PARTICIPATION AGREEMENT
THIS AGREEMENT is made this 30th day of April, 2001, by
and among The Xxxxx American Fund (the "Trust"), an open-end
management investment company organized as a Massachusetts
business trust, The Union Central Life Insurance Company, a life
insurance company organized as a corporation under the laws of
the State of Ohio, (the "Company"), on its own behalf and on
behalf of each segregated asset account of the Company set forth
in Schedule A, as may be amended from time to time (the
"Accounts"), Carillon Investments, Inc., a broker-dealer acting
as underwriter (the "Underwriter") and Xxxx Xxxxx & Company,
Incorporated, a Delaware corporation, the Trust's distributor
(the "Distributor").
WHEREAS, the Trust is registered with the Securities and
Exchange Commission (the "Commission") as an open-end management
investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"), and has an effective registration
statement relating to the offer and sale of the various series
of its shares under the Securities Act of 1933, as amended (the
"1933 Act");
WHEREAS, the Trust and the Distributor desire that Trust
shares be used as an investment vehicle for separate accounts
established for variable life insurance policies and variable
annuity contracts to be offered by life insurance companies
which have entered into fund participation agreements with the
Trust (the "Participating Insurance Companies");
WHEREAS, shares of beneficial interest in the Trust are
divided into the following series which are available for
purchase by the Company for the Accounts: Xxxxx American MidCap
Growth Portfolio, and Xxxxx American Leveraged Al1Cap Portfolio;
WHEREAS, the Trust has received an order from the
Commission, dated February 17, 1989 (File No. 812-7076),
granting Participating Insurance Companies and their separate
accounts exemptions from the provisions of Sections 9(a), 13(a),
15(a) and 15(b) of the 1940 Act, and Rules 6e-2(b)(15) and
6e-3(T)(b)(15) thereunder, to the extent necessary to permit
shares of the Portfolios of the Trust to be sold to and held by
variable annuity and variable life insurance separate accounts
of both affiliated and unaffiliated life insurance companies
(the "Shared Funding Exemptive Order");
WHEREAS, the Company has registered or will register under
the 1933 Act certain variable life insurance policies and
variable annuity contracts to be issued by the Company under
which the Portfolios are to be made available as investment
vehicles (the "Contracts");
WHEREAS, the Company has registered or will register each
Account as a unit investment trust under the 1940 Act unless an
exemption from registration under the 1940 Act is available and
the Trust has been so advised;
WHEREAS, the Company desires to use shares of the
Portfolios indicated on Schedule A as investment vehicles for
the Accounts;
NOW THEREFORE, in consideration of their mutual promises,
the parties agree as follows:
ARTICLE 1.
Purchase and Redemption of Trust Portfolio Shares
1.1. For purposes of this Article I, the Company shall be the
Trust's agent for the receipt from each account of
purchase orders and requests for redemption pursuant to
the Contracts relating to each Portfolio, provided that
the Company notifies the Trust of such purchase orders
and requests for redemption by 9:30 a.m. Eastern time on
the next following Business Day, as defined in Section
1.3. Notification shall be provided by facsimile at the
following number: (000) 000-0000.
1.2. The Trust shall make shares of the Portfolios available
to the Accounts at the net asset value next computed
after receipt of a purchase order by the Trust (or its
agent), as established in accordance with the provisions
of the then current prospectus of the Trust describing
Portfolio purchase procedures. The Company will transmit
orders from time to time to the Trust for the purchase
and redemption of shares of the Portfolios. The Trustees
of the Trust (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 if, in the sole discretion of the
Trustees acting in good faith and in light of their
fiduciary duties under federal and any applicable state
laws, such action is deemed in the best interests of the
shareholders of such Portfolio.
1.3. The Company shall pay for the purchase of shares of a
Portfolio on behalf of an Account with federal funds to
be transmitted by wire to the Trust, with the reasonable
expectation of receipt by the Trust by 2:00 p.m. Eastern
time on the next Business Day after the Trust (or its
agent) receives the purchase order. Upon receipt by the
Trust of the federal funds so wired, such funds shall
cease to be the responsibility of the Company and shall
become the responsibility of the Trust for this purpose.
"Business Day" shall mean any day on which the New York
Stock Exchange is open for trading and on which the
Trust calculates its net asset value pursuant to the
rules of the Commission.
1.4. The Trust will redeem for cash any full or fractional
shares of any Portfolio, when requested by the Company
on behalf of an Account. at the net asset value next
computed after receipt by the Trust (or its agent) of
the request for redemption, as established in accordance
with the provisions of the then current prospectus of
the Trust describing Portfolio redemption procedures.
