Exhibit 99.8
AMENDMENT TO PARTICIPATION AGREEMENT
As of May 3, 2004
by and among
Franklin Xxxxxxxxx Variable Insurance Products Trust
Franklin/Xxxxxxxxx Distributors, Inc.
SAFECO Life Insurance Company
SAFECO Securities, Inc.
Franklin Xxxxxxxxx Variable Insurance Products Trust (the "Trust"),
Franklin/Xxxxxxxxx Distributors, Inc. (the "Underwriter," and together with the
Trust, "we" or "us") and SAFECO Life Insurance Company ("you") and SAFECO
Securities, Inc., your distributor, on your behalf and on behalf of certain
Accounts, have previously entered into a Participation Agreement dated May 1,
2000 (the "Agreement"). The parties now desire to amend the Agreement in this
amendment (the "Amendment").
Except as modified hereby, all other terms and conditions of the Agreement
shall remain in full force and effect. Unless otherwise indicated, the terms
defined in the Agreement shall have the same meaning in this Amendment.
A M E N D M E N T
For good and valuable consideration, the receipt of which is hereby
acknowledged, the parties agree to amend the Agreement as follows:
1. Section 2.1.6 of the Agreement is hereby amended to add the following
sentence at the end of the section:
"Without limiting the foregoing, you agree that in recommending to a
Contract owner the purchase, sale or exchange of any subaccount units under
the Contracts, you shall have reasonable grounds for believing that the
recommendation is suitable for such Contract owner."
2. A new Section 2.1.12 is hereby added to the Agreement as follows:
"2.1.12 As covered financial institutions we, only with respect
to Portfolio shareholders, and you each undertake and agree to comply, and
to take full responsibility in complying with any and all applicable laws,
regulations, protocols and other requirements relating to money laundering
including, without limitation, the International Money Laundering Abatement
and Anti-Terrorist Financing Act of 2001 (Title III of the USA PATRIOT
Act)."
3. Section 3 of the Agreement is hereby deleted in its entirety and replaced
with the
following Section 3:
"3. PURCHASE AND REDEMPTION OF TRUST PORTFOLIO SHARES
3.1 AVAILABILITY OF TRUST PORTFOLIO SHARES
3.1.1 We will make shares of the Portfolios available to the
Accounts for the benefit of the Contracts. The shares will be available for
purchase at the net asset value per share next computed after we (or our
agent, or you as our designee) receive a purchase order, as established in
accordance with the provisions of the then current prospectus of the Trust.
All orders are subject to acceptance by us and by the Portfolio or its
transfer agent, and become effective only upon confirmation by us.
Notwithstanding the foregoing, the Trust's Board of Trustees ("Trustees")
may refuse to sell shares of any Portfolio to any person, or may suspend or
terminate the offering of shares of any Portfolio if such action is
required by law or by regulatory authorities having jurisdiction or if, in
the sole discretion of the Trustees, they deem such action to be in the
best interests of the shareholders of such Portfolio.
3.1.2 Without limiting the other provisions of this
Section 3.1, among other delegations by the Trustees, the Trustees have
determined that there is a significant risk that the Trust and its
shareholders may be adversely affected by investors with short term trading
activity and/or whose purchase and redemption activity follows a market
timing pattern as defined in the prospectus for the Trust, and have
authorized the Trust, the Underwriter and the Trust's transfer agent to
adopt procedures and take other action (including, without limitation,
rejecting specific purchase orders in whole or in part) as they deem
necessary to reduce, discourage, restrict or eliminate such trading and/or
market timing activity. You agree that your purchases and redemptions of
Portfolio shares are subject to, and that you will assist us in
implementing, the Market Timing Trading Policy and Additional Policies (as
described in the Trust's prospectus) and the Trust's restrictions on
excessive and/or short term trading activity and/or purchase and redemption
activity that follows a market timing pattern.
3.1.3 We agree that shares of the Trust will be sold only to
life insurance companies which have entered into fund participation
agreements with the Trust ("Participating Insurance Companies") and their
separate accounts or to qualified pension and retirement plans in
accordance with the terms of the Shared Funding Order. No shares of any
Portfolio will be sold to the general public.
3.2 MANUAL OR AUTOMATED PORTFOLIO SHARE TRANSACTIONS
3.2.1 Section 3.3 of this Agreement shall govern and
Section 3.4 shall not be operative, unless we receive from you at the
address provided in the next sentence, written notice that you wish to
communicate, process and settle purchase and redemptions for shares
(collectively, "share transactions") via the
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Fund/SERV and Networking systems of the National Securities Clearing
Corporation ("NSCC"). The address for you to send such written notice shall
be: Retirement Services, Franklin Xxxxxxxxx Investments, 000 Xxxx Xxxxx,
0xx Xxxxx, Xxx Xxxxx, Xxxxxxxxxx 00000-0000. After giving ten (10) days'
advance written notice at the address provided in the previous sentence of
your desire to use NSCC processing, Section 3.4 of this Agreement shall
govern and Section 3.3 shall not be operative.
3.2.2 At any time when, pursuant to the preceding paragraph,
Section 3.4 of this Agreement governs, any party to this Agreement may send
written notice to the other parties that it chooses to end the use of the
NSCC Fund/SERV and Networking systems and return to manual handling of
share transactions. Such written notice shall be sent: (i) if from you to
us, to the address provided in the preceding paragraph; (ii) if from us to
you, to your address in Schedule G of this Agreement. After giving ten (10)
days' advance written notice at the address as provided in the previous
sentence, Section 3.3 of this Agreement shall govern and Section 3.4 shall
not be operative.
3.3 MANUAL PURCHASE AND REDEMPTION
3.3.1 You are hereby appointed as our designee for the sole
purpose of receiving from Contract owners purchase and exchange orders and
requests for redemption resulting from investment in and payments under the
Contracts that pertain to subaccounts that invest in Portfolios
("Instructions"). "Business Day" shall mean any day on which the New York
Stock Exchange is open for trading and on which the Trust calculates its
net asset value pursuant to the rules of the SEC and its current
prospectus. "Close of Trading" shall mean the close of trading on the New
York Stock Exchange, generally 4:00 p.m. Eastern Time. You represent and
warrant that all Instructions transmitted to us for processing on or as of
a given Business Day ("Day 1") shall have been received in proper form and
time stamped by you prior to the Close of Trading on Day 1. Such
Instructions shall receive the share price next calculated following the
Close of Trading on Day 1, provided that we receive such Instructions from
you before 9 a.m. Eastern Time on the next Business Day ("Day 2"). You
represent and warrant that Instructions received in proper form and time
stamped by you after the Close of Trading on Day 1 shall be treated by you
and transmitted to us as if received on Day 2. Such Instructions shall
receive the share price next calculated following the Close of Trading on
Day 2. You represent and warrant that you have, maintain and periodically
test, procedures and systems in place reasonably designed to prevent
Instructions received after the Close of Trading on Day 1 from being
executed with Instructions received before the Close of Trading on Day 1.
All Instructions we receive from you after 9 a.m. Eastern Time on Day 2
shall be processed by us on the following Business Day and shall receive
the share price next calculated following the Close of Trading on Day 2.
