EXHIBIT 24(C)(8)(FF)
PARTICIPATION AGREEMENT
AMONG
MINNESOTA LIFE INSURANCE COMPANY,
PIMCO VARIABLE INSURANCE TRUST,
AND
ALLIANZ GLOBAL INVESTORS DISTRIBUTORS LLC
THIS AGREEMENT, dated as of the 9th day of April, 2010, by and among
Minnesota Life Insurance Company, (the "Company"), a Minnesota life insurance
company, on its own behalf and on behalf of each segregated asset account of
the Company set forth on Schedule A hereto as may be amended from time to time
(each account hereinafter referred to as the "Account"), PIMCO Variable
Insurance Trust (the "Fund"), a Delaware statutory trust, and Allianz Global
Investors Distributors LLC (the "Underwriter"), a Delaware limited liability
company.
WHEREAS, the Fund engages in business as an open-end management investment
company and is available to act as the investment vehicle for separate accounts
established for variable life insurance and variable annuity contracts (the
"Variable Insurance Products") to be offered by insurance companies which have
entered into participation agreements with the Fund and Underwriter
("Participating Insurance Companies");
WHEREAS, the shares of beneficial interest of the Fund are divided into
several separate series of shares, each designated a "Portfolio" and
representing the interest in a particular managed portfolio of securities and
other assets;
WHEREAS, the Fund has obtained an order (PIMCO Variable Insurance Trust, et
al., Investment Company Act Rel. Nos. 22994 (Jan. 7, 1998) (Notice) and 23022
(Feb. 9, 1998)(Order)) from the Securities and Exchange Commission (the "SEC")
granting Participating Insurance Companies and variable annuity and variable
life insurance separate accounts exemptions from the provisions of sections
9(a), 13(a), 15(a), and 15(b) of the Investment Company Act of 1940, as
amended, (the "1940 Act") and Rules 6e-2(b)(15) and 6e-3(T)(b)(15) thereunder,
if and to the extent necessary to permit shares of the Fund to be sold to and
held by variable annuity and variable life insurance separate accounts of both
affiliated and unaffiliated life insurance companies (the "Mixed and Shared
Funding Exemptive Order");
WHEREAS, the Fund is registered as an open-end management investment company
under the 1940 Act and shares of the Portfolios are registered under the
Securities Act of 1933, as amended (the "1933 Act");
WHEREAS, Pacific Investment Management Company LLC (the "Adviser"), which
serves as investment adviser to the Fund, is duly registered as an investment
adviser under the federal Investment Advisers Act of 1940, as amended;
WHEREAS, the Company has issued or will issue certain variable life
insurance and/or variable annuity contracts supported wholly or partially by
the Account (the "Contracts"), and said Contracts are listed in Schedule A
hereto, as it may be amended from time to time by mutual written agreement;
WHEREAS, the Account is duly established and maintained as a segregated
asset account, duly established by the Company, on the date shown for such
Account on Schedule A hereto, to set aside and invest assets attributable to
the aforesaid Contracts;
WHEREAS, the Underwriter, which serves as distributor to the Fund, is
registered as a broker dealer with the SEC under the Securities Exchange Act of
1934, as amended (the "1934 Act"), and is a member in good standing of the
Financial Industry Regulatory Authority ("FINRA"); and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase Advisor Class shares in the
Portfolios listed in Schedule A hereto, as it may be amended from time to time
by mutual written agreement (the "Designated Portfolios") on behalf of the
Account to fund the aforesaid Contracts, and the Underwriter is authorized to
sell such shares to the Account at net asset value;
NOW, THEREFORE, in consideration of their mutual promises, the Company, the
Fund and the Underwriter agree as follows:
ARTICLE I. Sale of Fund Shares
1.1. The Fund has granted to the Underwriter exclusive authority to
distribute the Fund's shares, and has agreed to instruct, and has so
instructed, the Underwriter to make available to the Company for purchase on
behalf of the Account Fund shares of those Designated Portfolios selected by
the Underwriter. Pursuant to such authority and instructions, and subject to
Article IX hereof, the Underwriter agrees to make available to the Company for
purchase on behalf of the Account, shares of those Designated Portfolios, such
purchases to be effected at net asset value in accordance with Section 1.3 of
this Agreement. Notwithstanding the foregoing, the Board of Trustees of the
Fund (the "Board") may suspend or terminate the offering of Fund shares of any
Designated Portfolio or class thereof, or liquidate any Designated Portfolio or
class thereof, if such action is required by law or by regulatory authorities
having jurisdiction or if, in the sole discretion of the Board acting in good
faith, suspension, termination or liquidation is necessary in the best
interests of the shareholders of such Designated Portfolio.
1.2. The Fund shall redeem, at the Company's request, any full or
fractional Designated Portfolio shares held by the Company on behalf of the
Account, such redemptions to be effected at net asset value in accordance with
Section 1.3 of this Agreement. Notwithstanding the foregoing, (i) the Company
shall not redeem Fund shares attributable to Contract owners except in the
circumstances permitted in Section 1.3 of this Agreement, and (ii) the Fund may
delay redemption of Fund shares of any Designated Portfolio to the extent
permitted by the 1940 Act, and any rules, regulations or orders thereunder.
1.3. Purchase and Redemption Procedures
(a) The Fund hereby appoints the Company as an agent of the Fund for
the limited purpose of receiving purchase and redemption requests on behalf of
the Account (but not with respect to any Fund shares that may be held in the
general account of the Company) for shares of those Designated Portfolios made
available hereunder, based on allocations of amounts to the Account or
subaccounts thereof under the Contracts and other transactions relating to the
Contracts or the Account. Receipt and acceptance of any such request (or
relevant transactional information therefor) on any day the New York Stock
Exchange is open for trading and on which the Fund calculates its net asset
value pursuant to the rules of the SEC (a "Business Day") by the Company as
such limited agent of the Fund prior to the time that the Fund ordinarily
calculates its net asset value as described from time to time in
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the Fund's statutory prospectus, as such term is defined in Rule 498 under the
1933 Act (which as of the date of execution of this Agreement is 4:00 p.m.
Eastern Time) shall constitute receipt and acceptance by the Fund on that same
Business Day, provided that the Fund or its designated agent receives notice of
such request by 9:00 a.m. Eastern Time on the next following Business Day.
(b) The Company shall pay for shares of each Designated Portfolio on
the day that it notifies the Fund of a purchase request for such shares.
Payment for Designated Portfolio shares shall be made in federal funds
transmitted to the Fund by wire to be received by the Fund by 4:00 p.m. Eastern
Time on the Business Day the Fund is notified of the purchase request for
Designated Portfolio shares (which request may be net of redemptions of
shares). If federal funds are not received on time, such funds will be
invested, and Designated Portfolio shares purchased thereby will be issued, as
soon as practicable and the Company shall promptly, upon the Fund's request,
reimburse the Fund for any charges, costs, fees, interest or other expenses
incurred by the Fund in connection with any advances to, or borrowing or
overdrafts by, the Fund, or any similar expenses incurred by the Fund, as a
result of portfolio transactions effected by the Fund based upon such purchase
request. Upon receipt of federal funds so wired, such funds shall cease to be
the responsibility of the Company and shall become the responsibility of the
Fund.
(c) Payment for Designated Portfolio shares redeemed by the Account
or the Company shall be made in federal funds transmitted by wire to the
Company or any other designated person on the next Business Day after the Fund
is properly notified of the redemption order of such shares (which order shall
be net of any purchase orders) except that the Fund reserves the right to
redeem Designated Portfolio shares in assets other than cash and to delay
payment of redemption proceeds to the extent permitted under Section 22(e) of
the 1940 Act and any Rules thereunder, and in accordance with the procedures
and policies of the Fund as described in the then current statutory prospectus
and/or SAI. The Fund shall not bear any responsibility whatsoever for the
proper disbursement or crediting of redemption proceeds by the Company; the
Company alone shall be responsible for such action.
