents a minority position or would preclude a majority vote, LIFE COMPANY
may be required, at SMFI's election, to withdraw each Account's investment in
SMFI or any Fund. No charge or penalty will
be imposed as a result of such withdrawal. Any such withdrawal must take place
within six (6) months after SMFI gives notice to LIFE COMPANY that this
provision is being implemented, and until such withdrawal SMFI shall continue
to accept and implement orders by LIFE COMPANY for the purchase and redemption
of Shares of SMFI.
(c) If a material irreconcilable conflict arises because a particular state
insurance regulator's decision applicable to LIFE COMPANY conflicts with the
majority of other state regulators, then LIFE COMPANY will withdraw each
Account's investment in SMFI within six (6) months after SMFI's Board of
Directors informs LIFE COMPANY that it has determined that such decision has
created a material irreconcilable conflict, and until such withdrawal SMFI
shall continue to accept and implement orders by LIFE COMPANY for the purchase
and redemption of Shares of SMFI. No charge or penalty will be imposed as a
result of such withdrawal.
(d) LIFE COMPANY agrees that any remedial action taken by it in resolving
any material irreconcilable conflict will be carried out at its expense and
with a view only to the interests of Contractholders.
(e) For purposes hereof, a majority of the Disinterested Directors will
determine whether or not any proposed action adequately remedies any material
irreconcilable conflict. In no event, however, will SMFI or any of its
affiliates be required to establish a new funding medium for any Contracts.
LIFE COMPANY will not be required by the terms hereof to establish a new
funding medium for any Contracts if an offer to do so has been declined by vote
of a majority of Contractholders materially adversely affected by the material
irreconcilable conflict.
5.5 Notice to LIFE COMPANY.
SMFI will promptly make known in writing to LIFE COMPANY the Board of
Directors' determination of the existence of a material irreconcilable
conflict, a description of the facts that give rise to such conflict and the
implications of such conflict.
5.6 Information Requested by Board of Directors.
LIFE COMPANY and SMFI (or its investment adviser) will at least annually
submit to the Board of Directors of SMFI such reports, materials or data as the
Board of Directors may reasonably request so that the Board of Directors may
fully carry out the obligations imposed upon it by the provisions hereof or any
exemptive order granted by the SEC to permit Mixed and Shared Funding, and said
reports, materials and data will be submitted at any reasonable time deemed
appropriate by the Board of Directors. All reports received by the Board of
Directors of potential or existing conflicts, and all Board of Directors
actions with regard to determining the existence of a conflict, notifying
Participating Insurance Companies and Participating Plans of a conflict, and
determining whether any proposed action adequately remedies a conflict, will be
properly recorded in the minutes of the Board of Directors or other appropriate
records, and such minutes or other records will be made available to the SEC
upon request.
5.7 Compliance with SEC Rules.
If, at any time during which SMFI is serving as an investment medium for
variable life insurance Contracts, 1940 Act Rules 6e-3(T) or, if applicable,
6e-2 are amended or Rule 6e-3 is adopted to provide exemptive relief with
respect to Mixed and Shared Funding. SMFI agrees that it will comply with the
terms and conditions thereof and that the terms of this Section 5 shall be
deemed modified if and only to the extent required in order also to comply with
the terms and conditions of such exemptive relief that is afforded by any of
said rules that are applicable.
5.8 Other Requirements.
SMFI will require that each Participating Insurance Company and
Participating Plan enter into an agreement with SMFI that contains in substance
the same provisions as are set forth in Sections 4.1 (b), 4.1(d), 4.3(a),
4.4(b), 4.5(a), 5, and 10 of this Agreement.
