PARTICIPATION AGREEMENT
AMONG
PIONEER VARIABLE CONTRACTS TRUST,
PHL VARIABLE INSURANCE COMPANY,
PHOENIX EQUITY PLANNING CORPORATION
PIONEER INVESTMENT MANAGEMENT, INC.
AND
PIONEER FUNDS DISTRIBUTOR, INC.
THIS AGREEMENT, made and entered into this 1ST day of March, 2008, by and
among PIONEER VARIABLE CONTRACTS TRUST, a Delaware business trust (the
"Trust"), PHL VARIABLE INSURANCE COMPANY, a Connecticut life insurance company
(the "Company") on its own behalf and on behalf of each of the segregated asset
accounts of the Company set forth in Schedule A hereto, as may be amended from
time to time (the "Accounts"), PHOENIX EQUITY PLANNING CORPORATION, a
corporation organized under the laws of the State of Connecticut, ("Policy
Underwriter"), PIONEER INVESTMENT MANAGEMENT, INC., a Delaware corporation
("PIM") and PIONEER FUNDS DISTRIBUTOR, INC. ("PFD"), a corporation organized
under the laws of The Commonwealth of Massachusetts. PIM and PFD are members of
the UniCredito Italiano banking group, register of banking groups.
WHEREAS, the Trust is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act"),
and its shares are registered or will be registered under the Securities Act of
1933, as amended (the "1933 Act");
WHEREAS, shares of beneficial interest of the Trust are divided into several
series and classes of shares, each series being designated a "Portfolio" and
representing an interest in a particular managed pool of securities and other
assets;
WHEREAS, the Trust is available to act as the investment vehicle for
separate accounts established for variable life insurance policies and/or
variable annuity contracts to be offered by insurance companies, including PHL
Variable Insurance Company , which have entered into participation agreements
with the Trust (the "Participating Insurance Companies");
WHEREAS, the Trust has obtained an order from the Securities and Exchange
Commission (the "SEC"), dated July 9, 1997 (File No. 812-10494) (the "Mixed and
Shared Funding Exemptive Order") 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 1940 Act and
Rules 6e-2(b)(15) and 6e-3(T)(b)(15) thereunder, to the extent necessary to
permit shares of the Trust to be sold to and held by variable annuity and
variable life insurance companies that may or may not be affiliated with one
another and qualified pension and retirement plans ("Qualified Plans");
WHEREAS, PIM is duly registered as an investment adviser under the
Investment Advisers Act of 1940, as amended, and any applicable state
securities law, and is the Trust's investment adviser;
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WHEREAS, the Company will issue certain variable annuity and/or variable
life insurance contracts (individually, the "Contract" or, collectively, the
"Contracts") which, if required by applicable law, will be registered under the
1933 Act;
WHEREAS, the Accounts are duly organized, validly existing segregated asset
accounts, established by resolution of the Board of Directors of the Company,
to set aside and invest assets attributable to the aforesaid variable annuity
and/or variable life insurance contracts that are allocated to the Accounts
(the Contracts and the Accounts covered by this Agreement, and each
corresponding Portfolio covered by this Agreement in which the Accounts may
invest, is specified in Schedule A attached hereto as may be modified from time
to time);
WHEREAS, the Company has registered or will register the Accounts as unit
investment trusts under the 1940 Act (unless exempt therefrom);
WHEREAS, the Portfolios offered by the Trust to the Company and the Accounts
are set forth on Schedule A attached hereto;
WHEREAS, PFD is registered as a broker-dealer with the Securities and
Exchange Commission (the "SEC") under the Securities Exchange Act of 1934, as
amended (hereinafter the "1934 Act"), and is a member in good standing of the
Financial Industry Regulatory Authority, Inc. ("FINRA") and is authorized to
sell shares of the Portfolios to unit investment trusts such as the Accounts;
WHEREAS, Policy Underwriter is an affiliated broker-dealer of the Company
and principal underwriter for the variable annuity and the variable life
policies. The Policy Underwriter is registered as a broker-dealer with the SEC
under the 1934 Act and is a member in good standing of FINRA; and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares in one or more of the
Portfolios specified in Schedule A attached hereto (the "Shares") on behalf of
the Accounts to fund the Contracts, and PFD intends to sell such Shares to the
Accounts at net asset value;
NOW, THEREFORE, in consideration of their mutual promises, the Trust, PIM,
PFD and the Company agree as follows:
ARTICLE I. SALE OF TRUST SHARES
1.1. PFD and the Company agree to provide pricing information, execute
orders and wire payments for purchases and redemptions of Fund shares as set
forth in this Article I until such time as they mutually agree to utilize
the National Securities Clearing Corporation ("NSCC"). Upon such mutual
agreement, PFD and the Company agree to provide pricing information, execute
orders and wire payments for purchases and redemptions of Fund shares
through NSCC and its subsidiary systems as set forth in Exhibit I.
1.2 PFD agrees to sell to the Company those Shares which the Accounts order
in accordance with the terms of this Agreement (based on orders placed by
Contract owners or participants on that Business Day, as defined below) and
which are available for purchase by such Accounts. Each such order will be
executed on a daily basis at the net asset value next computed after receipt
by the Trust or its designee of the order for the Shares. For purposes of
this Section 1.2, the Company
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shall be the designee of the Trust for receipt of such orders from Contract
owners or participants and receipt by such designee shall constitute receipt
by the Trust; provided that the Trust or its designee receives written (or
facsimile) notice of such orders by the time the Trust ordinarily calculates
its net asset value as described from time to time in the Trust's prospectus
(which as of the date of this Agreement is 4:00 p.m. New York time.
"Business Day" shall mean any day on which the New York Stock Exchange, Inc.
(the "NYSE") is open for trading and on which the Trust calculates its net
asset value pursuant to the rules of the SEC.
1.3. PFD agrees to make the Shares available for purchase at the applicable
net asset value per share by the Company and the Accounts on those days on
which the Trust calculates its net asset value in accordance with the rules
of the SEC. Notwithstanding the foregoing, the Board of Trustees of the
Trust (the "Board") may refuse to sell any Shares to the Company and the
Accounts, or suspend or terminate the offering of the Shares to the Company
and the Accounts if such action is required by law or by regulatory
authorities having jurisdiction over PIM, PFD or the Trust or is, in the
sole discretion of the Board acting in good faith and in light of its
fiduciary duties under federal and any applicable state laws, in the best
interest of the Shareholders of such Portfolio.
1.4. The Trust and PFD will sell Trust shares only to Participating
Insurance Companies and Qualified Plans which have agreed to participate in
the Trust to fund their Separate Accounts and/or Qualified Plans all in
accordance with the requirement of Section 817(h) of the Internal Revenue
Code, as amended (the "Code") and the Treasury regulations thereunder. The
Company will not resell the Shares except to the Trust or its agents.
1.5. The Trust agrees, upon the Company's request, to redeem for cash, any
full or fractional Shares held by the Accounts (based on orders placed by
Contract owners on that Business Day). Each such redemption request shall be
executed on a daily basis at the net asset value next computed after receipt
by the Trust or its designee of the request for redemption. For purposes of
this Section 1.5, the Company shall be the designee of the Trust for receipt
of requests for redemption from Contract owners or participants and receipt
by such designee shall constitute receipt by the Trust; provided that the
Trust or its designee receives written (or facsimile) notice of such request
for redemption by the time the Trust ordinarily calculates its net asset
value as described from time to time in the Trust's prospectus (which as of
the date of this Agreement is 4:00 p.m. New York time on such Business Day).
1.6. Each purchase, redemption and exchange order placed by the Company
shall be placed separately for each Portfolio and shall not be netted with
respect to any Portfolio. However, with respect to payment of the purchase
price by the Company and of redemption proceeds by the Trust, the Company
and the Trust shall net purchase and redemption orders with respect to each
Portfolio and shall transmit one net payment for all of the Portfolios in
accordance with Section 1.7 hereof.