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3.3.2 We shall calculate the net asset value per share of each
Portfolio on each Business Day, and shall communicate these net asset
values to you or your designated agent on a daily basis as soon as
reasonably practical after the calculation is completed (normally by 6:30
p.m. Eastern Time).
3.3.3 You shall submit payment for the purchase of shares of a
Portfolio on behalf of an Account in federal funds transmitted by wire to
the Trust or to its designated custodian, which must receive such wires no
later than the close of the Reserve Bank, which is 6:00 p.m. Eastern Time,
on the Business Day following the Business Day as of which such purchases
orders are made.
3.3.4 We will redeem any full or fractional shares of any
Portfolio, when requested by you on behalf of an Account, at the net asset
value next computed after receipt by us (or our agent or you as our
designee) of the request for redemption, as established in accordance with
the provisions of the then current prospectus of the Trust. We shall make
payment for such shares in the manner we establish from time to time, but
in no event shall payment be delayed for a greater period than is permitted
by the 0000 Xxx.
3.3.5 Issuance and transfer of the Portfolio shares will be by
book entry only. Stock certificates will not be issued to you or the
Accounts. Portfolio shares purchased from the Trust will be recorded in the
appropriate title for each Account or the appropriate subaccount of each
Account.
3.3.6 We shall furnish, on or before the ex-dividend date,
notice to you of any income dividends or capital gain distributions payable
on the shares of any Portfolio. You hereby elect to receive all such income
dividends and capital gain distributions as are payable on shares of a
Portfolio in additional shares of that Portfolio, and you reserve the right
to change this election in the future. We will notify you of the number of
shares so issued as payment of such dividends and distributions.
3.3.7 Each party to this Agreement agrees that, in the event of
a material error resulting from incorrect information or confirmations, the
parties will seek to comply in all material respects with the provisions of
applicable federal securities laws.
3.4 AUTOMATED PURCHASE AND REDEMPTION
3.4.1 "Fund/SERV" shall mean NSCC's Mutual Fund Settlement,
Entry and Registration Verification System, a system for automated,
centralized processing of mutual fund purchase and redemption orders,
settlement, and account registration; "Networking" shall mean NSCC's system
that allows mutual funds and life insurance companies to exchange account
level information electronically; and "Settling Bank" shall mean the entity
appointed by the Trust or you, as applicable, to perform such settlement
services on behalf of the Trust and you, as applicable, which entity agrees
to abide by NSCC's then current rules and
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procedures insofar as they relate to same day funds settlement. In all
cases, processing and settlement of share transactions shall be done in a
manner consistent with applicable law.
3.4.2 You are hereby appointed as our designee for the sole
purpose of receiving from Contract owners purchase and exchange orders and
requests for redemption resulting from investment in and payments under the
Contracts that pertain to subaccounts that invest in Portfolios
("Instructions"). "Business Day" shall mean any day on which the New York
Stock Exchange is open for trading and on which the Trust calculates its
net asset value pursuant to the rules of the SEC and its current
prospectus. "Close of Trading" shall mean the close of trading on the New
York Stock Exchange, generally 4:00 p.m. Eastern Time. Upon receipt of
Instructions, and upon your determination that there are good funds with
respect to Instructions involving the purchase of shares, you will
calculate the net purchase or redemption order for each Portfolio.
3.4.3 On each Business Day, you shall aggregate all purchase
and redemption orders for shares of a Portfolio that you received prior to
the Close of Trading. You represent and warrant that all orders for net
purchases or net redemptions derived from Instructions received by you and
transmitted to Fund/SERV for processing on or as of a given Business Day
("Day 1") shall have been received in proper form and time stamped by you
prior to the Close of Trading on Day 1. Such orders shall receive the share
price next calculated following the Close of Trading on Day 1, provided
that we receive Instructions from Fund/SERV by 6:30 a.m. Eastern Time on
the next Business Day ("Day 2"). You represent and warrant that orders
received in good order and time stamped by you after the Close of Trading
on Day 1 shall be treated by you and transmitted to Fund/SERV as if
received on Day 2. Such orders shall receive the share price next
calculated following the Close of Trading on Day 2. All Instructions we
receive from Fund/SERV after 6:30 a.m. Eastern Time on Day 2 shall be
processed by us on the following Business Day and shall receive the share
price next calculated following the close of trading on Day 2. You
represent and warrant that you have, maintain and periodically test,
procedures and systems in place reasonably designed to prevent orders
received after the Close of Trading on Day 1 from being executed with
orders received before the Close of Trading on Day 1, and periodically
monitor the systems to determine their effectiveness. Subject to your
compliance with the foregoing, you will be considered the designee of the
Underwriter and the Portfolios, and the Business Day on which Instructions
are received by you in proper form prior to the Close of Trading will be
the date as of which shares of the Portfolios are deemed purchased,
exchanged or redeemed pursuant to such Instructions. Dividends and capital
gain distributions will be automatically reinvested at net asset value in
accordance with the Portfolio's then current prospectus.
3.4.4 We shall calculate the net asset value per share of each
Portfolio on each Business Day, and shall furnish to you through NSCC's
Networking or Mutual Fund Profile System: (i) the most current net asset
value
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information for each Portfolio; and (ii) in the case of fixed income funds
that declare daily dividends, the daily accrual or the interest rate
factor. All such information shall be furnished to you by 6:30 p.m. Eastern
Time on each Business Day or at such other time as that information becomes
available.
3.4.5 You will wire payment for net purchase orders by the
Trust's NSCC Firm Number, in immediately available funds, to an NSCC
settling bank account designated by you in accordance with NSCC rules and
procedures on the same Business Day such purchase orders are communicated
to NSCC. For purchases of shares of daily dividend accrual funds, those
shares will not begin to accrue dividends until the day the payment for
those shares is received.
3.4.6 We will redeem any full or fractional shares of any
Portfolio, when requested by you on behalf of an Account, at the net asset
value next computed after receipt by us (or our agent or you as our
designee) of the request for redemption, as established in accordance with
the provisions of the then current prospectus of the Trust. NSCC will wire
payment for net redemption orders by the Trust, in immediately available
funds, to an NSCC settling bank account designated by you in accordance
with NSCC rules and procedures on the Business Day such redemption orders
are communicated to NSCC, except as provided in the Trust's prospectus and
statement of additional information.
3.4.7 Issuance and transfer of the Portfolio shares will be by
book entry only. Stock certificates will not be issued to you or the
Accounts. Portfolio shares purchased from the Trust will be recorded in the
appropriate title for each Account or the appropriate subaccount of each
Account.
3.4.8 We shall furnish through NSCC's Networking or Mutual Fund
Profile System on or before the ex-dividend date, notice to you of any
income dividends or capital gain distributions payable on the shares of any
Portfolio. You hereby elect to receive all such income dividends and
capital gain distributions as are payable on shares of a Portfolio in
additional shares of that Portfolio, and you reserve the right to change
this election in the future. We will notify you of the number of shares so
issued as payment of such dividends and distributions.