Section 6. Termination
6.1 Events of Termination.
Subject to Section 6.4 below, this Agreement will terminate as to a Fund:
(a) at the option of any party, with or without cause with respect to the
Fund, upon ninety (90) days advance written notice to the other parties, or, if
later, upon receipt of any required exemptive relief from the SEC, unless
otherwise agreed to in writing by the parties; or
(b) at the option of SMFI upon institution of formal proceedings against
LIFE COMPANY or its affiliates by the FINRA, the SEC, any state insurance
regulator or any other regulatory body regarding LIFE COMPANY's obligations
under this Agreement or related to the sale of the Contracts, the operation of
each Account, or the purchase of Shares, if, in each case, SMFI reasonably
determines that such proceedings, or the facts on which such proceedings would
be based, have a material likelihood of imposing material adverse consequences
on the Fund with respect to which the Agreement is to be terminated; or
(c) at the option of LIFE COMPANY upon institution of formal proceedings
against SMFI, its principal underwriter, or its investment adviser by the
FINRA, the SEC, or any state insurance regulator or any other regulatory body
regarding SMFI's obligations under this Agreement or related to the operation
or management of SMFI or the purchase of SMFI Shares, if, in each case, LIFE
COMPANY reasonably determines that such proceedings, or the facts on which such
proceedings would be based, have a material likelihood of imposing material
adverse consequences on LIFE COMPANY, or the Subaccount corresponding to the
Fund with respect to which the Agreement is to be terminated; or
(d) at the option of any Party in the event that (i) the Fund's Shares are
not registered, where required, and, in all material respects, issued and sold
in accordance with any applicable federal or state law, or (ii) such law
precludes the use of such Shares as an underlying investment medium of the
Contracts issued or to be issued by LIFE COMPANY; or
(e) upon termination of an Account's investment in the Fund pursuant to
Section 5 hereof; or
(f) at the option of LIFE COMPANY if the Fund ceases to qualify as a RIC
under Subchapter M of the Code or under successor or similar provisions, or if
LIFE COMPANY reasonably believes that the Fund may fail to so qualify; or
(g) at the option of LIFE COMPANY if the Fund fails to comply with
Section 817(h) of the Code or with successor or similar provisions, as
applicable, or if LIFE COMPANY reasonably believes that the Fund may fail to so
comply; or
(h) at the option of SMFI if the Contracts issued by LIFE COMPANY cease to
qualify as annuity contracts or life insurance contracts under the Code (other
than by reason of the Fund's noncompliance with Section 817(h) or Subchapter M
of the Code) or if interests in an Account under the Contracts are not
registered, where required, and, in all material respects, are not issued or
sold in accordance with any applicable federal or state law; or
(i) upon another Party's material breach of any provision of this Agreement.
6.2 Notice Requirement for Termination.
No termination of this Agreement will be effective unless and until the
Party terminating this Agreement gives prior written notice to the other Party
to this Agreement of its intent to terminate, and such notice shall set forth
the basis for such termination. Furthermore:
(a) in the event that any termination is based upon the provisions of
Sections 6.1(a) or 6.1(e) hereof, such prior written notice shall be given at
least ninety (90) days in advance of the effective date of termination unless a
shorter time is agreed to by the Parties hereto;
(b) in the event that any termination is based upon the provisions of
Sections 6.1(b) or 6.1(c) hereof, such prior written notice shall be given at
least ninety (90) days in advance of the effective date of termination unless a
shorter time is agreed to by the Parties hereto; and
(c) in the event that any termination is based upon the provisions of
Sections 6.1(d), 6.1(f), 6.1(g), 6.1(h) or 6.1(i) hereof, such prior written
notice shall be given as soon as possible within twenty-four (24) hours after
the terminating Party learns of the event causing termination to be required.
However, in the event that any termination is based upon 6.1(i), the breaching
party shall be given a reasonable amount of time to cure the breach before the
termination is effective.
6.3 Funds To Remain Available.
Notwithstanding any termination of this Agreement, SMFI will, at the option
of LIFE COMPANY, continue to make available additional shares of the Fund
pursuant to the terms and conditions of this Agreement, for all Contracts in
effect on the effective date of termination of this Agreement (hereinafter
referred to as "Existing Contracts"). Specifically, without limitation, the
owners of the Existing Contracts will be permitted to reallocate investments in
the Fund (as in effect on such date), 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 6.3 will not apply to
any terminations under Section 5 and the effect of such terminations will be
governed by Section 5 of this Agreement.
6.4 Survival of Warranties and Indemnifications.
All warranties and indemnifications will survive the termination of this
Agreement.
6.5 Continuance of Agreement for Certain Purposes.
If any Party terminates this Agreement with respect to any Fund pursuant to
Sections 6.1(b), 6.1(c), 6.1(d), 6.1(f), 6.1(g), 6.1 (h) or 6.1(i) hereof, this
Agreement shall nevertheless continue in effect as to any Shares of that Fund
that are outstanding as of the date of such termination.
Section 7. Parties To Cooperate Respecting Termination
The Parties hereto agree to cooperate and give reasonable assistance to one
another in taking all necessary and appropriate steps for the purpose of
ensuring that an Account owns no Shares of a Fund after the Final Termination
Date with respect thereto, or, in the case of a termination pursuant to
Section 6.1(a), the termination date specified in the notice of termination.
Such steps may include combining the affected Account with another Account,
substituting other mutual fund shares for those of the affected Fund, or
otherwise terminating participation by the Contracts in such Fund.
Section 8. Assignment
Except as provided for In the following situation, this Agreement may only
be assigned by any Party, with the written consent of each Party. However, the
Life Company retains the right, in its sole discretion, to substitute the
Underwriter for any other registered broker-dealer while this Agreement, or any
portion thereof, is in effect.