1.7. In the event of net purchases, the Company shall pay for the Shares by
11:00 a.m. New York time on the next Business Day after an order to purchase
the Shares is made in accordance with the provisions of Section 1.2. hereof.
Company shall transmit all such payments in federal funds by wire. If
payment in federal funds for any purchase is not received or is received by
the Trust after 11:00 a.m. on such Business Day, the Company and PIM will
reimburse the Trust for any charges, costs, fees, interest or other expenses
incurred by the Trust in connection with any advances to, or borrowings or
overdrafts by, the Trust, or any similar expenses (including the cost of and
any loss incurred by the Trust in unwinding any purchase of securities by
the Trust) incurred by the Trust as a result of portfolio transactions
effected by the Trust based upon such
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purchase request. In the event of net redemptions, the Trust ordinarily
shall pay and transmit the proceeds of redemptions of Shares by 11:00 a.m.
New York time on the next Business Day after a redemption order is received
from the Company in accordance with Section 1.5. hereof, although the Trust
reserves the right to postpone the date of payment or satisfaction upon
redemption consistent with Section 22(e) of the 1940 Act and any rules
pomulgated thereunder. Payments for net redemptions shall be in federal
funds transmitted by wire.
1.8. Issuance and transfer of the Shares will be by book entry only. Stock
certificates will not be issued to the Company or the Accounts. The Shares
ordered from the Trust will be recorded in an appropriate title for the
Accounts or the appropriate subaccounts of the Accounts.
1.9. The Trust shall furnish notice (by wire or telephone, followed by
written confirmation) no later than 7:00 p.m. New York time on the
ex-dividend date to the Company of any dividends or capital gain
distributions payable on the Shares. The Company hereby elects to receive
all such dividends and distributions as are payable in cash or Shares on a
Portfolio's Shares in additional Shares of that Portfolio. The Trust shall
notify the Company by the end of the next following Business Day of the
number of Shares so issued as payment of such dividends and distributions.
1.10. The Trust or its custodian shall make the net asset value per share
for each Portfolio available to the Company on each Business Day 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
by 6:00 p.m. New York time. In the event of an error in the computation of a
Portfolio's net asset value per share ("NAV") or any dividend or capital
gain distribution (each, a "pricing error"), PIM or the Trust shall notify
the Company as soon as possible after the discovery of the error. Such
notification may be verbal, but shall be confirmed promptly in writing in
accordance with Article XII of this Agreement. A pricing error shall be
corrected in accordance with the Trust's internal policies and procedures.
If an adjustment is necessary to correct a material error that occurred
through no fault of the Company and such adjustment has caused Contract
owners to receive less than the number of Shares or redemption proceeds to
which they are entitled, the number of Shares of the applicable Account will
be adjusted and the amount of any underpayments will be paid by the Trust or
PIM to the Company for crediting of such amounts to the Contract owners'
accounts. Upon notification by PIM of any overpayment due to a material
error, the Company shall promptly remit to the Trust or PIM, as appropriate,
any overpayment that has not been paid to Contract owner; however, PIM
acknowledges that the Company does not intend to seek additional payments
from any Contract owner who, because of a pricing error, may have underpaid
for units of interest credited to his/her account. The costs of correcting
such adjustments shall be borne by the Trust or PIM unless the Company is at
fault in which case such costs shall be borne by the Company.
ARTICLE II. CERTAIN REPRESENTATIONS, WARRANTIES AND COVENANTS
2.1. The Company represents and warrants that the Contracts are or will be
registered under the 1933 Act or are exempt from or not subject to
registration thereunder, and that the Contracts will be issued, sold, and
distributed in compliance in all material respects with all applicable state
and federal laws, including without limitation the 1933 Act, the 1934 Act,
and the 1940 Act. The Company further represents and warrants that it (i) is
an insurance company duly organized and in good standing under applicable
law; (ii) has legally and validly established each Account as a segregated
asset account under applicable law; (iii) has registered or, prior to any
issuance or sale of the Contracts, will register the Accounts as unit
investment trusts in accordance with the
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provisions of the 1940 Act (unless exempt therefrom) to serve as segregated
investment accounts for the Contracts, and (iv) will maintain such
registration for so long as any Contracts are outstanding. The Company shall
amend the registration statements under the 1933 Act for the Contracts and
the registration statements under the 1940 Act for the Accounts from time to
time as required in order to effect the continuous offering of the Contracts
or as may otherwise be required by applicable law. The Company shall
register and qualify the Contracts for sales in accordance with the
securities laws of the various states only if and to the extent deemed
necessary by the Company. At the time the Company is required to deliver the
Trust's prospectus or statement of additional information to a purchaser of
Shares in accordance with the requirements of federal or state securities
laws, the Company shall distribute to such Contract purchasers the then
current Trust prospectus, as supplemented.
2.2. The Company represents and warrants that the Contracts are currently
and at the time of issuance will be treated as life insurance, endowment or
annuity contracts under applicable provisions of the Internal Revenue Code
of 1986, as amended ("Code") and that it will maintain such treatment and
that it will notify the Trust or PIM immediately upon having a reasonable
basis for believing that the Contracts have ceased to be so treated or that
they might not be so treated in the future.
2.3. The Company represents and warrants that Policy Underwriter, the
underwriter for the individual variable annuity contracts and the variable
life policies, is a member in good standing of FINRA and is a registered
broker-dealer with the SEC. The Company represents and warrants that the
Company and Policy Underwriter will sell and distribute such contracts and
policies in accordance in all material respects with all applicable state
and federal securities laws, including without limitation the 1933 Act, the
1934 Act, and the 1940 Act and state insurance law suitability requirements.
2.4. The Trust represents and warrants that the Shares sold pursuant to this
Agreement shall be registered under the 1933 Act, duly authorized for
issuance in compliance with the laws of Delaware and that the Trust is and
shall remain registered under the 1940 Act. The Trust shall amend the
registration statement for its Shares under the 1933 Act and the 1940 Act
from time to time as required in order to effect the continuous offering of
its Shares. The Trust shall register and qualify the Shares for sale in
accordance with the laws of the various states only if and to the extent
deemed necessary by the Trust.
2.5. The Trust represents that it is lawfully organized and validly existing
under the laws of the State of Delaware. The Trust further represents that
it has adopted a plan pursuant to Rule 12b-1 under the 1940 Act and imposes
an asset-based charge to finance its distribution expenses with respect to
the Class II shares of certain of the Trust's Portfolios as permitted by
applicable law and regulation.
2.6. PFD represents and warrants that it is a member in good standing of
FINRA and is registered as a broker-dealer with the SEC. PFD represents that
it will sell and distribute the Shares in accordance in all material
respects with all applicable state and federal securities laws, including
without limitation the 1933 Act, the 1934 Act, and the 0000 Xxx.
2.7. PIM represents and warrants that it is and shall remain duly registered
as an investment adviser under the Investment Advisers Act of 1940, as
amended.
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2.8. No less frequently than annually, the Company shall submit to the Board
such reports, material or data as the Board may reasonably request so that
it may carry out fully the obligations imposed upon it by the conditions
contained in the Mixed and Shared Funding Exemptive Order pursuant to which
the SEC has granted exemptive relief to permit mixed and shared funding.
2.9. The Trust and PIM represent and warrant that all of their respective
officers, employees, investment advisers, and other individuals or entities
dealing with the money and/or securities of the Trust are, and shall
continue to be at all times, covered by one or more blanket fidelity bonds
or similar coverage for the benefit of the Trust in an amount not less than
the minimal coverage required by Rule 17g-1 under the 1940 Act or related
provisions as may be promulgated form time to time. The aforesaid bonds
shall include coverage for larceny and embezzlement and shall be issued by a
reputable bonding company. The Company represents and warrants that all of
its respective officers, employees, and other individuals or entities
employed or controlled by the Company dealing with the money and/or
securities of the Trust are, and shall continue to be at all times, covered
by a blanket fidelity bond or similar coverage in an amount deemed
appropriate by the Company. The aforesaid bond shall include coverage for
larceny and embezzlement and shall be issued by a reputable bonding company.