(d) Any purchase or redemption request for Designated Portfolio
shares held or to be held in the Company's general account shall be effected at
the net asset value per share next determined after the Fund's receipt of such
request, provided that, in the case of a purchase request, payment for Fund
shares so requested is received by the Fund in federal funds prior to close of
business for determination of such value, as defined from time to time in the
Fund's statutory prospectus.
(e) The Company shall not redeem Fund shares attributable to the
Contracts (as opposed to Fund shares attributable to the Company's assets held
in the Account) except (i) as necessary to implement Contract owner initiated
or approved transactions, (ii) as required by state and/or federal laws or
regulations or judicial or other legal precedent of general application
(hereinafter referred to as a "Legally Required Redemption"), (iii) upon 45
days prior written notice to the Fund and the Underwriter, as permitted by an
order of the SEC pursuant to Section 26(c) of the 1940 Act, but only if a
substitution of other securities for the shares of the Designated Portfolios is
consistent with the terms of the Contracts, or (iv) as permitted under the
terms of the Contracts. Upon request, the Company will promptly furnish to the
Fund reasonable assurance that any redemption pursuant to clause (ii) above is
a Legally Required Redemption. Furthermore, except in cases where permitted
under the terms of the Contracts, the Company shall not prevent Contract owners
from allocating payments to a Designated Portfolio that was otherwise available
under the Contracts without first giving the Fund 45 days notice of its
intention to do so.
1.4. The Fund shall use its best efforts to make the net asset value per
share for each Designated Portfolio available to the Company by 7:00 p.m.
Eastern Time each Business Day, and in any event, as soon as reasonably
practicable after the net asset value per share for such Designated Portfolio is
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calculated, and shall calculate such net asset value in accordance with the
Fund's statutory prospectus. Neither the Fund, any Designated Portfolio, the
Underwriter, nor any of their affiliates shall be liable for any information
provided to the Company pursuant to this Agreement which information is based
on incorrect information supplied by the Company or any other Participating
Insurance Company to the Fund or the Underwriter.
1.5. The Fund shall furnish notice (by wire or telephone followed by
written confirmation) to the Company as soon as reasonably practicable of any
income dividends or capital gain distributions payable on any Designated
Portfolio shares. The Company, on its behalf and on behalf of the Account,
hereby elects to receive all such dividends and distributions as are payable on
any Designated Portfolio shares in the form of additional shares of that
Designated Portfolio. The Company reserves the right, on its behalf and on
behalf of the Account, to revoke this election and to receive all such
dividends and capital gain distributions in cash. The Fund shall notify the
Company promptly of the number of Designated Portfolio shares so issued as
payment of such dividends and distributions.
1.6. Issuance and transfer of Fund shares shall be by book entry only.
Share certificates will not be issued to the Company or the Account. Purchase
and redemption orders for Fund shares shall be recorded in an appropriate
ledger for the Account or the appropriate subaccount of the Account.
1.7. (a) The parties hereto acknowledge that the arrangement
contemplated by this Agreement is not exclusive; the Fund's shares may be sold
to other insurance companies (subject to Section 1.8 hereof) and the cash value
of the Contracts may be invested in other investment companies, provided,
however, that until this Agreement is terminated pursuant to Article IX, the
Company shall promote the Designated Portfolios on the same basis as other
funding vehicles available under the Contracts. Funding vehicles other than
those listed on Schedule A to this Agreement may be available for the
investment of the cash value of the Contracts, provided, however, that if any
such vehicle or series thereof, has investment objectives or policies that are
substantially comparable to the investment objectives and policies of a
Designated Portfolio available hereunder, the Company gives the Fund and the
Underwriter 45 days written notice of its intention to make such other
investment vehicle available as a funding vehicle for the Contracts.
(a) The Company shall not, without prior notice to the Fund (unless
otherwise required by applicable law), take any action to operate the Account
as a management investment company under the 0000 Xxx.
(b) The Company shall not, without prior notice to the Fund (unless
otherwise required by applicable law), induce or encourage Contract owners to
change or modify the Fund or remove or otherwise change the Fund's distributor
or investment adviser.
(d) The Company shall not, without prior notice to the Fund, induce
or encourage Contract owners to vote on any matter submitted for consideration
by the shareholders of the Fund in a manner other than as recommended by the
Board of Trustees of the Fund.
1.8. The Company acknowledges that, pursuant to Form 24F-2, the Fund is
not required to pay fees to the SEC for registration of its shares under the
1933 Act with respect to its shares issued to an Account that is a unit
investment trust that offers interests that are registered under the 1933 Act
and on which a registration fee has been or will be paid to the SEC (a
"Registered Account"). The Company agrees to provide the Fund or its agent each
year within 60 days of the end of the Fund's fiscal year, or when reasonably
requested by the Fund, information as to the number of shares purchased by a
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Registered Account and any other Account the interests of which are not
registered under the 0000 Xxx. The Company acknowledges that the Fund intends
to rely on the information so provided.
ARTICLE II. Representations and Warranties
2.1. The Fund represents and warrants that (i) the Fund is lawfully
organized and validly existing under the laws of the State of Delaware,
(ii) the Fund is and shall remain registered under the 1940 Act,
(iii) Designated Portfolio shares sold pursuant to this Agreement are
registered under the 1933 Act (to the extent required by that Act) and are duly
authorized for issuance, (iv) the Fund shall amend the registration statement
for the shares of the Designated Portfolios under the 1933 Act and the 1940 Act
from time to time as required in order to effect the continuous offering of
such shares, and (v) the Board has elected for each Designated Portfolio to be
taxed as a Regulated Investment Company under Subchapter M of the Internal
Revenue Code of 1986, as amended (the "Code"). The Fund makes no
representations or warranties as to whether any aspect of the Designated
Portfolios' operations, including, but not limited to, investment policies,
fees and expenses, complies with the insurance laws and other applicable laws
of the various states. The Company agrees to promptly notify the Fund of any
investment restrictions imposed by state insurance law applicable to the Fund
or a Designated Portfolio. The Fund shall not be responsible, and the Company
shall take full responsibility, for determining any jurisdiction in which any
qualification or registration of Fund shares or the Fund by the Fund may be
required in connection with the sale of the Contracts or the indirect interest
of any Contract in any shares of the Fund and shall advise the Fund at such
time and in such manner as is necessary to permit the Fund to comply.
2.2. The Underwriter represents and warrants that shares of the
Designated Portfolios (i) shall be offered and sold in compliance in all
material respects with applicable federal securities laws, (ii) are offered and
sold only to Participating Insurance Companies and their separate accounts and
to persons or plans that communicate to the Fund that they qualify to purchase
shares of the Designated Portfolios under Section 817(h) of the Code and the
regulations thereunder without impairing the ability of the Account to consider
the portfolio investments of the Designated Portfolios as constituting
investments of the Account for the purpose of satisfying the diversification
requirements of Section 817(h) ("Qualified Persons"), and (iii) are registered
and qualified for sale in accordance with the laws of the various states to the
extent required by applicable law.
2.3. Subject to Company's representations and warranties in Sections 2.5
and 2.6, the Fund represents and warrants that it will invest the assets of
each Designated Portfolio in such a manner as to ensure that the Contracts will
be treated as annuity or life insurance contracts, whichever is appropriate,
under the Code and the regulations issued thereunder (or any successor
provisions). Without limiting the scope of the foregoing, the Fund represents
and warrants that each Designated Portfolio has complied and will continue to
comply with Section 817(h) of the Code and Treasury Regulation (S)1.817-5, and
any Treasury interpretations thereof, relating to the diversification
requirements for variable annuity, endowment, or life insurance contracts, and
any amendments or other modifications or successor provisions to such Section
or Regulation. The Fund will make every reasonable effort (a) to notify the
Company immediately upon having a reasonable basis for believing that a breach
of this Section 2.3 has occurred, and (b) in the event of such a breach, to
adequately diversify the Designated Portfolio so as to achieve compliance
within the grace period afforded by Treasury Regulation (S)1.817-5.
