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FORM N-4, ITEM 24(b)(8.44)
FORM RETAIL FUND PARTICIPATION AGREEMENT BETWEEN PAX WORLD FUNDS
TRUST 1, ALPS DISTRUBITORS, INC. & AMERICAN UNITED LIFE INSURANCE COMPANY(R)
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Rev. 11/07
RETAIL FUND PARTICIPATION AGREEMENT
THIS AGREEMENT, made and entered into this [Date], by and among [Company], a
_______ company organized under the laws of [State] (the "Company"), on its own
behalf and on behalf of each separate account of the Company set forth in
Schedule A hereto, as may be amended from time to time (each such account
hereinafter referred to as a "Separate Account"), PAX WORLD FUNDS SERIES TRUST
I, a Massachusetts business trust (the "Fund"), and ALPS Distributors, Inc, (the
"Underwriter").
WITNESSETH:
WHEREAS, beneficial interests in the Fund are divided into several series of
shares, each representing the interest in a particular managed portfolio of
securities and other assets (each a "Portfolio" and collectively, the
"Portfolios"); and
WHEREAS, the Fund is registered as an open-end diversified management investment
company under the Investment Company Act of 1940, as amended (hereinafter the
"1940 Act") and its shares are registered under the Securities Act of 1933, as
amended (hereinafter the "1933 Act"); and
WHEREAS, the Company issues certain group variable annuity contracts and group
funding agreements (the "Contracts") in connection with retirement plans
intended to meet the qualification requirements of Sections 401, 403(b) or 457
of the Internal Revenue Code of 1986, as amended (the "Code"); and
WHEREAS, each Separate Account is a duly organized, validly existing segregated
asset account, established by resolution of the Board of Directors of the
Company under the insurance laws of the State of Connecticut to set aside and
invest assets attributable to the Contracts; and
WHEREAS, the Underwriter is the principal underwriter for the Fund and is
registered as a broker-dealer with the Securities and Exchange Commission
(hereinafter the "SEC") under the Securities Exchange Act of 1934, as amended
(hereinafter the "1934 Act"), and is a member in good standing of the Financial
Industry Regulatory Authority, Inc. (hereinafter "FINRA"); and
WHEREAS, to the extent permitted by applicable insurance laws and regulations,
the Company intends to purchase shares in the Portfolios set forth in Schedule A
on behalf of each corresponding Separate Account set forth on such Schedule A to
fund the Contracts and the Underwriter is authorized to sell such shares to unit
investment trusts such as the Separate Accounts at net asset value; and
WHEREAS, the Company will provide, or arrange to have its agent or designee
provide, shareholder services, certain recordkeeping, record maintenance,
sub-accounting, and other administrative services to the Contracts, as
beneficial owners of the Portfolios ("Services") in accordance with the terms
and conditions of the Agreement set forth below.
NOW, THEREFORE, in consideration of their mutual promises, the Company, the Fund
and the Underwriter agree as follows:
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ARTICLE I. Purchase and Redemption of Portfolio Shares.
1.1 The procedures relating to purchase and redemption of shares of the
Portfolios and the handling thereof will be subject to the terms of the
then-current prospectus. The Fund and the Underwriter agree to sell to the
Company those shares of the Portfolios which the Company orders on behalf of any
Separate Account, executing such orders on a daily basis at the net asset value
next computed after receipt and acceptance by the Fund or its designee of such
order. For purposes of this Section, the Company shall be the designee of the
Fund for receipt of such orders from each Separate Account. Receipt by such
designee shall constitute receipt by the Fund; provided that the Fund or the
Underwriter receives notice of such orders via the National Securities Clearing
Corporation (the "NSCC") by 7:00 a.m. Eastern Time on the next following
Business Day. The Fund will receive all orders to purchase Portfolio shares
using the NSCC's Defined Contribution Clearance & Settlement ("DCC'S") platform.
The Fund will also provide the Company with account positions and activity data
using the NSCC's Networking platform. The Company shall pay for Portfolio shares
by the scheduled close of federal funds transmissions on the same Business Day
it places an order to purchase Portfolio shares in accordance with this section
using the NSCC's Fund/SERV System. Payment shall be in federal funds transmitted
by wire from the Company's designated Settling Bank to the Fund or its designee.
"Business Day" shall mean any day on which the New York Stock Exchange is open
for trading and on which the Fund or its designee calculates a Portfolio's net
asset value pursuant to the rules of the SEC. "Networking" shall mean the NSCC's
product that allows the Fund and the Company to exchange account level
information electronically. "Settling Bank" shall mean the entity appointed by
the Fund to perform such settlement services on behalf of the Portfolios and
agrees to abide by the NSCC's Rules and Procedures insofar as they relate to the
same day funds settlement.