The Company agrees that any amounts received under such bond relating to a
claim arising under this Agreement will be held by the Company for the
benefit of the Trust. The Company agrees to make all reasonable efforts to
maintain such bond and agrees to notify the Trust and PIM in writing in the
event such coverage terminates.
2.10. The Company represents and warrants, for purposes other than
diversification under Section 817 of the Code, that the Contracts are
currently at the time of issuance and, assuming the Trust meets the
requirements of Article VI, will be treated as annuity contracts under
applicable provisions of the Code, and that it will make every effort to
maintain such treatment and that it will notify the Trust, PFD and PIM
immediately upon having a reasonable basis for believing that the Contracts
have ceased to be so treated or that they might not be so treated in the
future. In addition, the Company represents and warrants that each Account
is a "segregated asset account" and that interests in the Account are
offered exclusively through the purchase of or transfer into a "variable
contract" within the meaning of such terms under Section 817 of the Code and
the regulations thereunder. The Company will use every effort to continue to
meet such definitional requirements, and it will notify the Trust, PFD and
PIM 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. The Company represents and warrants that it will not purchase Trust
shares with assets derived from tax-qualified retirement plans except,
indirectly, through Contracts purchased in connection with such plans.
ARTICLE III. PROSPECTUS AND PROXY STATEMENTS; VOTING
3.1. At least annually, the Trust or its designee shall provide the Company,
free of charge, with as many copies of the current prospectus (describing
only the Portfolios listed in Schedule A hereto) for the Shares as the
Company may reasonably request for distribution to existing Contract owners
whose Contracts are funded by such Shares. The Trust or its designee shall
provide the Company, at the Company's expense, with as many copies of the
current prospectus for the Shares as the Company may reasonably request for
distribution to prospective purchasers of Contracts. If requested by the
Company in lieu thereof, the Trust or its designee shall provide such
documentation (including an electronic PDF version of the prospectus in the
form sent to the financial printer) and other assistance as is reasonably
necessary in order for the parties hereto once each year (or more frequently
if the prospectus for the Shares is supplemented or amended) to
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have the prospectus for the Contracts and the prospectus for the Shares
printed together in one document; the expenses of such printing to be
apportioned between (a) the Company and (b) the Trust or its designee in
proportion to the number of pages of the Contract and Shares' prospectuses,
taking account of other relevant factors affecting the expense of printing,
such as covers, columns, graphs and charts; the Trust or its designee to
bear the cost of printing the Trust's prospectus portion of such document
for distribution to owners of existing Contracts funded by the Shares and
the Company to bear the expenses of printing the portion of such document
relating to the Accounts; provided, however, that the Company shall bear all
printing expenses of such combined documents where used for distribution to
prospective purchasers or to owners of existing Contracts not funded by the
Shares. In the event that the Company requests that the Trust or its
designee provides the Trust's prospectus in a "camera ready," diskette
format or other mutually agreed upon format, the Trust shall be responsible
for providing the prospectus in the format in which it or PIM is accustomed
to formatting prospectuses and shall bear the expense of providing the
prospectus in such format (e.g., typesetting expenses), and the Company
shall bear the expense of adjusting or changing the format to conform with
any of its prospectuses, subject to PIM's approval which shall not be
unreasonably withheld. Notwithstanding the foregoing, the Trust shall also
provide the Company, at the Trust's expense; no less frequently than
annually, copies of the Portfolios prospectuses in PDF format for use on the
Company's and/or affiliated producer's websites.
3.2. The prospectus for the Shares shall state that the statement of
additional information for the Shares is available from the Trust or its
designee. The Trust or its designee, at its expense, shall print and provide
such statement of additional information to the Company (or a master of such
statement suitable for duplication by the Company) for distribution to any
owner of a Contract funded by the Shares. The Trust shall also provide such
statement of additional information to the Company in a mutually agreed upon
electronic format. The Trust or its designee, at the Company's expense,
shall print and provide such statement to the Company (or a master of such
statement suitable for duplication by the Company) for distribution to a
prospective purchaser who requests such statement or to an owner of a
Contract not funded by the Shares.
3.3. The Trust or its designee shall provide the Company free of charge, if
and to the extent applicable to the Shares, copies of the Trust's proxy
materials, reports to Shareholders and other communications to Shareholders
in such quantity as the Company shall reasonably require for distribution to
Contract owners. The cost of distributing such documents shall be borne by
the Trust or its designee.
3.4 The Trust or PIM will provide the Company with as much notice as is
reasonably practicable of any proxy solicitation for any Portfolio, and of
any material change in the Trust's registration statement, particularly any
change resulting in change to the registration statement or prospectus or
statement of additional information for any Account. The Trust and PIM will
cooperate with the Company so as to enable the Company to solicit proxies
from Contract owners or to make changes to its prospectus, statement of
additional information or registration statement, in an orderly manner. The
Trust and PIM will make reasonable efforts to attempt to have changes
affecting Contract prospectuses become effective simultaneously with the
annual updates for such prospectuses.
3.5. The Trust hereby notifies the Company that it may be appropriate to
include in the prospectus pursuant to which a Contract is offered disclosure
regarding the potential risks of mixed and shared funding.
3.6. If and to the extent required by law, the Company shall:
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(a) solicit voting instructions from Contract owners;
(b) vote the Shares in accordance with instructions received from
Contract owners; and
(c) vote the Shares for which no instructions have been received in
the same proportion as the Shares of such Portfolio for which
instructions have been received from Contract owners;
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.
The Company will in no way recommend action in connection with or oppose or
interfere with the solicitation of proxies for the Shares held for such
Contract owners. The Company reserves the right to vote shares held in any
segregated asset account in its own right, to the extent permitted by law.
Participating Insurance Companies shall be responsible for assuring that
each of their separate accounts holding Shares calculates voting privileges
in the manner required by the Mixed and Shared Funding Exemptive Order. The
Trust and PIM will notify the Company of any changes of interpretations or
amendments to the Mixed and Shared Funding Exemptive Order.
ARTICLE IV. SALES MATERIAL AND INFORMATION
4.1. The Company shall furnish, or shall cause to be furnished, to PFD or
its designee, each piece of sales literature or other promotional material
in which the Trust, PIM, any other investment adviser to the Trust, or any
affiliate of PIM are named, at least ten (10) Business Days prior to its
use. No such material shall be used if PFD or its designee reasonably
objects to such use within ten (10) Business Days after receipt of such
material. PFD or its designee shall notify the Company within ten
(10) Business Days of receipt of its approval or disapproval of such
materials.
4.2. The Company shall not make any representation on behalf of the Trust,
PIM, any other investment adviser to the Trust or any affiliate of PIM and
shall not give any information on behalf of the Trust, PIM, any other
investment adviser to the Trust, or any affiliate of PIM or concerning the
Trust or any other such entity in connection with the sale of the Contracts
other than the information contained in the registration statement,
prospectus or statement of additional information for the Shares, as such
registration statement, prospectus and statement of additional information
may be amended or supplemented from time to time, or in reports or proxy
statements for the Trust, or in sales literature or other promotional
material approved by the Trust, PIM, PFD or their respective designees,
except with the permission of the Trust, PIM or their respective designees.
The Trust, PIM, PFD or their respective designees each agrees 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
information concerning the Trust, PIM, PFD or any of their affiliates which
is intended for use only by brokers or agents selling the Contracts (i.e.,
information that is not intended for distribution to Contract owners or
prospective Contract owners) is so used, and neither the Trust, PIM, PFD nor
any of their affiliates shall be liable for any losses, damages or expenses
relating to the improper use of such broker only materials.
