FUND PARTICIPATION AGREEMENT
FORETHOUGHT LIFE INSURANCE COMPANY
HARTFORD INVESTMENT MANAGEMENT COMPANY
HIMCO DISTRIBUTION SERVICES COMPANY
AND
HIMCO VARIABLE INSURANCE TRUST
OCTOBER 20, 2014
PARTICIPATION AGREEMENT
THIS AGREEMENT is made and entered into as of this 20th day of October,
2014, by and among FORETHOUGHT LIFE INSURANCE COMPANY, an Indiana corporation
(the "Company"), on its own behalf and on behalf of its separate accounts, as
set forth in SCHEDULE A (Part 2 thereof) as may be revised from time to time
(each account individually referred to as an "Account" and, collectively, the
"Accounts"); HIMCO VARIABLE INSURANCE TRUST, an open-end management investment
company organized as a Delaware statutory business trust (the "Trust") on its
own behalf and on behalf of the portfolios named on SCHEDULE A (Part 1 thereof),
each a series of the Trust (each portfolio individually referred to as a
"Portfolio" or "Fund" and, collectively, the "Portfolios" or "Funds"); HARTFORD
INVESTMENT MANAGEMENT COMPANY, a Delaware Corporation and an investment adviser
registered with the SEC ("HIMCO"); and HIMCO DISTRIBUTION SERVICES COMPANY, a
Connecticut Corporation and a broker/dealer registered with the SEC ("HDSC").
HIMCO in its capacity as investment adviser to the Fund is referred to herein as
the "Adviser." HDSC in its capacity as principal underwriter to the Fund is
referred to herein as the "Distributor."
WHEREAS, each Fund engages in business as an open-end management investment
company and is available to act as an investment vehicle for separate accounts
established by insurance companies to fund variable life insurance policies
and/or variable annuity contracts and for qualified pension and retirement
plans; and
WHEREAS, the Fund is relying on an order obtained by the Hartford Funds
(MUTUAL FUNDS MANAGED BY AN AFFILIATE OF HIMCO) from the SEC, dated November 1,
2000 (File No. IC-24724), granting participating insurance companies and
variable annuity and variable life insurance separate accounts exemptions from
the provisions of sections 9(a), 13(a), 15(a), and 15(b) of the Investment
Company Act of 1940, as amended (hereinafter the "1940 Act"), and Rules
6e-2(b)(15) and 6e-3(T)(b)(15) thereunder, to the extent necessary to permit
Shares to be sold to and held by variable annuity and variable life insurance
separate accounts of life insurance companies that may or may not be affiliated
with one another (hereinafter the "Mixed and Shared Funding Exemptive Order");
and
WHEREAS, the Fund is registered as an open-end management investment
company under the 1940 Act and shares of each Portfolio (the "Shares") are
registered under the Securities Act of 1933, as amended (hereinafter the "1933
Act"); and
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WHEREAS, the Adviser is duly registered as an investment adviser under the
Investment Advisers Act of 1940, as amended; and
WHEREAS, the Distributor is duly registered as a broker-dealer under the
Securities Exchange Act of 1934, as amended, (the "1934 Act") and is a member in
good standing with the Financial Industry Regulatory Authority ("FINRA"); and
WHEREAS, the Company is an insurance company that has issued certain
variable annuity contracts supported wholly or partially by the Accounts (the
"Contracts"); and
WHEREAS, the Company is the sponsor of each Account, and each Account is a
duly organized, validly existing segregated asset account, established by
resolution of the Board of Directors of the Company under the insurance laws of
the State of Indiana, to set aside and invest assets attributable to the
Contracts; and
WHEREAS, the Company provides all required, necessary and appropriate
administrative and other services with respect to the registered individual
variable annuity contracts;
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase Shares on behalf of the Accounts to
fund the Contracts and each Fund is authorized to sell such Shares to unit
investment trusts such as the Accounts at net asset value; and
WHEREAS, except as otherwise provided in regard to a Rule 22c-2 Agreement
between respective parties hereto (See SCHEDULE D hereto), this Agreement,
including any Schedules hereto, is intended to constitute the entire agreement
by and among the parties with respect to the specific matters dealt with herein,
and supersedes all previous agreements among the parties, written or oral, with
respect to such matters;
NOW, THEREFORE, in consideration of their mutual promises, the Company, the
Fund, the Distributor and the Adviser hereby agree as follows:
ARTICLE I. DEFINITIONS
1.1. "Business Day" shall mean any day on which the New York Stock
Exchange is open for trading and on which a Portfolio calculates its net asset
value pursuant to the rules of the Securities and Exchange Commission.
1.2. "Code" shall mean the Internal Revenue Code of 1986, as amended, and
any successor thereto.
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1.3. "Contract Owners" shall mean the owners of any of the Contracts, as
distinguished from all other product owners.
1.4. "Independent Trustees" and "Independent Directors", which may be used
interchangeably herein, shall each mean those members of the Fund's Board of
Directors or Trustees who are not interested persons of the Fund, the
Distributor, the Adviser or any sub-adviser to any of the Portfolios.
1.5. "IRS" shall mean the U.S. Internal Revenue Service.
1.6. "NAV" shall mean a Portfolio's net asset value per share ("NAV").
1.7. "Prospectus" with respect to Shares or with respect to a Contract
through which interests in an Account registered as a unit investment trust
under the 1940 Act are offered and issued, which interests are registered as
securities under the 1933 Act, shall mean each version of the effective
prospectus, including any supplements thereto, filed with the SEC under the 1933
Act. Unless otherwise indicated, the term "Prospectus" shall include any private
placement memo or other similar disclosure document used in connection with the
offer or sale of Contracts through which interests in unregistered Accounts are
offered and issued. With respect to any provision of this Agreement requiring a
party to take action in accordance with a Prospectus, such reference will be to
the version of the Prospectus last filed and effective prior to the taking of
such action, including any supplements thereto. The term Prospectus shall
include any statement of additional information incorporated by reference
therein.
1.8. "SEC" shall mean the U.S. Securities and Exchange Commission.
1.9. "SAI" shall mean each version of the effective Statement of
Additional Information, including any supplements thereto, filed with the SEC
under the 1933 Act. With respect to any provision of this Agreement requiring a
party to take action in accordance with a SAI, such reference will be to the
version of the SAI last filed and effective prior to the taking of such action,
including any supplements thereto. The term SAI shall include any Prospectus
incorporated by reference therein.
1.10. "Valuation Time" shall mean the time as of which a Fund calculates
net asset value for the Shares its Portfolios on the relevant Business Day.
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ARTICLE II. SALE OF FUND SHARES
2.1. The Fund and the Distributor agree to sell to the Company those Shares
that an Account orders, executing such orders on each Business Day at the NAV
next computed after receipt by the Fund or its designee of the order for the
Shares. For purposes of this Section 2.1, the Company shall be the designee of
the Fund for receipt of such orders and receipt by such designee shall
constitute receipt by the Fund, provided that the Fund receives notice of any
such order by 10:00 a.m. Eastern time on the next following Business Day. Such
notice may be communicated by electronic transmission or facsimile to the office
or person(s) designated for such notice by each Fund.
2.2. (a) The Fund and the Distributor agree to make Shares available for
purchase at the applicable NAV per share by the Company and the Accounts on
those days on which the Fund calculates its Portfolios' NAV pursuant to rules of
the SEC, and the Fund shall calculate such NAV on each day which the New York
Stock Exchange is open for trading. Notwithstanding the foregoing, the Fund may
refuse to sell Shares to any person, or suspend or terminate the offering of
Shares if such action is required by law or by regulatory authorities having
jurisdiction or is, in the sole discretion of the Fund acting in good faith,
necessary or appropriate in the best interests of the shareholders of such
Portfolio. All orders accepted by the Company shall be subject to the terms of
the then current Prospectus of the applicable Portfolio. The Company shall use
its best efforts, and shall reasonably cooperate with the Fund to enforce stated
Prospectus policies regarding transactions in Portfolio shares.
The Company acknowledges that orders accepted by it in violation of the
Fund's stated policies may be subsequently revoked or canceled by the Fund and
that the Fund shall not be responsible for any losses incurred by the Company or
any Contract Owner as a result of such cancellation.
(b) The Company acknowledges that the Fund has the right to refuse any
purchase order or to suspend or terminate the offering of Shares for any reason.
(c) The Fund will not sell Shares to any other participating insurance
company separate account unless an agreement containing provisions the substance
of which are the same as Sections 5.1(a), 5.1(b) (except with respect to
designation of applicable law), 6.6, 6.7, 6.8 (Sections 6.6, 6.7 and 6.8 shall
be required to the extent necessary by applicable law), and Article X of this
Agreement is in effect to govern such sales.
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2.3. Each Fund agrees to redeem for cash, on the Company's request, any
full or fractional Shares the Fund held by the Company, executing such requests
on each Business Day at the NAV next computed after receipt by the Fund or its
designee of the request for redemption. For purposes of this Section 2.3, the
Company shall be the designee of the Fund for receipt of requests for redemption
and receipt by such designee shall constitute receipt by the Fund, provided that
the Fund receives notice of any such request for redemption by 9:30 a.m. Eastern
time on the next following Business Day.
2.4. The Distributor and the Fund agree that Shares will be sold only to
insurance companies or qualified plans (for use in defined contribution
products/plans) for use in conjunction with variable life insurance policies or
variable annuities. The parties hereto acknowledge that the arrangement
contemplated by this Agreement is not exclusive; as may otherwise be expressly
limited herein, Shares may be sold to other insurance companies and the cash
value of the Contracts may be invested in other investment companies.
2.5. (a) The Company will place orders to purchase or redeem Shares
separately for each Portfolio. Each order shall describe the net amount of
shares and dollar amount of each Portfolio to be purchased or redeemed.
(b) The Company shall pay for Portfolio shares by 3:00 p.m. Eastern
time on the next Business Day after an order to purchase Portfolio shares is
received in accordance with the provisions of Section 2.1 hereof. Payment shall
be in federal funds transmitted by wire and/or by a credit for any shares
redeemed the same day as the purchase.
(c) Each Fund shall pay and transmit the proceeds of redemptions of
Portfolio shares by 11:00 a.m. Eastern Time on the next Business Day after a
redemption order is received in accordance with Section 2.3 hereof; provided,
however, that the Fund may delay payment in extraordinary circumstances to the
extent permitted under Section 22(e) of the 1940 Act. Payment shall be in
federal funds transmitted by wire and/or a credit for any shares purchased the
same day as the redemption. The Fund shall not bear any responsibility for the
proper disbursement or crediting of redemption proceeds by the Company; the
Company alone shall be responsible for such action.
2.6. Issuance and transfer of a Portfolio's shares will be by book entry
only. Stock certificates will not be issued to the Company or the Accounts.