Section 9. Notices
Notices and communications required or permitted by this Agreement will be
given by means mutually acceptable to the Parties concerned. Each other notice
or communication required or permitted by this Agreement will be given to the
following persons at the following addresses and facsimile numbers, or such
other persons, addresses or facsimile numbers as the Party receiving such
notices or communications may subsequently direct in writing:
Phoenix Life and Annuity Company
Xxx Xxxxxxxx Xxx
X.X. Xxx 0000
Xxxxxxxx, Xxxxxxxxxxx 00000-0000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Attn: Xxxx X. Xxxxx, Vice President
Phoenix Equity Planning Corporation
Xxx Xxxxxxxx Xxx
X.X. Xxx 0000
Xxxxxxxx, Xxxxxxxxxxx 00000-0000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Attn: Xxxx X. Xxxxx, Vice President and Secretary
Summit Mutual Funds, Inc.
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxx, Xxxx 00000
Facsimile: 513-632-1697
Attn: Xxxxxx X. Xxxxxxx
Ameritas Investment Corp.
0000 X Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Facsimile: 000-000-0000
Attn: Xxxxxxx X. Xxxxxxx
Section 10. Voting Procedures
Subject to the cost allocation procedures set forth in Section 3 hereof,
LIFE COMPANY will distribute one set per year of proxy material furnished by
SMFI to Contractholders to whom pass-through voting privileges are required to
be extended and will solicit voting instructions from Contractholders. The
Parties agree that any additional distributions shall require special
arrangements and any related costs shall be the responsibility of SMFI. LIFE
COMPANY will vote Shares in accordance with timely instructions received from
Contractholders. LIFE COMPANY will vote Shares that are (a) not attributable to
Contractholders to whom pass-through voting privileges are extended, or
(b) attributable to Contractholders, but for which no timely instructions have
been received, in the same proportion as Shares for which said instructions
have been received from Contractholders, so long as and to the extent that the
SEC continues to interpret the 1940 Act to require pass through voting
privileges for Contractholders. Neither LIFE COMPANY nor any of its affiliates
will in any way recommend action in connection with or oppose or interfere with
the solicitation of proxies for the Shares held for such Contractholders. LIFE
COMPANY reserves the right to vote shares held in any Account in its own right,
to the extent permitted by law. LIFE COMPANY shall be responsible for assuring
that each of its Accounts holding Shares calculates voting privileges in a
manner consistent with that of other Participating Insurance Companies or in
the manner required by the Mixed and Shared Funding exemptive order obtained by
SMFI. SMFI will notify LIFE COMPANY of any changes of interpretations or
amendments to Mixed and Shared Funding exemptive order it obtains. SMFI will
comply with all provisions of the 1940 Act requiring voting by shareholders,
and in particular, SMFI either will provide for annual meetings (except insofar
as the SEC may interpret Section 16 of the 1940 Act not to require such
meetings) or will comply with Section
16(c) of the 1940 Act (although SMFI is not one of the trusts described in
Section 16(c) of that Act) as well as with Sections 16(a) and, if and when
applicable, 16(b). Further, SMFI will act in accordance with the SEC's
interpretation of the requirements of Section 16(a) with respect to periodic
elections of directors and with whatever rules the SEC may promulgate with
respect thereto.
Section 11. Foreign Tax Credits
SMFI agrees to consult in advance with LIFE COMPANY concerning any decision
to elect or not to elect pursuant to Section 853 of the Code to pass through
the benefit of any foreign tax credits to its shareholders.
Section 12. Indemnification
12.1 Of SMFI and AIC by LIFE COMPANY AND UNDERWRITER.
(a) Except to the extent provided in Sections 12.1(b) and 12.1(c), below,
LIFE COMPANY and UNDERWRITER agree to indemnify and hold harmless SMFI, AIC,
their affiliates, and each person, if any, who controls SMFI, AIC, or their
affiliates within the meaning of Section 15 of the 1933 Act and each of their
respective directors and officers, (collectively, the "Indemnified Parties" for
purposes of this Section 12.1) against any and all losses, claims, damages,
liabilities (including amounts paid in settlement with the written consent of
LIFE COMPANY) or actions in respect thereof (including, to the extent
reasonable, legal and other expenses), to which the Indemnified Parties may
become subject under any statute, regulation, at common law or otherwise,
insofar as such losses, claims, damages, liabilities or actions:
(i)arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in any Contracts's 1933 Act
registration statement, any Contract Prospectus, the Contracts, or
sales literature or advertising for the Contracts (or any amendment