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4.3. PFD shall furnish, or shall cause to be furnished, to the Company or
its designee, each piece of sales literature or other promotional material
in which the Company and/or the Accounts is named, at least five
(5) Business Days prior to its use. No such material shall be used if the
Company or its designee reasonably objects to such use within five
(5) Business Days after receipt of such material. The Company shall notify
PFD within five (5) Business Days of receipt of its approval or disapproval
of such materials.
4.4. The Trust, PIM and PFD shall not give any information or make any
representations on behalf of the Company or concerning the Company, the
Accounts, or the Contracts in connection with the sale of the Contracts
other than the information or representations contained in a registration
statement, prospectus, or statement of additional information for the
Contracts, as such registration statement, prospectus and statement of
additional information may be amended or supplemented from time to time, or
in reports for the Accounts, or in sales literature or other promotional
material approved by the Company or its designee, except with the permission
of the Company. The Company or its designee agrees to respond to any request
for approval on a prompt and timely basis. The parties hereto agree that
this Section 4.4. is neither intended to designate nor otherwise imply that
PIM is an underwriter or distributor of the Contracts.
4.5. The Company and the Trust shall provide, or shall cause to be provided,
to the other at least one complete copy of all registration statements,
prospectuses, statements of additional information, reports, proxy
statements, sales literature and other promotional materials, and all
amendments to any of the above, that relate to the Contracts, or to the
Trust or its Shares, prior to or contemporaneously with the filing of such
document with the SEC or other regulatory authorities.
4.6. For purpose of this Article IV and Article VIII, the phrase "sales
literature or other promotional material" includes but is not limited to
advertisements (such as material published, or designed for use in, a
newspaper, magazine, or other periodical, radio, television, telephone,
electronic messages or tape recording, videotape display, signs or
billboards, motion pictures, or other public media, including, for example,
on-line networks such as the Internet or other electronic media), and sales
literature (such as brochures, electronic messages, circulars, reprints or
excerpts or any other advertisement, sales literature, or published
articles), distributed or made generally available to customers or the
public, educational or training materials or communications distributed or
made generally available to some or all agents or employees, and shareholder
reports, proxy materials (including solicitations for voting instructions)
and any other material constituting sales literature or advertising governed
by the FINRA, the 1933 Act or the 1940 Act. However, such phrase "sales
literature or other promotional material" shall not include any material
that simply lists the names of Portfolios of the Trust in a list of
investment options.
4.7. At the request of any party to this Agreement, each other party will
make available to the other party's independent auditors and/or
representative of the appropriate regulatory agencies, all records, data,
access to operating procedures that may be reasonably requested in
connection with compliance and regulatory requirements related to the
Agreement or any party's obligations under this Agreement.
4.8 Subject to the terms of Sections 4.1 and 4.2 of this Agreement, the
Trust (and its Portfolios), PIM and PFD hereby each consents in connection
with the marketing of the Contracts to the Company's use of their names or
other identifying marks, including PIONEER INVESTMENTS(R) and Pioneer's sail
logo, in connection with the marketing of the Contracts. The Trust, PIM or
PFD or their affiliates may withdraw this authorization as to any particular
use of any such name or identifying xxxx at any time: (i) upon a reasonable
determination that such use would have a material adverse effect on its
reputation or marketing efforts or its affiliates or (ii) if
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any of the Portfolios of the Trust cease to be available through the
Company. Except as set forth in the previous sentence, the Company will not
cause or permit, without prior written permission, the use, description or
reference to a Pioneer party's name, or to the relationship contemplated in
this Agreement, in any advertisement, or promotional materials or
activities, including without limitation, any advertisement or promotional
materials published, distributed, or made available, or any activity
conducted through, the Internet or any other electronic medium.
ARTICLE V. FEES AND EXPENSES
5.1. Neither the Trust, PIM nor PFD shall pay any fee or other compensation
to the Company under this Agreement, other than pursuant to Schedule B
attached hereto, and the Company shall pay no fee or other compensation to
the Trust, PIM or PFD under this Agreement. Notwithstanding the foregoing,
the parties hereto will bear certain expenses under the provisions of this
Agreement and shall reimburse other parties for expenses initially paid by
one party but allocated to another party. In addition, nothing herein shall
prevent the parties hereto from otherwise agreeing to perform, and arranging
for appropriate compensation for, other services relating to the Trust
and/or to the Accounts pursuant to this Agreement.
5.2. The Trust or its designee shall bear the expenses for the cost of
registration and qualification of the Shares under all applicable federal
and state laws, including preparation and filing of the Trust's registration
statement, and payment of filing fees and registration fees; preparation and
filing of the Trust's proxy materials and reports to Shareholders; setting
in type and printing its prospectus and statement of additional information
(to the extent provided by and as determined in accordance with Article III
above); setting in type and printing the proxy materials and reports to
Shareholders (to the extent provided by and as determined in accordance with
Article III above); the preparation of all statements and notices required
of the Trust by any federal or state law with respect to its Shares; all
taxes on the issuance or transfer of the Shares; and the costs of
distributing the Trust's prospectuses, reports to Shareholders and proxy
materials to owners of Contracts and participants funded by the Shares and
any expenses permitted to be paid or assumed by the Trust pursuant to a
plan, if any, under Rule 12b-1 under the 1940 Act. The Trust shall not bear
any expenses of marketing the Contracts.
5.3. The Company shall bear the expenses of distributing the Trust's
prospectus or prospectuses in connection with new sales of the Contracts and
the Trust shall bear the expense of distributing the Trust's Shareholder
reports to Contract owners. The Company shall bear all expenses associated
with the registration, qualification, and filing of the Contracts under
applicable federal securities and state insurance laws; the cost of
preparing, printing and distributing the Contract prospectus and statement
of additional information; and the cost of preparing, printing and
distributing annual individual account statements for Contract owners as
required by state insurance laws.
5.4. The Company agrees to provide certain administrative services,
specified in Schedule B attached hereto, in connection with the arrangements
contemplated by this Agreement. The parties intend that the services
referred to in the Section 5.4 be recordkeeping, shareholder communication,
and other transaction facilitation and processing, and related
administrative services and are not the services of an underwriter or
principal underwriter of the Trust and the Company is not an underwriter for
Shares within the meaning of the 1933 Act.
10
ARTICLE VI. DIVERSIFICATION AND RELATED LIMITATIONS
6.1 The Trust represents and warrants that each Fund is currently qualified,
and will use its best efforts to continue to qualify, as a regulated
investment company ("RIC") under Subchapter M of the Code. The Trust
represents and warrants that it will use its best efforts to qualify and to
maintain qualification of each Portfolio. The Trust will notify the Company
immediately upon having a reasonable basis for believing that the Trust has
ceased to so qualify as a RIC or that it might not so qualify as a RIC in
the future.
6.2 The Trust represents and warrants that it will use its best efforts to
comply and to maintain each Portfolio's compliance with the diversification
requirements set forth in Section 817(h) of the Code and Section 1.817-5(b)
of the regulations under the Code. The Trust will notify the Company
immediately upon having a reasonable basis for believe that a Portfolio has
ceased to comply or that a Portfolio might not comply in the future. In the
event the Trust breaches this Section 2.12, the Trust will use its best
efforts to adequately diversify the Portfolio so as to achieve compliance
within the grace period afforded by Section 1.817-5 of the regulations under
the Code.
6.3 The Trust represents and warrants that no sales of the Portfolios will
be made to the general public.
6.4 The Trust represents and warrants that it will continue to comply with
its Mixed and Shared Funding Exemptive Order.