If the Company is somehow prohibited from submitting purchase and settlement
instructions to the Fund or its designee for Portfolio shares via the NSCC's
DCC&S platform the following shall apply to this Section:
The Fund and the Underwriter agree to sell the Company those shares of the
Portfolios which the Company orders on behalf of any Separate Account, executing
such orders on a daily basis at the net asset value next computed after receipt
and acceptance by the Fund or its designee of such orders. For purposes of this
Section, the Company shall be the designee of the Fund for the receipt of such
orders from the Separate Account and receipt by such designee shall constitute
receipt by the Fund; provided that the Fund or the Underwriter receives notice
of such orders by 9:30 a.m. Eastern Time on the next following Business Day. The
Company shall pay for Portfolio shares by the scheduled close of federal funds
transmissions on the same Business Day it places an order to purchase Portfolio
shares in accordance with this section. Payment shall be in federal funds
transmitted by wire to the Fund's designated custodian, in accordance with the
terms of a Portfolio's current prospectus.
1.2 The Fund and the Underwriter agree to make shares of the Portfolios
available indefinitely for purchase at the applicable net asset value per share
by the Company on Business Days; provided, however, that the Board of Trustees
of the Fund (hereinafter the "Trustees") may refuse to sell shares of any
Portfolio to any person, or suspend or terminate the offering of shares of any
Portfolio if such action is required by law or by regulatory authorities having
jurisdiction or is, in the sole discretion of the Trustees, acting in good faith
and in compliance with their fiduciary duties under federal and any applicable
state laws, necessary in the best interests of the shareholders of any
Portfolio.
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1.3 The Fund and the Underwriter agree to redeem for cash, upon the Company's
request, any full or fractional shares of the Portfolios held by the Company on
behalf of a Separate Account, executing such requests on a daily basis at the
net asset value next computed after receipt and acceptance by the Fund or its
designee of the request for redemption. For purposes of this Section, the
Company shall be the designee of the Fund for receipt of requests for redemption
from each Separate Account and receipt by such designee shall constitute receipt
by the Fund; provided the Fund or the Underwriter receives notice of such
request for redemption via the NSCC by 7:00 a.m. Eastern Time on the next
following Business Day. The Fund will receive all orders to redeem Portfolio
shares using the NSCC's DCC&S platform. The Fund will also provide the Company
with account positions and activity data using the NSCC's Networking platform.
Payment for a Portfolio's shares redeemed shall be made in accordance with this
section using the NSCC's Fund/SERV System. Payment shall be in federal funds
transmitted by the NSCC to the Separate Account's Settling Bank as designated by
the Company, on the same Business Day the Fund or the Underwriter receives
notice of the redemption order from the Company provided that the Fund or the
Underwriter receives notice by 7:00 a.m. Eastern Time on such Business Day.
If the Company is somehow prohibited from submitting redemption and settlement
instructions to the Fund for Portfolio shares via the NSCC's DCC&S platform the
following shall apply to this Section:
The Fund and the Underwriter agree to redeem for cash, upon the Company's
request, any full or fractional shares of the Portfolios held by the Company on
behalf of a Separate Account, executing such requests on a daily basis at the
net asset value next computed after receipt and acceptance by the Fund or its
designee of the request for redemption. For purposes of this Section, the
Company shall be the designee of the Fund for receipt of requests for redemption
from each Separate Account and receipt by such designee shall constitute receipt
by the Fund; provided the Fund or the Underwriter receives notice of such
request for redemption by 9:30 a.m. Eastern Time on the next following Business
Day. Payment shall be in federal funds transmitted by wire to the Separate
Account as designated by the Company, on the same Business Day the Fund or the
Underwriter receives notice of the redemption order from the Company provided
that the Fund or the Underwriter receives notice by 9:30 a.m. Eastern Time on
such Business Day.
1.4 The Company will place separate orders to purchase or redeem shares of each
Portfolio.
1.5 Issuance and transfer of a Portfolio's shares will be by book entry only.
Share certificates will not be issued to the Company or any Separate Account.
Purchase and redemption orders for Fund shares will be recorded in an
appropriate title for each Separate Account or the appropriate subaccount of
each Separate Account.
1.6 The Fund or its agents shall furnish prior day and same day notice to the
Company of any income, dividends or capital gain distributions payable on a
Portfolio's shares. The Company hereby elects to receive all such dividends and
distributions as are payable on a Portfolio's shares in the form of additional
shares of that Portfolio. The Fund shall notify the Company of the number of
shares so issued as payment of such dividends and distributions no later than
one Business Day after issuance. The Company reserves the right to revoke this
election and to receive in cash all such dividends and distributions declared
after receipt of notice of revocation by the Fund.
1.7 The Fund or its agents shall make the net asset value per share of each
Portfolio available to the Company on a daily basis as soon as reasonably
practical after the close of trading each Business Day, but in no event later
than 7:00 p.m. Eastern Time on such Business Day.
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1.8(a) If the Fund or its agents provide materially incorrect share net asset
value information through no fault of the Company, the Separate Accounts shall
be entitled to an adjustment with respect to the Portfolio shares purchased or
redeemed to reflect the correct net asset value per share.