Shares purchased from a Portfolio will be recorded in an appropriate title for
the relevant Account or the relevant sub-
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account of an Account. Each Fund will furnish to the Company the CUSIP number
assigned to each Portfolio identified in Part 1 of SCHEDULE A hereto, as it may
be amended from time to time.
2.7. The Distributor shall notify the Company in advance, but not later
than ex-dividend date notice (by electronic communication or telephone, followed
by electronic confirmation) to the Company, of any income, dividends or capital
gain distributions payable on a Portfolio's shares. The Company hereby elects to
receive all such income dividends and capital gain distributions as are payable
on a Portfolio's shares in additional Shares. The Company reserves the right to
revoke this election and to receive all such income dividends and capital gain
distributions in cash. A Fund 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.
2.8. Each Fund shall make the NAV for each Portfolio available to the
Company on each Business Day as soon as reasonably practicable after the NAV is
calculated and shall use its best efforts to make such NAV available by 8:00
p.m. Eastern time. In the event of an error in the computation of a Portfolio's
NAV or any dividend or capital gain distribution (each, a "pricing error"), the
applicable Fund shall immediately notify the Company as soon as possible after
discovery of the error. Such notification may be verbal, but shall be confirmed
promptly in writing. A pricing error shall be corrected as follows:
(a) if the pricing error results in a difference between the
erroneous NAV and the correct NAV of less than $0.01 per share, then no
corrective action need be taken;
(b) if the pricing error results in a difference between the
erroneous NAV and the correct NAV equal to or greater than $0.01 per share, but
less than 1/2 of 1% of the Portfolio's NAV at the time of the error, then the
Adviser shall reimburse the Portfolio for any loss, after taking into
consideration any positive effect of such error; however, no adjustments to
Contract Owner accounts need be made; and
(c) if the pricing error results in a difference between the
erroneous NAV and the correct NAV equal to or greater than 1/2 of 1% of the
Portfolio's NAV at the time of the error, then the Adviser shall reimburse the
Portfolio for any loss (without taking into consideration any positive effect of
such error) and shall reimburse the Company for the costs of adjustments made to
correct Contract Owner accounts in accordance with the provisions of the
Adviser's current pricing policy. If an adjustment is necessary to correct a
material error that has caused Contract Owners to receive less than the amount
to which they are entitled, the number of shares of the
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applicable sub-account of such Contract Owners will be adjusted and the amount
of any underpayments shall be credited by the Adviser to the Company for
crediting of such amounts to the applicable Contract Owner's accounts. Upon
notification by the Adviser of any overpayment due to a material error, the
Company shall promptly remit to the Adviser any overpayment that has not been
paid to Contract Owners. In no event shall the Company be liable, under this
Agreement, to Contract Owners for any such adjustments or underpayment amounts.
A pricing error within categories (b) or (c) above shall be deemed to be
"materially incorrect" or constitute a "material error" for purposes of this
Agreement. The standards set forth in this Section 2.8 are based on the parties'
understanding of the views expressed by the staff of the SEC as of the date of
this Agreement. In the event the views of the SEC staff are later modified or
superseded by the SEC or judicial interpretation, the parties shall amend the
foregoing provisions of this Agreement to comport with the appropriate
applicable standards, on terms mutually satisfactory to all parties.
2.9. The Company may agree with the Fund and/or Distributor on additional
or revised specifics regarding purchasing and redeeming Shares through FundSERV
or other method(s) facilitated by the National Securities Clearing Corporation
("NSCC") as may bet set forth from time to time on SCHEDULE C.
2.10. The Company agrees to notify the Fund of any investment restrictions
imposed by state insurance law and contracts applicable to the Fund. The parties
agree to mutually cooperate with respect to any state insurance law restriction
or requirement applicable to a Portfolio's investments to the extent such
cooperation is permissible under the terms and conditions of the Fund's
prospectuses and other governing laws.
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ARTICLE III. [INTENTIONALLY LEFT BLANK]
Use of Roman numeral "III" in the sequencing of Articles of this Agreement is
intentionally omitted. This Agreement continues from Article II directly and
intentionally to Article V.
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ARTICLE IV. [INTENTIONALLY LEFT BLANK]
Use of Roman numeral "IV" in the sequencing of Articles of this Agreement is
intentionally omitted. This Agreement continues from Article II directly and
intentionally to Article V.
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ARTICLE V. REPRESENTATIONS AND WARRANTIES
5.1. The Company represents and warrants that:
(a) (i) The securities deemed to be issued by the Accounts under the
Contracts are or will be registered under the 1933 Act, or are not so registered
in proper reliance upon an exemption from such registration requirements;
(ii) the Contracts will be issued and sold in compliance in all
material respects with all applicable federal and state laws; and
(iii) the Contracts will be sold only by duly licensed and
appointed parties with which the Company has written agreements that require,
among other things, that the sale of the Contracts shall comply in all material
respects with applicable FINRA Conduct Rules.
(b) (i) It is an insurance company duly organized and in good
standing under applicable law;
(ii) it has legally and validly established each Account prior
to any issuance or sale of units thereof as a segregated asset account under
Indiana law and
(iii) it has registered each Account as a unit investment trust
in accordance with the provisions of the 1940 Act to serve as a segregated
investment account for the Contracts and will maintain such registration for so
long as any Contracts are outstanding as required by applicable law or,
alternatively, the Company has not registered one or more Accounts in proper
reliance upon an exclusion from such registration requirements.
(c) It has reviewed a copy of the Mixed and Shared Funding Exemptive
Order, and, in particular, has reviewed the conditions to the requested relief
set forth therein. As long as applicable, the Company agrees to be bound by the
responsibilities of a participating insurance company as set forth in the Mixed
and Shared Funding Exemptive Order, including, without limitation, the
requirement that the Company report any potential or existing conflicts of
interest of which it is aware to the Fund's Board of Trustees. The Company will
assist each Board in carrying out its responsibilities in monitoring such
conflicts under the Mixed and Shared Funding Exemptive Order by providing the
Board in a timely manner with all information reasonably necessary for the Board
to consider any issues raised. This includes, but is not limited to, an
obligation by the Company to inform each applicable Board whenever Contract
Owner voting instructions are disregarded and by confirming in writing, at a
Fund's
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request, that the Company is unaware of any such potential or existing
material irreconcilable conflicts;.
(d) For purposes other than diversification under Section 817 of the
Code, that the Contracts are currently and at the time of issuance will be
treated as annuity contracts or life insurance policies under applicable
provisions of the Code, and that it will make every effort to maintain such
treatment and that it will notify the Fund, the Distributor and the Adviser
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 each Account are offered exclusively
through the purchase of or transfer into a "variable contract" within the
meaning of such terms under Section 817 of the Code and the regulations
thereunder. The Company will use every effort to continue to meet such
definitional requirements, and it will notify the Fund, the Distributor and the
Adviser 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 initiate a purchase of Fund
shares with assets derived from tax-qualified retirement plans except,
indirectly, through Contracts purchased in connection with such plans.
(e) The Company agrees to comply with its obligations under
applicable anti-money laundering ("AML") laws, rules and regulations, including
but not limited to its obligations under the United States Bank Secrecy Act of
1970, as amended by the USA PATRIOT Act of 2001 (the "Patriot Act") and other
laws, and the rules, regulations, and official guidance issued thereunder
(collectively the "BSA"). The Company agrees to undertake inquiry and due
diligence regarding the customers to whom the Company offers and/or sells Shares
or on whose behalf the Company purchases Shares and the inquiry and due
diligence is reasonably designed to determine that the Company is not prohibited
from dealing with any such customer by:
(i) any sanctions administered by the Office of Foreign Asset
Control of the U.S. Department of the Treasury ("OFAC");
(ii) and of the Special Measures directed from time to time by
Treasury.
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(f) It is currently in compliance, and will remain in compliance,
with all applicable laws, rules and regulations relating to consumer privacy,
including, but not limited to, the Xxxxx-Xxxxx-Xxxxxx Act.
(g) (i) It operates in compliance with and will continue to operate
in compliance with its duties and obligations under the SEC Rule 22c-2 Agreement
with the Funds dated [ ] as it may be amended from time to time.
(ii) It has adopted, and will at all times during the term of this
Agreement maintain, reasonable and appropriate procedures ("Late Trading
Procedures") designed to ensure that any and all orders relating to the
purchase, sale or exchange of Shares communicated to the applicable Fund to be
treated in accordance as having been received on a Business Day have been
received by the Valuation Time on such Business Day and were not modified after
the Valuation Time, and that all orders received from Contract Owners but not
rescinded by the Valuation Time were communicated to the Fund or its agent as
received for that Business Day. Each transmission of orders by the Company shall
constitute a representation by the Company that such orders are accurate and
complete and relate to orders received by the Company by the Valuation Time on
the Business Day for which the order is to be priced and that such transmission
includes all orders relating to Fund shares received from Contract Owners but
not rescinded by the Valuation Time. The Company agrees to provide each Fund or
its designee with a copy of the Late Trading Procedures and such certifications
and representations regarding the Late Trading Procedures as the Fund or its
designee may reasonably request. The Company will endeavor to promptly notify
the Fund in writing of any material change to the Late Trading Procedures.
(iii) It has adopted, and will at all times during the term of
this Agreement maintain, reasonable and appropriate procedures ("Market Timing
Procedures") designed to minimize excessive trading in its Contracts. The
Company agrees to provide each Fund or its designee with a copy of the Market
Timing Procedures and such certifications and representations regarding the
Market Timing Procedures as the Fund or its designee may reasonably request. The
Company will endeavor to promptly notify the Fund of any material change to the
Market Timing Procedures. The parties agree to make reasonable efforts to
address any conflict between the Market Timing Procedures and actions taken or
policies adopted by a Fund designed to minimize any adverse impact on other Fund
investors due to excessive trading.
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5.2. The Fund and the Distributor represent and warrant that:
(a) (i) The Portfolio shares sold pursuant to this Agreement shall be
registered under the 1933 Act;
(ii) the Portfolio shares sold pursuant to this Agreement shall be
duly authorized for issuance and sold in compliance with all applicable federal
securities laws including without limitation the 1933 Act, the 1934 Act, and the
1940 Act;
(iii) the Fund is and shall remain registered under the 1940 Act;
and
(iv) the Fund shall amend the registration statement for its
Portfolios' shares under the 1933 Act and the 1940 Act from time to time as
required in order to effect the continuous offering of the shares.
(b) The Fund has adopted a plan pursuant to Rule 12b-1 under the 1940
Act for certain classes of its shares. The parties acknowledge that the Fund
reserves the right to modify or terminate its existing plan or to adopt
additional plans pursuant to Rule 12b-1 under the 1940 Act (including with
respect to its shares for which it has not currently adopted a Rule 12b-1 plan)
and to impose an asset-based or other charge to finance distribution expenses as
permitted by applicable law and regulation. The Fund and the Adviser agree to
comply with applicable provisions and SEC interpretation of the 1940 Act with
respect to any distribution plan.