3.4.9 All orders are subject to acceptance by Underwriter and
become effective only upon confirmation by Underwriter. Underwriter
reserves the right: (i) not to accept any specific order or part of any
order for the purchase or exchange of shares through Fund/SERV; and (ii) to
require any redemption order or any part of any redemption order to be
settled outside of Fund/SERV, in which case the order or portion thereof
shall not be "confirmed" by Underwriter, but rather shall be accepted for
redemption in accordance with Section 3.4.11 below.
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3.4.10 All trades placed through Fund/SERV and confirmed by
Underwriter via Fund/SERV shall settle in accordance with Underwriter's
profile within Fund/SERV applicable to you. Underwriter agrees to provide
you with account positions and activity data relating to share transactions
via Networking.
3.4.11 If on any specific day you or Underwriter are unable to
meet the NSCC deadline for the transmission of purchase or redemption
orders for that day, a party may at its option transmit such orders and
make such payments for purchases and redemptions directly to you or us, as
applicable, as is otherwise provided in the Agreement; provided, however,
that we must receive written notification from you by 9:00 a.m. Eastern
Time on any day that you wish to transmit such orders and/or make such
payments directly to us.
3.4.12 In the event that you or we are unable to or prohibited
from electronically communicating, processing or settling share
transactions via Fund/SERV, you or we shall notify the other, including
providing the notification provided above in Section 3.4.11. After all
parties have been notified, you and we shall submit orders using manual
transmissions as are otherwise provided in the Agreement.
3.4.13 These procedures are subject to any additional terms in
each Portfolio's prospectus and the requirements of applicable law. The
Trust reserves the right, at its discretion and without notice, to suspend
the sale of shares or withdraw the sale of shares of any Portfolio.
3.4.14 Each party to the Agreement agrees that, in the event of
a material error resulting from incorrect information or confirmations, the
parties will seek to comply in all material respects with the provisions of
applicable federal securities laws.
3.4.15 You and Underwriter represent and warrant that each: (a)
has entered into an agreement with NSCC; (b) has met and will continue to
meet all of the requirements to participate in Fund/SERV and Networking;
(c) intends to remain at all times in compliance with the then current
rules and procedures of NSCC, all to the extent necessary or appropriate to
facilitate such communications, processing, and settlement of share
transactions; and (d) will notify the other parties to this Agreement if
there is a change in or a pending failure with respect to its agreement
with NSCC."
4. A new Section 6.7 is hereby added to the Agreement as follows:
"6.7 You agree that any posting of Portfolio prospectuses on your
website will result in the Portfolio prospectuses: (i) appearing identical
to the hard copy printed version; (ii) being clearly associated with the
particular Contracts in which they are available and posted in close
proximity to the applicable Contract prospectuses; (iii) having no less
prominence than prospectuses of any other underlying funds available under
the Contracts; and (iv) being used in an
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authorized manner. Notwithstanding the above, you understand and agree that
you are responsible for ensuring that participation in the Portfolios, and
any website posting, or other use, of the Portfolio prospectuses is in
compliance with this Agreement and applicable state and federal securities
and insurance laws and regulations, including as they relate to paper or
electronic use of fund prospectuses. The format of such presentation, the
script and layout for any website that mentions the Trust, the Underwriter,
an Adviser or the Portfolios shall be routed to us as sales literature or
other promotional materials, pursuant to Section 6 of this Agreement.
In addition, you agree to be solely responsible for maintaining and
updating the Portfolio prospectuses' PDF files (including prospectus
supplements) and removing and/or replacing promptly any outdated
prospectuses, as necessary, ensuring that any accompanying instructions by
us, for using or stopping use are followed. You agree to designate and make
available to us a person to act as a single point of communication contact
for these purposes. We are not responsible for any additional costs or
additional liabilities that may be incurred as a result of your election to
place the Portfolio prospectuses on your website. We reserve the right to
revoke this authorization, at any time and for any reason, although we may
instead make our authorization subject to new procedures."
5. A new Section 6.8 is hereby added to the Agreement as follows:
"6.8 Each of your and your distributor's registered representatives,
agents, independent contractors and employees, as applicable, will have
access to our websites at xxxxxxxxxxxxxxxxx.xxx, and such other URLs
through which we may permit you to conduct business concerning the
Portfolios from time to time (referred to collectively as the "Site") as
provided herein: (i) upon registration by such individual on a Site; (ii)
if you cause a Site Access Request Form (an "Access Form") to be signed by
your authorized supervisory personnel and submitted to us, as a Schedule
to, and legally a part of, this Agreement; or (iii) if you provide such
individual with the necessary access codes or other information necessary
to access the Site through any generic or firm-wide authorization we may
grant you from time to time. Upon receipt by us of a completed registration
submitted by an individual through the Site or a signed Access Form
referencing such individual, we shall be entitled to rely upon the
representations contained therein as if you had made them directly
hereunder and we will issue a user identification, express number and/or
password (collectively, "Access Code"). Any person to whom we issue an
Access Code or to whom you provide the necessary Access Codes or other
information necessary to access the Site through any generic or firm-wide
authorization we may grant you from time to time shall be an "Authorized
User."
We shall be entitled to assume that such person validly represents you
and that all instructions received from such person are authorized, in
which case such person will have access to the Site, including all services
and information to which you are authorized to access on the Site. All
inquiries and actions initiated
8
by you (including your Authorized Users) are your responsibility, are at
your risk and are subject to our review and approval (which could cause a
delay in processing). You agree that we do not have a duty to question
information or instructions you (including Authorized Users) give to us
under this Agreement, and that we are entitled to treat as authorized, and
act upon, any such instructions and information you submit to us. You agree
to take all reasonable measures to prevent any individual other than an
Authorized User from obtaining access to the Site. You agree to inform us
if you wish to restrict or revoke the access of any individual Access Code.
If you become aware of any loss or theft or unauthorized use of any Access
Code, you agree to contact us immediately. You also agree to monitor your
(including Authorized Users') use of the Site to ensure the terms of this
Agreement are followed. You also agree that you will comply with all
policies and agreements concerning Site usage, including without limitation
the Terms of Use Agreement(s) posted on the Site ("Site Terms"), as may be
revised and reposted on the Site from time to time, and those Site Terms
(as in effect from time to time) are a part of this Agreement. Your duties
under this section are considered "services" required under the terms of
this Agreement. You acknowledge that the Site is transmitted over the
Internet on a reasonable efforts basis and we do not warrant or guarantee
their accuracy, timeliness, completeness, reliability or non-infringement.
Moreover, you acknowledge that the Site is provided for informational
purposes only, and is not intended to comply with any requirements
established by any regulatory or governmental agency."
6. A new paragraph is added at the end of Section 10.8 of the Agreement as
follows:
"Each party to this Agreement agrees to limit the disclosure of
nonpublic personal information of Contract owners consistent with its
policies on privacy with respect to such information and Regulation S-P of
the SEC. Each party hereby agrees that it will comply with all applicable
requirements under the regulations implementing Title V of the
Xxxxx-Xxxxx-Xxxxxx Act and any other applicable federal and state consumer
privacy acts, rules and regulations. Each party further represents that it
has in place, and agrees that it will maintain, information security
policies and procedures for protecting nonpublic personal customer
information adequate to conform to applicable legal requirements."