or supplement to any of the foregoing), or arise out of or are based
upon the omission or the alleged omission to state therein a material
fact required to be stated therein or necessary to make the
statements therein not misleading; provided, that this agreement to
indemnify shall not apply as to any Indemnified Party if such
statement or omission or such alleged statement or omission was made
in reliance upon and in conformity with information furnished to LIFE
COMPANY or UNDERWRITER by or on behalf of SMFI or AIC for use in any
Contract's 1933 Act, registration statement, any Contract Prospectus,
the Contracts, or sales literature or advertising or otherwise for
use in connection with the sale of Contracts or Shares (or any
amendment or supplement to any of the foregoing); or
(ii)arise out of or as a result of any other statements or
representations (other than statements or representations contained
in SMFI's 1933 Act
registration statement, SMFI Prospectus, sales literature or
advertising of SMFI, or any amendment or supplement to any of the
foregoing, not supplied for use therein by or on behalf of LIFE
COMPANY, UNDERWRITER or their respective affiliates and on which such
persons have reasonably relied) or the negligent, illegal or
fraudulent conduct of LIFE COMPANY, UNDERWRITER or their respective
affiliates or persons under their control (including, without
limitation, their employees and "Associated Persons," as that term is
defined in paragraph (m) of Article I of the FINRA's By-Laws), in
connection with the sale or distribution of the Contracts or Shares;
or
(iii)arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in SMFI's 1933 Act
registration statement, SMFI Prospectus, sales literature or
advertising of SMFI, or any amendment or supplement to any of the
foregoing, or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading if such a statement or omission was
made in reliance upon and in conformity with information furnished to
SMFI, AIC or their affiliates by or on behalf of LIFE COMPANY,
UNDERWRITER or their respective affiliates for use in SMFI's 1933 Act
registration statement, SMFI Prospectus, sales literature or
advertising of SMFI, or any amendment or supplement to any of the
foregoing; or
(iv)arise as a result of any failure by LIFE COMPANY or UNDERWRITER to
perform the obligations, provide the services and furnish the
materials required of them under the terms of this Agreement, or any
material breach of any representation and/or warranty made by LIFE
COMPANY or UNDERWRITER in this Agreement or arise out of or result
from any other material breach of this Agreement by LIFE COMPANY or
UNDERWRITER; or
(v)arise as a result of failure by the Contracts issued by LIFE COMPANY
to qualify as annuity contracts or life insurance contracts under the
Code, otherwise than by reason of any Fund's failure to comply with
Subchapter M or Section 817(h) of the Code.
(b) LIFE COMPANY and UNDERWRITER shall not be liable under this Section 12.1
with respect to any losses, claims, damages, liabilities or actions to which an
Indemnified Party would otherwise be subject by reason of willful misfeasance,
bad faith, or gross negligence in the performance by that Indemnified Party of
its duties or by reason of that Indemnified Party's reckless disregard of
obligations or duties under this Agreement.
(c) LIFE COMPANY and UNDERWRITER shall not be liable under this Section 12.1
with respect to any action against an Indemnified Party unless SMFI or AIC
shall have notified LIFE COMPANY and UNDERWRITER in writing within a reasonable
time after the summons or other first legal process giving information of the
nature of the action 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 LIFE
COMPANY and UNDERWRITER of any such action shall not relieve LIFE COMPANY and
UNDERWRITER from any liability which they may have to the Indemnified Party
against whom such action is brought otherwise than on account of this
Section 12.1. Except as otherwise provided herein, in case any such action is
brought against an Indemnified Party, LIFE COMPANY and UNDERWRITER shall be
entitled to participate, at their own expense, in the defense of such action
and also shall be entitled to assume the defense thereof, with counsel approved
by the Indemnified Party named in the action, which approval shall not be
unreasonably withheld. After notice from LIFE COMPANY and UNDERWRITER to such
Indemnified Party of LIFE COMPANY's election to assume the defense thereof, the
Indemnified Party will cooperate fully with LIFE COMPANY and UNDERWRITER and
shall bear the fees and expenses of any additional counsel retained by it, and
LIFE COMPANY and UNDERWRITER will not be liable to such Indemnified Party under
this Agreement for any legal or other expenses subsequently incurred by such
Indemnified Party independently in connection with the defense thereof, other
than reasonable costs of investigation.