1.8(b) The determination of the materiality of any net asset value pricing error
and its correction shall be based on the SEC's recommended guidelines regarding
these errors. Any material error in the calculation or reporting of net asset
value per share, dividend or capital gain information shall be reported promptly
to the Company upon discovery. The Fund shall indemnify and hold harmless the
Company against any amount the Company is legally required to pay Contract
Owners, participants or beneficiaries that have selected a Portfolio as an
investment option ("Contract Owners"), and which amount is due to the Fund's or
its agents' material miscalculation and/or incorrect reporting of or failure to
report the daily net asset value, dividend rate or capital gains distribution
rate. The Company shall submit an invoice to the Fund or its agents for such
losses incurred as a result of the above which shall be payable within sixty
(60) days of receipt. Should a material miscalculation by the Fund or its agents
result in a gain to the Company, the Company shall immediately reimburse the
Fund, the applicable Portfolios or its agents for any material losses incurred
by the Fund, the applicable Portfolios or its agents as a result of the
incorrect calculation. Should a material miscalculation by the Fund or its
agents result in a gain to Contract Owners, the Company will consult with the
Fund or its designee as to what reasonable efforts shall be made to recover the
money and repay the Fund, the applicable Portfolio or its agents. The Company
shall then make such reasonable effort, at the expense of the Fund or its
agents, to recover the money and repay the Fund, the applicable Portfolios or
its agents; but the Company shall not be obligated to take legal action against
Contract Owners.
With respect to the material errors or omissions described above, this section
shall control over other indemnification provisions in this Agreement.
ARTICLE II. Representations and Warranties
2.1. The Company represents and warrants that the Contracts are or will be
registered unless exempt and that it will make every effort to maintain such
registration under the 1933 Act to the extent required by the 1933 Act; that the
Contracts are intended to be issued and sold in compliance in all material
respects with all applicable federal and state laws. The Company further
represents and warrants that it is an insurance company duly organized and in
good standing under applicable law and that it has legally and validly
established each Separate Account prior to any issuance or sale of Contracts,
shares or other interests therein, as a segregated asset account under the
insurance laws of the State of Indiana and has registered or, prior to any
issuance or sale of the Contracts, will register and will maintain the
registration of each Separate Account as a unit investment trust in accordance
with and to the extent required by the provisions of the 1940 Act, unless exempt
therefrom, to serve as a segregated investment account for the Contracts. Unless
exempt, the Company shall amend its registration statement for its Contracts
under the 1933 Act and the 1940 Act from time to time as required in order to
effect the continuous offering of its Contracts. The Company shall register and
qualify the Contracts for sale in accordance with securities laws of the various
states only if and to the extent deemed necessary by the Company.
2.2 The Fund represents and warrants that (i) each Portfolio's shares sold
pursuant to this Agreement shall be registered under the 1933 Act and duly
authorized for issuance in accordance with applicable law and that the Fund is
and shall remain registered under the 1940 Act for as long as the Portfolio
shares are sold; (ii) the Fund shall amend the registration statement for a
Portfolio's shares under
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the 1933 Act and the 1940 Act from time to time as required in order to effect
the continuous offering of shares; and (iii) the Fund shall register and qualify
a Portfolio's shares for sales in accordance with the laws of the various states
only if and to the extent deemed advisable by the Fund or the Underwriter.
2.3 The Fund represents that each Portfolio (a) is currently qualified as a
Regulated Investment Company under Subchapter M of the Code; (b) will make every
effort to maintain such qualification (under Subchapter M or any successor or
similar provision); and (c) will notify the Company immediately upon having a
reasonable basis for believing that such Portfolio has ceased to so qualify or
might not so qualify in the future.
2.4 To the extent that the Fund finances distribution expenses pursuant to Rule
12b-1 under the 1940 Act, the Fund represents that its Trustees, including a
majority of its Trustees who are not interested persons of the Fund, have
formulated and approved a plan under Rule 12b-1 to finance distribution
expenses.
2.5 The Fund makes no representation as to whether any aspect of its operations
(including, but not limited to, fees and expenses and investment policies)
complies with the insurance laws or insurance regulations of the various states.
2.6 The Underwriter represents and warrants that it (a) is a corporation,
partnership, national association or other entity duly organized and validly
existing in good standing under the laws of the jurisdiction in which it is
organized; (b) is a member in good standing of the FINRA; (c) is registered as a
broker-dealer with the SEC; (d) will sell and distribute the Portfolio shares in
accordance in all material respects with all applicable federal and state
securities laws, including without limitation the 1933 Act, the 1934 Act, and
the 0000 Xxx.
2.7 The Fund represents that it is lawfully organized and validly existing under
the laws of the Commonwealth of Massachusetts and that it does and will comply
in all material respects with applicable provisions of the 0000 Xxx.
2.8 The Fund represents and warrants that all of its Trustees, 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 by Rule 17g-1
under the 1940 Act or related provisions as may be promulgated from time to
time. The aforesaid Bond includes coverage for larceny and embezzlement and is
issued by a reputable bonding company.
2.9 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 covered by a blanket fidelity bond or
similar coverage in an amount not less than $5 million. The aforesaid includes
coverage for larceny and embezzlement and is issued by a reputable bonding
company.