(c) The Fund shall register and qualify the shares for sale in
accordance with the laws of the various states if and to the extent required by
applicable law. The Fund makes no representation as to whether any aspect of its
operations complies with the insurance laws and regulations of any state.
(d) The Fund is lawfully organized and validly existing under the
laws of the State of Delaware and that it does and will comply in all material
respects with the 1940 Act.
(e) The Fund and the Distributor shall comply with all applicable
laws and regulations designed to prevent money laundering and, if required by
such laws or regulations, share with the Company information about individuals,
entities, organizations and countries suspected of possible terrorist or money
laundering activities.
5.3. The Adviser represents and warrants that it is and shall remain duly
registered under all applicable federal and state securities laws and that it
shall perform its obligations for each Fund and Portfolio in compliance in all
material respects with any applicable state and federal securities laws.
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5.4. The Distributor represents and warrants that it is and shall remain
duly registered under all applicable federal and state securities laws and that
it shall perform its obligations for the Fund and each Portfolio in compliance
in all material respects with the laws of any applicable state and federal
securities laws.
5.5. The Fund and the Adviser represent and warrant that:
(a) All of their respective officers, employees, investment advisers,
and other individuals or entities dealing with the money and/or securities of
the Fund are, and shall continue to be at all times, covered by one or more
blanket fidelity bonds or similar coverage for the benefit of the Fund 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 from time to time. The aforesaid
bonds shall include coverage for larceny and embezzlement and shall be issued by
a reputable bonding company.
(b) They will use their best efforts to the extent possible to
provide the Company with 60 days' notice of any material change affecting the
Portfolios (including, but not limited to, any material change in the
registration statement or prospectus affecting the Portfolios) and any proxy
solicitation affecting the Portfolios and consult with the Company in order to
implement any such change in an orderly manner, recognizing the expenses of
changes and attempting to minimize such expenses by implementing them in
conjunction with regular annual updates of the Prospectus for the Contracts.
(c) The Fund will at all times remain permitted, under applicable
securities industry regulation and authoritative guidance, to rely on a Mixed
and Shared Funding Exemptive Order from the SEC granting participating insurance
companies and variable insurance products separate accounts exemptions from the
provisions of the 1940 Act and the rules thereunder to the extent necessary to
permit Shares to be sold to and held by variable insurance product separate
accounts of both affiliated and unaffiliated life insurance companies.
5.6 [Intentionally Omitted]
5.7. Notwithstanding anything possibly to the contrary in the Agreement
or any Rule 22c-2 Shareholder Information Agreement entered into by the parties,
the Fund hereby waive enforcement rights of fund policies regarding market
timing or frequent trading with respect to transfers of assets into or from
Company sponsored dynamic or static asset allocation models.
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ARTICLE VI. PROSPECTUSES AND PROXY STATEMENTS; VOTING
6.1. At least annually, the Distributor shall provide the Company with as
many copies of a Fund's current Prospectus as the Company may reasonably
request, with expenses to be borne in accordance with SCHEDULE B hereof. If
requested by the Company, the Distributor or Fund shall provide such
documentation (including an electronic version of the current prospectus) and
other assistance as is reasonably necessary in order for the Company once each
year (or more frequently if the prospectus for the Fund is amended) to have the
prospectus for the Contracts and the Prospectus for the Fund printed together in
one document.
6.2. If applicable state or federal laws or regulations require that the
SAI for the Fund be distributed to all Contract Owners, then the Fund and/or the
Distributor shall provide the Company with copies of the Fund's SAI in such
quantities, with expenses to be borne in accordance with SCHEDULE B hereof, as
the Company may reasonably require to permit timely distribution thereof to
Contract Owners. The Distributor and/or the Fund shall also provide an SAI to
any Contract Owner or prospective owner who requests such SAI from the Fund.
6.3. The Fund and/or the Distributor shall provide the Company with copies
(including an electronic copy in print ready format) of the Fund's proxy
material, reports to shareholders and other communications to shareholders in
such quantity, with expenses to be borne in accordance with SCHEDULE B hereof,
as the Company may reasonably require to permit timely distribution thereof to
Contract Owners.
6.4. It is understood and agreed that, except with respect to information
regarding the Company provided in writing by that party, the Company shall not
be responsible for the content of the Prospectus or SAI for a Fund. It is also
understood and agreed that, except with respect to information regarding the
Fund, the Distributor, the Adviser or the Portfolios provided in writing by the
Fund, the Distributor the Adviser or the Portfolios, neither the Fund, the
Distributor the Adviser nor the Portfolios are responsible for the content of
the prospectus or SAI for the Contracts.
6.5. Each Fund or its designee will use its best efforts to the extent
possible to provide the Company with 60 days' notice of any change for a Fund or
Portfolio, including but not limited to:
(a) fund objective changes;
(b) anticipated fund reorganizations, substitutions or close;
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(c) no action or exemptive requests granted by the SEC;
(d) Fund and/or Portfolio name changes;
(e) Fund or Portfolio adviser, sub-adviser and/or portfolio manager
changes; and/or
(f) conditions or undertakings that affect the Company's rights or
obligations under this Agreement.
6.6 In the event of a proxy solicitation the Fund at its expense shall,
with respect to the Contracts, mail the proxy materials to Contract Owners and
tabulate the results. In order to assist the Fund in the process, the Company
will provide to the Fund or its designated representative adequate electronic
files so that the Fund may make proper solicitations of Contract Owners. The
electronic files will be in a mutually acceptable format and will contain
Contract Owner information, mailing information, and the numbers of shares of
each applicable Fund in which each Contract Owner has an interest on the record
date.
6.7. If and to the extent required by law the Company shall:
(a) vote the Portfolio shares held in the Accounts in accordance with
instructions received from Contract Owners;
(b) vote Portfolio shares held in the Accounts for which no
instructions have been received in the same proportion as Portfolio shares 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; provided, that such
Shares may be voted differently, as determined by the Company, to an extent
permitted by applicable regulation or authoritative interpretation; and
(c) vote Portfolio shares held in its general account or otherwise in
the same proportion as Portfolio shares 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 such voting by an insurance
company; provided, that such Shares may be voted differently, as determined by
the Company, to an extent permitted by applicable regulation or authoritative
interpretation. The Company reserves the right to vote Portfolio shares in its
own right, to the extent permitted by law.
6.8. The Company shall be responsible for assuring that each of the
Company's separate accounts holding Shares calculates voting privileges as
directed by the applicable Fund and agreed to by the Company and the Fund. Each
Fund agrees to promptly notify the Company
18
of any changes of interpretations or amendments of the Mixed and Shared Funding
Exemptive Order.
6.9. The Fund will comply with all provisions of the 1940 Act requiring
voting by shareholders, and in particular each Fund will either provide for
annual meetings (except insofar as the SEC may interpret Section 16 of the 1940
Act not to require such meetings) or, as each Fund currently intends, comply
with Section 16(c) of the 1940 Act (although no Fund is one of the trusts
described in Section 16(c) of that Act) as well as with Sections 16(a) and, if
and when applicable, 16(b). Further, each Fund will act in accordance with the
SEC's interpretation of the requirements of Section 16(a) with respect to
periodic elections of directors or trustees and with whatever rules the SEC may
promulgate with respect thereto.
18
ARTICLE VII. SALES MATERIAL AND INFORMATION
7.1. (a) The Company shall not give any information or make any
representations or statements on behalf of a Fund or Portfolio in connection
with the sale of the Contracts other than the information or representations
contained in the registration statement, including a Fund's Prospectus or SAI,
as the same may be amended or supplemented from time to time, or in sales
literature or other promotional material approved by a Fund, the Distributor
and/or the Adviser, except with the prior written consent of the Fund,
Distributor and/or Adviser, as applicable.
(b) The Company shall furnish, or cause to be furnished, to each
Fund, as applicable, prior to use each piece of sales literature or other
promotional material prepared by the Company in which a Fund, the Distributor,
the Adviser and/or any of their respective affiliates is described at least 10
(ten) business days prior to its use. No sales literature or promotional
material will be used if the Fund, the Distributor or the Adviser reasonably
objects to its use within 10 (ten) business days following receipt of such
material. Each Fund, the Distributor and the Adviser each agrees that it will
use its best efforts to respond promptly to any request by the Company for such
prior approval. Neither the Fund, Distributor nor the Adviser will be
responsible for errors or omissions in, or the content of, the Company's
material except to the extent that the error or omission resulted from
information provided by or on behalf of the Fund, Distributor or the Adviser.
(c) The Company is hereby granted a non-exclusive, royalty-free, U.S.
license to use, print, broadcast and otherwise display in any print or
electronic medium with respect to the annuity Contracts, the Fund's, the
Adviser's or the Distributor's service marks, trade names and logos solely with
respect to such sales literature or other promotional material created and
published by the Company with respect to the Contracts.
7.2. (a) Each Fund, the Distributor and the Adviser shall not give any
information or make any representations on behalf of the Company or concerning
the Company, the Accounts, or the Contracts other than the information or
representations contained in a registration statement, including the prospectus
or SAI, for the Contracts, as the same may be amended or supplemented from time
to time, or in sales literature or other promotional material approved by the
Company or its designees, except with the prior written consent of the Company.
19
(b) Each Fund, the Distributor and the Adviser shall furnish, or
cause to be furnished, to the Company prior to use each piece of sales
literature or other promotional material prepared by the Fund, the Distributor
and the Adviser in which the Company and/or any of its affiliates are described.
No sales literature or promotional material will be used if the Company
reasonably objects to its use within 10 (ten) business days following receipt of
such material. The Company agrees that it will use its best efforts to respond
promptly to any request by a Fund, the Distributor or the Adviser for such prior
approval. The Company will not be responsible for errors or omissions in, or the
content of, the Company's material except to the extent that the error or
omission resulted from information provided by or on behalf of the Company.
7.3. For purposes of this Article VII and Article XI, the phrase "sales
literature and other promotional material" includes, but is not limited to,
advertisements (such as material published, or designed for use in, a newspaper,
magazine, or other periodical, radio, television, telephone or tape recording,
videotape display, signs or billboards, motion pictures, or other public media;
E.G., on-line networks such as the Internet or other electronic media), sales
literature (I.E., any written communication distributed or made generally
available to customers or the public, including brochures, circulars, research
reports, market letters, form letters, seminar texts, reprints or excerpts of
any other advertisement, sales literature, or published article), educational or
training materials or other communications distributed or made generally
available to some or all agents or employees, and shareholder reports, and proxy
materials (including solicitations for voting instructions) and any other
material constituting sales literature or advertising under the FINRA rules, the
1933 Act or the 0000 Xxx.
7.4. At the request of any party to this Agreement, each other party will
make available to the requesting party's independent auditors and/or
representatives of the appropriate regulatory agencies, all records, data and
access to operating procedures that may be reasonably requested in connection
with compliance and regulatory requirements related to this Agreement or any
party's obligations under this Agreement.