12.2 Of LIFE COMPANY and UNDERWRITER by SMFI and AIC.
(a) Except to the extent provided in Sections 12.2(c), 12.2(d) and 12.2(e),
below, SMFI and AIC agree to indemnify and hold harmless LIFE COMPANY,
UNDERWRITER, their respective affiliates, and each person, if any, who controls
LIFE COMPANY, UNDERWRITER or their respective affiliates within the meaning of
Section 15 of the 1933 Act and each of their respective directors and officers,
(collectively, the "Indemnified Parties" for purposes of this Section 12.2)
against any and all losses, claims, damages, liabilities (including amounts
paid in settlement with the written consent of SMFI and/or AIC) or actions in
respect thereof (including, to the extent reasonable, legal and other
expenses), to which the Indemnified Parties may become subject under any
statute, regulation, at common law, or otherwise, insofar as such losses,
claims, damages, liabilities or actions:
(i)arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in SMFI's 1933 Act
registration statement, SMFI Prospectus or sales literature or
advertising of SMFI (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 SMFI or its affiliates by or
on behalf of LIFE COMPANY, UNDERWRITER or their respective affiliates
for use in SMFI's 1933 Act registration statement, SMFI Prospectus,
or in sales literature or advertising or otherwise for use in
connection with the sale of Contracts or Shares (or any amendment or
supplement to any of the foregoing); or
(ii)arise out of or as a result of any other statements or
representations (other than statements or representations contained
in any Account's 1933 Act registration statement, any Account
Prospectus, sales literature or
advertising for the Contracts, or any amendment or supplement to any
of the foregoing, not supplied for use therein by or on behalf of
SMFI, AIC or their affiliates and on which such persons have
reasonably relied) or the negligent, illegal or fraudulent conduct of
SMFI, AIC or their affiliates or persons under their control
(including, without limitation, their employees and "Associated
Persons" as that term is defined in Section (m) of Article I of the
FINRA By-Laws), in connection with the sale or distribution of SMFI
Shares; or
(iii)arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in any Contract's 1933 Act
registration statement, any Contract Prospectus, sales literature or
advertising covering the Contracts, or any amendment or supplement to
any of the foregoing, 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 and in conformity with information
furnished to LIFE COMPANY, UNDERWRITER or their respective affiliates
by or on behalf of SMFI or AIC for use in any Contract's 1933 Act
registration statement, any Contract Prospectus, sales literature or
advertising covering the Contracts, or any amendment or supplement to
any of the foregoing; or
(iv)arise as a result of any failure by SMFI to perform the obligations,
provide the services and furnish the materials required of it under
the terms of this Agreement, or any material breach of any
representation and/or warranty made by SMFI in this Agreement or
arise out of or result from any other material breach of this
Agreement by SMFI.
(b) Except to the extent provided in Sections 12.2(c), 12.2(d) and 12.2(e)
hereof, SMFI and AIC agree to indemnify and hold harmless the Indemnified
Parties from and against any and all losses, claims, damages, liabilities
(including amounts paid in settlement thereof with, the written consent of SMFI
and/or AIC) or actions in respect thereof (including, to the extent reasonable,
legal and other expenses) to which the Indemnified Parties may become subject
directly or indirectly under any statute, at common law or otherwise, insofar
as such losses, claims, damages, liabilities or actions directly or indirectly
result from or arise out of the failure of any Fund to operate as a regulated
investment company in compliance with (i) Subchapter M of the Code and
regulations thereunder, or (ii) Section 817(h) of the Code and regulations
thereunder, including, without limitation, any income taxes and related
penalties, rescission charges, liability under state law to Contractholders
asserting liability against LIFE COMPANY pursuant to the Contracts, the costs
of any ruling and closing agreement or other settlement with the IRS, and the
cost of any substitution by LIFE COMPANY of Shares of another investment
company or portfolio for those of any adversely affected Fund as a funding
medium for each Account that LIFE COMPANY reasonably deems necessary or
appropriate as a result of the noncompliance.
(c) Neither SMFI nor AIC shall be liable under this Section 12.2 with
respect to any losses, claims, damages, liabilities or actions to which an
Indemnified Party would otherwise be subject by reason of willful misfeasance,
bad faith, or gross negligence in the performance by that Indemnified Party of
its duties or by reason of such Indemnified Party's reckless disregard of its
obligations and duties under this Agreement.
(d) Neither SMFI nor AIC shall be liable under this Section 12.2 with
respect to any action against an Indemnified Party unless the Indemnified Party
shall have notified SMFI and/or AIC in writing within a reasonable time after
the summons or other first legal process giving information of the nature of
the action 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 SMFI or AIC of any such action shall not relieve
SMFI or AIC from any liability which it may have to the Indemnified Party
against whom such action is brought otherwise than on account of this
Section 12.2. Except as otherwise provided herein, in case any such action is
brought against an Indemnified Party, SMFI and/or AIC will be entitled to
participate, at its own expense, in the defense of such action and also shall
be entitled to assume the defense thereof with counsel approved by the
Indemnified Party named in the action, which approval shall not be unreasonably
withheld or delayed. After notice from SMFI and/or AIC to such Indemnified
Party of SMFI's or AIC's election to assume the defense thereof, the
Indemnified Party will cooperate fully with SMFI and AIC and shall bear the
fees and expenses of any additional counsel retained by it, and SMFI and AIC
will not be liable to such Indemnified Party under this Agreement for any legal
or other expenses subsequently incurred by such Indemnified Party independently
in connection with the defense thereof, other than reasonable costs of
investigation.
(e) In no event shall SMFI or AIC be liable under the indemnification
provisions contained in this Agreement to any individual or entity, including,
without limitation, LIFE COMPANY, UNDERWRITER, with respect to any losses,
claims, damages, liabilities or expenses that arise out of or result from (i) a
breach of any representation, warranty, and/or covenant made by LIFE COMPANY or
UNDERWRITER hereunder; (ii) the failure by LIFE COMPANY or any Participating
Insurance Company to maintain its segregated asset account (which invests in
any Fund) as a legally and validly established segregated asset account under
applicable state law and as a duly registered unit investment trust under the
provisions of the 1940 Act (unless exempt therefrom); or (iii) the failure by
LIFE COMPANY to maintain its variable annuity or life insurance contracts (with
respect to which any Fund serves as an underlying funding vehicle) as annuity
contracts or life insurance contracts under applicable provisions of the Code.