The Trust shall make payment for such shares in the
manner established from time to time by the Trust.
Proceeds of redemption with respect to a Portfolio will
normally
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be paid to the Company for an Account in federal funds
transmitted by wire to the Company by order of the
Trust with the reasonable expectation of receipt by
the Company by 2:00 p.m. Eastern time on the next
Business Day after the receipt by the Trust (or its
agent) of the request for redemption. Such payment
may be delayed if, for example, the Portfolio's cash
position so requires or if extraordinary market
conditions exist, but in no event shall payment be
delayed for a greater period than is permitted by the
1940 Act. The Trust reserves the right to suspend the
right of redemption, consistent with Section 22(e) of
the 1940 Act and any rules thereunder.
1.5. Payments for the purchase of shares of the Trust's
Portfolios by the Company under Section 1.3 and
payments for the redemption of shares of the Trust's
Portfolios under Section 1.4 on any Business Day may
be netted against one another for the purpose of
determining the amount of any wire transfer.
1.6. Issuance and transfer of the Trust's Portfolio shares
will be by book entry only. Stock certificates will
not be issued to the Company or the Accounts. Portfolio
Shares purchased from the Trust will be recorded in the
appropriate title for each Account or the appropriate
subaccount of each Account.
1.7. The Trust shall furnish, on or before the ex-dividend
date, notice to the Company of any income dividends or
capital gain distributions payable on the shares of any
Portfolio of the Trust. The Company hereby elects to
receive all such income dividends and capital gain
distributions as are payable on a Portfolio's shares
in additional shares of that Portfolio. The Trust shall
notify the Company of the number of shares so issued as
payment of such dividends and distributions.
1.8. The Trust shall calculate the net asset value of each
Portfolio on each Business Day, as defined in Section 1.3.
The Trust shall make the net asset value per share for
each Portfolio available to the Company or its designated
agent on a daily basis as soon as reasonably practical
after the net asset value per share is calculated and
shall use its best efforts to make such net asset value
per share available to the Company by 6:30 p.m. Eastern
time each Business Day.
1.9. The Trust agrees that its Portfolio shares will be sold
only to Participating Insurance Companies and their
segregated asset accounts, to the Fund Sponsor or its
affiliates and to such other entities as may be
permitted by Section 817(h) of the Code, the regulations
hereunder, or judicial or administrative interpretations
thereof. No shares of any Portfolio will be sold
directly to the general public. The Company agrees that
it will use Trust shares only for the purposes of funding
the Contracts through the Accounts listed in Schedule A,
as amended from time to time.
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1.10. The Trust agrees that all Participating Insurance
Companies shall have the obligations and responsibilities
regarding pass-through voting and conflicts of interest
corresponding materially to those contained in Section
2.11 and Article IV of this Agreement.
ARTICLE II.
Obligations of the Parties
2.1. The Trust shall prepare and be responsible for filing
with the Commission and any state regulators requiring
such filing all shareholder reports, notices, proxy
materials (or similar materials such as voting
instruction solicitation materials), prospectuses and
statements of additional information of the Trust. The
Trust shall bear the costs of registration and
qualification of shares of the Portfolios, preparation
and filing of the documents listed in this Section 2.1
and all taxes to which an issuer is subject on the
issuance and transfer of its shares.
2.2. The Company shall distribute such prospectuses, proxy
statements and periodic reports of the Trust to the
Contract owners as required to be distributed to such
Contract owners under applicable federal or state law.
2.3. The Trust shall provide such documentation (including
a final copy of the Trust's prospectus as set in type
or in camera-ready copy) and other assistance as is
reasonably necessary in order for the Company to print
together in one document the current prospectus for
the Contracts issued by the Company and the current
prospectus for the Trust. The Trust shall bear the
expense of printing copies of its current prospectus
that will be distributed to existing Contract owners,
and the Company shall bear the expense of printing
copies of the Trust's prospectus that are used in
connection with offering the Contracts issued by the
Company.
2.4. The Trust and the Distributor shall provide (1) at the
Trust's expense, one copy of the Trust's current Statement
of Additional Information ("SAI") to the Company and to
any Contract owner who requests such SAI, (2) at the
Company's expense, such additional copies of the Trust's
current SAI as the Company shall reasonably request and
that the Company shall require in accordance with
applicable law in connection with offering the Contracts
issued by the Company.