2.4. The Fund represents and warrants that each Designated Portfolio is
or will be qualified as a Regulated Investment Company under Subchapter M of
the Code, that the Fund will make every reasonable effort to maintain such
qualification (under Subchapter M or any successor or similar provisions) and
that the Fund will notify the Company immediately upon having a reasonable
basis for believing that a Designated Portfolio has ceased to so qualify or
that it might not so qualify in the future.
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2.5. The Company represents and warrants that the Contracts (a) are, or
prior to issuance will be, registered under the 1933 Act, or (b) are not
registered because they are properly exempt from registration under the 1933
Act or will be offered exclusively in transactions that are properly exempt
from registration under the 1933 Act. The Company also represents and warrants
that it is an insurance company duly organized and in good standing under
applicable law, that it has legally and validly established the Account prior
to any issuance or sale thereof as a segregated asset account under Minnesota
state insurance laws, and that it (a) has registered or, prior to any issuance
or sale of the Contracts, will register the Account as a unit investment trust
in accordance with the provisions of the 1940 Act to serve as a segregated
investment account for the Contracts, or alternatively (b) has not registered
the Account in proper reliance upon an exclusion from registration under the
1940 Act. The Company further represents and warrants that (i) the Contracts
will be issued and sold in compliance in all material respects with all
applicable federal securities and state securities and insurance laws, (ii) the
sale of the Contracts shall comply in all material respects with state
insurance suitability requirements; (iii) the information provided pursuant to
Section 1.8 shall be accurate in all material respects; and (iv) it and the
Account are Qualified Persons. The Company shall register and qualify the
Contracts or interests therein as securities in accordance with the laws of the
various states only if and to the extent required by applicable law.
2.6. The Company represents and warrants that the Contracts are
currently, and at the time of issuance shall be, treated as life insurance or
annuity contracts, under applicable provisions of the Code, and that it will
make every reasonable effort to maintain such treatment, and that it will
notify the Fund and the Underwriter immediately upon having a reasonable basis
for believing the Contracts have ceased to be so treated or that they might not
be so treated in the future. In addition, the Company represents and warrants
that each of its Accounts is a "segregated asset account" and that interests in
the Accounts 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. Company will use every reasonable effort
to continue to meet such definitional requirements, and it will notify the Fund
and the Underwriter 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.
2.7. The Underwriter represents and warrants that it is a member in good
standing of the FINRA and is registered as a broker-dealer with the SEC.
2.8. The Fund and the Underwriter represent and warrant that all of
their trustees/directors, officers, employees, investment advisers, and other
individuals or entities dealing with the money and/or securities of the Fund
are and shall continue to be at all times covered by a blanket fidelity bond or
similar coverage for the benefit of the Fund in an amount not less than the
minimum coverage as required currently by Rule 17g-1 of the 1940 Act or related
provisions as may be promulgated from time to time. The aforesaid bond shall
include coverage for larceny and embezzlement and shall be issued by a
reputable bonding company.
2.9. The Company represents and warrants that all of its directors,
officers, employees, and other individuals/entities employed or controlled by
the Company dealing with the money and/or securities of the Account are covered
by a blanket fidelity bond or similar coverage for the benefit of the Account,
in an amount not less than $5 million. The aforesaid bond includes coverage for
larceny and embezzlement and is issued by a reputable bonding company. The
Company agrees to hold for the benefit of the Fund and to pay to the Fund any
amounts lost from larceny, embezzlement or other events covered by the
aforesaid bond to the extent such amounts properly belong to the Fund pursuant
to the terms of this Agreement. The Company agrees to make all reasonable
efforts to see that this bond or another bond containing these provisions is
always in effect, and agrees to notify the Fund and the Underwriter in the
event that such coverage no longer applies.
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2.10. The Company represents and warrants that it shall comply with any
applicable privacy and notice provisions of 15 U.S.C. (S)(S) 6801-6827 and any
applicable regulations promulgated thereunder (including but not limited to 17
C.F.R. Part 248), and any other applicable federal and state privacy law, as
they may be amended from time to time.
2.11. The Company represents and warrants that it has in place an
anti-money laundering program ("AML program") that does now and will continue
to comply with applicable laws and regulations, including the relevant
provisions of the USA PATRIOT Act (Pub. L. No. 107-56 (2001)) and the
regulations issued thereunder (the "Patriot Act"). The Company hereby certifies
that it has established and maintains an AML program that includes written
policies, procedures and internal controls reasonably designed to identify its
Contract owners and has undertaken appropriate due diligence efforts to "know
its customers" in accordance with all applicable anti-money laundering
regulations in its jurisdiction including, where applicable, the Patriot Act.
The Company further confirms that it will monitor for suspicious activity in
accordance with the requirements of the Patriot Act. In addition, the Company
represents and warrants that it has adopted and implemented policies and
procedures reasonably designed to achieve compliance with the applicable
requirements administered by the Office of Foreign Assets Control of the U.S.
Department of the Treasury. The Company agrees to provide the Underwriter with
such information as it may reasonably request, including but not limited to the
filling out of questionnaires, attestations and other documents, to enable the
Underwriter to fulfill its obligations under applicable law, and, upon its
request, to file a notice pursuant to Section 314 of the Patriot Act and the
implementing regulations related thereto to permit the voluntary sharing of
information between the parties hereto. Upon filing such a notice, the Company
agrees to forward a copy to the Underwriter, and further agrees to comply with
all requirements under the Patriot Act and implementing regulations concerning
the use, disclosure, and security of any information that is shared.
2.12. The Company represents and warrants that (a) the Company has, and
will maintain, policies and procedures reasonably designed to monitor and
prevent market timing or excessive trading activity by its customers and
(b) the Company will provide the Fund or its agent with assurances regarding
the compliance of its handling of orders with respect to shares of the
Designated Portfolios with the requirements of Rule 22c-1 under the 1940 Act,
regulatory interpretations thereof, and the Fund's market timing and excessive
trading policies upon reasonable request. Additionally, the Company shall
comply with provisions of the Prospectus (the term "Prospectus" to include the
summary prospectuses and statutory prospectuses of the Portfolios of the Fund
as defined under Rule 498 of the 0000 Xxx) and statement of additional
information ("SAI") of the Fund, and with applicable federal and state
securities laws. Among other things, and without limitation of the foregoing,
the Company shall be responsible for reasonably assuring that: (a) only orders
to purchase, redeem or exchange Portfolio shares received by the Company or any
Indirect Intermediary (as defined below) prior to the Valuation Time (as
defined below) shall be submitted directly or indirectly by the Company to the
Fund or its transfer agent or other applicable agent for receipt of a price
based on the net asset value per share calculated for that day in accordance
with Rule 22c-1 under the 1940 Act (Orders to purchase, redeem or exchange
Portfolio shares received by the Company subsequent to the Valuation Time on
any given day shall receive a price based on the next determined net asset
value per share in accordance with Rule 22c-1 under the 1940 Act.); and (b) the
Company shall cause to be imposed and/or waived applicable redemption fees, if
any, only in accordance with the Portfolio's then current Prospectus or SAI
and/or as instructed by the Underwriter. The Company further agrees to make
reasonable efforts to assist the Fund and its service providers (including but
not limited to the Underwriter) to detect, prevent and report market timing or
excessive short-term trading of Portfolio shares. To the extent the Company has
actual knowledge of violations of Fund policies (as set forth in the then
current Prospectus or SAI) regarding (i) the timing of purchase, redemption or
exchange orders and pricing of Portfolio shares, (ii) market timing or
excessive short-term trading, or (iii) the imposition of redemption fees, if
any, the Company agrees to report such known violations to the Underwriter. For
purposes of this provision, the term "Valuation Time" refers to the
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time as of which the shares of a Portfolio are valued on each business day,
currently the close of regular trading on the New York Stock Exchange
(normally, 4:00 p.m., Eastern Time) on each day that the New York Stock
Exchange is open for business.