2.11 The foregoing representations and warranties shall be made, by the parties
hereto that makes such representation or warranty as of the date first written
above and at the time of each purchase and each sale of each Portfolio's shares
pursuant to this Agreement.
2.12 The Company represents that it has adopted written policies and procedures
reasonably designed to detect and deter frequent and/or disruptive trading in
Shares. The Company and the Fund
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agree to reasonably cooperate for the purpose of discouraging frequent or
disruptive trading in shares of the Funds and agree to negotiate a "shareholder
information agreement" under Rule 22c-2.
ARTICLE III. Prospectuses; Reports and Proxy Statements; Voting
3.1 The Fund shall provide the Company at no charge with as many printed copies
of a Portfolio's current prospectus and statement of additional information as
the Company may reasonably request. If requested by the Company, in lieu of
providing printed copies of a Portfolio's current prospectus and statement of
additional information, the Fund shall provide camera-ready film, computer
diskettes, e-mail transmissions or PDF files containing a Portfolio's prospectus
and statement of additional information, and such other assistance as is
reasonably necessary in order for the Company once each year (or more frequently
if the prospectus and/or statement of additional information for the Portfolios
are amended during the year) to have the prospectus for the Contracts (if
applicable) and a Portfolio's prospectus printed together in one document or
separately. The Company may elect to print a Portfolio's prospectus and/or its
statement of additional information in combination with other fund companies'
prospectuses and statements of additional information.
3.2(a) The Fund shall provide the Company at no charge with copies of a
Portfolio's proxy statements, reports to shareholders, and other communications
to shareholders in such quantity as the Company shall reasonably require for
distributing to Contract Owners.
3.2(b) The Fund shall pay for the cost of typesetting, printing and distributing
all Portfolios' prospectuses, statements of additional information, reports to
shareholders and other communications to Contract Owners and prospective
Contract Owners. The Fund shall pay for all costs for typesetting, printing and
distributing proxy materials.
3.3. A Portfolio's statement of additional information shall be obtainable by
Contract Owners from the Fund, the Underwriter, the Company or such other person
as the Fund may designate.
3.4 If and to the extent required by law the Company shall distribute all proxy
material furnished by the Fund to Contract Owners to whom voting privileges are
required to be extended and shall:
A. solicit voting instructions from Contract Owners;
B. vote Portfolio shares held in the Separate Account in accordance with
instructions received from Contract Owners; and
C. so long as and to the extent that the SEC continues to interpret the 1940 Act
to require pass through voting privileges for variable annuity contract owners,
vote Portfolio shares held in the Separate Account for which no timely
instructions have been received, in the same proportion as shares of such
Portfolio for which instructions have been received from the Company's Contract
Owners. The Company reserves the right to vote Portfolio shares held in any
segregated asset account for its own account, to the extent permitted by law.
Notwithstanding the foregoing, with respect to the Portfolio shares held by
unregistered Separate Accounts that issue Contracts issued in connection with
employee benefit plans subject to the provisions of the Employee Retirement
Income Security Act
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of 1974, as amended, the Company shall vote such shares allocated to such
Contracts only in accordance with the Company's agreements with such Contract
Owners.
3.5 The Fund will comply with all provisions of the 1940 Act requiring voting by
shareholders. The Fund will not hold annual meetings but will hold such special
meetings as may be necessary from time to time. Further, the Fund will act in
accordance with the SEC interpretation of the requirements of Section 16(a) with
respect to periodic elections of directors or trustees and with whatever rules
the SEC may promulgate with respect thereto.
ARTICLE IV. Sales Material and Information
Unworkable.
4.1 Neither the Company nor any person contracting with the Company shall 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 Portfolio shares, as such registration statement and prospectus
may be amended or supplemented from time to time, or in reports to shareholders
or proxy statements for the Portfolios, or in sales literature or other
promotional material approved by the Fund or the Underwriter, except with the
permission of the Fund or the Underwriter.
4.2 The Fund shall furnish, or shall cause to be furnished, to the Company or
its designee, each piece of sales literature or other promotional material in
which the Company or any Separate Account is named, at least five calendar days
prior to its use. No such literature or material shall be used without prior
approval from the Company or its designee, however, the failure to object in
writing within two Business Days will be deemed approved. Such approval process
shall not apply to subsequent usage of materials that are substantially similar
to prior approved materials.
4.3 Neither the Fund nor the Underwriter shall give any information or make any
representations on behalf of the Company or concerning the Company, each
Separate Account, or the Contracts other than the information or representations
contained in the Contracts, a disclosure document, registration statement or
prospectus for the Contracts (if applicable), as such registration statement and
prospectus may be amended or supplemented from time to time, or in published
reports for each Separate Account which are in the public domain or approved by
the Company for distribution to Contract Owners or participants, or in sales
literature or other promotional material approved by the Company, except with
the permission of the Company.
4.4 The Fund will provide to the Company at least one complete copy of all
prospectuses, statements of additional information, reports to shareholders,
proxy statements, and all amendments to any of the above, that relate to the
Fund or Portfolios, promptly after the filing of such document with the SEC or
other regulatory authorities.