2.5. The Trust, at its expense, shall provide the Company with
copies of its proxy material, periodic reports to
shareholders and other communications to shareholders in
such quantity as the Company shall reasonably require for
purposes of distributing to Contract owners. The Trust, at
the Company's expense, shall provide the Company with
copies and/or pdfs of its periodic reports to shareholders
and other communications to shareholders including
stickers to the Prospectus and SAI-in such quantity as
the Company shall reasonably request for use in connection
with offering the Contracts issued by the Company. If
requested by the
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Company in lieu thereof, the Trust shall provide such
documentation (including a final copy of the Trust's
proxy materials, periodic reports to shareholders and
other communications to shareholders, as set in type
or in camera-ready copy) and other assistance as
reasonably necessary in order for the Company to print
such shareholder communications for distribution to
Contract owners.
2.6. The Company agrees and acknowledges that the Distributor
is the sole owner of the name and xxxx "Xxxxx" and that
all use of any designation comprised in whole or part of
such name or xxxx under this Agreement shall inure to the
benefit of the Distributor. Except as provided in Section
2.5, the Company shall not use any such name or xxxx on
its own behalf or on behalf of the Accounts or Contracts
in any registration statement, advertisement, sales
literature or other materials relating to the Accounts or
Contracts without the prior written consent of the
Distributor. Upon termination of this Agreement for any
reason, the Company shall cease all use of any such name
or xxxx as soon as reasonably practicable.
2.7. The Company shall furnish, or cause to be furnished, to
the Trust or its designee a copy of each Contract
prospectus and/or statement of additional information
describing the Contracts, each report to Contract owners,
proxy statement, application for exemption or request
for no-action letter in which the Trust or the
Distributor is named contemporaneously with the filing
of such document with the Commission. The Company shall
furnish, or shall cause to be furnished, to the Trust
or its designee each piece of sales literature or other
promotional material in which the Trust or the Distributor
is named, no less than three Business Days prior to its
use. No such material shall be used if the Trust or its
designee reasonably objects to such use within three
Business Days after receipt of such material.
2.8. The Company shall not give any information or make any
representations or statements on behalf of the Trust or
concerning the Trust or the Distributor in connection
with the sale of the Contracts other than information or
representations contained in and accurately derived from
the registration statement or prospectus for the Trust
shares (as such registration statement and prospectus may
be amended or supplemented from time to time), annual and
semi-annual reports of the Trust, Trust-sponsored proxy
statements, or in sales literature or other promotional
material approved by the Trust or its designee, except
as required by legal process or regulatory authorities or
with the prior written permission of the Trust, the
Distributor or their respective designees. The Trust and
the Distributor agree to respond to any request for
approval on a prompt and timely basis. The Company shall
adopt and implement procedures reasonably designed to
ensure that "broker only" materials including information
therein about the Trust or the Distributor are not
distributed to existing or prospective Contract owners,
provided that such "broker only" material is appropriately
designated as such by the Distributor or Trust.
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2.9. The Trust shall use its best efforts to provide the
Company, on a timely basis, with such information about
the Trust, the Portfolios and the Distributor, in such
form as the Company may reasonably require, as the
Company shall reasonably request in connection with the
preparation of registration statements, prospectuses
and annual and semi-annual reports pertaining to the
Contracts.
2.10. The Trust and the Distributor shall not give, and agree
that no affiliate of either of them shall give, any
information or make any representations or statements
on behalf of the Company or concerning the Company, the
Accounts or the Contracts other than information or
representations contained in and accurately derived from
the registration statement or prospectus for the
Contracts (as such registration statement and prospectus
may be amended or supplemented from time to time), or in
materials approved by the Company for distribution
including sales literature or other promotional
materials, except as required by legal process or
regulatory authorities or with the prior written
permission of the Company. The Company agrees to respond
to any request for approval on a prompt and timely basis.
2.11. So long as, and to the extent that, the Commission
interprets the 1940 Act to require pass-through voting
privileges for Contract owners, the Company will provide
pass-through voting privileges to Contract owners whose
cash values are invested, through the registered Accounts,
in shares of one or more Portfolios of the Trust. The
Trust shall require all Participating Insurance Companies
to calculate voting privileges in the same manner and the
Company shall be responsible for assuring that the
Accounts calculate voting privileges in the manner
established by the Trust. With respect to each registered
Account, the Company will vote shares of each Portfolio
of the Trust held by a registered Account and for which
no timely voting instructions from Contract owners are
received in the same proportion as those shares for which
voting instructions are received. The Company and its
agents will in no way recommend or oppose or interfere
with the solicitation of proxies for Portfolio shares held
to fund the Contacts without the prior written consent of
the Trust, which consent may be withheld in the Trust's
sole discretion. The Company reserves the right, to the
extent permitted by law, to vote shares held in any
Account in its sole discretion.
2.12. The Company and the Trust will each provide to the other
information about the results of any regulatory
examination relating to the Contracts or the Trust,
including relevant portions of any "deficiency letter" and
any response thereto.