20
ARTICLE VIII. FEES AND EXPENSES
8.1. Each Fund, the Distributor and the Adviser shall pay no fee or other
compensation to the Company under this Agreement, and the Company shall pay no
fee or other compensation to a Fund, the Distributor or the Adviser under this
Agreement; provided, however, that:
(a) the parties hereto will bear expenses as reflected in SCHEDULE B
and other provisions of this Agreement, and
(b) the parties may enter into other agreements relating to the
Company's investment in a Fund or Portfolio, including services agreements.
Notwithstanding the foregoing, pursuant to the distribution plans adopted
by each Fund pursuant to Rule 12b-1 under the 1940 Act, and as contemplated by
Section 5.2(b) of this Agreement, the Fund or each Portfolio or class of shares
thereof may pay the Distributor and the Distributor may pay the Company for
activities primarily intended to result in the servicing of Contracts or of the
sale/servicing of Fund shares to the Accounts through which such Contracts were
issued.
21
ARTICLE IX. DIVERSIFICATION AND QUALIFICATION
9.1. Each Fund, the Distributor and the Adviser represent and warrant that
the Fund and each Portfolio thereof will at all times comply with Section 817(h)
of the Code and Treasury Regulation ss.1.817-5 or any other regulations
promulgated under Section 817(h), as amended from time to time, and any Treasury
interpretations thereof, relating to the diversification requirements for
variable annuity, endowment, or life insurance contracts and any amendments or
other modifications or successor provisions to such Section or Regulations. Each
Fund, the Distributor or the Adviser will notify the Company immediately upon
having a reasonable basis for believing that a Fund or any Portfolio has ceased
to comply with the Section 817(h) diversification or might not so comply in the
future. To the extent that a Fund or Portfolio ceases to so qualify, the Fund
and the Adviser will use their best efforts to take all steps necessary to
adequately diversify the affected Portfolio so as to achieve compliance within
the grace period afforded by Treasury Regulation ss.1.817-5.
9.2. Each Fund, the Distributor and the Adviser represent and warrant that
each Fund and each Portfolio is currently qualified as a Regulated Investment
Company under Subchapter M of the Code, and that each Portfolio will maintain
such qualification (under Subchapter M or any successor or similar provisions)
as long as this Agreement is in effect. Each Fund, the Distributor or the
Adviser will notify the Company immediately upon having a reasonable basis for
believing that a Fund or any Portfolio has ceased to comply with the Subchapter
M qualification requirements or might not so comply in the future.
9.3. Without in any way limiting the effect of Sections 11.2, 11.3 and 11.4
hereof and without in any way limiting or restricting any other remedies
available to the Company, the Adviser or the Distributor will pay all costs
associated with or arising out of any failure, or any anticipated or reasonably
foreseeable failure, of a Fund or any Portfolio to comply with Sections 9.1 or
9.2 hereof, including all costs associated with reasonable and appropriate
corrections or responses to any such failure; such costs may include, but are
not limited to, the costs involved in creating, organizing, and registering a
new investment company as a funding medium for the Contracts and/or the costs of
obtaining whatever regulatory authorizations are required to substitute shares
of another investment company for those of the failed Portfolio (including but
not limited to an order pursuant to Section 26(c) of the 1940 Act). In addition,
the Distributor or the Adviser shall bear the costs of bringing Contracts into
compliance with section 817(h) of the
22
Code following a diversification failure, and the costs of adverse tax
consequences to affected Contract holders if the Contracts cannot be brought
into compliance.
9.4. The Company agrees that, if the IRS asserts in writing in connection
with any governmental audit or review of the Company (or, to its knowledge, of
any Contract Owner) that any Portfolio has failed to comply with the
diversification requirements of Section 817(h) of the Code or the Company
otherwise becomes aware of any facts that could give rise to any claim against a
Fund, the Distributor or the Adviser as a result of such a failure or alleged
failure:
(a) The Company shall promptly notify the Fund, the Distributor and
the Adviser of such assertion or potential claim;
(b) The Company shall consult with the Fund, the Distributor and the
Adviser as to how to minimize any liability that may arise as a result of such
failure or alleged failure;
(c) The Company shall use its best efforts to minimize any liability
of the Fund, the Distributor and the Adviser resulting from such failure,
including, without limitation, demonstrating, pursuant to Treasury Regulations,
Section 1.817-5(a)(2), to the commissioner of the IRS that such failure was
inadvertent;
(d) Any written materials to be submitted by the Company to the
IRS, any Contract Owner or any other claimant in connection with any of the
foregoing proceedings or contests (including, without limitation, any such
materials to be submitted to the IRS pursuant to Treasury Regulations, Section
1.817-5(a)(2)) shall be provided by the Company to the Fund, the Distributor and
the Adviser (together with any supporting information or analysis) within at
least two (2) business days prior to submission;
(e) The Company shall provide the Fund, the Distributor and the
Adviser with such cooperation as the Fund, the Distributor and the Adviser shall
reasonably request (including, without limitation, by permitting the Fund, the
Distributor and the Adviser to review the relevant books and records of the
Company) in order to facilitate review by the Fund, the Distributor and the
Adviser of any written submissions provided to it or its assessment of the
validity or amount of any claim against it arising from such failure or alleged
failure;
(f) The Company shall not with respect to any claim of the IRS or any
Contract Owner that would give rise to a claim against the Fund, the Distributor
and the Adviser
(i) compromise or settle any claim,
(ii) accept any adjustment on audit, or
23
(iii) forego any allowable administrative or judicial appeals,
without the express written consent of the Fund, the Distributor and the
Adviser, which shall not be unreasonably withheld; provided that, the Company
shall not be required to appeal any adverse judicial decision unless the Fund
and the Adviser shall have provided an opinion of independent counsel to the
effect that a reasonable basis exists for taking such appeal; and further
provided that the Fund, the Distributor and the Adviser shall bear the costs and
expenses, including reasonable attorney's fees, incurred by the Company in
complying with this clause (f).
24
ARTICLE X. POTENTIAL CONFLICTS AND COMPLIANCE WITH MIXED AND
SHARED FUNDING EXEMPTIVE ORDER
10.1. The Fund's Board will monitor the Fund for the existence of any
material irreconcilable conflict between the interests of the Contract Owners of
all Accounts investing in the Fund. A material irreconcilable conflict may arise
for a variety of reasons, including, but not limited to:
(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 is being
managed; or
(e) a difference in voting instructions given by variable annuity
contract and variable life insurance contract owners. The Board shall promptly
inform the Company if it determines that a material irreconcilable conflict
exists and the implications thereof.
10.2. The Company will monitor their operations and those of the Fund for
purposes of identifying any actual or potential material irreconcilable
conflicts between the interests of the Contract Owners of all separate accounts
investing in a Fund. The Company will report any potential or existing conflicts
of which they are aware to the applicable Board. The Company will assist each
Board in carrying out its responsibilities under the Mixed and Shared Funding
Exemptive Order, by providing the Board at least annually with all information
reasonably necessary for the Board to consider any issues raised. This includes,
but is not limited to, an obligation by the Company to:
(a) inform the Board whenever Contract Owner voting instructions are
to be disregarded and
(b) provide such other information and reports as the Board may
reasonably request. Such responsibilities shall be carried out by the Company
with a view only to the interests of the Company's Contract Owners.
10.3. If it is determined by a majority of a Board, or a majority of its
Independent Trustees, that a material irreconcilable conflict exists due to
issues relating to the Contracts, the Company shall, at their expense and to the
extent reasonably practicable (as determined by a
25
majority of the Independent Trustees), take whatever steps are necessary to
remedy or eliminate the material irreconcilable conflict, up to and including:
(a) withdrawing the assets allocable to some or all of the separate
accounts from a Fund or any Portfolio and reinvesting such assets in a different
investment medium, including (but not limited to) another Fund or Portfolio, or
submitting the question whether 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. Such actions will be taken by the Company with a view
only to the interests of the Company's Contract Owners.
10.4. 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 affected Fund's election, to withdraw the Account's
investment in the Fund 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
Independent Trustees. No charge or penalty will be imposed as a result of such
withdrawal. Any such withdrawal and termination must take place within six (6)
months after a Fund gives written notice that this provision is being
implemented, and until the end of that six-month period the Adviser, the
Distributor and the Fund shall continue to accept and implement orders by the
Company for the purchase (and redemption) of Shares.
10.5. 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
Account's investment in a Fund and terminate this Agreement within six (6)
months after the Board informs the Company in writing that it has determined
that such decision has created an irreconcilable material 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 Independent Trustees. No charge or penalty will be imposed as a
result of such withdrawal. Until the end of the foregoing
26
six-month period, a Fund shall continue to accept and implement orders by the
Company for the purchase (and redemption) of Shares.
10.6. For purposes of Sections 10.3 through 10.5 of this Agreement, a
majority of the Independent Trustees shall determine whether any proposed action
adequately remedies any material irreconcilable conflict, but in no event will a
Fund be required to establish a new funding medium for the Contracts. The
Company shall not be required by Section 10.3 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 irreconcilable material 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 Fund 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.
10.7. 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) each Fund or the Company shall take such steps as may be
necessary to comply with Rules 6e-2 and 6e-3(T), as amended, and Rule 6e-3, as
adopted, to the extent such rules are applicable: and
(b) Sections 6.5, 6.6, 6.7, 10.1, 10.2, 10.3, 10.4, and 10.5 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.
10.8 The parties hereto agree that the conditions or undertakings required
by the Mixed and Shared Funding Exemptive Order that may be imposed on any party
hereto by virtue of such order by the SEC:
(a) shall apply only upon the sale of shares of the applicable
Portfolios to the Account(s) (and then only to the extent required under the
1940 Act);
(b) will be incorporated herein by reference; and
27
(c) all parties hereto agree to comply with such conditions and
undertakings to the extent applicable to each such party notwithstanding any
provision of this Agreement to the contrary.