4.5. The Company will provide to the Fund at least one complete copy of all
prospectuses, statements of additional information, reports, solicitations for
voting instructions, and all amendments to any of the above, if applicable to
the investment in a Separate Account or Contract, promptly after the filing of
such document with the SEC or other regulatory authorities.
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4.6 For purposes of this Article IV, 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, Internet, 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, electronic mail, 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,
disclosure documents, prospectuses, statements of additional information,
shareholder reports, and proxy materials.
4.7 The Company agrees and acknowledges that the Company has no right, title or
interest in the names and marks of the Fund or Portfolios and that all use of
any designation comprised in whole or part or such names or marks under this
Agreement shall inure to the benefit of the Fund, Portfolios, and the
Underwriter. The Company shall not use any such names or marks on its own behalf
or on behalf of a Separate Account in connection with marketing the Contracts
without prior written consent of the Fund or the Underwriter. Upon termination
of this Agreement for any reason, the Company shall cease all use of any such
names or marks.
4.8 The Fund and Underwriter agree and acknowledge that each has no right, title
or interest in the names and marks of the Company, and that all use of any
designation comprised in whole or part or such names or marks under this
Agreement shall inure to the benefit of the Company. Except as provided in
Section 4.3, the Fund and Underwriter shall not use any such names or marks on
its own behalf or on behalf of a Portfolio in connection with marketing such
Fund or Portfolio without prior written consent of the Company. Upon termination
of this Agreement for any reason, the Fund, Portfolios, and the Underwriter
shall cease all use of any such names or marks.
ARTICLE V. Fees and Expenses
5.1 The Fund and/or Distributor shall pay the fees and expenses provided for in
the attached Schedule B. The Company acknowledges that any compensation paid to
it by Underwriter is subject to all rules and regulations of the FINRA and the
plan of distribution adopted by the Fund pursuant to Rule 12b-1 of the 1940 Act
("12b-1 Plan"). The Company further acknowledges that any compensation paid to
it by the Underwriter will only derive from amounts paid to the Underwriter from
the Fund. The Company also acknowledges and agrees that the Underwriter shall
not be responsible for the payment of any such fee unless and until the
Underwriter has received such fee from the applicable Fund, and the Company
agrees to waive payment of such fee unless and until the Underwriter has
received payment from the Fund. Underwriter has the burden to demonstrate that
it has attempted, in good faith, to obtain payment from the Fund and demonstrate
it remains unpaid.
ARTICLE VI. Indemnification
6.1 Indemnification By The Company
(a) The Company agrees to indemnify and hold harmless the Fund, the Underwriter
and each of their respective trustees, directors, officers, employees or agents
and each person, if any, who controls the Fund or the Underwriter within the
meaning of section 15 of the 1933 Act (collectively, the
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"Indemnified Parties" for purposes of this Section 6.1) against any and all
losses, claims, damages, liabilities (including amounts paid in settlement with
the written consent of the Company) or litigation (including reasonable legal
and other expenses), to which the Indemnified Parties may become subject under
any statute, regulation, at common law or otherwise, insofar as such losses,
claims, damages, liabilities or expenses (or actions in respect thereof) or
settlements are related to the sale or acquisition of Portfolio 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 disclosure statement,
registration statement, prospectus or statement of information for the Contracts
or contained in the Contracts or sales literature or other promotional material
for the Contracts (or any amendment or supplement to any of the foregoing), or
arise out of or are based upon the omission 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 an Indemnified Party if such statement or omission or such
alleged statement or omission was made in reliance upon and in conformity with
information furnished by such Indemnified Party or the Fund to the Company on
behalf of the Fund for use in the registration statement, prospectus or
statement of additional information 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 Portfolio shares; or
(ii) arise out of or as a result of (a) statements or representations by or on
behalf of the Company (other than statements or representations contained in the
registration statement, prospectus or sales literature or other promotional
material of the Fund not supplied by the Company, or persons under its control
and other than statements or representations authorized by the Fund or the
Underwriter); or (b) the willful misfeasance, bad faith, gross negligence or
reckless disregard of duty of the Company or persons under its control, with
respect to the sale or distribution of the Contracts or Portfolio shares; or
(iii) arise out of or as a result of any untrue statement or alleged untrue
statement of a material fact contained in the registration statement,
prospectus, statement of additional information or sales literature or other
promotional material 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 and in
conformity with information furnished to the Fund or the Underwriter by the
Company or persons under its control; or
(iv) arise as a result of any material 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 by the Company of this Agreement; except to the extent
provided in Sections 6.1(b) and 6.4 hereof.
(b) No party shall be entitled to indemnification to the extent that such loss,
claim, damage, liability or litigation is due to the willful misfeasance, bad
faith, gross negligence or reckless disregard of duty by the party seeking
indemnification.
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(c) In accordance with Section 6.4 hereof, 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 Portfolio shares or the
Contracts or the operation of the Fund.