2.13. No compensation shall be paid by the Trust to the Company,
or by the Company to the Trust, under this Agreement
(except for specified expense reimbursements). However,
nothing herein shall prevent the parties hereto from
otherwise agreeing to perform, and arranging for
appropriate compensation for, other services relating to
the Trust, the Accounts or both.
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2.14. The Trust and Distributor agree and acknowledge that the
Company is the sole owner of the name and xxxx "Union
Central" and that all use of any designation comprised
in whole or part of such name or xxxx under this Agreement
shall inure to the benefit of the Company. Except as
provided in Section 2.7, the Trust and Distributor shall
not use any such name or xxxx on their own behalf or on
behalf of the Accounts or Contracts in any registration
statement, advertisement, sales literature or other
materials relating to the Accounts or Contracts without
the prior written consent of the Company. Upon termination
of this Agreement for any reason, the Trust and
Distributor shall cease all use of any such name or xxxx
as soon as reasonably practicable.
ARTICLE III.
Representations and Warranties
3.1. The Company represents and warrants that it is an
insurance company duly organized and in good standing
under the laws of the State of Ohio and that it has
legally and validly established each Account as a
segregated asset account under such law as of the date
set forth in Schedule A, and that Carillon Investments,
Inc., the principal underwriter for the Contracts, is
registered as a broker-dealer under the Securities
Exchange Act of 1934 and is a member in good standing
of the National Association of Securities Dealers, Inc.
3.2. The Company represents and warrants that it has registered
or, prior to any issuance or sale of the Contracts, will
register each Account as a unit investment trust in
accordance with the provisions of the 1940 Act and cause
each Account to remain so registered to serve as a
segregated asset account for the Contracts, unless an
exemption from registration is available.
3.3. The Company represents and warrants that the Contracts
will be registered under the 1933 Act unless an exemption
from registration is available prior to any issuance or
sale of the Contracts; the Contracts will be issued and
sold in compliance in all material respects with all
applicable federal and state laws; and the sale of the
Contracts shall comply in all material respects with state
insurance law suitability requirements.
3.4. The Trust represents and warrants that it is duly
organized and validly existing under the laws of the
Commonwealth of Massachusetts and that it does and will
comply in all material respects with the 1940 Act and the
rules and regulations thereunder.
3.5. The Trust and the Distributor represent and warrant that
the Portfolio shares offered and sold pursuant to this
Agreement will be registered under the 1933 Act and sold
in accordance with all applicable federal and state laws,
and the Trust shall be registered under the 1940 Act prior
to and at the time of any issuance or sale of such shares.
The Trust shall amend its registration statement under the
1933 Act and the 1940 Act from time to time as required in
order to effect the continuous offering of its shares. The
Trust shall register and qualify its
7
shares for sale in accordance with the laws of the various
states only if and to the extent deemed advisable by the
Trust.
3.6. The Trust represents and warrants that the investments of
each Portfolio will comply with the diversification
requirements for variable annuity, endowment or life
insurance contracts set forth in Section 817(h) of the
Internal Revenue Code of 1986, as amended (the "Code"),
and the rules and regulations thereunder, including
without limitation Treasury Regulation 1.817-5, and will
notify the Company immediately upon having a reasonable
basis for believing any Portfolio has ceased to comply
or might not so comply and will immediately take all
reasonable steps to adequately diversify the Portfolio
to achieve compliance within the grace period afforded
by Regulation 1.817-5.
3.7. The Trust represents and warrants that it is currently
qualified as a "regulated investment company" under
Subchapter M of the Code, that it will make every effort
to maintain such qualification and will notify the Company
immediately upon having a reasonable basis for believing
it has ceased to so qualify or might not so qualify in
the future.
3.8. The Trust represents and warrants that it, its directors,
officers, employees and others dealing with the money or
securities, or both, of a Portfolio shall at all times be
covered by a blanket fidelity bond or similar coverage for
the benefit of the Trust in an amount not less than the
minimum coverage required by Rule 17- 1 or other
applicable regulations under the 1940 Act. Such bond shall
include coverage for larceny and embezzlement and be
issued by a reputable bonding company.
3.9. The Distributor represents that it is duly organized and
validly existing under the laws of the State of Delaware
and that it is registered, and will remain registered,
during the term of this Agreement, as a broker-dealer
under the Securities Exchange Act of 1934 and is a member
in good standing of the National Association of Securities
Dealers, Inc.
ARTICLE IV.
Potential Conflicts
4.1. The parties acknowledge that a Portfolio's shares may be
made available for investment to other Participating
Insurance Companies. In such event, the Trustees will
monitor the Trust for the existence of any material
irreconcilable conflict between the interests of the
contract owners of all Participating Insurance Companies.