12.3 Effect of Notice.
Any notice given by the indemnifying Party to an Indemnified Party referred
to in Sections 12.1 (c) or 12.2(d) above of participation in or control of any
action by the indemnifying Party will in no event be deemed to be an admission
by the indemnifying Party of liability, culpability or responsibility, and the
indemnifying Party will remain free to contest liability with respect to the
claim among the Parties or otherwise.
12.4 Successors.
A successor by law of any Party shall be entitled to the benefits of the
indemnification contained in this Section 12.
Section 13. Applicable Law
This Agreement will be construed and the provisions hereof interpreted under
and in accordance with Ohio law, without regard for that state's principles of
conflict of laws.
Section 14. Execution in Counterparts
This Agreement may be executed simultaneously in two or more counterparts,
each of which taken together will constitute one and the same instrument.
Section 15. Severability
If any provision of this Agreement is held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement will not
be affected thereby.
Section 16. Rights Cumulative
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, that the Parties are entitled to under federal and state
laws.
Section 17. Headings
The Table of Contents and headings used in this Agreement are for purposes
of reference only and shall not limit or define the meaning of the provisions
of this Agreement.
Section 18. Confidentiality
(a) SMFI acknowledges that the identities of the customers of LIFE COMPANY
or any of its affiliates (collectively, the "LIFE COMPANY Protected Parties"
for proposes of this Section 18), information maintained regarding those
customers, and all computer programs and procedures or other information
developed by the LIFE COMPANY Protected Parties or any of their employees or
agents in connection with LIFE COMPANY's performance of its duties under this
Agreement are the valuable property of the LIFE COMPANY Protected Parties. SMFI
agrees that if it comes into possession of any list or compilation of the
identities of or other information about the LIFE COMPANY Protected Parties'
customers, or any other information or property of the LIFE COMPANY Protected
Parties, other than such information as may be independently developed or
compiled by SMFI from information supplied to it by the LIFE COMPANY Protected
Parties' customers who also maintain accounts directly with SMFI, SMFI will
hold such information or property in confidence and refrain from using,
disclosing or distributing any of such information or other property except:
(a) with LIFE COMPANY'S prior written consent; or (b) as required by law or
judicial process. LIFE COMPANY acknowledges that the identities of the
customers of SMFI or any of its affiliates (collectively, the "SMFI Protected
Parties" for purposes of this Section 18), information maintained regarding
those
customers, and all computer programs and procedures or other information
developed by the SMFI Protected Parties or any of their employees or agents in
connection with SMFI's performance of its duties under this Agreement are the
valuable property of the SMFI Protected Parties.
LIFE COMPANY agrees that if it comes into possession of any list or compilation
of the identities of or other information about the SMFI Protected Parties'
customers or any other information or property of the SMFI Protected Parties,
other than such information as may be independently developed or compiled by
LIFE COMPANY from information supplied to it by the SMFI Protected Parties'
customers who also maintain accounts directly with LIFE COMPANY, LIFE COMPANY
will hold such information or property in confidence and refrain from using,
disclosing or distributing any of such information or other property except:
(a) with SMFI's prior written consent; or (b) as required by law or judicial
process. Each party acknowledges that any breach of the agreements in this
Section 18 would result in immediate and irreparable harm to the other parties
for which there would be no adequate remedy at law and agree that in the event
of such a breach, the other parties will be entitled to equitable relief by way
of temporary and permanent injunctions, as well as such other relief as any
court of competent jurisdiction deems appropriate.
(b) The parties each warrant and represent that their conduct under this
Agreement shall comply with the Xxxxx-Xxxxx-Xxxxxx Act, Regulation S-P (17
C.F.R. (S)248), and all other applicable federal and state laws concerning
customer confidentiality, and that no party will share customers' non-public
personal information with third parties, except as allowed by applicable laws.
This section shall survive termination of this Agreement.
Section 19. Trademarks and Fund Names
(a) Summit Investment Partners, Inc. ("Summit" or "licensor"), an affiliate
of SMFI, owns all right, title and interest in and to the name, trademark and
service xxxx "Summit Pinnacle" and such other tradenames, trademarks and
service marks as may be set forth on Schedule B, as amended from time to time
by written notice from Summit to LIFE COMPANY (the "Summit licensed marks" or
the "licensor's licensed marks") and is authorized to use and to license other
persons to use such marks. LIFE COMPANY and its affiliates are hereby granted a
non-exclusive license to use the Summit licensed marks in connection with LIFE
COMPANY's performance of the services contemplated under this Agreement,
subject to the terms and conditions set forth in this Section 19.