28
ARTICLE XI. INDEMNIFICATION
11.1. INDEMNIFICATION BY THE COMPANY
(a) The Company agrees to indemnify and hold harmless the Fund, each
Portfolio, the Distributor and the Adviser and each of their respective officers
and directors or trustees and each person, if any, who controls the Fund, the
Portfolios, the Distributor or the Adviser within the meaning of Section 15 of
the 1933 Act (collectively, the "Indemnified Parties" for purposes of this
Section 11.1) against any and all losses, claims, expenses, damages and
liabilities (including amounts paid in settlement with the written consent of
the Company) or litigation (including reasonable legal and other expenses) to
which the Indemnified Parties may become subject under any statute or
regulation, at common law or otherwise, insofar as such losses, claims,
expenses, damages or liabilities (or actions in respect thereof) or settlements
are related to the sale or acquisition of the Fund's shares or the Contracts
and:
(i) arise out of or are based upon any untrue statements or alleged
untrue statements of any material fact contained in the registration statement,
prospectus or SAI covering 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 in
light of the circumstances in which they were made, PROVIDED that this Agreement
to indemnify shall not apply as to any Indemnified Party if such statement or
omission or such alleged statement or omission was made in reliance upon and in
conformity with information furnished in writing to the Company by or on behalf
of, the Adviser, Distributor or Fund for use in the registration statement,
prospectus or SAI for the Contracts or in the Contracts or sales literature or
other promotional material (or any amendment or supplement to any of the
foregoing) or otherwise for use in connection with the sale of the Contracts or
Fund shares; or
(ii) arise out of or as a result of statements or representations
(other than statements or representations contained in the registration
statement, Prospectus, SAI or sales literature or other promotional material of
the Fund not supplied by the Company or persons under its control) or wrongful
conduct of the Company or persons under its control, with respect to the sale or
distribution of the Contracts or Fund Shares; or
29
(iii) arise out of any untrue statement or alleged untrue statement
of a material fact contained in a registration statement, Prospectus, SAI, or
sales literature or other promotional material of a Fund, or any amendment
thereof or supplement thereto, or the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statement or statements therein not misleading in light of the circumstances in
which they were made, if such a statement or omission was made in reliance upon
and in conformity with information furnished in writing to the Fund by or on
behalf of the Company or persons under its control; or
(iv) arise as a result of any failure by the Company to provide the
services and furnish the materials required under the terms of this Agreement;
or
(v) arise out of or result from any material breach of this
Agreement by the Company, including without limitation Section 5.1 and Section
10.6 hereof, as limited by and in accordance with the provisions of Sections
11.1(b) and 11.1(c) hereof.
(b) The Company shall not be liable under this indemnification provision
with respect to any losses, claims, expenses, damages, liabilities or litigation
to which an Indemnified Party would otherwise be subject by reason of such
Indemnified Party's willful misfeasance, bad faith, or negligence in the
performance of such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of its obligations or duties under this Agreement or
to any of the Indemnified Parties.
(c) The Company shall not be liable under this indemnification provision
with respect to any claim made against an Indemnified Party unless such
Indemnified Party shall have notified the Company in writing within a reasonable
time after the summons or other first legal process giving information of the
nature of the claim shall have been served upon such Indemnified Party (or after
such Indemnified Party shall have received notice of such service on any
designated agent), but failure to notify the Company of any such claim shall not
relieve the Company from any liability that it may have to the Indemnified Party
against whom such action is brought otherwise than on account of this
indemnification provision, except to the extent that the Company has been
prejudiced by such failure to give notice. In case any such action is brought
against the Indemnified Parties, the Company shall be entitled to participate,
at its own expense, in the defense of such action. The Company also shall be
entitled to assume the defense thereof, with counsel satisfactory to the party
named in the action. After notice from the Company to such party of the
Company's election to assume the defense thereof, the
30
Indemnified Party shall bear the fees and expenses of any additional counsel
retained by it, and the Company will not be liable to such party under this
Agreement for any legal or other expenses subsequently incurred by such party
independently in connection with the defense thereof other than reasonable costs
of investigation.
(d) The Indemnified Parties will promptly notify the Company of the
commencement of any litigation or proceedings against them in connection with
the issuance or sale of Fund shares or the Contracts or the operation of a Fund.
11.2. INDEMNIFICATION BY THE ADVISER
(a) The Adviser agrees to indemnify and hold harmless the Company and
its directors and officers and each person, if any, who controls the Company
within the meaning of Section 15 of the 1933 Act (collectively, the "Indemnified
Parties" for purposes of this Section 11.2) against any and all losses, claims,
expenses, damages, liabilities (including amounts paid in settlement with the
written consent of the Adviser) or litigation (including reasonable legal and
other expenses) to which the Indemnified Parties may become subject under any
statute or regulation, at common law or otherwise, insofar as such losses,
claims, damages, liabilities or expenses (or actions in respect thereof) or
settlements are related to the sale or acquisition of a Fund's shares or the
Contracts and:
(i) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the registration statement or
Prospectus or SAI or sales literature or other promotional material of a
Portfolio prepared by the Fund or the Adviser (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 in light of the
circumstances in which they were made, PROVIDED that this Agreement to indemnify
shall not apply as to any Indemnified Party if such statement or omission or
such alleged statement or omission was made in reliance upon and in conformity
with information furnished in writing to the Adviser or the Fund by or on behalf
of the Company for use in the registration statement, Prospectus or SAI for the
Fund or in sales literature or other promotional material (or any amendment or
supplement to any of the foregoing) or otherwise for use in connection with the
sale of the Contracts or Fund shares; or
(ii) arise out of or as a result of statements or representations
(other than statements or representations contained in the registration
statement, prospectus, SAI or
31
sales literature or other promotional material for the Contracts not supplied by
the Adviser or persons under its control) or wrongful conduct of a Fund or the
Adviser or persons under their control, with respect to the sale or distribution
of the Contracts or Fund shares; or
(iii) arise out of any untrue statement or alleged untrue statement
of a material fact contained in a registration statement, prospectus, SAI, or
sales literature or other promotional material covering the Contracts, or any
amendment thereof or supplement thereto, or the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statement or statements therein not misleading in light of the circumstances
in which they were made, if such statement or omission was made in reliance upon
and in conformity with information furnished in writing to the Company by or on
behalf of the Adviser or a Fund; or
(iv) arise as a result of any failure by a Fund or the Adviser to
provide the services and furnish the materials required under the terms of this
Agreement (including a failure, whether unintentional or in good faith or
otherwise, to comply with the diversification and other qualification
requirements specified in Article IX of this Agreement); or
(v) arise out of or result from any material breach of this
Agreement by the Adviser or the Fund; or
(vi) arise out of or result from the incorrect or untimely
calculation or reporting by a Fund or the Adviser of the daily net asset value
per share (subject to Section 2.8 of this Agreement) or dividend or capital gain
distribution rate; as limited by and in accordance with the provisions of
Sections 11.2(b) and 11.2(c) hereof.
(b) The Adviser shall not be liable under this indemnification provision
with respect to any losses, claims, expenses, damages, liabilities or litigation
to which an Indemnified Party would otherwise be subject by reason of:
(i) any violation of insurance law, compliance with which is a
responsibility of the Company under this Agreement or as to which the Company
failed to inform the Adviser or
(ii) such Indemnified Party's willful misfeasance, bad faith, or
negligence in the performance of such Indemnified Party's duties or by reason of
such Indemnified Party's reckless disregard of its obligations or duties under
this Agreement or to any of the Indemnified Parties.
32
(c) The Adviser shall not be liable under this indemnification provision
with respect to any claim made against an Indemnified Party unless such
Indemnified Party shall have notified the Adviser in writing within a reasonable
time after the summons or other first legal process giving information of the
nature of the claim shall have been served upon such Indemnified Party (or after
such Indemnified Party shall have received notice of such service on any
designated agent), but failure to notify the Adviser of any such claim shall not
relieve the Adviser from any liability that it may have to the Indemnified Party
against whom such action is brought otherwise than on account of this
indemnification provision, except to the extent that the Adviser has been
prejudiced by such failure to give notice. In case any such action is brought
against the Indemnified Parties, the Adviser will be entitled to participate, at
its own expense, in the defense thereof. The Adviser also shall be entitled to
assume the defense thereof, with counsel satisfactory to the party named in the
action. After notice from the Adviser to such party of the Adviser's election to
assume the defense thereof, the Indemnified Party shall bear the fees and
expenses of any additional counsel retained by it, and the Adviser will not be
liable to such party under this Agreement for any legal or other expenses
subsequently incurred by such party independently in connection with the defense
thereof other than reasonable costs of investigation.
(d) The Company agree to promptly notify the Adviser of the commencement
of any litigation or proceedings against it or any of its officers or directors
in connection with the issuance or sale of the Contracts or the operation of the
Account.
11.3. INDEMNIFICATION BY THE DISTRIBUTOR
(a) The Distributor agrees to indemnify and hold harmless the Company, the
Fund, each Portfolio and the Adviser, and their directors and officers and each
person, if any, who controls the Company, the Fund, each Portfolio and the
Adviser within the meaning of Section 15 of the 1933 Act (collectively, the
"Indemnified Parties" for purposes of this Section 11.3) against any and all
losses, claims, expenses, damages, liabilities (including amounts paid in
settlement with the written consent of the Distributor) or litigation (including
reasonable legal and other expenses) to which the Indemnified Parties may become
subject under any statute or regulation, at common law or otherwise, insofar as
such losses, claims, damages, liabilities or expenses (or actions in respect
thereof) or settlements are related to the sale or acquisition of a Fund's
shares or the Contracts and:
3
(i) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the registration
statement or Prospectus or SAI or sales literature or other promotional material
of a Fund prepared by the Distributor (or any amendment or supplement to any of
the foregoing), or arise out of or are based upon the omission or the alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, PROVIDED that this
Agreement to indemnify shall not apply as to any Indemnified Party if such
statement or omission or such alleged statement or omission was made in reliance
upon and in conformity with information furnished in writing to the Distributor
by or on behalf of the Company for use in the registration statement, Prospectus
or SAI for a Fund or in sales literature or other promotional material (or any
amendment or supplement to any of the foregoing) or otherwise for use in
connection with the sale of the Contracts or Fund shares; or
(ii) arise out of or as a result of statements or representations
(other than statements or representations contained in the registration
statement, prospectus, SAI or sales literature or other promotional material for
the Contracts not supplied by the Distributor or persons under its control) or
wrongful conduct of the Distributor or persons under its control, with respect
to the sale or distribution of the Contracts or Fund shares; or
(iii) arise out of any untrue statement or alleged untrue statement
of a material fact contained in a registration statement, prospectus, SAI, or
sales literature or other promotional material covering the Contracts, or any
amendment thereof or supplement thereto, or the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statement or statements therein not misleading, if such statement or
omission was made in reliance upon information furnished in writing to the
Company by or on behalf of the Distributor; or
(iv) arise as a result of any failure by the Distributor to provide
the services and furnish the materials required under the terms of this
Agreement; or
(v) arise out of or result from any material breach of this
Agreement by the Distributor including without limitation Section 5.2; or as
limited by and in accordance with the provisions of Sections 11.3(b) and 11.3(c)
hereof.
(b) The Distributor shall not be liable under this indemnification
provision with respect to any losses, claims, expenses, damages, liabilities or
litigation to which an Indemnified Party would otherwise be subject by reason of
such Indemnified Party's willful
34
misfeasance, bad faith, or negligence in the performance of such Indemnified
Party's duties or by reason of such Indemnified Party's reckless disregard of
its obligations or duties under this Agreement or to any of the Indemnified
Parties.