6.2 Indemnification By the Underwriter
(a) The Underwriter agrees, with respect to each Portfolio that it distributes,
to indemnify and hold harmless the Company and each of its directors, officers,
employees or agents 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 6.2) against any and all losses, claims, damages,
liabilities (including amounts paid in settlement with the written consent of
the Underwriter) or litigation (including reasonable legal and other expenses)
to which the Indemnified Parties may become subject under any statute,
regulation, at common law or otherwise, insofar as such losses, claims, damages,
liabilities or expenses (or actions in respect thereof) or settlements are
related to the sale or acquisition of the shares of the Portfolios that it
distributes 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,
prospectus or statement of additional information for the Fund or sales
literature or other promotional material of the Fund (or any amendment or
supplement to any of the foregoing), or arise out of or are 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 by such
Indemnified Party or the Company to the Fund or the Underwriter on behalf of the
Company for use in the registration statement, prospectus or statement of
additional information for the Fund or in sales literature of the Fund (or any
amendment or supplement thereto) or otherwise for use in connection with the
sale of the Contracts or the Portfolio shares; or
(ii) arise out of or as a result of the willful misfeasance, bad faith, gross
negligence or reckless disregard of duty of the Underwriter or persons under the
control of the Underwriter with respect to the sale or distribution of the
Contracts or Portfolio shares; or
(iii) arise out of any untrue statement or alleged untrue statement of a
material fact contained in a registration statement, prospectus, statement of
additional information or sales literature or other promotional material with
respect to 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 and in
conformity with information furnished to the Company by the Underwriter or
persons under the control of the Underwriter; or
(iv) arise as a result of any material failure by the Underwriter 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 Underwriter in this Agreement or arise out of or result
from any other material breach of this Agreement by the Underwriter; except to
the extent provided in Sections 6.2(b) and 6.4 hereof.
10
(b) No party shall be entitled to indemnification to the extent that such loss,
claim, damage, liability or litigation is due to the willful misfeasance, bad
faith, gross negligence or reckless disregard of duty by the party seeking
indemnification.
(c) In accordance with Section 6.4 hereof, the Indemnified Parties will promptly
notify the Underwriter of the commencement of any litigation or proceedings
against them in connection with the issuance or sale of Portfolio shares or the
Contracts or the operation of the Separate Accounts.
6.3 Indemnification by the Fund
(a) The Fund agrees to indemnify and hold harmless the Company and each of its
directors, officers, employees or agents 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 6.3) against any and all
losses, claims, damages, liabilities (including amounts paid in settlement with
the written consent of the Fund) or litigation (including reasonable legal and
other expenses) to which the Indemnified Parties may become subject under any
statute, regulation, at common law or otherwise, insofar as such losses, claims,
damages, liabilities or expenses (or actions in respect thereof) or settlements
are related to the sale or acquisition of the shares of the Portfolios 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,
prospectus or statement of additional information for the Fund or sales
literature or other promotional material of the Fund (or any amendment or
supplement to any of the foregoing), or arise out of or are 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 by such
Indemnified Party or the Company to the Fund or the Underwriter on behalf of the
Company for use in the registration statement, prospectus or statement of
additional information for the Fund or in sales literature of the Fund (or any
amendment or supplement thereto) or otherwise for use in connection with the
sale of the Contracts or the Portfolio shares; or
(ii) arise out of or as a result of (a) statements or representations (other
than statements or representations contained in the registration statement,
prospectus or sales literature for the Contracts not supplied by the Fund or the
Underwriter or persons under their respective control and other than statements
or representations authorized by the Company); or (b) the willful misfeasance,
bad faith, gross negligence or reckless disregard of duty of the Fund or persons
under the control of the Fund, with respect to the sale or distribution of the
Contracts or Portfolio shares; or
(iii) arise out of any untrue statement or alleged untrue statement of a
material fact contained in a registration statement, prospectus, statement of
additional information or sales literature or other promotional material with
respect to 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 and in
conformity with information furnished to the Company by the Fund or persons
under the control of the Fund; or
(iv) arise as a result of any material failure by the Fund to provide the
services and furnish the materials under the terms of this Agreement; or
11
(v) arise out of or result from any material breach of any representation and/or
warranty made by the Fund in this Agreement or arise out of or result from any
other material breach of this Agreement by the Fund; except to the extent
provided in Sections 6.3(b) and 6.4 hereof.
(b) No party shall be entitled to indemnification to the extent that such loss,
claim, damage, liability or litigation is due to the willful misfeasance, bad
faith, gross negligence or reckless disregard of duty by the party seeking
indemnification.
(c) In accordance with Section 6.4 hereof, the Indemnified Parties will promptly
notify the Fund 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 operation of the Separate Accounts.