2.13 The Company agrees to provide promptly to the Underwriter, upon
written request, the taxpayer identification number ("TIN"), the
Individual/International Taxpayer Identification Number ("ITIN"), or other
government-issued identifier ("GII") and the Contract owner number or
participant account number, if known, of any or all Contractholder(s) of the
account, the name or other identifier of any investment professional(s)
associated with the Contractholder(s) or account (if known), and the amount,
date and transaction type (purchase, redemption, transfer, or exchange) of
every purchase, redemption, transfer, or exchange of shares held through an
account maintained by the Company during the period covered by the request.
Unless otherwise specifically requested by the Underwriter, the Company shall
only be required to provide information relating to Contractholder-Initiated
Transfer Purchases or Contractholder-Initiated Transfer Redemptions.
(a) Period Covered by Request. Requests must set forth a specific period, not
to exceed 180 days from the date of the request, for which transaction
information is sought. The Underwriter may request transaction information
older than 180 days from the date of the request as it deems necessary to
investigate compliance with policies established or utilized by the Fund or the
Underwriter for the purpose of eliminating or reducing any dilution of the
value of the outstanding shares issued by a Portfolio. If requested by the
Underwriter, the Company will provide the information specified in this
Section 2.13 for each trading day.
(b) Form and Timing of Response. The Company agrees to provide, promptly upon
request of the Underwriter, the requested information specified in this
Section 2.13. The Company agrees to use its best efforts to determine promptly
whether any specific person about whom it has received the identification and
transaction information specified in this Section 2.13 is itself a "financial
intermediary," as that term is defined in Rule 22c-2 under the 1940 Act (an
"Indirect Intermediary") and, upon request of the Underwriter, promptly either
(i) provide (or arrange to have provided) the information set forth in this
Section 2.13 for those Contractholders who hold an account with an Indirect
Intermediary or (ii) restrict or prohibit the Indirect Intermediary from
purchasing shares in nominee name on behalf of other persons. The Company
additionally agrees to inform the Underwriter whether it plans to perform (i)
or (ii) above. Responses required by this paragraph must be communicated in
writing and in a format mutually agreed upon by the parties. To the extent
practicable, the format for any Contractholder and transaction information
provided to the Underwriter should be consistent with the NSCC Standardized
Data Reporting Format.
(c) Limitations on Use of Information. The Underwriter agrees not to use the
information received under this Section 2.13 for marketing or any other similar
purpose without the prior written consent of the Company; provided, however,
that this provision shall not limit the use of publicly available information,
information already in the possession of the Underwriter, the Fund or their
affiliates at the time the information is received pursuant to this
Section 2.13 or information which comes into the possession of the Underwriter,
the Fund or their affiliates from a third party.
(d) Agreement to Restrict Trading. The Company agrees to execute written
instructions from the Underwriter to restrict or prohibit further purchases or
exchanges of Portfolio shares by a Contractholder that has been identified by
the Underwriter as having engaged in transactions in Portfolio shares (directly
or indirectly through the Company's account) that violate policies established
or utilized by the Fund or the Underwriter for the purpose of eliminating or
reducing any dilution of the value of the outstanding shares issued by a
Portfolio. Unless otherwise directed by the Underwriter, any such restrictions
or
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prohibitions shall only apply to Contractholder-Initiated Transfer Purchases or
Contractholder-Initiated Transfer Redemptions that are effected directly or
indirectly through the Company.
(e) Form of Instructions. Instructions must include the TIN, ITIN or GII and
the specific individual Contract owner number or participant account number
associated with the Contractholder, if known, and the specific restriction(s)
to be executed. If the TIN, ITIN, GII or the specific individual Contract owner
number or participant account number associated with the Contractholder is not
known, the instructions must include an equivalent identifying number of the
Contractholder(s) or account(s) or other agreed upon information to which the
instruction relates.
(f) Timing of Response. The Company agrees to execute instructions from the
Underwriter as soon as reasonably practicable, but not later than five
(5) business days after receipt of the instructions by the Company.
(g) Confirmation by the Company. The Company must provide written confirmation
to the Underwriter that the Underwriter's instructions to restrict or prohibit
trading have been executed. The Company agrees to provide confirmation as soon
as reasonably practicable, but not later than ten (10) business days after the
instructions have been executed.
(h) Definitions. For purposes of this Section 2.13, the following terms shall
have the following meanings, unless a different meaning is clearly required by
the context:
(i) The term "Contractholder" means the holder of interests in a
Contract or a participant in an employee benefit plan with a
beneficial interest in a Contract.
(ii) The term "Contractholder-Initiated Transfer Purchase" means a
transaction that is initiated or directed by a Contractholder that
results in a transfer of assets within a Contract to a Portfolio, but
does not include transactions that are executed: (i) automatically
pursuant to a contractual or systematic program or enrollment such as
a transfer of assets within a Contract to a Portfolio as a result of
"dollar cost averaging" programs, insurance company approved asset
allocation programs, or automatic rebalancing programs; (ii) pursuant
to a Contract death benefit; (iii) as a result of a one-time step-up
in Contract value pursuant to a Contract death benefit; (iv) as a
result of an allocation of assets to a Portfolio through a Contract
as a result of payments such as loan repayments, scheduled
contributions, retirement plan salary reduction contributions, or
planned premium payments to the Contract; or (v) pre-arranged
transfers at the conclusion of a required "free look" period.
(iii) The term "Contractholder-Initiated Transfer Redemption" means a
transaction that is initiated or directed by a Contractholder that
results in a transfer of assets within a Contract out of a Portfolio,
but does not include transactions that are executed:
(i) automatically pursuant to a contractual or systematic program or
enrollments such as transfers of assets within a Contract out of a
Portfolio as a result of annuity payouts, loans, systematic
withdrawal programs, insurance company approved asset allocation
programs and automatic rebalancing programs; (ii) as a result of any
deduction of charges or fees under a Contract; (iii) within a
Contract out of a Portfolio as a result of scheduled withdrawals or
surrenders from a Contract; or (iv) as a result of payment of a death
benefit from a Contract.
- 9 -
(iv) The term "Portfolios" shall mean the constituent series of the
Fund, but for purposes of this Section 2.13 shall not include
Portfolios excepted from the requirements of paragraph (a) of Rule
22c-2 by paragraph (b) of Rule 22c-2.
(v) The term "promptly" shall mean as soon as practicable but in no
event later than five (5) business days from the Company's receipt of
the request for information from the Underwriter.
(vi) The term "written" includes electronic writings and facsimile
transmissions.
(vii) In addition, for purposes of this Section 2.13, the term
"purchase" does not include the automatic reinvestment of dividends
or distributions.
ARTICLE III. Prospectuses and Proxy Statements; Voting
3.1. Subject to Section 6.1 and the Fund's determination to use summary
prospectuses, as such term is defined in Rule 498 under the 1933 Act, the
Underwriter shall provide the Company with as many copies of the Fund's current
Prospectuses as the Company may reasonably request. The Company shall bear the
expense of printing copies of the current summary prospectus and statutory
prospectus, if requested by Contract owners, for the Contracts that will be
distributed to existing Contract owners, and the Company shall bear the expense
of printing copies of the Fund's Prospectuses that are used in connection with
offering the Contracts issued by the Company. If requested by the Company in
lieu thereof, the Fund shall provide such documentation (including a final copy
of the new summary and/or statutory prospectus in electronic format at the
Fund's expense) and other assistance as is reasonably necessary in order for
the Company once each year (or more frequently if the summary prospectus for
the Fund is amended) to have the prospectus for the Contracts and the Fund's
summary prospectus bound together in one document in accordance with applicable
law, including but not limited to, Rule 498 under the 1933 Act (such printing
to be at the Company's expense). The Company shall deliver the summary
prospectus to existing Contract owners and potential investors as required by,
and in accordance with, Rule 498 and all other applicable laws.