(c) The Distributor shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Distributor in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Distributor of
any such claim shall not relieve the Distributor from any liability that it may
have to the Indemnified Party against whom such action is brought otherwise than
on account of this indemnification provision, except to the extent that the
Distributor has been prejudiced by such failure to give notice. In case any such
action is brought against the Indemnified Parties, the Distributor will be
entitled to participate, at its own expense, in the defense thereof. The
Distributor also shall be entitled to assume the defense thereof, with counsel
satisfactory to the party named in the action. After notice from the Distributor
to such party of the Distributor's election to assume the defense thereof, the
Indemnified Party shall bear the fees and expenses of any additional counsel
retained by it, and the Distributor will not be liable to such party under this
Agreement for any legal or other expenses subsequently incurred by such party
independently in connection with the defense thereof other than reasonable costs
of investigation.
(d) The Company agrees to promptly notify the Distributor of the
commencement of any litigation or proceedings against it or any of its officers
or directors in connection with the issuance or sale of the Contracts or the
operation of the Account.
11.4. [INTENTIONALLY OMITTED]
35
ARTICLE XII. APPLICABLE LAW
12.1. This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the State of Connecticut,
without regard to the Connecticut conflict of laws provisions.
12.2. 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.
36
ARTICLE XIII. TERMINATION
13.1. This Agreement shall terminate:
(a) at the option of any party, with or without cause, with respect to
some or all Portfolios, upon ninety (90) days' prior written notice delivered to
the other parties; or
(b) at the option of the Company by written notice to the other parties
with respect to any Portfolio based upon the Company's determination that shares
of such Portfolio are not reasonably available to meet the requirements of the
Contracts; or
(c) at the option of the Company by written notice to the other parties
with respect to any Portfolio in the event any of the Portfolio's shares are not
registered, issued or sold in accordance with applicable state and/or federal
law or such law precludes the use of such shares as the underlying investment
media of the Contracts issued or to be issued by the Company; or
(d) at the option of the Fund, the Distributor or the Adviser in the event
that formal administrative proceedings are instituted against the Company by
FINRA, the SEC, the Insurance Commissioner or like official of any state or any
other regulatory body regarding the Company's duties under this Agreement or
related to the sale (if any) and administration of the Contracts, the operation
of any Account, or the purchase of Fund shares, if, in each case, the Fund,
Distributor or Adviser, as the case may be, reasonably determines in its sole
judgment exercised in good faith, that any such administrative proceedings will
have a material adverse effect upon the ability of the Company to perform its
obligations under this Agreement; or
(e) at the option of the Company in the event that formal administrative
proceedings are instituted against the Fund, the Distributor or the Adviser by
FINRA, the SEC, or any state securities or insurance department or any other
regulatory body, if the Company reasonably determines in its sole judgment
exercised in good faith, that any such administrative proceedings will have a
material adverse effect upon the ability of the Fund, the Distributor or the
Adviser to perform their obligations under this Agreement; or
(f) at the option of the Company by prior written notice to the Fund with
respect to any Portfolio if the Company reasonably and in good faith believes
that the Portfolio will fail to meet the Section 817(h) diversification
requirements or Subchapter M qualifications specified in Article IX hereof; or
37
(g) at the option of any non-defaulting party hereto in the event of a
material breach of this Agreement by any party hereto (the "defaulting party")
other than as described in Section 13.1(a)-(h); provided, that the
non-defaulting party gives written notice thereof to the defaulting party, with
copies of such notice to all other non-defaulting parties, and if such breach
shall not have been remedied within thirty (30) days after such written notice
is given, then the non-defaulting party giving such written notice may terminate
this Agreement by giving thirty (30) days' written notice of termination to the
defaulting party; or
(h) At the option of the Fund or the Adviser if the Contracts cease to
qualify as annuity contracts or life insurance contracts, as applicable, under
the Code, or if the Fund or Adviser reasonably believe that the Contracts may
fail to so qualify; or
(i) At the option of the Fund or the Adviser, if the Contracts are not
registered (if registration is required), issued or sold in accordance with
applicable federal and/or state law; or
(j) At the option of the party from which consent was not obtained, in the
event this Agreement is assigned without the prior written consent of all
parties hereto; or
(k) At the option of the Fund, by a vote of the majority of the Fund's
Board, Adviser or Company, upon a reasonable determination by the Fund's Board
that a material irreconcilable conflict exists among the interests of:
(i) all Contract Owners of all Separate Accounts, or
(ii) the interests of Participating Companies investing in the
Fund; or
(l) At any time upon written agreement of all parties to this Agreement.
13.2. This Agreement may be terminated as to one or more Portfolios (but
less than all Portfolios) in writing by mutual agreement and amendment of
Schedule A deleting such Portfolio pursuant to Section 15.12 hereof. The
execution and delivery of an amended SCHEDULE A that deletes one or more
Portfolios shall constitute a termination of this Agreement only with respect to
such deleted Portfolio and shall not affect the obligations of the Company and
the Fund hereunder with respect to the other Portfolios set forth in SCHEDULE A,
as amended from time to time.
38
13.3. NOTICE REQUIREMENT. No termination of this Agreement shall be
effective unless and until the party terminating this Agreement gives prior
written notice to all other parties of its intent to terminate, which notice
shall set forth the basis for the termination. Furthermore:
(a) in the event any termination is based upon the provisions of
Article X, or the provisions of Section 13.1(a) of this Agreement, the prior
written notice shall be given in advance of the effective date of termination as
required by those provisions unless such notice period is shortened by mutual
written agreement of the parties;
(b) in the event any termination is based upon the provisions of
Section 13.1(d), 13.1(e) or 13.1(g) of this Agreement, the prior written notice
shall be given at least sixty (60) days before the effective date of
termination; and
(c) in the event any termination is based upon the provisions of Section
13.1(b), 13.1(c), 13.1(f), 13.1(h), 13.1(i), 13.1(j) or 13.1(k), the prior
written notice shall be given in advance of the effective date of termination,
which date shall be determined by the party sending the notice.
13.4. EFFECT OF TERMINATION. Notwithstanding any termination of this
Agreement, other than as a result of a failure by either a Fund or a Portfolio
or the Company to meet Section 817(h) of the Code diversification requirements,
each Fund, the Distributor and the Adviser shall, at the option of the Company,
continue to make available additional shares of the Fund or Portfolio pursuant
to the terms and conditions of this Agreement, for all Contracts in effect on
the effective date of termination of this Agreement (hereinafter referred to as
"Existing Contracts"). Specifically, without limitation, the owners of the
Existing Contracts shall be permitted to reallocate investments in a Fund or
Portfolio, redeem investments in a Fund or Portfolio and/or invest in a Fund or
Portfolio upon the making of additional purchase payments under the Existing
Contracts. The parties agree that this Section 13.4 shall not apply to any
terminations under Article X and the effect of such Article X terminations shall
be governed by Article X of this Agreement.
39
13.5. SURVIVING PROVISIONS. Notwithstanding any termination of this
Agreement, each party's obligations under Article XI to indemnify 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.
40
ARTICLE XIV. NOTICES
Any notice shall be sufficiently given when sent by registered or certified
mail to the other party at the address of such party set forth below or at such
other address as such party may from time to time specify in writing to the
other parties. If to the Company:
Forethought Life Insurance Company
000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxxxx, XX 00000
Attention: Xxxx Xxxx, Senior Vice President
If to the Adviser:
HIMCO
Xxx Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Attention General Counsel
If to the Distributor:
HIMCO Distribution Services Company
Xxx Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Attention General Counsel
If to a Fund:
HVIT Funds
Xxx Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Attention General Counsel
41
ARTICLE XV. MISCELLANEOUS
15.1. CONFIDENTIALITY. The parties hereto agree that each shall treat
confidentially the terms and conditions of this Agreement and all information
provided by one party to one or more of the other parties regarding its business
and operations. All confidential information provided by a party hereto,
including non-public personal information within the meaning of SEC Regulation
S-P and/or the Xxxxx-Xxxxx-Xxxxxx Act, whichever is applicable, shall be used by
any other party hereto solely for the purpose of rendering services pursuant to
this Agreement and, except as may be required in carrying out this Agreement,
shall not be disclosed to any third party without the prior written consent of
such providing party. Without limiting the foregoing, no party hereto shall
disclose any information that another party has designated as proprietary. The
foregoing shall not be applicable to any information that is required to be
disclosed by any auditor of the parties hereto, by judicial or administrative
process or otherwise by applicable law or regulation.
15.2. CAPTIONS. 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.
15.3. COUNTERPARTS. This Agreement may be executed simultaneously in two or
more counterparts, each of which taken together shall constitute one and the
same instrument.
15.4. INTERPRETATION. In connection with the operation of this Agreement,
the Company, the Adviser, the Distributor and any Fund may agree from time to
time on such provisions interpretative of or in addition to the provisions of
this Agreement with respect to any party as may in their joint opinion be
consistent with the general tenor of this Agreement. Any such interpretative or
additional provisions shall be in a writing signed by all parties and shall be
annexed hereto, provided that no such interpretative or additional provisions
shall contravene any applicable federal or state regulations or any provision of
the articles of incorporation or analogous governing document of any party. No
interpretative or additional provisions made as provided in the preceding
sentence shall be deemed to be an amendment of this Agreement or affect any
other party.
15.5. SURVIVAL OF TERMS. 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.
42
15.6. ASSIGNMENT. This Agreement shall be binding on and shall inure to the
benefit of each Fund severally, the Distributor, the Adviser and the Company and
their respective successors and assigns, provided that neither the Company, the
Distributor, the Adviser nor any Fund may assign this Agreement or any of its
rights or obligations hereunder without the prior written consent of the other
parties; provided, further, that it is hereby understood and acknowledged that
third-party servicing agents may carry-out certain duties of respective parties
hereto, but in such cases the parties hereto retain liability and ultimate
obligations of performance hereunder.
15.7. Each party to this Agreement will maintain all records required by
law and such records will be preserved, maintained and made available to the
extent required by law and in accordance with the 1940 Act and the rules
thereunder. Each party hereto shall cooperate with each other party and all
appropriate governmental authorities (including without limitation the SEC,
FINRA and state insurance regulators) and shall permit such authorities
reasonable access to its books and records in connection with any investigation
or inquiry relating to this Agreement or the transactions contemplated hereby.
15.8. 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.
15.9. The Company agrees that the obligations assumed by the Fund, the
Distributor and the Adviser pursuant to this Agreement shall be limited in any
case to the applicable Fund or Portfolio, the Distributor and/or the Adviser and
their respective assets and the Company shall not seek satisfaction of any such
obligation from any other Fund or Portfolio, from the shareholders of any Fund
or Portfolio, or from the Distributor or the Adviser, the Trustees, officers,
employees or agents of the Fund, the Distributor or the Adviser, or any of them.