A material irreconcilable conflict may arise for a
variety of reasons, including: (a) an action by any state
insurance regulatory authority; (b) a change in applicable
federal or state insurance, tax or securities laws or
regulations, or a public ruling, private letter ruling,
no-action or interpretative letter, or any similar action
by insurance, tax, or securities regulatory authorities;
(c) an administrative or judicial decision in any relevant
proceeding; (d) the manner in which the investments of any
Portfolio are being managed; (e) a difference in voting
instructions given by variable annuity
8
contract and variable life insurance contract owners; or
(f) a decision by an insurer to disregard the voting
instructions of contract owners. The Trust shall promptly
inform the Company of any determination by the Trustees
that a material irreconcilable conflict exists and of the
implications thereof.
4.2. The Company and Underwriter agree to report promptly any
potential or existing conflicts of which it is aware to
the Trustees. The Company and Underwriter will assist
the Trustees in carrying out their responsibilities
under the Shared Funding Exemptive Order by providing
the Trustees with all information reasonably necessary
for and requested by the Trustees to consider any issues
raised including, but not limited to, information as to
a decision by the Company to disregard Contract owner
voting instructions. All communications from the Company
or Underwriter to the Trustees may be made in care of the
Trust.
4.3. If it is determined by a majority of the Trustees, or a
majority of the disinterested Trustees, that a material
irreconcilable conflict exists that affects the interests
of contract owners, the Company shall, in cooperation with
other Participating Insurance Companies whose contract
owners are also affected, at its own expense and to the
extent reasonably practicable (as determined by the
Trustees) take whatever steps are necessary to remedy
or eliminate the material irreconcilable conflict, which
steps could include: (a) withdrawing the assets allocable
to some or all of the Accounts from the Trust or any
Portfolio and reinvesting such assets in a different
investment medium, including (but not limited to) another
Portfolio of the Trust, or submitting the question of
whether or not such segregation should be implemented to
a vote of all affected Contract owners and, as
appropriate, segregating the assets of any appropriate
group (i.e., annuity contract owners, life insurance
contract owners, or variable contract owners of one or
more Participating Insurance Companies) that votes in
favor of such segregation, or offering to the affected
Contract owners the option of making such a change; and
(b) establishing a new registered management investment
company or managed separate account.
4.4. If a material irreconcilable conflict arises because of
a decision by the Company to disregard Contract owner
voting instructions and that decision represents a
minority position or would preclude a majority vote,
the Company may be required, at the Trust's election,
to withdraw the affected Account's investment in the
Trust and terminate this Agreement with respect to such
Account; provided, however that such withdrawal and
termination shall be limited to the extent required by
the foregoing material irreconcilable conflict as
determined by a majority of the disinterested Trustees.
Any such withdrawal and termination must take place
within six (6) months after the Trust gives written
notice that this provision is being implemented. Until
the end of such six (6) month period, the Trust shall
continue to accept and implement orders by the Company
for the purchase and redemption of shares of the Trust.
9
4.5. If a material irreconcilable conflict arises because
a particular state insurance regulator's decision
applicable to the Company conflicts with the majority
of other state regulators, then the Company will
withdraw the affected Account's investment in the
Trust and terminate this Agreement with respect to
such Account within six (6) months after the Trustees
inform the Company in writing that the Trust has
determined that such decision has created a material
irreconcilable conflict; provided, however, that such
withdrawal and termination shall be limited to the
extent required by the foregoing material irreconcilable
conflict as determined by a majority of the disinterested
Trustees. Until the end of such six (6) month period,
the Trust shall continue to accept and implement orders
by the Company for the purchase and redemption of shares
of the Trust.
4.6. For purposes of Section 4.3 through 4.6 of this Agreement,
a majority of the disinterested Trustees shall determine
whether any proposed action adequately remedies any
material irreconcilable conflict, but in no event will
the Trust be required to establish a new funding medium
for any Contract. The Company shall not be required to
establish a new funding medium for the Contracts if an
offer to do so has been declined by vote of a majority
of Contract owners materially adversely affected by the
material irreconcilable conflict. In the event that the
Trustees determine that any proposed action does not
adequately remedy any material irreconcilable conflict,
then the Company will withdraw the Account's investment
in the Trust and terminate this Agreement within six (6)
months after the Trustees inform the Company in writing
of the foregoing determination; provided, however, that
such withdrawal and termination shall be limited to the
extent required by any such material irreconcilable
conflict as determined by a majority of the disinterested
Trustees.