3.2. The Underwriter (or the Fund), at its expense, shall provide a
reasonable number of copies of the current SAI for the Fund free of charge to
the Company for itself and for any owner of a Contract who requests such SAI.
3.3. The Fund shall provide the Company with information regarding the
Fund's expenses, which information may include a table of fees and related
narrative disclosure for use in any prospectus or other descriptive document
relating to a Contract. The Company agrees that it will use such information in
the form provided. The Company shall provide prior written notice of any
proposed modification of such information, which notice will describe in detail
the manner in which the Company proposes to modify the information, and agrees
that it may not modify such information in any way without the prior consent of
the Fund.
3.4. The Fund, at its expense, or at the expense of its designee, shall
provide the Company with copies of its proxy material, reports to shareholders,
and other communications to shareholders in such quantity as the Company shall
reasonably require for distributing to Contract owners.
3.5. The Company shall:
- 10 -
(i)solicit voting instructions from Contract owners;
(ii)vote the Fund shares in accordance with instructions received
from Contract owners; and
(iii)vote Fund shares for which no instructions have been received in
the same proportion as Fund shares of such portfolio for which
instructions have been received,
so long as and to the extent that the SEC continues to interpret the 1940 Act
to require pass-through voting privileges for variable contract owners or to
the extent otherwise required by law. The Company will vote Fund shares held in
any segregated asset account in the same proportion as Fund shares of such
portfolio for which voting instructions have been received from Contract
owners, to the extent permitted by law.
3.6. Participating Insurance Companies shall be responsible for assuring
that each of their separate accounts participating in a Designated Portfolio
calculates voting privileges as required by the Shared Funding Exemptive Order
and consistent with any reasonable standards that the Fund may adopt and
provide in writing.
ARTICLE IV. Sales Material and Information
4.1. The Company shall furnish, or shall cause to be furnished, to the
Fund or its designee, each piece of sales literature or other promotional
material that the Company develops and in which the Fund (or a Designated
Portfolio thereof) or the Adviser or the Underwriter is named. No such material
shall be used until approved by the Fund or its designee, and the Fund will use
its best efforts for it or its designee to review such sales literature or
promotional material within ten Business Days after receipt of such material.
The Fund or its designee reserves the right to reasonably object to the
continued use of any such sales literature or other promotional material in
which the Fund (or a Designated Portfolio thereof) or the Adviser or the
Underwriter is named, and no such material shall be used if the Fund or its
designee so object.
4.2. The Company shall not give any information or make any
representations or statements on behalf of the Fund or concerning the Fund or
the Adviser or the Underwriter in connection with the sale of the Contracts
other than the information or representations contained in the registration
statement or Prospectus or SAI for the Fund shares, as such registration
statement and Prospectus or SAI may be amended or supplemented from time to
time, or in reports or proxy statements for the Fund, or in sales literature or
other promotional material approved by the Fund or its designee or by the
Underwriter, except with the permission of the Fund or the Underwriter or the
designee of either. The Company shall comply with all applicable laws,
including Rule 498 of the 1933 Act, when composing, compiling and delivering
sales literature or other promotional material. The Fund shall be entitled to
review Company's placement of sales materials with the summary prospectus in
order to review Company's compliance with applicable laws.
4.3. The Fund and the Underwriter, or their designee, shall furnish, or
cause to be furnished, to the Company, each piece of sales literature or other
promotional material that it develops and in which the Company, and/or its
Account, is named. No such material shall be used until approved by the
Company, and the Company will use its best efforts to review such sales
literature or promotional material within ten Business Days after receipt of
such material. The Company reserves the right to reasonably object to the
continued use of any such sales literature or other promotional material in
which the Company and/or its Account is named, and no such material shall be
used if the Company so objects.
- 11 -
4.4. The Fund and the Underwriter shall not give any information or make
any representations on behalf of the Company or concerning the Company, the
Account, or the Contracts other than the information or representations
contained in a registration statement, prospectus (which shall include an
offering memorandum, if any, if the Contracts issued by the Company or
interests therein are not registered under the 1933 Act), or SAI for the
Contracts, as such registration statement, prospectus, or SAI may be amended or
supplemented from time to time, or in published reports for the Account which
are in the public domain or approved by the Company for distribution to
Contract owners, or in sales literature or other promotional material approved
by the Company or its designee, except with the permission of the Company.
4.5. The Fund will provide to the Company at least one complete copy of
all registration statements, summary and/or statutory prospectuses, SAIs,
reports, proxy statements, sales literature and other promotional materials,
applications for exemptions, requests for no-action letters, and all amendments
to any of the above, that relate to the Fund or its shares, promptly after the
filing of such document(s) with the SEC or other regulatory authorities.
4.6. The Company will provide to the Fund at least one complete copy of
all registration statements, prospectuses (which shall include an offering
memorandum, if any, if the Contracts issued by the Company or interests therein
are not registered under the 1933 Act), SAIs, reports, solicitations for voting
instructions, sales literature and other promotional materials, applications
for exemptions, requests for no-action letters, and all amendments to any of
the above, that relate to the Contracts or the Account, promptly after the
filing of such document(s) with the SEC or other regulatory authorities. The
Company shall provide to the Fund and the Underwriter any complaints received
from the Contract owners pertaining to the Fund or the Designated Portfolio.
4.7. For purposes of this Article IV, the phrase "sales literature and
other promotional materials" includes, but is not limited to, any of the
following that refer to the Fund or any affiliate of the Fund: 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), sales
literature (i.e., any written communication distributed or made generally
available to customers or the public, including brochures, circulars, reports,
market letters, form letters, seminar texts, reprints or excerpts of any other
advertisement, sales literature, or published article), educational or training
materials or other communications distributed or made generally available to
some or all agents or employees, and registration statements, prospectuses,
SAIs, shareholder reports, proxy materials, and any other communications
distributed or made generally available with regard to the Fund.
ARTICLE V. Fees and Expenses
5.1. Except as otherwise provided herein, no party to this Agreement
shall pay any fee or other compensation to any other party to this Agreement.
Except as otherwise provided herein, all expenses incident to performance by a
party under this Agreement shall be paid by such party.
5.2. All expenses incident to performance by the Fund under this
Agreement shall be paid by the Fund. The Fund shall see to it that all its
shares are registered and authorized for issuance in accordance with applicable
federal law and, if and to the extent deemed advisable by the Fund, in
accordance with applicable state laws prior to their sale. The Fund shall bear
the expenses for the cost of registration and qualification of the Fund's
shares, preparation and filing of the Fund's Prospectuses and registration
statement, proxy materials and reports, setting the Prospectuses in type,
setting in type and printing the proxy materials and reports to shareholders,
the preparation of all statements and notices required by any federal or state
law, and all taxes on the issuance or transfer of the Fund's shares.
- 12 -
5.3. The Company shall bear the expenses of distributing the Fund's
Prospectuses to owners of Contracts issued by the Company and of distributing
the Fund's proxy materials and reports to such Contract owners.