ARTICLE VII. POTENTIAL MATERIAL CONFLICTS
7.1. The Trust agrees that the Board, constituted with a majority of
disinterested trustees, will monitor each Portfolio of the Trust for the
existence of any material irreconcilable conflict between the interests of
the variable annuity contract owners and the variable life insurance policy
owners of the Company and/or affiliated companies ("contract owners")
investing in the Trust. 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 interpretive letter, or any similar action by
insurance, tax or securities regulatory authorities; (c) an administrative
or judicial decision in any relevant proceeding; (d) the manner in which the
investments of any Portfolio are being managed; (e) a difference in voting
instructions given by variable annuity contract and variable life insurance
contract owners or by contract owners of different Participating Insurance
Companies; or (f) a decision by a Participating Insurance Company to
disregard the voting instructions of contract owners. The Board shall have
the sole authority to determine if a material irreconcilable conflict
exists, and such determination shall be binding on the Company only if
approved in the form of a resolution by a majority of the Board, or a
majority of the disinterested trustees of the Board. The Board will give
prompt notice of any such determination to the Company.
7.2. The Company agrees that it will be responsible for assisting the Board
in carrying out its responsibilities under the conditions set forth in the
Trust's exemptive application pursuant to which the SEC has granted the
Mixed and Shared Funding Exemptive Order by providing the Board, as it may
reasonably request, with all information necessary for the Board to consider
any issues raised and agrees that it will be responsible for promptly
reporting any potential or existing
11
conflicts of which it is aware to the Board including, but not limited to,
an obligation by the Company to inform the Board whenever contract owner
voting instructions are disregarded. The Company also agrees that, if a
material irreconcilable conflict arises, it will at its own cost remedy such
conflict up to and including (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 to a vote of all affected
contract owners whether to withdraw assets from the Trust or any Portfolio
and reinvesting such assets in a different investment medium and, as
appropriate, segregating the assets attributable to any appropriate group of
contract owners (e.g., annuity contract owners, life insurance owners or
variable contract owners of one or more Participating Insurance Companies)
that votes in favor of such segregation, or offering to any of the affected
contract owners the option of segregating the assets attributable to their
contracts or policies, and (b) establishing a new registered management
investment company and segregating the assets underlying the Contracts,
unless a majority of Contract owners materially adversely affected by the
conflict have voted to decline the offer to establish a new registered
management investment company.
7.3. A majority of the disinterested trustees of the Board shall determine
whether any proposed action by the Company adequately remedies any material
irreconcilable conflict. In the event that the Board determines that any
proposed action does not adequately remedy any material irreconcilable
conflict, the Company will withdraw from investment in the Trust each of the
Accounts designated by the disinterested trustees and terminate this
Agreement within six (6) months after the Board informs the Company in
writing of the foregoing determination; provided, however, that such
withdrawal and termination shall be limited to the extent required to remedy
any such material irreconcilable conflict as determined by a majority of the
disinterested trustees of the Board.
7.4 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
Account's investment in the Trust and terminate this Agreement; 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 Trust's independent 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, and until the end
of that six-month period PFD and the Trust shall continue to accept and
implement orders by the Company for the purchase and redemption of shares of
the Trust.
7.5. If material irreconcilable conflict arises because of particular state
insurance regulator's decision applicable to the Company conflicts with the
majority of other state regulators, then the Company will withdraw the
Account's investment in the Trust and terminate this Agreement within six
(6) months after the Trust's Board informs the Company in writing that it
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 members of the
Trust's Board. Until the end of the foregoing six (6) month period, the
Trust and PFD shall continue to accept and implement orders by the Company
for the purchase and redemption of shares of the Trust.
7.6 For purposes of Sections 7.3 through 7.6 of this Agreement, a majority
of the disinterested members of the Board shall determine whether any
proposed action adequately remedies any
12
material irreconcilable conflict, but in no event will the Trust be required
to establish a new funding medium for the Contracts. The Company shall not
be required by Section 7.2 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 affected by the material irreconcilable conflict. In the
event that the Board determines 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 Board informs the Company in writing of the
foregoing determination; provided, however, that such withdrawal and
termination shall be limited to the extent required by any such material
irreconcilable conflict as determined by a majority of the independent
trustees.
7.7. If and to the extent that Rule 6e-2 and Rule 6e-3(T) are amended, or
Rule 6e-3 is adopted, to provide exemptive relief from any provision of the
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 Trust and/or the
Participating Insurance Companies, as appropriate, shall take such steps as
may be necessary to comply with Rule 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, 3.6, 7.1, 7.2, 7.3 and 7.7 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 VIII. INDEMNIFICATION
8.1.Indemnification by the Company
The Company agrees to indemnify and hold harmless the Trust, PIM, PFD,
any affiliates of PIM, and each of their respective directors, trustees,
officers and each person, if any, who controls the Trust or PIM within the
meaning of Section 15 of the 1933 Act, and any agents or employees of the
foregoing (each an "Indemnified Party," or collectively, the "Indemnified
Parties" for purposes of this Section 8.1) against any and all losses,
claims, damages, liabilities (including amounts paid in settlement with the
written consent of the Company) or expenses (including reasonable counsel
fees) to which any Indemnified Party may become subject under any statute,
regulation, at common law or otherwise, insofar as such losses, claims,
damages, liabilities or expenses (or actions in respect thereof) or
settlements:
(a) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the
registration statement, prospectus or statement of additional
information for the Contracts or contained in the Contracts or
sales literature or other promotional material for the Contracts
(or any amendment or supplement to any of the foregoing), or arise
out of or are based upon the omission or the alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, provided
that this Agreement to indemnify shall not apply as to any
Indemnified Party if such statement or omission or such alleged
statement or omission was made in reasonable reliance upon and in
conformity with information furnished to the Company or its
designee by or on behalf of the Trust, PIM or PFD for use in the
registration statement, prospectus or statement of additional
information for the Contracts or in the Contracts or sales
literature or other promotional material (or any amendment or
supplement) or otherwise for use in connection with the sale of
the Contracts or Shares; or
13
(b) arise out of or as a result of statements or representations not
supplied by the Company or its designee, or persons under its
control (other than statements or representations contained in the
Trust's registration statement, prospectus, statement of
additional information or in sales literature or other promotional
material of the Trust and on which the Company has reasonably
relied) or wrongful conduct of the Company or persons under its
control, with respect to the sale or distribution of the Contracts
or Shares; or
(c) arise out of any untrue statement or alleged untrue statement of a
material fact contained in the registration statement, prospectus,
statement of additional information, or sales literature or other
promotional literature of the Trust, 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 Trust by or on behalf of the Company; or
(d) 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; or
(e) arise as a result of any failure by the Company to perform any of
its obligations under this Agreement;
as limited by and in accordance with the provisions of this Article VIII.