15.10. The Fund, the Distributor and the Adviser agree that the obligations
assumed by the Company pursuant to this Agreement shall be limited in any case
to the Company and its assets and neither the Fund, the Distributor nor the
Adviser shall seek satisfaction of any such obligation from the shareholders of
the Company, the directors, officers, employees or agents of the Company, or any
of them.
15.11. No provision of this Agreement may be waived, amended or terminated
except by a statement in writing signed by the party against which enforcement
of such waiver, amendment or termination is sought; provided, SCHEDULE A may be
amended from time to time to add one or
44
more Portfolios, by the Fund's execution and delivery to the other parties of an
amended SCHEDULE A, and the execution of such amended SCHEDULE A by the other
parties, in which case such amendment shall take effect immediately upon
execution by the other parties. SCHEDULE A MAY ALSO BE AMENDED FROM TIME TO TIME
TO DELETE ONE OR MORE FUNDS OR ONE OR MORE PORTFOLIOS (BUT LESS THAN ALL OF THE
PORTFOLIOS) OF ONE OR MORE FUNDS, BY MUTUAL AGREEMENT OF THE PARTIES TO THIS
AGREEMENT. 15.12. No provision of this Agreement may be deemed or construed to
modify or supersede any contractual rights, duties, or indemnifications, as
between the Adviser and one or more Funds, and the Distributor and one or more
Funds.
15.13 The parties mutually acknowledge that the Agreement represents the
collective drafting efforts of each party and therefore any ambiguity shall not
be interpreted against the interests of any party.
44
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
as of the date specified on the cover page of this Agreement.
FORETHOUGHT LIFE INSURANCE COMPANY
By:
----------------------------------------
Name:
Title
HARTFORD INVESTMENT MANAGEMENT COMPANY
By:
----------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Executive Vice President
HIMCO DISTRIBUTION SERVICES COMPANY
By:
----------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: CEO, President
HIMCO VARIABLE INSURANCE TRUST (ON BEHALF OF ITSELF AND EACH INVESTMENT COMPANY
LISTED ON SCHEDULE A)
By:
----------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President
45
SCHEDULE A
PART 1 - PORTFOLIOS UNDER THE HIMCO VARIABLE INSURANCE TRUST:
Offered in unregistered variable annuities covered by this Agreement:
HIMCO VIT Index Fund
HIMCO VIT Portfolio Diversifier Fund
PART 2 - SEPARATE ACCOUNTS:
Forethought Life Insurance Company Separate Account A
SCHEDULE B
EXPENSES
Each Fund and/or the Distributor and/or Adviser, and the Company will coordinate
the functions and pay the costs of completing these functions based upon an
allocation of costs in the tables below. Costs shall be allocated to reflect a
Fund's share of the total costs determined according to the number of pages of
the Fund's respective portions of the documents.
----------------------------- -------------------------- -------------------------- --------------------------
ITEM FUNCTION PARTY RESPONSIBLE FOR PARTY RESPONSIBLE FOR
COORDINATION EXPENSE
----------------------------- -------------------------- -------------------------- --------------------------
HIMCO VIT Funds Prospectus Printing of Fund Company Inforce - Fund
prospectuses Prospective -
Company
----------------------------- -------------------------- -------------------------- --------------------------
Distribution (including Company Fund
postage) to New and
Inforce Contract Owners
----------------------------- -------------------------- -------------------------- --------------------------
Distribution (including Company Company
postage) to Prospective
Contract Owners
----------------------------- -------------------------- -------------------------- --------------------------
Product Prospectus Printing and Distribution Company Company
for Inforce and
Prospective Contract
Owners
----------------------------- -------------------------- -------------------------- --------------------------
----------------------------- -------------------------- -------------------------- ----------------------
ITEM FUNCTION PARTY RESPONSIBLE FOR PARTY RESPONSIBLE FOR
COORDINATION EXPENSE
----------------------------- -------------------------- -------------------------- ----------------------
HIMCO VIT Funds Printing and Distribution Distributor or Adviser Fund, Distributor or
Prospectus Update (including if Required by Fund, Adviser
Supplements) Distributor or Adviser
----------------------------- -------------------------- -------------------------- ----------------------
Printing and Distribution Company (Distributor or Company
if Required by Company Adviser to provide
Company with document in
PDF format)
----------------------------- -------------------------- -------------------------- ----------------------
Product Prospectus Update Printing and Distribution Company Fund, Distributor or
(including Supplements) if Required by Fund, Adviser
Distributor or Adviser
----------------------------- -------------------------- -------------------------- ----------------------
Printing and Distribution Company Company
if Required by Company
----------------------------- -------------------------- -------------------------- ----------------------
HIMCO VIT Funds SAI Printing Distributor or Adviser Fund, Distributor or
Adviser
----------------------------- -------------------------- -------------------------- ----------------------
Distribution (including Company Company
postage)
----------------------------- -------------------------- -------------------------- ----------------------
Product SAI Printing Company Company
----------------------------- -------------------------- -------------------------- ----------------------
Distribution Company Company
----------------------------- -------------------------- -------------------------- ----------------------
Proxy Material for Printing if proxy Distributor or Adviser Fund, Distributor or
HIMCO VIT required by Law, Fund, Adviser
Funds Adviser, or Distributor
----------------------------- -------------------------- -------------------------- ----------------------
Distribution (including Distributor or Adviser Fund, Distributor or
labor) if proxy required Adviser
by Law, Fund, Adviser, or
Distributor
----------------------------- -------------------------- -------------------------- ----------------------
Printing & distribution Company Company
if required by Company
----------------------------- -------------------------- -------------------------- ----------------------
----------------------------- -------------------------- -------------------------- ----------------------
ITEM FUNCTION PARTY RESPONSIBLE FOR PARTY RESPONSIBLE FOR
COORDINATION EXPENSE
----------------------------- -------------------------- -------------------------- ----------------------
HIMCO VIT Funds Annual & Printing of reports Distributor or Adviser Fund, Distributor or
Semi-Annual Report Adviser
----------------------------- -------------------------- -------------------------- ----------------------
Distribution Company Fund, Distributor or
Adviser
----------------------------- -------------------------- -------------------------- ----------------------
Other communication If Required by the Fund, Company Fund, Distributor or
to New and Distributor or Adviser Adviser
Prospective clients
----------------------------- -------------------------- -------------------------- ----------------------
If Required by Company Company Company
----------------------------- -------------------------- -------------------------- ----------------------
Other communication to Distribution (including Company Fund, Distributor or
Inforce labor and printing) if Adviser
required by the Fund,
Distributor or Adviser
----------------------------- -------------------------- -------------------------- ----------------------
Distribution (including Company Company
labor and printing) if
required by Company
----------------------------- -------------------------- -------------------------- ----------------------
Errors in Share Price Cost of error to Company Fund or Adviser
calculation pursuant to participants
Section 1.10
----------------------------- -------------------------- -------------------------- ----------------------
Cost of reasonable Company Fund or Adviser
expenses related to
administrative work to
correct error
----------------------------- -------------------------- -------------------------- ----------------------
----------------------------- -------------------------- -------------------------- ----------------------
ITEM FUNCTION PARTY RESPONSIBLE FOR PARTY RESPONSIBLE FOR
COORDINATION EXPENSE
----------------------------- -------------------------- -------------------------- ----------------------
Operations of the Fund All operations and Distributor or Adviser Fund or Adviser
related expenses,
including the cost of
registration and
qualification of shares,
taxes on the issuance or
transfer of shares, cost
of management of the
business affairs of the
Fund, and expenses paid
or assumed by the fund
pursuant to any Rule
12b-1 plan
----------------------------- -------------------------- -------------------------- ----------------------
Operations of the Accounts Federal registration of Company Company
units of separate account
(24f-2 fees)
----------------------------- -------------------------- -------------------------- ----------------------
SCHEDULE C
PROCEDURES FOR VA CONTRACT ORDERS CONDUCTED THROUGH NSCC
IN THE CASE OF ANY CONFLICT BETWEEN THE LANGUAGE OF ARTICLE II OF THE AGREEMENT
AND THIS SCHEDULE C, THIS SCHEDULE C SHALL CONTROL. ALL PROVISIONS OF ARTICLE II
NOT EXPRESSLY CONFLICTING ANY TERM HEREOF SHALL REMAIN BINDING UPON ALL PARTIES.
1. By 6:00 p.m. Eastern Time on each Business Day, the Company shall use its
best efforts to notify Distributor, either verbally or by facsimile, of
purchases or redemptions of $1,000,000 or more for individual life insurance
Contracts.
2. Orders received by the Company prior to the close of regular trading on the
New York Stock Exchange ("Close of Trading") on any given Business Day and that
are transmitted to Distributor via the NSCC Fund/SERV system by 9:00 a.m.
Eastern Time the next Business Day will be executed by Distributor at the net
asset value determined as of the Close of Trading on the Business Day the Order
was received by the Company.
3. If the NSCC FUND/SERV system or other automated means agreed upon among the
parties (E.G., computer, etc.) for the placement of orders is unavailable or
there is a malfunction in intermediary's systems, parties
shall follow the transaction procedures in Article II of the Agreement.
4. Orders received and accepted by the Company prior to the Close of Trading on
any given Business Day and that are transmitted to Distributor via the NSCC
Fund/SERV system after 9:00 a.m. Eastern Time the next Business Day, and Orders
received and accepted by the Company after the Close of Trading on any given
Business Day will be executed by Distributor at the net asset value determined
as of the Close of Trading on the next Business Day following the day of receipt
of such Order by the Company.
SCHEDULE D
RULE 22c-2 SHAREHOLDER INFORMATION AGREEMENT
THIS AGREEMENT is entered into as of October 20, 2014 by and among
Forethought Life Insurance Company ("we" or "us") and HIMCO Distribution
Services Company ("you") in your capacity as the principal underwriter of the
series/portfolios of HIMCO Variable Insurance Trust (each a "Fund" and together
the "Funds").
WHEREAS, Rule 22c-2 under the Investment Company Act of 1940, as amended,
requires mutual funds to enter into "shareholder information agreements" with
financial intermediaries that hold fund shares on behalf of other investors in
"omnibus accounts" and submit orders to purchase or redeem fund shares on behalf
of such investors directly to the fund, its transfer agent or principal
underwriter; and
WHEREAS, shares of one or more of the Funds are purchased and redeemed on
an omnibus basis directly by our Accounts (as defined below) in connection with
for one or more Contracts (as defined below).
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained below, the parties hereby agree as follows:
1. DEFINITIONS. As used in this Agreement, the following terms have the
following meanings, unless a different meaning is clearly required by the
context:
(a) "ACCOUNT" means an insurance company separate account sponsored or
administered by us.