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IN WITNESS WHEREOF, each of the parties has caused its duly authorized officers
to execute this Amendment.
The Company: SAFECO Life Insurance Company
By:
--------------------------------------
Name:
Title:
The Trust: FRANKLIN XXXXXXXXX VARIABLE INSURANCE
PRODUCTS TRUST
ONLY ON BEHALF OF
EACH PORTFOLIO LISTED
ON SCHEDULE C OF
THE AGREEMENT. By:
--------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Assistant Vice President
The Underwriter: FRANKLIN/XXXXXXXXX DISTRIBUTORS, INC.
By:
--------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
The Distributor: SAFECO Securities, Inc.
By:
---------------------------------------
Name:
Title:
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AMENDMENT NO. 4 TO
PARTICIPATION AGREEMENT
Franklin Xxxxxxxxx Variable Insurance Products Trust
Franklin/Xxxxxxxxx Distributors, Inc.
Symetra Life Insurance Company
(Formerly "SAFECO Life Insurance Company")
Symetra Securities, Inc.
(Formerly "SAFECO Securities, Inc.")
The
participation agreement, dated as of May 1, 2000, by and among Franklin
Xxxxxxxxx Variable Insurance Products Trust, Franklin/Xxxxxxxxx Distributors,
Inc., Symetra Life Insurance Company (formerly "SAFECO Life Insurance Company")
and Symetra Securities, Inc. (formerly "SAFECO Securities, Inc.") (the
"Agreement") is hereby amended as follows:
1. Effective September 1, 2004, SAFECO Life Insurance Company and SAFECO
Securities, Inc. changed their names to Symetra Life Insurance Company and
Symetra Securities, Inc., respectively.
2. Schedules A, B, C, D, F and G of the Agreement are deleted and replaced in
their entirety with the Schedules A, B, C, D, F and G attached hereto.
All other terms and provisions of the Agreement not amended herein shall remain
in full force and effect.
This Amendment is dated as of October ____, 2004
FRANKLIN XXXXXXXXX VARIABLE SYMETRA LIFE INSURANCE COMPANY
INSURANCE PRODUCTS TRUST
By: By:
-------------------------------------- --------------------------------
Name: Xxxxx X. Xxxxxxxx Name: Xxxxx X. Xxxxxxxxxxxx
Title: Assistant Vice President Title: Vice President
FRANKLIN/XXXXXXXXX DISTRIBUTORS, INC. SYMETRA SECURITIES, INC.
By: By:
-------------------------------------- -------------------------------
Name: Xxxxx X. Xxx Name: Xxxxx X. Xxxxxxxxxxxx
Title: Senior Vice President Title: Vice President
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SCHEDULE A
THE COMPANY AND ITS DISTRIBUTOR
THE COMPANY
Symetra Life Insurance Company
0000 000xx Xxxxx XX
Xxxxxxx, XX 00000
An insurance company organized under Washington laws.
THE DISTRIBUTOR
Symetra Securities, Inc.
0000 000xx Xxxxx XX
Xxxxxxx, XX 00000
A corporation organized under Washington laws.
2
SCHEDULE B
ACCOUNTS OF THE COMPANY
1. Name:
Symetra Separate Account C
Date Established: February 11, 1994
SEC Registration Number: 811-8052
2. Name: Symetra Separate Account SL
Date Established: November 6, 1986
SEC Registration Number: 811-04909 / 333-30329
3. Name: Symetra Resource Variable Account B
Date Established: February 6, 1986
SEC Registration Number: 811-4716
4. Name: Symetra SAFEFLEX Separate Account D
Date Established: March 12, 1993
SEC Registration Number: Not Applicable
3
SCHEDULE C
AVAILABLE PORTFOLIOS AND CLASSES OF SHARES OF THE TRUST; INVESTMENT ADVISERS
PORTFOLIO OF THE TRUST INVESTMENT ADVISER
---------------------- ------------------
Franklin Small Cap Fund - Class 2 Franklin Advisers, Inc.
Franklin U.S. Government Fund - Class 2 Franklin Advisers, Inc.
Mutual Shares Securities Fund - Class 2 Franklin Mutual Advisers, LLC
Templeton Developing Markets Securities Fund Class 2 Xxxxxxxxx Asset Management Ltd.
Templeton Growth Securities Fund - Class 2 Xxxxxxxxx Global Advisors Limited
Franklin Income Securities Fund - Class 2 Franklin Advisers, Inc.
4
SCHEDULE D
CONTRACTS OF THE COMPANY
PRODUCT NAME SEPARATE ACCOUNT NAME
# INSURANCE REGISTERED Y/N REGISTERED Y/N
COMPANY 1933 ACT #, STATE FORM ID 1940 ACT # CLASSES OF SHARES AND PORTFOLIOS
---------------------------------------------------------------------------------------------------------------------
1 Symetra Premier Accumulation Life Symetra Separate Account CLASS 2 SHARES:
Life VUL XX Xxxxxxxx Small Cap Fund
Insurance Yes Yes Franklin U.S. Government Fund
Company 1933 Act #: 333-30329 811-04909 Mutual Shares Securities Fund
Form No.: LP-9228EP 11/96 Xxxxxxxxx Developing Markets Securities
Fund
Templeton Growth Securities Fund
Franklin Income Securities Fund
2 Symetra SAFECO Safeflex Group VA Symetra SAFEFLEX Separate CLASS 2 SHARES:
Life Not Registered Account D Franklin Small Cap Fund
Insurance LPC-333 6/92 No Franklin U.S. Government Fund
Company LPC-1289 2/01 N/A Mutual Shares Securities Fund
LPC-1292 2/01 Xxxxxxxxx Developing Markets Securities
(and any State specific Fund
variations) Templeton Growth Securities Fund
Franklin Income Securities Fund
3 Symetra Spinnaker Symetra Separate Account C CLASS 2 SHARES:
Life Yes Yes Franklin Income Securities Fund
Insurance 1933 Act #: 33-69712 811-8052 Franklin Small Cap Fund
Company LPC-412 7/93 Franklin U.S. Government Fund
(and any State specific Mutual Shares Securities Fund
variations) Xxxxxxxxx Developing Markets Securities
Fund
Templeton Growth Securities Fund
4 Symetra Spinnaker Plus Symetra Resource Variable CLASS 2 SHARES:
Life Yes Account B Franklin Income Securities Fund
Insurance 1933 Act #: 33-69600 Yes Franklin Small Cap Fund
Company LPC 417 7/93 811-4716 Franklin U.S. Government Fund
(and any State specific Mutual Shares Securities Fund
variations) Xxxxxxxxx Developing Markets Securities
Fund
Templeton Growth Securities Fund
5 Symetra Spinnaker Advisor Symetra Separate Account C CLASS 2 SHARES:
Life Yes Yes Franklin Income Securities Fund
Insurance 1933 Act #:333-41622 811-8052 Franklin Small Cap Fund
Company LPC-1156 3/00 Franklin U.S. Government Fund
LPC-1157 3/00 Mutual Shares Securities Fund
LPC-1158 3/00 Xxxxxxxxx Developing Markets Securities
LPC-1159 3/00 Fund
(and any State specific Templeton Growth Securities Fund
variations)
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SCHEDULE F
RULE 12b-1 PLANS
COMPENSATION SCHEDULE
Each Portfolio named below shall pay the following amounts pursuant to the terms
and conditions referenced below under its Class 2 Rule 12b-1 Distribution Plan,
stated as a percentage per year of Class 2's average daily net assets
represented by shares of Class 2.