8.2.Indemnification by PIM and PFD
PIM and PFD agree to indemnify and hold harmless the Company and Policy
Underwriter and any of their affiliates as well as each of their trustees
and officers and each person, if any, who controls the Company or Policy
Underwriter within the meaning of Section 15 of the 1933 Act, and any agents
or employees of the foregoing (each an "Indemnified Party," or collectively,
the "Indemnified Parties" for purposes of this Section 8.2) against any and
all losses, claims, damages, liabilities (including amounts paid in
settlement with the written consent of the Trust) or expenses (including
reasonable counsel fees) to which any Indemnified Party may become subject
under any statute, at common law or otherwise, insofar as such losses,
claims, damages, liabilities or expenses (or actions in respect thereof) or
settlements are related to the sale or acquisition of the Shares or the
Contracts and:
(a) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the
registration statement, prospectus, statement of additional
information or sales literature or other promotional material of
the Trust (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 statement 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
14
omission was made in reasonable reliance upon and in conformity with
information furnished to the Trust, PIM, PFD or their respective
designees by or on behalf of the Company for use in the registration
statement, prospectus or statement of additional information for the
Trust or in sales literature or other promotional material for the
Trust (or any amendment or supplement) or otherwise for use in
connection with the sale of the Contracts or Shares; or
(b) arise out of or as a result of statements or representations
(other than statements or representations contained in the
Contract's registration statement, prospectus, statement of
additional information or in sales literature or other promotional
material for the Contracts not supplied by the Trust, PIM, PFD or
any of their respective designees or persons under their
respective control and on which any such entity has reasonably
relied) or wrongful conduct of the Trust, PIM, PFD or persons
under their control, with respect to the sale or distribution of
the Contracts or Shares; or
(c) arise out of any untrue statement or alleged untrue statement of a
material fact contained in the registration statement, prospectus,
statement of additional information, or sales literature or other
promotional literature of the Accounts or relating to the
Contracts, or any amendment thereof or supplement thereto, or the
omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statement
or statements therein not misleading, if such statement or
omission was made in reliance upon information furnished to the
Company by or on behalf of the Trust, PIM or PFD; or
(d) arise out of or result from any material breach of any
representation and/or warranty made by the Trust in this Agreement
(including a failure, whether unintentional or in good faith or
otherwise, to comply with the diversification requirements
specified in Article VI of this Agreement) or arise out of or
result from any other material breach of this Agreement by the
Trust; or
(e) arise out of or result from the materially incorrect or untimely
calculation or reporting of the daily net asset value per share or
dividend or capital gain distribution rate; or
(f) arise as a result of any failure by PIM or PFD to perform any of
their respective obligations under this Agreement;
as limited by and in accordance with the provisions of this Article VIII.
8.3. In no event shall the Trust, PIM or PFD be liable under the
indemnification provisions contained in this Agreement to any individual or
entity, including without limitation, the Company, or any Participating
Insurance Company or any Contract owner, with respect to any losses, claims,
damages, liabilities or expenses that arise out of or result from (i) a
breach of any representation, warranty, and/or covenant made by the Company
hereunder or by any Participating Insurance Company under an agreement
containing substantially similar representations, warranties and covenants;
(ii) the failure by the Company or any Participating Insurance Company to
maintain its segregated asset account (which invests in any Portfolio) as a
legally and validly established segregated asset account under applicable
state law and as a duly registered unit investment trust under the
provisions of the 1940 Act (unless exempt therefrom); or (iii) the failure
by the Company
15
or any Participating Insurance Company to maintain its variable annuity
and/or variable life insurance contracts (with respect to which any
Portfolio serves as an underlying funding vehicle) as life insurance,
endowment or annuity contracts under applicable provisions of the Code.
8.4. Neither the Company, the Trust, PIM nor PFD shall be liable under the
indemnification provisions contained in this Agreement with respect to any
losses, claims, damages, liabilities or expenses to which an Indemnified
Party would otherwise be subject by reason of such Indemnified Party's
willful misfeasance, willful misconduct, 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.
8.5. Promptly after receipt by an Indemnified Party under this Section 8.5.
of notice of commencement of any action, such Indemnified Party will, if a
claim in respect thereof is to be made against the indemnifying party under
this section, notify the indemnifying party of the commencement thereof; but
the omission so to notify the indemnifying party will not relieve it from
any liability which it may have to any Indemnified Party otherwise than
under this section. In case any such action is brought against any
Indemnified Party, and it notified the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate
therein and, to the extent that it may wish, assume the defense thereof,
with counsel satisfactory to such Indemnified Party. After notice from the
indemnifying party of its intention to assume the defense of an action, the
Indemnified Party shall bear the expenses of any additional counsel obtained
by it, and the indemnifying party shall not be liable to such Indemnified
Party under this section for any legal or other expenses subsequently
incurred by such Indemnified Party in connection with the defense thereof
other than reasonable costs of investigation.
8.6. A successor by law of the parties to this Agreement shall be entitled
to the benefits of the indemnification contained in this Article VIII. The
indemnification provisions contained in this Article VIII shall survive any
termination of this Agreement.
ARTICLE IX. APPLICABLE LAW
9.1. This Agreement shall be construed and the provisions hereof interpreted
under and in accordance with the laws of The Commonwealth of Massachusetts.
9.2. 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, the Mixed and Shared Funding Exemptive
Order) and the terms hereof shall be interpreted and construed in accordance
therewith.
ARTICLE X. NOTICE OF FORMAL PROCEEDINGS OR LITIGATION
The Trust, PIM, PFD and the Company agree that each such party shall
promptly notify the other parties to this Agreement, in writing, of the
institution of any formal proceedings brought against such party or its
designees by FINRA, the SEC, or any insurance department or any other
regulatory body regarding such party's duties under this Agreement or
related to the sale of the Contracts, the operation of the Accounts, or the
purchase of the Shares. Each of the parties further agrees promptly to
notify the other parties of the commencement of any litigation or proceeding
against it or any of its respective officers, directors, trustees, employees
or 1933 Act control
16
persons in connection with this Agreement, the issuance or sale of the
Contracts, the operation of the Accounts, or the sale or acquisition of
Shares. The indemnification provisions contained in this Article X shall
survive any termination of this Agreement.
ARTICLE XI. TERMINATION
11.1. This Agreement shall terminate with respect to the Accounts, or one,
some, or all Portfolios:
(a) at the option of any party upon three (3) months' advance written
notice delivered to the other parties; provided, however, that
such notice shall not be given earlier than three (3) months
following the date of this Agreement; or
(b) at the option of the Company to the extent that the Shares of
Portfolios are not reasonably available to meet the requirements
of the Contracts or are not "appropriate funding vehicles" for the
Contracts, as reasonably determined by the Company. Without
limiting the generality of the foregoing, the Shares of a
Portfolio would not be "appropriate funding vehicles" if, for
example, such Shares did not meet the diversification or other
requirements referred to in Article VI hereof; or if the Company
would be permitted to disregard Contract owner voting instructions
pursuant to Rule 6e-2 or 6e-3(T) under the 1940 Act. Prompt notice
of the election to terminate for such cause and an explanation of
such cause shall be furnished to the Trust by the Company; or
(c) at the option of the Trust, PIM or PFD upon institution of formal
proceedings against the Company by FINRA, the SEC, or any
insurance department or any other regulatory body regarding the
Company's duties under this Agreement or related to the sale of
the Contracts, the operation of the Accounts, or the purchase of
the Shares; provided that the party terminating this Agreement
under this provision shall give notice of such termination to the
other parties to this Agreement; or
(d) at the option of the Company upon institution of formal
proceedings against the Trust by FINRA, the SEC, or any state
securities or insurance department or any other regulatory body
regarding the duties of the Trust, PIM or PFD under this Agreement
or related to the sale of the Shares; provided that the party
terminating this Agreement under this provision shall give notice
of such termination to the other parties to this Agreement; or
(e) at the option of the Company, the Trust, PIM or PFD upon receipt
of any necessary regulatory approvals and/or the vote of the
Contract owners having an interest in the Accounts (or any
subaccounts) to substitute the shares of another investment
company for the corresponding Portfolio Shares in accordance with
the terms of the Contracts for which those Portfolio Shares had
been selected to serve as the underlying investment media. The
Company will give thirty (30) days' prior written notice to the
Trust of the Date of any proposed vote or other action taken to
replace the Shares; or
17
(f) at the option of the Trust, PIM or PFD by written notice to the
Company, if any one or all of the Trust, PIM or PFD 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, or prospects since the
date of this Agreement or is the subject of material adverse
publicity; or
(g) at the option of the Company by written notice to the Trust, PIM
or PFD, if the Company shall determine, in its sole judgment
exercised in good faith, that the Trust, PIM or PFD has suffered a
material adverse change in this business, operations, financial
condition or prospects since the date of this Agreement or is the
subject of material adverse publicity; or
(h) at the option of any party to this Agreement, upon another
unaffiliated party's material breach of any provision of or
representation contained in this Agreement.
11.2. The notice shall specify the Portfolio or Portfolios, Contracts and,
if applicable, the Accounts as to which the Agreement is to be terminated.