4.7. The Company shall at least annually submit to the
Trustees such reports, materials or data as the Trustees
may reasonably request so that the Trustees may fully
carry out the duties imposed upon them by the Shared
Funding Exemptive Order, and said reports, materials
and data shall be submitted more frequently if reasonably
deemed appropriate by the Trustees.
4.8. If and to the extent that Rule 6e-3(T) is 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 Shared Funding Exemptive Order) on terms
and conditions materially different from those contained
in the Shared Funding Exemptive Order, then the Trust
and/or the Participating Insurance Companies, as
appropriate, shall take such steps as may be necessary
to comply with Rule 6e-3(T), as amended, or Rule 6e-3,
as adopted, to the extent such rules are applicable.
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ARTICLE V.
Indemnification
5.1. Indemnification By the Company and Underwriter. The
Company and Underwriter agree to indemnify and hold
harmless the Distributor, the Trust and each of its
Trustees, officers, employees and agents and each
person, if any, who controls the Trust within the
meaning of Section 15 of the 1933 Act (collectively,
the "Indemnified Parties" for purposes of this Section
5.1) against any and all losses, claims, damages,
liabilities (including amounts paid in settlement with
the written consent of the Company or the Underwriter,
which consent shall not be unreasonably withheld) or
expenses (including the reasonable costs of investigating
or defending any alleged loss, claim, damage, liability
or expense and reasonable legal counsel fees incurred
in connection therewith) (collectively, "Losses"), to
which the Indemnified Parties may become subject under
any statute or regulation, or at common law or otherwise,
insofar as such Losses are related to the sale or
acquisition of the Contracts or Trust shares and:
(a) arise out of or are based upon any untrue statements
or alleged untrue statements of any material fact
contained in a registration statement or prospectus
for the Contracts or in the Contracts themselves or
in sales literature generated or approved by the
Company on behalf of the Contracts or Accounts (or
any amendment or supplement to any of the foregoing)
(collectively, "Company Documents" for the purposes
of this Article V), 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 indemnity 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 was accurately derived
from written information furnished to the Company
by or on behalf of the Trust for use in Company
Documents or otherwise for use in connection with
the sale of the Contracts or Trust shares, or was
approved by the indemnified party or its designee
and was used as approved; or
(b) arise out of or result from statements or
representations (other than statements or
representations contained in and accurately derived
from Trust Documents as defined in Section 5.2(a))
or wrongful conduct of the Company or Underwriter
or persons under its control, with respect to the
sale or acquisition of the Contracts or Trust shares;
or
(c) arise out of or result from any untrue statement or
alleged untrue statement of a material fact contained
in Trust Documents as defined in Section 5.2(a) or
the omission or alleged omission to state therein a
material fact required to be stated therein or
necessary to make the statements therein not
misleading if such statement or omission was made in
reliance upon and accurately derived from written
information furnished to the Trust by or on behalf
of the Company or Underwriter;
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or
(d) arise out of or result from any failure by the Company
or Underwriter to provide the services or furnish the
materials required under the terms of this Agreement;
or
(e) arise out of or result from any material breach of any
representation and/or warranty made by the Company or
Underwriter in this Agreement or arise out of or
result from any other material breach of this
Agreement by the Company or Underwriter; or
(f) arise out of or result from the provision by the
Company to the Trust of insufficient or incorrect
information regarding the purchase or sale of shares
of any Portfolio, or the failure of the Company to
provide such information on a timely basis.
5.2. Indemnification by the Distributor. The Distributor agrees
to indemnify and hold harmless the Company and the
Underwriter and each of its directors, officers,
employees, and agents and each person, if any, who
controls the Company or the Underwriter within the meaning
of Section 15 of the 1933 Act (collectively, the
"Indemnified Parties" for the purposes of this Section
5.2) against any and all losses, claims, damages,
liabilities (including amounts paid in settlement with
the written consent of the Distributor, which consent
shall not be unreasonably withheld) or expenses
(including the reasonable costs of investigating or
defending any alleged loss, claim, damage, liability or
expense and reasonable legal counsel fees incurred in
connection therewith) (collectively, "Losses"), to which
the Indemnified Parties may become subject under any
statute or regulation, or at common law or otherwise,
insofar as such Losses are related to the sale or
acquisition of the Contracts or Trust shares and:
(a) arise out of or are based upon any untrue statements
or alleged untrue statements of any material fact
contained in the registration statement or prospectus
for the Trust (or any amendment or supplement thereto)
(collectively, "Trust Documents" for the purposes of
this Article V), 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 indemnity 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 was accurately derived from
written information furnished to the Distributor or
the Trust by or on behalf of the Company or
Underwriter for use in Trust Documents or otherwise
for use in connection with the sale of the Contracts
or Trust shares; or
(b) arise out of or result from statements or
representations (other than statements or
representations contained in and accurately derived
from Company or Underwriter Documents) or wrongful
conduct of the Distributor or persons under its
control, with respect to the sale or acquisition of
the Contracts or Portfolio shares; or
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(c) arise out of or result from any untrue statement or
alleged untrue statement of a material fact contained
in Company or Underwriter Documents or the omission
or alleged omission to state therein a material fact
required to be stated therein or necessary to make
the statements therein not misleading if such
statement or omission was made in reliance upon and
accurately derived from written information furnished
to the Company or Underwriter by or on behalf of the
Trust; or
(d) arise out of or result from any failure by the
Distributor or the Trust to provide the services or
furnish the materials required under the terms of
this Agreement; or
(e) arise out of or result from any material breach of
any representation and/or warranty made by the
Distributor or the Trust in this Agreement or arise
out of or result from any other material breach of
this Agreement by the Distributor or the Trust.