6.4. Indemnification Procedure
(a) Any person obligated to provide indemnification under this Article VI
("Indemnifying Party" for the purpose of this Section 6.4) shall not be liable
under the indemnification provisions of this Article VI with respect to any
claim made against a party entitled to indemnification under this Article VI
("Indemnified Party") for the purpose of this Section 6.4) unless such
Indemnified Party shall have notified the Indemnifying Party in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such party shall have received notice of such
service on any designated agent), but failure to notify the Indemnifying Party
of any such claim shall not relieve the Indemnifying Party from any liability
which it may have to the Indemnified Party against whom such action is brought
otherwise than on account of the indemnification provision of this Article VI.
In case any such action is brought against the Indemnified Party, the
Indemnifying Party will be entitled to participate, at its own expense, in the
defense thereof. The Indemnifying Party also shall be entitled to assume the
defense thereof, with counsel satisfactory to the party named in the action.
After notice from the Indemnifying Party to the Indemnified Party of the
Indemnifying Party's election to assume the defense thereof, the Indemnified
Party shall bear the fees and expenses of any additional counsel retained by the
Indemnified Party, and the Indemnifying Party will not be liable to such party
under this Agreement for any legal or other expenses subsequently incurred by
such party independently in connection with the defense thereof other than
reasonable costs of investigation, unless:
(i) the Indemnifying Party and the Indemnified Party shall have mutually agreed
to the retention of such counsel or
(ii) the named parties to any such proceeding (including any impleaded parties)
include both the Indemnifying Party and the Indemnified Party and representation
of both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them.
A successor by law of the parties to this Agreement shall be entitled to the
benefits of the indemnification contained in this Article VI. The
indemnification provisions contained in this Article VI shall survive any
termination of this Agreement.
ARTICLE VII. Applicable Law
12
7.1 This Agreement shall be construed and the provisions hereof interpreted
under and in accordance with the laws of the State of Connecticut.
7.2 This Agreement shall be subject to the provisions of the 1933, 1934 and 1940
Acts, and the rules and regulations and rulings thereunder, including such
exemptions from those statutes, rules and regulations as the SEC may grant and
the terms hereof shall be interpreted and construed in accordance therewith.
ARTICLE VIII. Term & Termination
1. 8.1 Term.
(a) Except as otherwise provided below, the term of this Agreement shall be for
five (5) years from the date hereof, unless terminated earlier by reason of a
breach of contract or by law, or pursuant to this section 8. At the end of the
initial term of this Agreement, this Agreement shall be automatically renewed
for successive one year periods, unless any party notifies the other no later
than thirty days before any anniversary of its intent to terminate this
Agreement.
8.2 This Agreement shall terminate:
(a) at the option of any party upon one month's 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 Fund or the Underwriter 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 or related to the sale of the Contracts, the administration of
the Contracts, the operation of the Separate Accounts, or the purchase of the
Portfolio shares, which in the judgment of the Fund or the Underwriter are
reasonably likely to have a material adverse effect on the Company's ability to
perform its obligations under this Agreement; or
(c) at the option of the Company upon institution of formal proceedings against
the Fund or the Underwriter by the FINRA, the SEC, or any state securities or
insurance department or any other regulatory body, related to the purchase or
sale of the Portfolio shares or the operation of the Fund which in the judgment
of the Company are reasonably likely to have a material adverse effect on the
Underwriter's or the Fund's ability to perform its obligations under this
Agreement; or
(d) at the option of the Company if a Portfolio delineated in Schedule A ceases
to qualify as a Regulated Investment Company under Subchapter M of the Code (a
"RIC"), or under any successor or similar provision, and the disqualification is
not cured within the period permitted for such cure, or if the Company
reasonably believes that any such Portfolio may fail to so qualify and be unable
to cure such disqualification within the period permitted for such cure; or
(e) at the option of any party to this Agreement, upon another party's material
breach of any provision of this Agreement; provided that the party not in breach
shall give the party in breach notice of the breach and the party in breach does
not cure such breach within 30 days of receipt of such notice of breach; or
(f) at the option of the Company, if the Company determines in its sole judgment
exercised in good faith, that either the Fund or the Underwriter has suffered a
material adverse change in
13
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
(g) at the option of the Fund or the Underwriter. if the Fund or the Underwriter
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 or Underwriter.
8.3 Notice Requirement
(a) In the event that any termination of this Agreement is based upon the
provisions of Sections 8.1(b), 8.1(c) or 8.1(d), 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;
provided that for any termination of this Agreement based on the provisions of
Section 8.1(d), said termination shall be effective upon the Portfolio's failure
to qualify as a RIC and to cure such disqualification within the period
permitted for such cure.
(b) In the event that any termination of this Agreement is based upon the
provisions of Sections 8.1(f) or 8.1(g), 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 60 days before the effective date of termination.
8.4 It is understood and agreed that the right to terminate this Agreement
pursuant to Section 8.1(a) may be exercised for any reason or for no reason.
8.5 Effect of Termination
(a) Notwithstanding any termination of this Agreement pursuant to Section 8.1(a)
through 8.1(g) of this Agreement and subject to Section 1.2 of this Agreement,
the Company may require the Fund and the Underwriter to continue to make
available additional shares of the Portfolios for so long after the termination
of this Agreement as the Company 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"), unless such further sale of a Portfolio's shares is
proscribed by law, regulation or an applicable regulatory body. Specifically,
without limitation, the owners of the Existing Contracts shall be permitted to
direct reallocation of investments in the Portfolios, redeem investments in the
Portfolios and/or invest in the Portfolios upon the making of additional
purchase payments under the Existing Contracts unless such further sale of
Portfolio shares is proscribed by law, regulation or an applicable regulatory
body.