11.3. It is understood and agreed that the right of any party hereto to
terminate this Agreement pursuant to Section 11.1(a) may be exercised for
cause or for no cause.
11.4. Except as necessary to implement Contract owner initiated
transactions, or as required by state insurance laws or regulations, the
Company shall not redeem the Shares attributable to the Contracts (as
opposed to the Shares attributable to the Company's assets held in the
Accounts), and the Company shall not prevent Contract owners from allocating
payments to a Portfolio that was otherwise available under the Contracts,
until thirty (30) days after the Company shall have notified the Trust of
its intention to do so.
11.5 Notwithstanding any termination of this Agreement, the Trust shall at
the option of the Company, continue to make available additional shares of
the Trust 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") unless such further sale
of Trust shares is proscribed by law, regulation or applicable regulatory
body, or unless the Trust determines that liquidation of the Trust following
termination of this Agreement is in the best interests of the Trust and its
shareholders. Specifically, without limitation, the owners of the Existing
Contracts shall be permitted to direct reallocation of investments in the
Trust, redemption of investments in the Trust and/or investment in the Trust
upon the making of additional purchase payments under the Existing
Contracts. The parties agree that this Section 11.5 shall not apply to any
terminations under Article VII and the effect of such Article VII
terminations shall be governed by Article VII of this Agreement.
11.6 Notwithstanding any termination of this Agreement, each party's
obligations under Article VIII to indemnify the other parties shall survive
and not be affected by any termination of this Agreement. In addition, with
respect to Existing Contracts, all provisions of this Agreement shall also
survive and not be affected by any termination of this Agreement
18
ARTICLE XII. NOTICES
Any notice shall be sufficiently given when sent by registered or certified
mail, overnight courier or facsimile 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:
Pioneer Variable Contracts Trust
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxxxxxxxx Xxxxxx, Assistant Secretary
If to the Company:
PHL Variable Insurance Company
Xxx Xxxxxxxx Xxx
Xxxxxxxx, Xxxxxxxxxxx 00000-0000
Attn: Xxxx X. Xxxxx, Vice President
Copy to: Xxxxxx Xxxxxx
If to PIM:
Pioneer Investment Management, Inc.
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxxx, General Counsel
If to PFD:
Pioneer Funds Distributor, Inc.
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxxx Xxxxxxxx, Executive Vice President
ARTICLE XIII. MISCELLANEOUS
13.1.Subject to the requirements of legal process and regulatory authority,
each party hereto shall treat as confidential all information
reasonably identified as confidential in writing by any party hereto
and, except as permitted by this Agreement or as otherwise required by
applicable law or regulation, shall not disclose, disseminate or
utilize such other confidential information without the express
written consent of the affected party until such time as it may come
into the public domain. Notwithstanding anything to the contrary in
this Agreement, in addition to and not in lieu of other provisions in
this Agreement:
(a) "Confidential Information" includes without limitation all
information regarding the customers of the Company, the Trust,
PIM, PFD or any of their subsidiaries, affiliates or licensees; or
the accounts, account numbers, names, addresses, social security
numbers or any other personal identifier of such customers; or any
information derived therefrom.
19
(b) Neither the Company, the Trust, PIM or PFD may disclose
Confidential Information for any purpose other than to carry out
the purpose for which Confidential Information was provided to the
Company, the Trust, PIM or PFD as set forth in this Agreement; and
the Company, the Trust, PIM and PFD agree to cause their
employees, agents and representatives, or any other party to whom
the Company, the Trust, PIM or PFD may provide access to or
disclose Confidential Information to limit the use and disclosure
of Confidential Information to that purpose.
(c) The Company, the Trust, PIM and PFD agree to implement appropriate
measures designed to ensure the security and confidentiality of
Confidential Information, to protect such information against any
anticipated threats or hazards to the security and integrity of
such information, and to protect against unauthorized access to,
or use of, Confidential Information that could result in
substantial harm or inconvenience to any of the customers of the
Company or any of its subsidiaries, affiliates or licensees; the
Company, the Trust, PIM and PFD further agree to cause all their
respective agents, representatives or subcontractors, or any other
party to whom they provide access to or disclose Confidential
Information, to implement appropriate measures to meet the
objectives set forth in this Section 13.1.
13.2. The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions
hereof or otherwise affect their construction or effect.
13.3. This Agreement may be executed simultaneously in one or more
counterparts, each of which taken together shall constitute one and the same
instrument.
13.4. If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the Agreement
shall not be affected thereby.
13.5. The Schedules attached hereto, as modified from time to time, are
incorporated herein by reference and are part of this Agreement.
13.6. Each party hereto shall cooperate with each other party in connection
with inquiries by 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.
13.7. 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.
13.8. A copy of the Trust's Certificate of Trust is on file with the
Secretary of State of Delaware. The Company acknowledges that the
obligations of or arising out of this instrument are not binding upon any of
the Trust's trustees, officers, employees, agents or shareholders
individually, but are binding solely upon the assets and property of the
Trust in accordance with its proportionate interest hereunder. The Company
further acknowledges that the assets and liabilities of each
20
Portfolio are separate and distinct and that the obligations of or arising
out of this instrument are binding solely upon the assets or property of the
Portfolio on whose behalf the Trust has executed this instrument. The
Company also agrees that the obligations of each Portfolio hereunder shall
be several and not joint, in accordance with its proportionate interest
hereunder, and the Company agrees not to proceed against any Portfolio for
the obligations of another Portfolio.
13.9. Neither this Agreement nor any of the rights and obligations hereunder
may be assigned by any party without the prior written consent of all
parties hereto.
13.10. The Trust, PIM and PFD agree that the obligations assumed by the
Company shall be limited in any case to the Company and its assets and
neither the Trust, PIM nor PFD shall seek satisfaction of any such
obligation from the shareholders of Company, the directors, officers,
employees or agents of the Company, or any of them.
13.11. No provision of the Agreement may be deemed or construed to modify or
supersede any contractual rights, duties, or indemnifications, as between
PIM and the Trust and PFD and the Trust.
13.12. This Agreement, including any Schedules or Exhibits hereto, may be
amended only by a written instrument executed by each party hereto.
ARTICLE XIV. RESERVATION OF RIGHTS TO CHANGE POLICY UNDERWRITER
14.1 The Company retains the right, in its sole discretion, to substitute
the Policy Underwriter for any other affiliated registered broker-dealer
while this Agreement, or any portion thereof, is in effect.
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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 above.
PHL VARIABLE INSURANCE COMPANY
By its authorized officer,
By: /s/ Xxxx Xxxxxxx X'Xxxxxxx
------------------------------
Xxxx Xxxxxxx X'Xxxxxxx
Senior Vice President
PHOENIX EQUITY PLANNING CORPORATION
By its authorized officer,
By: /s/ Xxxx X. Xxxxx
------------------------------
Xxxx X. Xxxxx
Vice President and Secretary
PIONEER VARIABLE CONTRACTS TRUST,
on behalf of the Portfolios
By its authorized officer and not
individually,
By: /s/ Xxxxxxxxxxx Xxxxxx
------------------------------
Xxxxxxxxxxx Xxxxxx
Assistant Secretary
PIONEER INVESTMENT MANAGEMENT, INC.
By its authorized officer,
By: /s/ Xxxx Xxxxxxx
------------------------------
Xxxx Xxxxxxx
Executive Vice President
PIONEER FUNDS DISTRIBUTOR, INC.