ARTICLE VI. Potential Conflicts
6.1. The parties to this Agreement agree that the conditions or
undertakings required by the Mixed and Shared Funding Exemptive Order that may
be imposed on the Company, the Fund and/or the Underwriter by virtue of such
order by the SEC: (i) shall apply only upon the sale of shares of the
Designated Portfolios to variable life insurance separate accounts (and then
only to the extent required under the 1940 Act); (ii) shall apply and be
incorporated herein by reference only if any of the Company, any Participating
Insurance Company, the Fund or the Adviser relies on the exemptions from
Sections 9(a), 13(a), 15(a) or 15(b) of the 1940 Act granted by the Mixed and
Shared Funding Exemptive Order; (iii) will be incorporated herein by reference;
and (iv) such parties agree to comply with such conditions and undertakings to
the extent applicable to each such party notwithstanding any provision of this
Agreement to the contrary.
6.2. If and to the extent that Rule 6e-2 and Rule 6e-3(T) are amended,
or Rule 6e-3 is adopted, to provide exemptive relief from any provision of the
1940 Act or the rules promulgated thereunder with respect to mixed or shared
funding (as defined in the Mixed and Shared Funding Exemptive Order) on terms
and conditions materially different from those contained in the Mixed and
Shared Funding Exemptive Order, then (a) the parties to this Agreement shall
take such steps as may be necessary to comply with Rules 6e-2 and 6e-3(T), as
amended, and Rule 6e-3, as adopted, to the extent such rules are applicable;
and (b) Sections 3.5 and 3.6 of this Agreement shall continue in effect only to
the extent that terms and conditions substantially identical to such Sections
are contained in such Rule(s) as so amended or adopted.
ARTICLE VII. Indemnification
7.1. Indemnification By the Company
7.1(a). The Company agrees to indemnify and hold harmless the Fund
and the Underwriter and each of its trustees/directors and officers, and each
person, if any, who controls the Fund or Underwriter within the meaning of
Section 15 of the 1933 Act or who is under common control with the Underwriter
(collectively, the "Indemnified Parties" for purposes of this Section 7.1)
against any and all losses, claims, damages, liabilities (including amounts
paid in settlement with the written consent of the Company) or litigation
(including legal and other expenses), to which the Indemnified Parties may
become subject under any statute or regulation, at common law or otherwise,
insofar as such losses, claims, damages, liabilities or expenses (or actions in
respect thereof) or settlements:
(i) arise out of or are based upon any untrue statement or alleged
untrue statements of any material fact contained in the registration
statement, prospectus (which shall include a written description of a
Contract that is not registered under the 1933 Act), or SAI for the
Contracts or contained in the Contracts or sales literature 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 the Company by
- 13 -
or on behalf of the Fund for use in the registration statement,
prospectus or SAI for the Contracts or in the Contracts or sales
literature (or any amendment or supplement) or otherwise for use in
connection with the sale of the Contracts or Fund shares; or
(ii) arise out of or as a result of statements or representations
(other than statements or representations contained in the
registration statement, prospectus, SAI, or sales literature of the
Fund not supplied by the Company or persons under its control) or
wrongful conduct of the Company or its agents or persons under the
Company's authorization or control, with respect to the sale or
distribution of the Contracts or Fund Shares; or
(iii) arise out of any untrue statement or alleged untrue statement
of a material fact contained in a registration statement, prospectus,
SAI, or sales literature of the Fund or any amendment thereof or
supplement thereto or the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to
make the statements therein not misleading if such a statement or
omission was made in reliance upon information furnished to the Fund
by or on behalf of the Company; or
(iv) arise as a result of any material failure by the Company to
provide the services and furnish the materials under the terms of
this Agreement (including a failure, whether unintentional or in good
faith or otherwise, to comply with the qualification requirements
specified in Section 2.6 of this Agreement); or
(v) arise out of or result from any material breach of any
representation and/or warranty made by the Company in this Agreement
or arise out of or result from any other material breach of this
Agreement by the Company;
as limited by and in accordance with the provisions of Sections 7.1(b) and
7.1(c) hereof.
7.1(b). The Company shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or
litigation to which an Indemnified Party would otherwise be subject by reason
of such Indemnified Party's willful misfeasance, fraud, bad faith, or gross
negligence in the performance of such Indemnified Party's duties or by reason
of such Indemnified Party's reckless disregard of its obligations or duties
under this Agreement.
7.1(c). The Company shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Company in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice
of such service on any designated agent), but failure to notify the Company of
any such claim shall not relieve the Company from any liability which it may
have to the Indemnified Party against whom such action is brought otherwise
than on account of this indemnification provision. In case any such action is
brought against an Indemnified Party, the Company shall be entitled to
participate, at its own expense, in the defense of such action. The Company
also shall be entitled to assume the defense thereof, with counsel satisfactory
to the party named in the action. After notice from the Company to such party
of the Company's election to assume the defense thereof, the Indemnified Party
shall bear the fees and expenses of any additional counsel retained by it, and
the Company will not be liable to such party under this Agreement for any legal
or other expenses
- 14 -
subsequently incurred by such party independently in connection with the
defense thereof other than reasonable costs of investigation.
7.1(d). The Indemnified Parties will promptly notify the Company of
the commencement of any litigation or proceedings against them in connection
with the issuance or sale of the Fund shares or the Contracts or the operation
of the Fund.
7.2. Indemnification by the Underwriter
7.2(a). The Underwriter agrees to indemnify and hold harmless the
Company and each of its directors and officers and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act
(collectively, the "Indemnified Parties" for purposes of this Section 7.2)
against any and all losses, claims, damages, liabilities (including amounts
paid in settlement with the written consent of the Underwriter) or litigation
(including legal and other expenses) to which the Indemnified Parties may
become subject under any statute or regulation, at common law or otherwise,
insofar as such losses, claims, damages, liabilities or expenses (or actions in
respect thereof) or settlements:
(i) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the registration
statement or prospectus or SAI or sales literature of the Fund (or
any amendment or supplement to any of the foregoing), or arise out of
or are based upon the omission or the alleged omission to state
therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, provided that this
agreement to indemnify shall not apply as to any Indemnified Party if
such statement or omission or such alleged statement or omission was
made in reliance upon and in conformity with information furnished to
the Underwriter or Fund by or on behalf of the Company for use in the
registration statement, prospectus or SAI for the Fund or in sales
literature (or any amendment or supplement) or otherwise for use in
connection with the sale of the Contracts or Fund shares; or
(ii) arise out of or as a result of statements or representations
(other than statements or representations contained in the
registration statement, prospectus, SAI or sales literature for the
Contracts not supplied by the Underwriter or persons under its
control) or wrongful conduct of the Fund or Underwriter or persons
under their control, with respect to the sale or distribution of the
Contracts or Fund shares; or
(iii) arise out of any untrue statement or alleged untrue statement
of a material fact contained in a registration statement, prospectus,
SAI or sales literature covering the Contracts, or any amendment
thereof or supplement thereto, or the omission or alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statement or statements therein not misleading,
if such statement or omission was made in reliance upon information
furnished to the Company by or on behalf of the Fund or the
Underwriter; or
(iv) arise as a result of any failure by the Fund or the Underwriter
to provide the services and furnish the materials under the terms of
this Agreement (including a failure of the Fund, whether
unintentional or in good faith or
- 15 -
otherwise, to comply with the diversification and other qualification
requirements specified in Sections 2.3 and 2.4 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; as limited by and in accordance
with the provisions of Sections 7.2(b) and 7.2(c) hereof.
7.2(b). The Underwriter shall not be liable under this
indemnification provision with respect to any losses, claims, damages,
liabilities or litigation to which an Indemnified Party would otherwise be
subject by reason of such Indemnified Party's willful misfeasance, fraud, bad
faith, or gross negligence in the performance of such Indemnified Party's
duties or by reason of such Indemnified Party's reckless disregard of
obligations and duties under this Agreement or to the Company or the Account,
whichever is applicable.