(b) The grant of license to LIFE COMPANY and its affiliates ( the
"licensee") shall terminate automatically upon termination of this Agreement.
Upon automatic termination, the licensee shall cease to use the licensor's
licensed marks, except that LIFE COMPANY shall have the right to continue to
service any outstanding Contracts bearing any of the Summit licensed marks.
Upon Summit's elective termination of this license, LIFE COMPANY and its
affiliates shall immediately cease to issue any new annuity or life insurance
contracts bearing any of the Summit licensed marks and shall likewise cease any
activity which suggests that it has any right under any of the Summit licensed
marks or that it has any association with Summit, except that LIFE COMPANY
shall have the right to continue to service outstanding Contracts bearing any
of the Summit licensed marks.
(c) The licensee shall obtain the prior written approval of the licensor for
the public release by such licensee of any materials bearing the licensor's
licensed marks. The licensor's approvals shall not be unreasonably withheld.
(d) During the term of this grant of license, a licensor may request that a
licensee submit samples of any materials bearing any of the licensor's licensed
marks which were previously approved by the licensor but, due to changed
circumstances, the licensor may wish to reconsider. If, on reconsideration, or
on initial review, respectively, any such samples fail to meet with the written
approval of the licensor, then the licensee shall immediately cease
distributing such disapproved materials. The licensor's approval shall not be
unreasonably withheld, and the licensor, when requesting reconsideration of a
prior approval, shall assume the reasonable expenses of withdrawing and
replacing such disapproved materials. The licensee shall obtain the prior
written approval of the licensor for the use of any new materials developed to
replace the disapproved materials, in the manner set forth above.
(e) The licensee hereunder: (i) acknowledges and stipulates that, to the
best of the knowledge of the licensee, the licensor's licensed marks are valid
and enforceable trademarks and/or service marks and that such licensee does not
own the licensor's licensed marks and claims no rights therein other than as a
licensee under this Agreement; (ii) agrees never to contend otherwise in legal
proceedings or in other circumstances; and (iii) acknowledges and agrees that
the use of the licensor's licensed marks pursuant to this grant of license
shall inure to the benefit of the licensor.
(f) LIFE COMPANY and UNDERWRITER understand that (i) the S&P 500 Index(R)
and the S&P MidCap 400 Index(R) are trademarks of The XxXxxx-Xxxx Companies,
Inc.; the Xxxxxxx 2000 Index is a trademark/service xxxx of the Xxxxx Xxxxxxx
Company; Nasdaq and related marks are trademarks or service marks of The Nasdaq
Stock Market, Inc.; and Xxxxxx Xxxxxxx Capital International is the licensor of
the EAFE Index trademark; (ii) these trademarks have been licensed for use by
SMFI; and (iii) the Funds are not sponsored, endorsed, sold or promoted by any
of the licensing organizations, and they make no representation or warranty
regarding the Funds, and bear no liability with respect to the Funds. LIFE
COMPANY and UNDERWRITER agree to comply with any requirements of the licensing
organizations regarding the use of their trademarks in any prospectuses, sales
literature or other promotional material.
Section 20. Parties to Cooperate
Each party to this Agreement will cooperate with each other party and all
appropriate governmental authorities (including, without limitation, the SEC,
the FINRA and state insurance regulators) and will permit each other and such
authorities reasonable access to its books and records (including copies
thereof) in connection with any investigation or inquiry relating to this
Agreement or the transactions contemplated hereby.
Section 21. Excessive Trading
Life Company represents and warrants that it has reasonable policies and
procedures in place to monitor and restrict what Life Company determines to be
disruptive trading. Life Company further represents and warrants that the
prospectuses for the Contracts describes these monitoring procedures and the
actions that the Life Company will take if it determines a Contract holder is
exhibiting a disruptive trading pattern. Life Company further represents and
warrants that such prospectus disclosure will indicate that the underlying
funds may reject any single trade without any notice to the Contract holders.
-----------------
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed in
their names and on their behalf by and through their duly authorized officers
signing below.
SUMMIT MUTUAL FUNDS, INC.
Attest: /s/ Xxxxxx X. Xxxxxxx By: /s/ Xxxx X. Xxxxxxxx
-------------------------------- ------------------------------------------
Name: Xxxxxx X. Xxxxxxx Name: Xxxx X. Xxxxxxxx
Title: Vice President, Controller and Title: Vice President and Secretary
Chief Compliance Officer
AMERITAS INVESTMENT CORP.