By its authorized officer,
By: /s/ Xxxxxx Xxxxxxxx
------------------------------
Xxxxxx Xxxxxxxx
Executive Vice President
22
SCHEDULE A
SEPARATE ACCOUNTS AND PORTFOLIOS
SUBJECT TO THE PARTICIPATION AGREEMENT
As of March 1, 2008
Name of Separate Portfolios and
Account and Date Class of Shares
Established by Board of Directors Available to Contracts
--------------------------------- -------------------------------------
PHL Variable Accumulation Pioneer Emerging Markets VCT
Account II established October 25, Portfolio (Class II)
2007
Pioneer International ValueVCT
Portfolio (Class II)
Pioneer High Yield VCT Portfolio
(Class I)
Pioneer Fund VCT Portfolio (Class II)
Pioneer Cullen Value VCT Portfolio
(Class II)
Pioneer Mid Cap Value VCT Portfolio
(Class II)
Pioneer Strategies Income VCT
Portfolio (Class II)
Pioneer Growth Opportunities VCT
Portfolio (Class I)
Pioneer Equity Income VCT Portfolio
(Class II)
Pioneer Global High Yield VCT
Portfolio (Class II)
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Schedule B
1. Administrative Services
Administrative services to Contract owners and participants shall be the
responsibility of the Company and shall not be the responsibility of the Trust
or PFD. The Company will provide properly registered and licensed personnel and
any systems needed for all Contract owners servicing and support - for both
fund and annuity and life insurance information and questions, including:
. Communicate all purchase, withdrawal, and exchange orders it receives
from its customers to PFD;
. Respond to Contract owner and participant inquires;
. Delivery of both Trust and Contract prospectuses as required under
applicable law;
. Entry of initial and subsequent orders;
. Transfer of cash to Portfolios;
. Explanations of Portfolio objectives and characteristics;
. Entry of transfers between Portfolios;
. Portfolio balance and allocation inquires; and
. Mail Trust proxies.
2. Administrative Service Fees
For the administrative services set forth above, PIM or any of its affiliates
shall pay a servicing fee based on the annual rate of 0.25% of the average
aggregate net daily assets invested in the Class I Shares and the Class II
Shares of the Portfolios through the Accounts at the end of each calendar
quarter. Such payments will be made to the Company within thirty (30) days
after the end of each calendar quarter. Such fees shall be paid quarterly in
arrears. Each payment will be accompanied by a statement showing the
calculation of the fee payable to the Company for the quarter and such other
supporting data as may be reasonably requested by the Company. The Company will
calculate the asset balance on each day on which the fee is to be paid pursuant
to this Agreement with respect to each Portfolio for the purpose of reconciling
its calculation of average aggregate net daily assets with PIM's calculation.
Annually (as of December 31) or upon reasonable request of PIM, Company will
provide PIM a statement showing the number of subaccounts in each Class of
Shares of each Portfolio as of the most recent calendar quarter end.
3. 12b-1 Distribution Related Fees (Class II Shares Only)
In accordance with the Portfolios' plans pursuant to Rule 12b-1 under the
Investment Company Act of 1940, PFD will make payments to the Company at an
annual rate of 0.25% of the average daily net assets invested in the Class II
shares of the Portfolios through the Accounts in each calendar quarter. PFD
will make such payments to the Company within thirty (30) days after the end of
each calendar quarter. Each payment will be accompanied by a statement showing
the calculation of the fee payable to the Company for the quarter and such
other supporting data as may be reasonably requested by the Company. The Rule
12b-1 distribution related fees will be paid to the Company for as long as the
Accounts own any Shares of a Portfolio and (i) distribution services are being
provided pursuant to this Agreement and (ii) a Rule 12b-1 plan is in effect
with respect to such Portfolio.
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Exhibit I
To
Participation Agreement
Procedures for Pricing and Order/Settlement Through National Securities
Clearing Corporation's Mutual Fund Profile System and Mutual Fund Settlement,
Entry and Registration Verification System
1. As provided in Section 1.1 of the Participation Agreement, the parties
hereby agree to provide pricing information, execute orders and wire
payments for purchases and redemptions of Fund shares through National
Securities Clearing Corporation ("NSCC") and its subsidiary systems as
follows:
(a) Distributor or the Funds will furnish to Company or its affiliate
through NSCC's Mutual Fund Profile System ("MFPS") (1) the most
current net asset value information for each Fund, (2) a schedule of
anticipated dividend and distribution payment dates for each Fund,
which is subject to change without prior notice, ordinary income and
capital gain dividend rates on the Fund's ex-date, and (3) in the case
of fixed income funds that declare daily dividends, the daily accrual
or the interest rate factor. All such information shall be furnished
to Company or its affiliate by 6:30 p.m. Eastern Time on each business
day that the Fund is open for business (each a "Business Day") or at
such other time as that information becomes available. Changes in
pricing information will be communicated to both NSCC and Company.
(b) Upon receipt of Fund purchase, exchange and redemption instructions
for acceptance as of the time at which a Fund's net asset value is
calculated as specified in such Fund's prospectus ("Close of Trading")
on each Business Day ("Instructions"), and upon its determination that
there are good funds with respect to Instructions involving the
purchase of Shares, Company or its affiliate will calculate the net
purchase or redemption order for each Fund. Orders for net purchases
or net redemptions derived from Instructions received by Company or
its affiliate prior to the Close of Trading on any given Business Day
will be sent to the Defined Contribution Interface of NSCC's Mutual
Fund Settlement, Entry and Registration Verification System
("Fund/SERV") by 5:00 a.m. Eastern Time on the next Business Day.
Subject to Company's or its affiliate's compliance with the foregoing,
Company or its affiliate will be considered the agent of the
Distributor and the Funds, and the Business Day on which Instructions
are received by Company or its affiliate in proper form prior to the
Close of Trading will be the date as of which shares of the Funds are
deemed purchased, exchanged or redeemed pursuant to such Instructions.
Instructions received in proper form by Company or its affiliate after
the Close of Trading on any given Business Day will be treated as if
received on the next following Business Day. Dividends and capital
gains distributions will be automatically reinvested at net asset
value in accordance with the Fund's then current prospectuses.
(c) Company or its affiliate will wire payment for net purchase orders by
the Fund's NSCC Firm Number, in immediately available funds, to an
NSCC settling bank account designated by Company or its affiliate no
later than 5:00 p.m. Eastern time on the same Business Day such
purchase orders are communicated to NSCC. For purchases of shares of
daily dividend accrual funds, those shares will not begin to accrue
dividends until the day the payment for those shares is received.
(d) NSCC will wire payment for net redemption orders by Fund, in
immediately available funds, to an NSCC settling bank account
designated by Company or its affiliate, by 5:00 p.m. Eastern Time on
the Business Day such redemption orders are communicated to NSCC,
except as provided in a Fund's prospectus and statement of additional
information.
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(e) With respect to (c) or (d) above, if Distributor does not send a
confirmation of Company's or its affiliate's purchase or redemption
order to NSCC by the applicable deadline to be included in that
Business Day's payment cycle, payment for such purchases or
redemptions will be made the following Business Day.
(f) If on any day Company or its affiliate, or Distributor is unable to
meet the NSCC deadline for the transmission of purchase or redemption
orders, it may at its option transmit such orders and make such
payments for purchases and redemptions directly to Distributor or
Company or its affiliate, as applicable, as is otherwise provided in
the Agreement.
(g) These procedures are subject to any additional terms in each Fund's
prospectus and the requirements of applicable law. The Funds reserve
the right, at their discretion and without notice, to suspend the sale
of shares or withdraw the sale of shares of any Fund.
2. Company or its affiliate, Distributor and clearing agents (if applicable)
are each required to have entered into membership agreements with NSCC and
met all requirements to participate in the MFPS and Fund/SERV systems
before these procedures may be utilized. Each party will be bound by the
terms of their membership agreement with NSCC and will perform any and all
duties, functions, procedures and responsibilities assigned to it and as
otherwise established by NSCC applicable to the MFPS and Fund/SERV system
and the Networking Matrix Level utilized.
3. Except as modified hereby, all other terms and conditions of the Agreement
shall remain in full force and effect. Unless otherwise indicated herein,
the terms defined in the Agreement shall have the same meaning as in this
Exhibit.
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