PORTFOLIO NAME MAXIMUM ANNUAL PAYMENT RATE
-------------- ---------------------------
Franklin Income Securities Fund 0.25%
Franklin Small Cap Fund 0.25%
Franklin U.S. Government Fund 0.25%
Mutual Shares Securities Fund 0.25%
Xxxxxxxxx Developing Markets Securities Fund 0.25%
Templeton Growth Securities Fund 0.25%
AGREEMENT PROVISIONS
If the Company, on behalf of any Account, purchases Trust Portfolio shares
("Eligible Shares") which are subject to a Rule 12b-1 plan adopted under the
1940 Act (the "Plan"), the Company may participate in the Plan.
To the extent the Company or its affiliates, agents or designees
(collectively "you") provide any activity or service which is primarily intended
to assist in the promotion, distribution or account servicing of Eligible Shares
("Rule 12b-1 Services") or variable contracts offering Eligible Shares, the
Underwriter, the Trust or their affiliates (collectively, "we") may pay you a
Rule 12b-1 fee. "Rule 12b-1 Services" may include, but are not limited to,
printing of prospectuses and reports used for sales purposes, preparing and
distributing sales literature and related expenses, advertisements, education of
dealers and their representatives, and similar distribution-related expenses,
furnishing personal services to owners of Contracts which may invest in Eligible
Shares ("Contract Owners"), education of Contract Owners, answering routine
inquiries regarding a Portfolio, coordinating responses to Contract Owner
inquiries regarding the Portfolios, maintaining such accounts or providing such
other enhanced services as a Trust Portfolio or Contract may require, or
providing other services eligible for service fees as defined under NASD rules.
Your acceptance of such compensation is your acknowledgment that eligible
services have been rendered. All Rule 12b-1 fees, shall be based on the value of
Eligible Shares owned by the Company on behalf of its Accounts, and shall be
calculated on the basis and at the rates set forth in the Compensation Schedule
stated above. The aggregate annual fees paid pursuant to each Plan shall not
exceed the amounts stated as the "annual maximums" in the Portfolio's
prospectus, unless an increase is approved by shareholders as provided in the
Plan. These maximums shall be a specified percent of the value of a Portfolio's
net assets attributable to Eligible Shares owned by the Company on behalf of its
Accounts (determined in the same manner as the Portfolio uses to compute its net
assets as set forth in its effective Prospectus). The Rule
6
12b-1 fee will be paid to you within thirty (30) days after the end of the
three-month periods ending in January, April, July and October.
You shall furnish us with such information as shall reasonably be requested
by the Trust's Boards of Trustees ("Trustees") with respect to the Rule 12b-1
fees paid to you pursuant to the Plans. We shall furnish to the Trustees, for
their review on a quarterly basis, a written report of the amounts expended
under the Plans and the purposes for which such expenditures were made.
The Plans and provisions of any agreement relating to such Plans must be
approved annually by a vote of the Trustees, including the Trustees who are not
interested persons of the Trust and who have no financial interest in the Plans
or any related agreement ("Disinterested Trustees"). Each Plan may be terminated
at any time by the vote of a majority of the Disinterested Trustees, or by a
vote of a majority of the outstanding shares as provided in the Plan, on sixty
(60) days' written notice, without payment of any penalty. The Plans may also be
terminated by any act that terminates the Underwriting Agreement between the
Underwriter and the Trust, and/or the management or administration agreement
between Franklin Advisers, Inc. and its affiliates and the Trust. Continuation
of the Plans is also conditioned on Disinterested Trustees being ultimately
responsible for selecting and nominating any new Disinterested Trustees. Under
Rule 12b-1, the Trustees have a duty to request and evaluate, and persons who
are party to any agreement related to a Plan have a duty to furnish, such
information as may reasonably be necessary to an informed determination of
whether the Plan or any agreement should be implemented or continued. Under Rule
12b-1, the Trust is permitted to implement or continue Plans or the provisions
of any agreement relating to such Plans from year-to-year only if, based on
certain legal considerations, the Trustees are able to conclude that the Plans
will benefit each affected Trust Portfolio and class. Absent such yearly
determination, the Plans must be terminated as set forth above. In the event of
the termination of the Plans for any reason, the provisions of this Schedule F
relating to the Plans will also terminate. You agree that your selling
agreements with persons or entities through whom you intend to distribute
Contracts will provide that compensation paid to such persons or entities may be
reduced if a Portfolio's Plan is no longer effective or is no longer applicable
to such Portfolio or class of shares available under the Contracts.
Any obligation assumed by the Trust pursuant to this Agreement shall be limited
in all cases to the assets of the Trust and no person shall seek satisfaction
thereof from shareholders of the Trust. You agree to waive payment of any
amounts payable to you by Underwriter under a Plan until such time as the
Underwriter has received such fee from the Trust.
The provisions of the Plans shall control over the provisions of the
Participation Agreement, including this Schedule F, in the event of any
inconsistency.
You agree to provide complete disclosure as required by all applicable statutes,
rules and regulations of all rule 12b-1 fees received from us in the prospectus
of the Contracts.
7
SCHEDULE G
ADDRESSES FOR NOTICES
To the Company: Symetra Life Insurance Company
0000 000xx Xxxxx XX
Xxxxxxx, XX 00000
Attention: Xxxxxxxxxx X. Xxxxxxxxx, Counsel
To the Distributor: Symetra Securities, Inc.
0000 000xx Xxxxx XX
Xxxxxxx, XX 00000
Attention: Xxxxxxxxxx X. Xxxxxxxxx, Counsel
To the Trust: Franklin Xxxxxxxxx Variable Insurance Products Trust
Xxx Xxxxxxxx Xxxxxxx, Xxxx. 000, 0xx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxx, Vice President
To the Underwriter: Franklin Xxxxxxxxx Distributors, Inc.
Xxx Xxxxxxxx Xxxxxxx, Xxxx. 000, 0xx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxx, Senior Vice President
If to the Trust or Underwriter
With a copy to: Xxxxxx Xxxxxxx, General Counsel
Franklin Xxxxxxxxx Xxxxxxxxxxx
Xxx Xxxxxxxx Xxxxxxx, Xxxx. 000, 0xx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
8
PARTICIPATION AGREEMENT
AMONG
PIONEER VARIABLE CONTRACTS TRUST,
(NAME) INSURANCE AND ANNUITY COMPANY
PIONEER INVESTMENT MANAGEMENT, INC.
AND
PIONEER FUNDS DISTRIBUTOR, INC.