7.2(c). The Underwriter shall not be liable under this
indemnification provision with respect to any claim made against an Indemnified
Party unless such Indemnified Party shall have notified the Underwriter in
writing within a reasonable time after the summons or other first legal process
giving information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice
of such service on any designated agent), but failure to notify the Underwriter
of any such claim shall not relieve the Underwriter from any liability which it
may have to the Indemnified Party against whom such action is brought otherwise
than on account of this indemnification provision. In case any such action is
brought against the Indemnified Party, the Underwriter will be entitled to
participate, at its own expense, in the defense thereof. The Underwriter also
shall be entitled to assume the defense thereof, with counsel satisfactory to
the party named in the action. After notice from the Underwriter to such party
of the Underwriter's election to assume the defense thereof, the Indemnified
Party shall bear the fees and expenses of any additional counsel retained by
it, and the Underwriter 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.
7.2(d). The Company agrees promptly to notify the Underwriter of the
commencement of any litigation or proceedings against it or any of its officers
or directors in connection with the issuance or sale of the Contracts or the
operation of the Account.
7.3. Indemnification By the Fund
7.3(a). The Fund agrees to indemnify and hold harmless the Company
and each of its directors and officers and each person, if any, who controls
the Company within the meaning of Section 15 of the 1933 Act (collectively, the
"Indemnified Parties" for purposes of this Section 7.3) against any and all
losses, claims, expenses, damages, liabilities (including amounts paid in
settlement with the written consent of the Fund) or litigation (including legal
and other expenses) to which the Indemnified Parties may be required to pay or
may become subject under any statute or regulation, at common law or otherwise,
insofar as such losses, claims, expenses, damages, liabilities or expenses (or
actions in respect thereof) or settlements, are related to the operations of
the Fund and:
(i) arise as a result of any failure by the Fund to provide the
services and furnish the materials under the terms of this Agreement
(including a failure, whether unintentional or in good faith or
otherwise, to comply with the
- 16 -
diversification and other qualification requirements specified in
Section 2.3 and 2.4 of this Agreement); or
(ii) arise out of or result from any material breach of any
representation and/or warranty made by the Fund in this Agreement or
arise out of or result from any other material breach of this
Agreement by the Fund;
as limited by and in accordance with the provisions of Sections 7.3(b) and
7.3(c) hereof. The parties acknowledge that the Fund's indemnification
obligations under this Section 7.3 are subject to applicable law.
7.3(b). The Fund shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or
litigation to which an Indemnified Party would otherwise be subject by reason
of such Indemnified Party's willful misfeasance, fraud, bad faith, or gross
negligence in the performance of such Indemnified Party's duties or by reason
of such Indemnified Party's reckless disregard of obligations and duties under
this Agreement or to the Company, the Fund, the Underwriter or the Account,
whichever is applicable.
7.3(c). The Fund shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Fund in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice
of such service on any designated agent), but failure to notify the Fund of any
such claim shall not relieve the Fund from any liability which it may have to
the Indemnified Party against whom such action is brought otherwise than on
account of this indemnification provision. In case any such action is brought
against the Indemnified Parties, the Fund will be entitled to participate, at
its own expense, in the defense thereof. The Fund also shall be entitled to
assume the defense thereof, with counsel satisfactory to the party named in the
action. After notice from the Fund to such party of the Fund's election to
assume the defense thereof, the Indemnified Party shall bear the fees and
expenses of any additional counsel retained by it, and the Fund will not be
liable to such party 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.
7.3(d). The Company and the Underwriter agree promptly to notify the
Fund of the commencement of any litigation or proceeding against it or any of
its respective officers or directors in connection with the Agreement, the
issuance or sale of the Contracts, the operation of the Account, or the sale or
acquisition of shares of the Fund.
ARTICLE VIII. Applicable Law
8.1. This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the State of California.
8.2. This Agreement shall be subject to the provisions of the 1933,
1934 and 1940 Acts, and the rules and regulations and rulings thereunder,
including such exemptions from those statutes, rules and regulations as the SEC
may grant (including, but not limited to, any Mixed and Shared Funding
Exemptive Order) and the terms hereof shall be interpreted and construed in
accordance therewith. If, in the future, the Mixed and Shared Funding Exemptive
Order should no longer be necessary under applicable law, then Article VI shall
no longer apply.
- 17 -
ARTICLE IX. Termination
9.1.This Agreement shall continue in full force and effect until the
first to occur of:
(a)termination by any party, for any reason with respect to some or all
Designated Portfolios, by three (3) months advance written notice
delivered to the other parties; or
(b)termination by the Company by written notice to the Fund and the
Underwriter based upon the Company's determination that shares of the
Fund are not reasonably available to meet the requirements of the
Contracts; or
(c)termination by the Company by written notice to the Fund and the
Underwriter in the event any of the Designated Portfolio's shares are
not registered, issued or sold in accordance with applicable state
and/or federal law or such law precludes the use of such shares as
the underlying investment media of the Contracts issued or to be
issued by the Company; or
(d)termination by the Fund or Underwriter in the event that formal
administrative proceedings are instituted against the Company by
FINRA, the SEC, the Insurance Commissioner or like official 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
operation of any Account, or the purchase of the Fund's shares;
provided, however, that the Fund or Underwriter determines in its
sole judgment exercised in good faith, that any such administrative
proceedings will have a material adverse effect upon the ability of
the Company to perform its obligations under this Agreement; or
(e)termination by the Company in the event that formal administrative
proceedings are instituted against the Fund or Underwriter by FINRA,
the SEC, or any state securities or insurance department or any other
regulatory body; provided, however, that the Company determines in
its sole judgment exercised in good faith, that any such
administrative proceedings will have a material adverse effect upon
the ability of the Fund or Underwriter to perform its obligations
under this Agreement; or
(f)termination by the Company by written notice to the Fund and the
Underwriter with respect to any Designated Portfolio in the event
that such Portfolio ceases to qualify as a Regulated Investment
Company under Subchapter M or fails to comply with the Section 817(h)
diversification requirements specified in Section 2.4 hereof, or if
the Company reasonably believes that such Portfolio may fail to so
qualify or comply; or
(g)termination by the Fund or Underwriter by written notice to the
Company in the event that the Contracts fail to meet the
qualifications specified in Section 2.6 hereof; or
(h)termination by either the Fund or the Underwriter by written notice
to the Company, if either one or both of the Fund or the Underwriter
respectively, shall determine, in their sole judgment exercised in
good faith, that the Company has suffered a material adverse change
in its business, operations, financial condition,
- 18 -
or prospects since the date of this Agreement or is the subject of
material adverse publicity; or
(i)termination by the Company by written notice to the Fund and the
Underwriter, if the Company shall determine, in its sole judgment
exercised in good faith, that the Fund, Adviser, or the Underwriter
has suffered a material adverse change in its business, operations,
financial condition or prospects since the date of this Agreement or
is the subject of material adverse publicity; or
(j)termination by the Fund or the Underwriter by written notice to the
Company, if the Company gives the Fund and the Underwriter the
written notice specified in Section 1.7(a)(ii) hereof and at the time
such notice was given there was no notice of termination outstanding
under any other provision of this Agreement; provided, however, any
termination under this Section 9.1(j) shall be effective forty-five
days after the notice specified in Section 1.7(a)(ii) was given; or
(k)termination by the Company upon any substitution of the shares of
another investment company or series thereof for shares of a
Designated Portfolio of the Fund in accordance with the terms of the
Contracts, provided that the Company has given at least 45 days prior
written notice to the Fund and Underwriter of the date of
substitution; or
(l)termination by the Fund if the Board has decided to (i) refuse to
sell shares of any Designated Portfolio to the Company and/or any of
its Accounts; (ii) suspend or terminate the offering of shares of any
Designated Portfolio; or (iii) dissolve, reorganize, liquidate, merge
or sell all assets of the Fund or any Designated Portfolio, subject
to the provisions of Section 1.1; or
(m)termination by any party in the event that the Fund's Board of
Trustees determines that a material irreconcilable conflict exists as
provided in Article VI.