5.3. None of the Company or Underwriter, the Trust or the
Distributor shall be liable under the indemnification
provisions of Sections 5.1 or 5.2, as applicable, with
respect to any Losses incurred or assessed against an
Indemnified Party that arise from such Indemnified
Party's willful misfeasance, bad faith or gross
negligence in the performance of such Indemnified
Party's duties or by reason of such Indemnified Party's
reckless disregard of obligations or duties under this
Agreement.
5.4. None of the Company, the Underwriter, the Trust or the
Distributor shall be liable under the indemnification
provisions of Sections 5.1 or 5.2, as applicable, with
respect to any claim made against an Indemnified party
unless such Indemnified Party shall have notified the
other party in writing within a reasonable time after
the summons, or other first written notification, giving
information of the nature of the claim shall have been
served upon or otherwise received by such Indemnified
Party (or after such Indemnified Party shall have
received notice of service upon or other notification
to any designated agent), but failure to notify the party
against whom indemnification is sought of any such claim
shall not relieve that party from any liability which it
may have to the Indemnified Party in the absence of
Sections 5.1 and 5.2.
5.5. In case any such action is brought against an Indemnified
Party, the indemnifying party shall be entitled to
participate, at its own expense, in the defense of such
action. The indemnifying party also shall be entitled to
assume the defense thereof, with counsel reasonably
satisfactory to the party named in the action. After
notice from the indemnifying party to the Indemnified
Party of an election to assume such defense, the
Indemnified Party shall bear the fees and expenses of
any additional counsel retained by it, and the
indemnifying party will not be liable to the Indemnified
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.
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ARTICLE VI.
Termination
6.1. This Agreement shall terminate:
(a) at the option of any party upon 60 days advance
written notice to the other parties, unless a
shorter time is agreed to by the parties;
(b) at the option of the Trust or the Distributor if
the Contracts issued by the Company cease to
qualify as annuity contracts or life insurance
contracts, as applicable, under the Code or if the
Contracts are not registered, issued or sold in
accordance with applicable state and/or federal
law; or at the option of any party upon a
determination by a majority of the Trustees of
the Trust, or a majority of its disinterested
Trustees, that a material irreconcilable conflict
exists; or
(d) at the option of the Company upon institution of
formal proceedings against the Trust or the
Distributor by the NASD, the SEC, or any state
securities or insurance department or any other
regulatory body regarding the Trust's or the
Distributor's duties under this Agreement or related
to the sale of Trust shares or the operation of the
Trust; or
(e) at the option of the Company if the Trust or a
Portfolio fails to meet the diversification
requirements specified in Section 3.6 hereof; or
(f) at the option of the Company if shares of the
Series are not reasonably available to meet the
requirements of the Variable Contracts issued by
the Company, as determined by the Company, and
upon prompt notice by the Company to the other
parties; or
(g) at the option of the Company in the event any of the
shares of the Portfolio are not registered, issued
or sold in accordance with applicable state and/or
federal law, or such law precludes the use of such
shares as the underlying investment media of the
Variable Contracts issued or to be issued by the
Company; or
(h) at the option of the Company, if the Portfolio fails
to qualify as a Regulated Investment Company under
Subchapter M of the Code; or
(i) at the option of the Distributor if it shall determine
in its sole judgment exercised in good faith, that the
Company and/or its affiliated companies has suffered a
material adverse change in its business, operations,
financial condition or prospects since the date of
this Agreement or is the subject of material adverse
publicity.
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(j) at the option of the Company upon any substitution
of the shares of another investment company or series
thereof for shares of a Portfolio of the Trust. in
accordance with the terms of the Contracts, provided
that the Company has given at least 45 days' prior
written notice to the Trust and the Distributor of
the date of substitution.