(b) The Fund and/or Underwriter shall not remain obligated to pay Company the
fees in effect as of the date of termination for even so long as shares are held
by the Accounts and Company continues to provide services to the Accounts.
(c) In the event of the insolvency or liquidation of the Company, fees shall
continue to be payable directly to the Company or its liquidator, receiver,
conservator or statutory successor, without diminution and
14
reasonable provision for verification by the Company or its liquidator,
receiver, conservator or statutory successor.
ARTICLE IX. Notices
9.1 (a) Any notice shall be deemed duly given only if sent by hand or overnight
express delivery, evidenced by written receipt or by certified mail, return
receipt requested, 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. All notices shall be deemed given the date received
or rejected by the addressee.
If to the Company:
[Firm]
[Address]
[Attn: ________]
with a copy to:
[Firm]
[Address]
[Attn: ________]
If to the Fund:
Pax World Funds Series Trust I
00 Xxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Attention: Manager, Broker/Dealer Services
If to the Underwriter:
ALPS Distributors, Inc.
0000 Xxxxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Attention: General Counsel
ARTICLE X Miscellaneous
10.1 Subject to law and regulatory authority, each party hereto shall treat as
confidential the names and addresses of the owners of the Contracts and all
other information reasonably identified as such in writing by any other party
hereto, and, except as contemplated by this Agreement, shall not disclose,
disseminate or utilize such confidential information without the express prior
written consent
15
of the affected party until such time as it may come into the public domain. In
addition, the parties hereby represent that they will use and disclose Personal
Information (as defined below) only to carry out the purposes for which it was
disclosed to them and will not use or disclose Personal information if
prohibited by applicable law, including, without limitation, statutes and
regulations enacted pursuant to the Xxxxx-Xxxxx-Xxxxxx Act (Public Law 106-102).
"Personal Information" means financial and medical information that identifies
an individual personally and is not available to the public, including, but not
limited to, credit history, income, financial benefits, policy or claim
information and medical records. If either party outsources services to a third
party, such third party will agree in writing to maintain the security and
confidentiality of any information shared with them.
10.2 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.
10.3 This Agreement may be executed simultaneously in two or more counterparts,
each of which taken together shall constitute one and the same instrument.
10.4 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.
10.5 This Agreement shall not be assigned by any party hereto without the prior
written consent of all the parties.
10.6 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 each other and such authorities
(and the parties hereto) reasonable access to its books and records in
connection with any investigation or inquiry relating to this Agreement or the
transactions contemplated hereby. Notwithstanding the foregoing, each party
hereto further agrees to furnish the California Insurance Commissioner with any
information or reports in connection with services provided under this Agreement
which such Commissioner may request in order to ascertain whether the insurance
operations of the Company are being conducted in a manner consistent with the
California laws and regulations.
10.7 Each party represents that (a) the execution and delivery of this Agreement
and the consummation of the transactions contemplated herein have been duly
authorized by all necessary corporate or trust action, as applicable, by such
party and when so executed and delivered this Agreement will be the valid and
binding obligation of such party enforceable in accordance with its terms
subject to bankruptcy, insolvency, reorganization, moratorium and similar laws
of general applicability relating to or affecting creditors' rights and to
general equity principles; (b) the party has obtained, and during the term of
this Agreement will maintain, all authorizations, licenses, qualifications or
registrations required to be maintained in connection with the performance of
its duties under this Agreement; and (c) the party will comply in all material
respects with all applicable laws, rules and regulations.
10.8 The parties to this Agreement may amend by written agreement the Schedules
to this Agreement from time to time to reflect changes in or relating to the
Contracts, the Separate Accounts or the Portfolios of the Fund.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed in its name and behalf by its duly authorized representative as of the
date first written above.
16
[Company] PAX WORLD FUNDS SERIES TRUST I
By: By:
Name: Name: Xxxxxxx X. Xxxxxx
Title: Title: Secretary
Insert Name________________________
By: ______________________________
Name: ____________________________
Title: _____________________________
SCHEDULE A
SEPARATE ACCOUNTS
---------------------------------------------------------------------------
Name of Separate Account and Date Established
SCHEDULE B
In consideration of the Services provided by the Company, the Fund and/or the
Distributor agrees to pay the Company an amount
17
equal to the following basis points per annum on the average aggregate amount
invested by the Company's Separate Account(s) in each Portfolio under this
Agreement, such amounts to be paid within 30 days of the end of each calendar
quarter.
Share Class 12b-1 Fee Rate Sub-TA Fee Rate
Individual Investor class 0.25% per year 0.10% per year
R class 0.50% per year 0.10% per year
Institutional class N/A 0.00% per year
18