THIS AGREEMENT, made and entered into this (date), by and among PIONEER
VARIABLE CONTRACTS TRUST, a Delaware business trust (the "Trust"), (NAME)
INSURANCE AND ANNUITY COMPANY, a (state) life insurance company (the "Company")
on its own behalf and on behalf of each of the segregated asset accounts of the
Company set forth in Schedule A hereto, as may be amended from time to time (the
"Accounts"), PIONEER INVESTMENT MANAGEMENT, INC., a Delaware corporation ("PIM")
and PIONEER FUNDS DISTRIBUTOR, INC. ("PFD"), a corporation organized under the
laws of The Commonwealth of
Massachusetts.
WHEREAS, the Trust is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act"),
and its shares are registered or will be registered under the Securities Act of
1933, as amended (the "1933 Act");
WHEREAS, shares of beneficial interest of the Trust are divided into
several series and classes of shares, each series being designated a "Portfolio"
and representing an interest in a particular managed pool of securities and
other assets;
WHEREAS, the Trust is available to act as the investment vehicle for
separate accounts established for variable life insurance policies and/or
variable annuity contracts to be offered by insurance companies, including LESS
(NAME), which have entered into
participation agreements with the Trust (the
"Participating Insurance Companies");
WHEREAS, the Trust has obtained an order from the Securities and Exchange
Commission (the "SEC"), dated July 9, 1997 (File No. 812-10494) (the "Mixed and
Shared Funding Exemptive Order") granting Participating Insurance Companies and
variable annuity and variable life insurance separate accounts exemptions from
the provisions of Sections 9(a), 13(a), 15(a) and 15(b) of the 1940 Act and
Rules 6e-2(b)(15) and 6e-3(T)(b)(15) thereunder, to the extent necessary to
permit shares of the Trust to be sold to and held by variable annuity and
variable life insurance companies that may or may not be affiliated with one
another and qualified pension and retirement plans ("Qualified Plans");
WHEREAS, PIM is duly registered as an investment adviser under the
Investment Advisers Act of 1940, as amended, and any applicable state securities
law, and is the Trust's investment adviser;
WHEREAS, the Company will issue certain variable annuity and/or variable
life insurance contracts (individually, the "Contract" or, collectively, the
"Contracts") which, if required by applicable law, will be registered under the
1933 Act;
1
WHEREAS, the Accounts are duly organized, validly existing segregated asset
accounts, established by resolution of the Board of Directors of the Company, to
set aside and invest assets attributable to the aforesaid variable annuity
and/or variable life insurance contracts that are allocated to the Accounts (the
Contracts and the Accounts covered by this Agreement, and each corresponding
Portfolio covered by this Agreement in which the Accounts may invest, is
specified in Schedule A attached hereto as may be modified from time to time);
WHEREAS, the Company has registered or will register the Accounts as unit
investment trusts under the 1940 Act (unless exempt therefrom);
WHEREAS, the Portfolios offered by the Trust to the Company and the
Accounts are set forth on Schedule A attached hereto;
WHEREAS, PFD is registered as a broker-dealer with the Securities and
Exchange Commission (the "SEC") under the Securities Exchange Act of 1934, as
amended (hereinafter the "1934 Act"), and is a member in good standing of the
National Association of Securities Dealers, Inc. (the "NASD") and is authorized
to sell shares of the Portfolios to unit investment trusts such as the Accounts;
WHEREAS, (underwriter name) ("Policy Underwriter"), the underwriter for the
variable annuity and the variable life policies, is registered as a
broker-dealer with the SEC under the 1934 Act and is a member in good standing
of the NASD; and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares in one or more of the
Portfolios specified in Schedule A attached hereto (the "Shares") on behalf of
the Accounts to fund the Contracts, and PFD intends to sell such Shares to the
Accounts at net asset value;
NOW, THEREFORE, in consideration of their mutual promises, the Trust, PIM,
PFD and the Company agree as follows:
ARTICLE I. SALE OF TRUST SHARES
1.1. PFD and the Company agree to provide pricing information, execute
orders and wire payments for purchases and redemptions of Fund shares as
set forth in this Article I until such time as they mutually agree to
utilize the National Securities Clearing Corporation ("NSCC"). Upon such
mutual agreement, PFD and the Company agree to provide pricing information,
execute orders and wire payments for purchases and redemptions of Fund
shares through NSCC and its subsidiary systems as set forth in Exhibit I.
1.2 PFD agrees to sell to the Company those Shares which the Accounts
order in accordance with the terms of this Agreement (based on orders
placed by Contract owners or participants on that Business Day, as defined
below) and which are available for purchase by such Accounts. Each such
order will be executed on a daily basis at the net asset value next
computed after receipt by the Trust or its designee of the order for the
Shares. For purposes of this Section 1.2, the Company shall be the designee
of the Trust for receipt of such orders from Contract owners or
participants and receipt by such designee shall constitute receipt by the
Trust; provided that the Trust or its designee receives written (or
facsimile) notice of such orders by the time the Trust ordinarily
calculates its net asset value as described from time to time in the
Trust's prospectus (which as of the date of this Agreement is 4:00 p.m. New
York time on such Business Day. "Business Day"
2
shall mean any day on which the New York Stock Exchange, Inc. (the "NYSE")
is open for trading and on which the Trust calculates its net asset value
pursuant to the rules of the SEC.
1.3. PFD agrees to make the Shares available for purchase at the
applicable net asset value per share by the Company and the Accounts on
those days on which the Trust calculates its net asset value in accordance
with the rules of the SEC. Notwithstanding the foregoing, the Board of
Trustees of the Trust (the "Board") may refuse to sell any Shares to the
Company and the Accounts, or suspend or terminate the offering of the
Shares to the Company and the Accounts if such action is required by law or
by regulatory authorities having jurisdiction over PIM, PFD or the Trust or
is, in the sole discretion of the Board acting in good faith and in light
of its fiduciary duties under federal and any applicable state laws, in the
best interest of the Shareholders of such Portfolio.
1.4. The Trust and PFD will sell Trust shares only to Participating
Insurance Companies and Qualified Plans which have agreed to participate in
the Trust to fund their Separate Accounts and/or Qualified Plans all in
accordance with the requirement of Section 817(h) of the Internal Revenue
Code, as amended (the "Code") and the Treasury regulations thereunder. The
Company will not resell the Shares except to the Trust or its agents.
1.5. The Trust agrees, upon the Company's request, to redeem for cash,
any full or fractional Shares held by the Accounts (based on orders placed
by Contract owners on that Business Day). Each such redemption request
shall be executed on a daily basis at the net asset value next computed
after receipt by the Trust or its designee of the request for redemption.
For purposes of this Section 1.5, the Company shall be the designee of the
Trust for receipt of requests for redemption from Contract owners or
participants and receipt by such designee shall constitute receipt by the
Trust; provided that the Trust or its designee receives written (or
facsimile) notice of such request for redemption by the time the Trust
ordinarily calculates its net asset value as described from time to time in
the Trust's prospectus (which as of the date of this Agreement is 4:00 p.m.
New York time on such Business Day).
1.6. Each purchase, redemption and exchange order placed by the Company
shall be placed separately for each Portfolio and shall not be netted with
respect to any Portfolio. However, with respect to payment of the purchase
price by the Company and of redemption proceeds by the Trust, the Company
and the Trust shall net purchase and redemption orders with respect to each
Portfolio and shall transmit one net payment for all of the Portfolios in
accordance with Section 1.7 hereof.