9.2. (a) Notwithstanding any termination of this Agreement, and except
as provided in Section 9.2(c), the Fund and the Underwriter shall, at the
option of the Company, continue, until the one year anniversary from the date
of termination, and from year to year thereafter if deemed appropriate by the
Fund and the Underwriter, to make available additional shares of the Designated
Portfolios 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, based on
instructions from the owners of the Existing Contracts, the Accounts shall be
permitted to reallocate investments in the Designated Portfolios of the Fund
and redeem investments in the Designated Portfolios, and shall be permitted to
invest in the Designated Portfolios in the event that owners of the Existing
Contracts make additional premium payments under the Existing Contracts.
9.2. (b) Upon termination of this agreement, the Fund or Underwriter may
request that the Company seek an order pursuant to Section 26(c) of the 1940
Act to permit the substitution of other securities for the shares of the
designated portfolios. The Company agrees that it shall reasonably cooperate
with the Fund or Underwriter and seek such an order upon request. Until the
order is obtained, the owners of the Existing Contracts, the Accounts shall be
permitted to reallocate investments in the Designated Portfolios of the Fund
and redeem investments in the Designated Portfolios, and shall be permitted to
invest in the Designated Portfolios in the event that owners of the Existing
Contracts make additional premium payments under the Existing Contracts. If the
Fund or Underwriter's request for a substitution order is made in conjunction
with its provision of notice of
- 19 -
termination pursuant to sections 9.1 (d), (g), (h) or (j), the Company shall
bear the expense of obtaining such an order. If the Company's request for a
substitution order is made in conjunction with its provision of notice of
termination pursuant to sections 9.1(c), (e), (f) or (i), the Fund or
Underwriter or its agent, based on the party by reason of which termination is
sought by the Company, respectively shall bear the reasonable expenses of the
Company in obtaining such an order. Notwithstanding anything herein to the
contrary, if the Company in its sole discretion decides to obtain a
substitution order, such expenses shall be borne by the Company.
9.2. (c) In the event (i) the Agreement is terminated pursuant to
Sections 9.1(g) or 9.1(m), at the option of the Fund or the Underwriter; or
(ii) the one year anniversary of the termination of the Agreement is reached
or, after waiver as provided in Section 9.2(a), such subsequent anniversary is
reached (each of (i) and (ii) referred to as a "triggering event" and the date
of termination as provided in (i) or the date of such anniversary as provided
in (ii) referred to as the "request date"), the parties agree that such
triggering event shall be considered as a request for immediate redemption of
shares of the Designated Portfolios held by the Accounts, received by the Fund
and its agents as of the request date, and the Company agrees to take all
reasonable steps necessary to effect such redemption, and the Fund agrees to
process such redemption request in accordance with the 1940 Act and the
regulations thereunder and the Fund's registration statement.
9.2. (d) The parties agree that Section 9.2(c) shall apply to any
terminations under Article VI and the effect of such Article VI terminations
shall be governed by Article VI of this Agreement. The parties further agree
that, to the extent that all or a portion of the assets of the Accounts
continue to be invested in the Fund or any Designated Portfolio of the Fund,
Articles I, II, VI, VII and VIII will remain in effect after termination.
9.3. Notwithstanding any termination of this Agreement, each party's
obligation under Article VII to indemnify the other parties shall survive.
ARTICLE X. Notices
Any notice shall be sufficiently given when sent by registered or
certified mail to the other party at the address of such party set forth below
or at such other address as such party may from time to time specify in writing
to the other party.
If to the Fund: PIMCO Variable Insurance Trust
000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
Attention: Legal Department
If to the Company: Minnesota Life Insurance Company
000 Xxxxxx Xxxxxx Xxxxx
Xx. Xxxx, XX 00000-0000
Attention: Legal Department
If to Underwriter: Allianz Global Investors Distributors LLC
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
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ARTICLE XI. Miscellaneous
11.1. All persons dealing with the Fund must look solely to the property
of the Fund, and in the case of a series company, the respective applicable
Designated Portfolios listed on Schedule A hereto as though each such
Designated Portfolio had separately contracted with the Company and the
Underwriter for the enforcement of any claims against the Fund. The parties
agree that neither the Board, officers, agents or shareholders of the Fund
assume any personal liability or responsibility for obligations entered into by
or on behalf of the Fund.
11.2. Subject to the requirements of legal process and regulatory
authority, each party hereto shall treat as confidential the names and
addresses of the owners of the Contracts and all information reasonably
identified as confidential in writing by any other party hereto and, except as
permitted by this Agreement, shall not disclose, disseminate or utilize such
names and addresses and other confidential information without the express
written consent of the affected party until such time as such information has
come into the public domain.
11.3. The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions hereof
or otherwise affect their construction or effect.
11.4. This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
11.5. If any provision of this Agreement shall be held or made invalid
by a court decision, statute, rule or otherwise, the remainder of the Agreement
shall not be affected thereby.
11.6. Each party hereto shall cooperate with each other party and all
appropriate governmental authorities (including without limitation the SEC,
FINRA, and state insurance regulators) and shall permit such authorities
reasonable access to its books and records in connection with any investigation
or inquiry relating to this Agreement or the transactions contemplated hereby.
Notwithstanding the generality of the foregoing, each party hereto further
agrees to furnish the applicable 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 variable insurance
contract operations of the Company are being conducted in a manner consistent
with the applicable variable insurance contract laws and regulations and any
other applicable law or regulations.
11.7. The rights, remedies and obligations contained in this Agreement
are cumulative and are in addition to any and all rights, remedies, and
obligations, at law or in equity, which the parties hereto are entitled to
under state and federal laws.
11.8. This Agreement or any of the rights and obligations hereunder may
not be assigned by any party without the prior written consent of all parties
hereto.
11.9. The Company shall furnish, or shall cause to be furnished, to the
Fund or its designee copies of the following reports:
(a)the Company's annual statement (prepared under statutory accounting
principles) and annual report (prepared under generally accepted
accounting principles) filed with any state or federal regulatory
body or otherwise made available to the public, as soon as
practicable and in any event within 90 days after the end of each
fiscal year; and
- 21 -
(b)any registration statement (without exhibits) and financial reports
of the Company filed with the Securities and Exchange Commission or
any state insurance regulatory, as soon as practicable after the
filing thereof.
- 22 -
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed in its name and on its behalf by its duly authorized representative
and its seal to be hereunder affixed hereto as of the date specified below.
MINNESOTA LIFE INSURANCE COMPANY
By its authorized officer
/s/ Xxxxx X. Xxxx
By: -------------------------
Xxxxx X. Xxxx
Name: -------------------------
Executive Vice President
Title: -------------------------
Date: -------------------------
PIMCO VARIABLE INSURANCE TRUST
By its authorized officer
/s/ Xxxxx X. Xxxxxxx
By: -------------------------
Xxxxx X. Xxxxxxx
Name: -------------------------
Vice President
Title: -------------------------
4/20/10
Date: -------------------------
ALLIANZ GLOBAL INVESTORS
DISTRIBUTORS LLC
By its authorized officer
/s/ Xxxxxx Xxxxxx
By: -------------------------
Xxxxxx Xxxxxx
Name: -------------------------
Managing Director, COO
Title: -------------------------
4/23/2010
Date: -------------------------
- 23 -
SCHEDULE A
The term "Designated Portfolio" of the Fund will include any currently offered
class of any Portfolio of the Fund (as listed below) as well as any Portfolio
of the Fund or any share class of any Portfolio (now existing or hereafter
created) created subsequent to the date hereof.
DESIGNATED PORTFOLIOS/CLASSES:
Advisor Class Shares
Low Duration Portfolio
Total Return Portfolio
SEGREGATED ASSET ACCOUNTS:
Variable Annuity Account
Minnesota Life Variable Life Account