(b) "BUSINESS DAY" means any day that the New York Stock Exchange is open
for trading.
(c) "CONFIDENTIAL INFORMATION" includes, but is not limited to: (i)
"Nonpublic Personal Information" as defined in Title V of the Xxxxx-Xxxxx-Xxxxxx
Act of 1999 or any successor federal or state statute, and the rules and
regulations thereunder, all as may be amended or supplemented from time to time,
(ii) "Protected Health Information" as such term is defined in the Health
Insurance Portability and Accountability Act of 1996, or any successor federal
or state statute, and the rules and regulations thereunder, all as may be
amended or supplemented from time to time; and (iii) "Shareholder Information"
as such term is defined below.
(d) "CONTRACT" means a variable annuity contract, variable life insurance
policy or variable funding agreement issued through an Account.
(e) "FUND POLICIES" means policies established by the Fund and communicated
to us in writing for the purpose of eliminating or reducing potentially harmful
market timing or frequent trading in shares of the Fund as described in the
Fund's prospectus or statement of additional information as amended from time to
time. This term "Fund" does not include any "excepted funds" as defined in Rule
22c-2(b), 17 C.F.R. 270.22c-2(b).
(f) "INDIRECT INTERMEDIARY" means a "financial intermediary" as defined by
Rule 22c-2(c)(5)(iii)(excluding any exempted financial intermediary pursuant to
Rule 22c-2(c)(1)(iv))
that transmits purchase and redemption orders directly to
us on behalf of Shareholders with respect to a Contract invested in a Fund
through an Account.
(g) "SHAREHOLDER" means (1) the holder of interests in a Contract or (2) a
participant in an employee benefit plan with a beneficial interest in a
Contract.
(h) "SHAREHOLDER-INITIATED TRANSFER PURCHASE" means a transaction that is
initiated or directed by a Shareholder that results in a transfer of assets
within a Contract to a Fund, but does not include transactions that are
executed: (i) automatically pursuant to contractual or systematic programs or
enrollments such as transfers of assets within a Contract to a Fund as a result
of "dollar cost averaging" programs, asset allocation programs and automatic
rebalancing programs; (ii) pursuant to a Contract death benefit; (iii) a step-up
(or comparable benefit) in Contract value (or comparable benefit base) pursuant
to a Contract death benefit or guaranteed minimum withdrawal benefit; or (iv)
allocation of assets to a Fund through a Contract as a result of payments such
as loan repayments, scheduled contributions, or retirement plan salary reduction
contributions, or planned premium payments to the Contract.
(i) "SHAREHOLDER-INITIATED TRANSFER REDEMPTION" means a transaction that
is initiated or directed by a Shareholder that results in a transfer of assets
within a Contract out of a Fund, but does not include transactions that are
executed: (i) automatically pursuant to contractual or systematic programs or
enrollments such as transfers of assets within a Contract out of a Fund as a
result of annuity payouts, loans, systematic withdrawal programs, asset
allocation programs and automatic rebalancing programs; (ii) as a result of any
deduction of charges or fees under a Contract; (iii) within a Contract out of a
Fund as a result of scheduled withdrawals or surrenders from a Contract; or (iv)
as a result of the payment of a death benefit from a Contract.
(j) "WRITTEN" means any communication other than an oral communication
transmitted in paper, electronically or by facsimile.
2. AGREEMENT TO PROVIDE REQUESTED SHAREHOLDER INFORMATION. Effective as of the
date of this Agreement, we agree to use our best efforts to provide the
following information to you solely for the purpose of facilitating your
compliance with Rule 22c-2. Nothing herein, nor any action by us, shall be
construed as, or inferred to mean that we have undertaken any duty or
obligation, whether express or implied, at law or in equity, to detect abusive
trading activities pursuant to the Fund Policies. We agree to provide to you,
upon prior written request, the following information that is on our books and
records (collectively, "Shareholder Information") for all Shareholders that
engaged in any purchase, redemption, transfer or exchange transactions in the
Fund shares through an Account during the period covered by the request, if
known:
(a) the taxpayer identification number ("TIN"), Individual/International
Taxpayer Identification Number ("ITIN") or other government issued identifier
("GII");
(b) the individual Contract number or participant account number
associated with the Shareholder;
(c) the amount and date(s) and transaction type (purchase, redemption,
transfer, or exchange); and
(d) any other data mutually agreed upon in writing.
Unless otherwise specifically requested by you, this Paragraph 2 shall be
understood to require us to provide only Shareholder Information relating to
Shareholder-Initiated Transfer Purchases and Shareholder-Initiated Transfer
Redemptions.
All requests must contain the relevant fund account number, CUSIP, trade amount
and date. Requests must be made to us directly via e-mail at:
XX0Xxxx00x-0@xx0.xxx
or such other address we may communicate to you in writing from time to time
(including without limitation communications by the administrator signatory
hereto).
3. PERIOD COVERED BY REQUEST AND FREQUENCY OF REQUESTS. Requests to provide
Shareholder Information shall set forth the specific period for which it is
sought. In no event shall such period begin more than ninety days (90) prior to
the date of the request for information or cover a period greater than ninety
(90) days. For purposes of this Agreement, good cause will exist where you have
a reasonable belief that Shareholder transactions submitted to the Fund indicate
potential market timing or excessive trading activity or other violation of Fund
Policies.
4. FORM AND TIMING OF RESPONSE; PROCEDURES REGARDING INDIRECT INTERMEDIARIES.
(a) We agree to provide the requested Shareholder Information that is on our
books and records to you promptly, but in any event not later than 10 Business
Days after receipt of a good order request given in accordance with Paragraph 2
above, which shall contain the fund account number, CUSIP, trade amount and
date. If you so request, we agree to use best efforts to promptly, but in any
event not later than ten (10) business days, determine whether any specific
person, identified by you from the requested Shareholder Information, is itself
an Indirect Intermediary. Upon your further request, which must be given in
accordance with Paragraph 2 above, we agree to use best efforts either to: (i)
provide (or arrange to have provided) the requested Shareholder Information from
the Indirect Intermediary; or (ii) if the Indirect Intermediary refuses to
provide the requested Shareholder Information and you so direct us in writing,
restrict or prohibit further purchases of Fund shares by such Indirect
Intermediary through the Account. We agree to inform you whether we plan to
perform (i) or (ii).
(b) Responses required by this paragraph must be communicated in writing and in
a format mutually agreed upon by the parties.
(c) To the extent reasonably practicable, the format for any Shareholder
Information provided to you will be consistent with the NSCC Standardized Data
Reporting Format.
5. LIMITATION ON USE OF INFORMATION. You agree that you shall not use the
information received pursuant to this Agreement, including any Confidential
Information, for any purpose other than to comply with Rule 22c-2. You and your
affiliates shall observe applicable state and federal privacy laws, rules and
regulations with respect to Confidential Information. You shall safeguard all
Confidential Information and promptly notify us of any voluntary or involuntary
dissemination thereof. Neither you nor any of your affiliates or subsidiaries
may use any information provided pursuant to this Agreement for marketing or
solicitation purposes.
6. AGREEMENT TO RESTRICT TRADING. We agree to execute reasonable, clear and
unequivocal written instructions from you given on behalf of the Fund to
restrict or prohibit further purchases of Fund shares by a Shareholder that has
been identified by you as having engaged in transactions of the Fund's shares
(directly or indirectly through an Account) that violate Fund Policies. Unless
you specifically direct us otherwise, such restrictions and
prohibitions shall apply only to Shareholder-Initiated Transfer Purchases and
Shareholder-Initiated Transfer Redemptions. We will execute such restrictions
with respect to the Shareholder, but only for the Contract through which such
transactions in the Fund's shares occurred. We will not impose any restriction,
and nothing in this Agreement shall require that we impose any restriction, on a
Shareholder based on any transactions other than transactions in the Fund's
shares through an Account. Instructions must be received by us via email at the
following address:
Compliance Department Contact Information:
Xxxxxxxxx Xxxxx
Separate Account Chief Compliance Officer
00 Xxxxxxxxx Xxxxxx, 0xx Xxxxx
Forethought Life Insurance Company
Xxxxxxxx, XX 00000
Xxxxxxxxx.xxxxx@xxxxxxxxxxx.xxx
Operations Department Contact Information:
Forethought Life Insurance Company
C/O se2
X.X. Xxx 000000
Xxxxxx, Xxxxxx, 00000-0000
XX0Xxxx00x-0@xx0.xxx
or such other address that we may communicate to you in writing from time to
time.
7. FORM OF INSTRUCTIONS. Instructions given in accordance with Paragraph 6 shall
be given to us via e-mail in a mutually agreed upon file format. The
instructions in the file must include:
(a) the fund account number;
(b) the Shareholder's TIN, ITIN or GII, if known;
(c) the specific individual Contract owner number or participant account
number (if known) associated with the Shareholder;
(d) the specific restriction(s) to be executed with respect to such
Shareholder, including how long such restriction(s) are to remain in
place; and
(e) a brief written statement that may be provided to the Shareholder,
explaining how the Shareholder's transfer activity violated Fund
Policies.
If the TIN is not known, the instructions must include an equivalent identifying
number of the Shareholder(s) or account(s) or other agreed upon information to
which the instruction relates.
8. TIMING OF RESPONSE. We agree to use reasonable efforts to execute
instructions given in accordance with Paragraphs 6 and 7 promptly, but in any
event not later than 10 Business Days after receipt of such instructions. We
will provide written confirmation to you or your designee as soon as reasonably
practicable, but in any event not later than ten (10) Business Days, that
instructions have been executed
9. CONSTRUCTION OF THE AGREEMENT; FUND PARTICIPATION AGREEMENTS. The parties
have entered into one or more Fund Participation Agreements between or among
them for the purchase and redemption of shares of the Funds by the Accounts in
connection with the Contracts. This Agreement supplements those Fund
Participation Agreements. To the extent the terms of this Agreement conflict
with the terms of a Fund Participation Agreement, the terms of this Agreement
shall control.
10. TERMINATION. This Agreement will terminate upon the termination of the Fund
Participation Agreements.
11. AMENDMENT. This Agreement may be modified or amended, and the terms of this
Agreement may be waived, only by a writing signed by the parties.
12. BINDING EFFECT. This Agreement shall be binding upon, and inure to the
benefit of, the parties hereto and their respective successors and assigns.
13. COUNTERPARTS. This Agreement may be executed in one or more counterparts
each of which, when taken together, shall constitute a single instrument.
FORETHOUGHT LIFE INSURANCE COMPANY
By:
------------------------------
Name:
------------------------------
Title:
------------------------------
HIMCO DISTRIBUTION SERVICES COMPANY
By:
-------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: CEO, President
Address for communications:
HDSC x/x XXXXX
Xxx Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Attention General Counsel