1.7. In the event of net purchases, the Company shall pay for the Shares
by 11:00 a.m. New York time on the next Business Day after an order to
purchase the Shares is made in accordance with the provisions of Section
1.2. hereof. Company shall transmit all such payments in federal funds by
wire. If payment in federal funds for any purchase is not received or is
received by the Trust after 11:00 a.m. on such Business Day, the Company
shall promptly, upon the Trust's request, reimburse the Trust for any
charges, costs, fees, interest or other expenses incurred by the Trust in
connection with any advances to, or borrowings or overdrafts by, the Trust,
or any similar expenses (including the cost of and any loss incurred by the
Trust in unwinding any purchase of securities by the Trust) incurred by the
Trust as a result of portfolio transactions effected by the Trust based
upon such purchase request. In the event of net redemptions, the Trust
ordinarily shall pay and transmit the proceeds of redemptions of Shares by
11:00 a.m. New York time on the next Business Day after a redemption order
is received from the Company in accordance with Section 1.5. hereof,
although the Trust reserves the right to postpone the date of payment or
satisfaction
3
upon redemption consistent with Section 22(e) of the 1940 Act and any rules
pomulgated thereunder. Payments for net redemptions shall be in federal
funds transmitted by wire.
1.8. Issuance and transfer of the Shares will be by book entry only.
Stock certificates will not be issued to the Company or the Accounts. The
Shares ordered from the Trust will be recorded in an appropriate title for
the Accounts or the appropriate subaccounts of the Accounts.
1.9. The Trust shall furnish notice (by wire or telephone, followed by
written confirmation) no later than 7:00 p.m. New York time on the
ex-dividend date to the Company of any dividends or capital gain
distributions payable on the Shares. The Company hereby elects to receive
all such dividends and distributions as are payable in cash or Shares on a
Portfolio's Shares in additional Shares of that Portfolio. The Trust shall
notify the Company by the end of the next following Business Day of the
number of Shares so issued as payment of such dividends and distributions.
1.10. The Trust or its custodian shall make the net asset value per share
for each Portfolio available to the Company on each Business Day as soon as
reasonably practical after the net asset value per share is calculated and
shall use its best efforts to make such net asset value per share available
by 6:00 p.m. New York time. In the event of an error in the computation of
a Portfolio's net asset value per share ("NAV") or any dividend or capital
gain distribution (each, a "pricing error"), PIM or the Trust shall notify
the Company as soon as possible after the discovery of the error. Such
notification may be verbal, but shall be confirmed promptly in writing in
accordance with Article XII of this Agreement. A pricing error shall be
corrected in accordance with the Trust's internal policies and procedures.
If an adjustment is necessary to correct a material error that occurred
through no fault of the Company and such adjustment has caused Contract
owners to receive less than the number of Shares or redemption proceeds to
which they are entitled, the number of Shares of the applicable Account
will be adjusted and the amount of any underpayments will be paid by the
Trust or PIM to the Company for crediting of such amounts to the Contract
owners' accounts. Upon notification by PIM of any overpayment due to a
material error, the Company shall promptly remit to the Trust or PIM, as
appropriate, any overpayment that has not been paid to Contract owner;
however, PIM acknowledges that the Company does not intend to seek
additional payments form any Contract owner who, because of a pricing
error, may have underpaid for units of interest credited to his/her
account. The costs of correcting such adjustments shall be borne by the
Trust or PIM unless the Company is at fault in which case such costs shall
be borne by the Company.
ARTICLE II. CERTAIN REPRESENTATIONS, WARRANTIES AND COVENANTS
2.1. The Company represents and warrants that the Contracts are or will
be registered under the 1933 Act or are exempt from or not subject to
registration thereunder, and that the Contracts will be issued, sold, and
distributed in compliance in all material respects with all applicable
state and federal laws, including without limitation the 1933 Act, the
Securities Exchange Act of 1934, as amended (the "1934 Act"), and the 1940
Act. The Company further represents and warrants that it (i) is an
insurance company duly organized and in good standing under applicable law;
(ii) has legally and validly established each Account as a segregated asset
account under applicable law; (iii) has registered or, prior to any
issuance or sale of the Contracts, will register the Accounts as unit
investment trusts in accordance with the provisions of the 1940 Act (unless
exempt therefrom) to serve as segregated investment accounts for the
Contracts, and (iv) will maintain such registration for so long as any
Contracts are outstanding. The Company shall amend the registration
statements under the 1933 Act for the Contracts and the registration
statements under
4
the 1940 Act for the Accounts from time to time as required in order to
effect the continuous offering of the Contracts or as may otherwise be
required by applicable law. The Company shall register and qualify the
Contracts for sales in accordance with the securities laws of the various
states only if and to the extent deemed necessary by the Company. At the
time the Company is required to deliver the Trust's prospectus or statement
of additional information to a purchaser of Shares in accordance with the
requirements of federal or state securities laws, the Company shall
distribute to such Contract purchasers the then current Trust prospectus,
as supplemented.
2.2. The Company represents and warrants that the Contracts are currently
and at the time of issuance will be treated as life insurance, endowment or
annuity contracts under applicable provisions of the Code, that it will
maintain such treatment and that it will notify the Trust or PIM
immediately upon having a reasonable basis for believing that the Contracts
have ceased to be so treated or that they might not be so treated in the
future.
2.3. The Company represents and warrants that Policy Underwriter, the
underwriter for the individual variable annuity contracts and the variable
life policies, is a member in good standing of the NASD and is a registered
broker-dealer with the SEC. The Company represents and warrants that the
Company and Policy Underwriter will sell and distribute such contracts and
policies in accordance in all material respects with all applicable state
and federal securities laws, including without limitation the 1933 Act, the
1934 Act, and the 1940 Act and state insurance law suitability
requirements.
2.4. The Trust represents and warrants that the Shares sold pursuant to
this Agreement shall be registered under the 1933 Act, duly authorized for
issuance in compliance with the laws of Delaware and that the Trust is and
shall remain registered under the 1940 Act. The Trust shall amend the
registration statement for its Shares under the 1933 Act and the 1940 Act
from time to time as required in order to effect the continuous offering of
its Shares. The Trust shall register and qualify the Shares for sale in
accordance with the laws of the various states only if and to the extent
deemed necessary by the Trust.
2.5. The Trust represents that it is lawfully organized and validly
existing under the laws of the State of Delaware. The Trust further
represents that it has adopted a plan pursuant to Rule 12b-1 under the 1940
Act and imposes an asset-based charge to finance its distribution expenses
with respect to the Class II shares of certain of the Trust's Portfolios as
permitted by applicable law and regulation.
2.6. PFD represents and warrants that it is a member in good standing of
the NASD and is registered as a broker-dealer with the SEC. PFD represents
that it will sell and distribute the Shares in accordance in all material
respects with all applicable state and federal securities laws, including
without limitation the 1933 Act, the 1934 Act, and the 0000 Xxx.
2.7. PIM represents and warrants that it is and shall remain duly
registered as an investment adviser under the Investment Advisers Act of
1940, as amended.