Attest: /s/ Xxxxx X. Xxxxxxx Sherffius By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------- ------------------------------------------
Name: Xxxxx X. Xxxxxxx Sherffius Name: Xxxxxxx X. Xxxxxxx
Title: Vice President and Compliance Title: Vice President and Chief Compliance Officer
Officer
PHOENIX LIFE AND ANNUITY COMPANY,
on behalf of itself and its separate Accounts
Attest: /s/ Xxxxxxx X. Xxxxxxx By: /s/ Xxxxx Xxxxxx
-------------------------------- ------------------------------------------
Name: Xxxxxxx X. Xxxxxxx Name: Xxxxx Xxxxxx
Title: Vice President and Counsel Title: Senior Vice President
PHOENIX EQUITY PLANNING CORPORATION
Attest: /s/ Xxxxxxx Xxxxxxx By: /s/Xxxx Xxxxx
--------------------------- ----------------------------
Name: Xxxxxxx Xxxxxxx Name: Xxxx Xxxxx
Title: Counsel Title: Vice President and Secretary
SCHEDULE A
FUNDS AVAILABLE UNDER THE CONTRACTS
Summit Mutual Funds, Inc. Pinnacle Series:
S&P MidCap 400 Index Portfolio - Class I
SEPARATE ACCOUNTS UTILIZING THE FUNDS
Phoenix Life and Annuity Variable Universal Life Account
SCHEDULE B
SUMMIT MUTUAL FUNDS, INC.
Summit Pinnacle Series:
S&P MidCap 400 Index Portfolio - Class I
Summit and Design
Schedule C
EXPENSE ALLOCATIONS
Life Company SMFI /AIC
------------ ------------------------------------------------------------
Preparing and filing the Account's registration statement. Preparing and filing the Fund's registration statement.
Text composition for Account prospectuses and supplements. Text composition for Fund prospectuses and supplements.
Text alterations of Account prospectuses and Account Text alterations of Fund prospectuses and Fund supplements.
supplements.
Printing, mailing and distributing Account prospectuses and Printing, mailing and distributing Fund prospectuses and Fund
Account supplements for policy owners of record and for supplements only for existing policy owners of record
prospective purchasers. invested in Summit Funds.
Printing, mailing and distributing Fund prospectuses and Fund
supplements for prospective policy owners.
Text composition and printing Account SAIs. Mailing and Text composition and printing Fund SAIs. Mailing and
distributing Account SAIs to policy owners of record upon request distributing Fund SAIs to policy owners upon request by
by policy owners. policy owners.
Text composition, printing, mailing, and distributing annual and Text composition of annual and semi-annual reports for Fund.
semi-annual reports for Account. Printing, mailing, and distributing annual and semi-annual
Printing, mailing and distributing annual and semi-annual reports reports for Fund only for existing policy owners of record
for Fund for prospective policy owners. invested in Summit Funds.
Text composition, printing, mailing, distributing, and tabulation of Text composition, printing, mailing, distributing and
proxy statements and voting instruction solicitation materials to tabulation of proxy statements and voting instruction
policy owners of record with respect to proxies related to the solicitation materials to policy owners of record with
Account respect to proxies related to the Fund.
Preparation, printing and distributing sales material and
advertising relating to the Funds, insofar as such materials relate to
the Contracts and filing such materials with and obtaining approval
from, the SEC, the FINRA, any state insurance regulatory
authority, and any other appropriate regulatory authority, to the
extent required.
Life Company SMFI /AIC
------------ ----------------------------------------------------------
Preparing and filing the Account's registration statement. Preparing and filing the Fund's registration statement.
Text composition for Account prospectuses and supplements. Text composition for Fund prospectuses and supplements.
Text alterations of Account prospectuses and Account Text alterations of Fund prospectuses and Fund supplements.
supplements.
Printing, mailing and distributing Account prospectuses and Printing, mailing and distributing Fund prospectuses and Fund
Account supplements for policy owners of record and for supplements only for existing policy owners of record
prospective purchasers. invested in Summit Funds.
Printing, mailing and distributing Fund prospectuses and Fund
supplements for prospective policy owners.
Text composition and printing Account SAIs. Mailing and Text composition and printing Fund SAIs. Mailing and
distributing Account SAIs to policy owners of record upon request distributing Fund SAIs to policy owners upon request by
by policy owners. policy owners.
Text composition, printing, mailing, and distributing annual and Text composition of annual and semi-annual reports for Fund.
semi-annual reports for Account. Printing, mailing, and distributing annual and semi-annual
Printing, mailing and distributing annual and semi-annual reports reports for Fund only for existing policy owners of record
for Fund for prospective policy owners. invested in Summit Funds.
Text composition, printing, mailing, distributing, and tabulation of Text composition, printing, mailing, distributing and
proxy statements and voting instruction solicitation materials to tabulation of proxy statements and voting instruction
policy owners of record with respect to proxies related to the solicitation materials to policy owners of record with
Account respect to proxies related to the Fund.
Preparation, printing and distributing sales material and
advertising relating to the Funds, insofar as such materials relate to
the Contracts and filing such materials with and obtaining approval
from, the SEC, the FINRA, any state insurance regulatory
authority, and any other appropriate regulatory authority, to the
extent required.