6.2. Notwithstanding any termination of this Agreement, the
Trust shall, at the option of the Company, continue to
make available additional shares of any Portfolio and
redeem shares of any Portfolio pursuant to the terms
and conditions of this Agreement for all Contracts in
effect on the effective date of termination of this
Agreement.
6.3. The provisions of Article V shall survive the termination
of this Agreement, and the provisions of Article IV and
Section 2.9 shall survive the termination of this
Agreement as long as shares of the Trust are held on
behalf of Contract owners in accordance with Section 6.2.
ARTICLE VII.
Notices
Any notice shall be sufficiently given when sent by
registered, certified or overnight 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 Trust or its Distributor:
Xxxx Xxxxx Management, Inc.
Xxx Xxxxx Xxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxx, XX 00000
Attn: Xxxxxxx X. Xxxx
If to the Underwriter:
Carillon Investments, Inc.
0000 Xxxxxxxx Xxxx
Xxxxxxxxxx, Xxxx 00000
ATTN: Xxxxxxxxx Xxxxxxx
If to the Company:
The Union Central Life Insurance Company
0000 Xxxxxxxx Xxxx
Xxxxxxxxxx, Xxxx 00000
ATTN: Xxxxxxx X. Xxxxxxxx
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ARTICLE VIII.
Miscellaneous
8.1. The captions in this Agreement are included for
convenience of reference only and in no way define or
delineate any of the provisions hereof or otherwise
affect their construction or effect. 8.2. This Agreement
may be executed in two or more counterparts, each of
which taken together shall constitute one and the same
instrument.
8.3. If any provision of this Agreement shall be held or
made invalid by a court decision, statute, rule or
otherwise, the remainder of the Agreement shall not be
affected thereby.
8.4. This Agreement shall be construed and the provisions
hereof interpreted under and in accordance with the
laws of the State of New York. It shall also be subject
to the provisions of the federal securities laws and
the rules and regulations thereunder and to any orders
of the Commission granting exemptive relief therefrom
and the conditions of such orders. Copies of any such
orders shall be promptly forwarded by the Trust to the
Company.
8.5. All liabilities of the Trust arising, directly or
indirectly, under this Agreement, of any and every
nature whatsoever, shall be satisfied solely out of
the assets of the Trust and no Trustee, officer, agent
or holder of shares of beneficial interest of the
Trust shall be personally liable for any such liabilities.
8.6. Each party shall cooperate with each other party and
all appropriate governmental authorities (including
without limitation the Commission, the National
Association of Securities Dealers, Inc. 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.
8.7. 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.
8.8. This Agreement shall not be exclusive in any respect.
8.9. Neither this Agreement nor any rights or obligations
hereunder may be assigned by either party without the
prior written approval of the other party.
8.10. No provisions of this Agreement may be amended or
modified in any manner except by a written agreement
properly authorized and executed by both parties.
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8.11. Each party hereto shall, except as required by law or
otherwise permitted by this Agreement, 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 shall not disclose such confidential
information without the written consent of the affected
party unless such information has become publicly
available.
8.12 The Distributor and the Trust will not share, distribute
or sell confidential information to any non-affiliated
third party except as permitted by law. The Distributor
and the Trust shall restrict access of confidential
information to affiliates and to service providers
involved in administering accounts. They will further
protect confidential information by maintaining physical,
electronic and procedural safeguards. All parties agree
to comply with applicable federal and state securities
and insurance laws and regulations relating to the
confidentiality of non-public personal information.
IN WITNESS WHEREOF, the parties have caused their duly
authorized officers to execute this Participation Agreement as
of the date and year first above written.
Xxxx Xxxxx & Company, Incorporated
By: /s/ Xxxxxxx X. Xxxx
Name: Xxxxxxx X. Xxxx
Title:
The Xxxxx American Fund
By: /s/ Xxxxxxx X. Xxxx
Name: Xxxxxxx X. Xxxx
Title:
The Union Central Life Insurance Company
By: /s/ Xxxxxxx X. Xxxxxxxx
Name:
Title:
Carillon Investments, Inc.
By: /s/ Xxxxxxxxx X. Xxxxxxx
Name: Xxxxxxxxx X. Xxxxxxx
Title: President
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SCHEDULE A
The Xxxxx American Fund:
Xxxxx American Leveraged AllCap Portfolio
Xxxxx American MidCap Growth Portfolio
The Accounts:
Carillon Account (variable annuity) Registered 2/6/84
Carillon Life Account (variable life-both products) Registered
7/10/95
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