2.8. No less frequently than annually, the Company shall submit to the
Board such reports, material or data as the Board may reasonably request so
that it may carry out fully the obligations imposed upon it by the
conditions contained in the Mixed and Shared Funding Exemptive Order
pursuant to which the SEC has granted exemptive relief to permit mixed and
shared funding.
5
2.9. The Trust and PIM represent and warrant that all of their respective
officers, employees, investment advisers, and other individuals or entities
dealing with the money and/or securities of the Trust are, and shall
continue to be at all times, covered by one or more blanket fidelity bonds
or similar coverage for the benefit of the Trust in an amount not less than
the minimal coverage required by Rule 17g-1 under the 1940 Act or related
provisions as may be promulgated form time to time. The aforesaid bonds
shall include coverage for larceny and embezzlement and shall be issued by
a reputable bonding company. The Company represents and warrants that all
of its respective officers, employees, and other individuals or entities
employed or controlled by the Company dealing with the money and/or
securities of the Trust are, and shall continue to be at all times, covered
by a blanket fidelity bond or similar coverage in an deemed appropriate by
the Company. The aforesaid bond shall include coverage for larceny and
embezzlement and shall be issued by a reputable bonding company. The
Company agrees that any amounts received under such bond relating to a
claim arising under this Agreement will be held by the Company for the
benefit of the Trust. The Company agrees to make all reasonable efforts to
maintain such bond and agrees to notify the Trust and PIM in writing in the
event such coverage terminates.
2.10. The Company represents and warrants, for purposes other than
diversification under Section 817 of the Code, that the Contracts are
currently at the time of issuance and, assuming the Trust meets the
requirements of Article VI, will be treated as annuity contracts under
applicable provisions of the Code, and that it will make every effort to
maintain such treatment and that it will notify the Trust, PFD and PIM
immediately upon having a reasonable basis for believing that the Contracts
have ceased to be so treated or that they might not be so treated in the
future. In addition, the Company represents and warrants that each Account
is a "segregated asset account" and that interests in the Account are
offered exclusively through the purchase of or transfer into a "variable
contract" within the meaning of such terms under Section 817 of the Code
and the regulations thereunder. The Company will use every effort to
continue to meet such definitional requirements, and it will notify the
Trust, PFD and PIM immediately upon having a reasonable basis for believing
that such requirements have ceased to be met or that they might not be met
in the future. The Company represents and warrants that it will not
purchase Trust shares with assets derived from tax-qualified retirement
plans except, indirectly, through Contracts purchased in connection with
such plans.
ARTICLE III. PROSPECTUS AND PROXY STATEMENTS; VOTING
3.1. At least annually, the Trust or its designee shall provide the
Company, free of charge, with as many copies of the current prospectus
(describing only the Portfolios listed in Schedule A hereto) for the Shares
as the Company may reasonably request for distribution to existing Contract
owners whose Contracts are funded by such Shares. The Trust or its designee
shall provide the Company, at the Company's expense, with as many copies of
the current prospectus for the Shares as the Company may reasonably request
for distribution to prospective purchasers of Contracts. If requested by
the Company in lieu thereof, the Trust or its designee shall provide such
documentation (including a "camera ready" copy of the new prospectus as set
in type or, at the request of the Company, as a diskette in the form sent
to the financial printer) and other assistance as is reasonably necessary
in order for the parties hereto once each year (or more frequently if the
prospectus for the Shares is supplemented or amended) to have the
prospectus for the Contracts and the prospectus for the Shares printed
together in one document; the expenses of such printing to be apportioned
between (a) the Company and (b) the Trust or its designee in proportion to
the number of pages of the Contract and Shares' prospectuses, taking
account of other relevant factors affecting the expense of printing, such
as covers, columns, graphs and charts; the Trust or its designee to bear
the cost of printing the Trust's prospectus portion of such document for
6
distribution to owners of existing Contracts funded by the Shares and the
Company to bear the expenses of printing the portion of such document
relating to the Accounts; provided, however, that the Company shall bear
all printing expenses of such combined documents where used for
distribution to prospective purchasers or to owners of existing Contracts
not funded by the Shares. In the event that the Company requests that the
Trust or its designee provides the Trust's prospectus in a "camera ready,"
diskette format or other mutually agreed upon format, the Trust shall be
responsible for providing the prospectus in the format in which it or PIM
is accustomed to formatting prospectuses and shall bear the expense of
providing the prospectus in such format (e.g., typesetting expenses), and
the Company shall bear the expense of adjusting or changing the format to
conform with any of its prospectuses, subject to PIM's approval which shall
not be unreasonably withheld. Notwithstanding the foregoing, the Trust
shall also provide the Company, at the Trust's expense, no less frequently
than annually, copies of the Portfolios prospectuses in PDF format for use
on the Company's and/or affiliated producer's websites.
3.2. The prospectus for the Shares shall state that the statement of
additional information for the Shares is available from the Trust or its
designee. The Trust or its designee, at its expense, shall print and
provide such statement of additional information to the Company (or a
master of such statement suitable for duplication by the Company) for
distribution to any owner of a Contract funded by the Shares. The Trust
shall also provide such statement of additional information to the Company
in a mutually agreed upon electronic format. The Trust or its designee, at
the Company's expense, shall print and provide such statement to the
Company (or a master of such statement suitable for duplication by the
Company) for distribution to a prospective purchaser who requests such
statement or to an owner of a Contract not funded by the Shares.
3.3. The Trust or its designee shall provide the Company free of charge,
if and to the extent applicable to the Shares, copies of the Trust's proxy
materials, reports to Shareholders and other communications to Shareholders
in such quantity as the Company shall reasonably require for distribution
to Contract owners. The cost of distributing such documents shall be borne
the Trust or its designee.
3.4 The Trust or PIM will provide the Company with as much notice as is
reasonably practicable of any proxy solicitation for any Portfolio, and of
any material change in the Trust's registration statement, particularly any
change resulting in change to the registration statement or prospectus or
statement of additional information for any Account. The Trust and PIM will
cooperate with the Company so as to enable the Company to solicit proxies
from Contract owners or to make changes to its prospectus, statement of
additional information or registration statement, in an orderly manner. The
Trust and PIM will make reasonable efforts to attempt to have changes
affecting Contract prospectuses become effective simultaneously with the
annual updates for such prospectuses.
3.5. The Trust hereby notifies the Company that it may be appropriate to
include in the prospectus pursuant to which a Contract is offered
disclosure regarding the potential risks of mixed and shared funding.
3.6. If and to the extent required by law, the Company shall:
(a) solicit voting instructions from Contract owners;
(b) vote the Shares in accordance with instructions received from
Contract owners; and
7
(c) vote the Shares for which no instructions have been received
in the same proportion as the Shares of such Portfolio for
which instructions have been received from Contract owners;
so long as and to the extent that the SEC continues to interpret the 1940
Act to require pass through voting privileges for variable contract owners.
The Company will in no way recommend action in connection with or oppose or
interfere with the solicitation of proxies for the Shares held for such
Contract owners. The Company reserves the right to vote shares held in any
segregated asset account in its own right, to the extent permitted by law.
Participating Insurance Companies shall be responsible for assuring that
each of their separate accounts holding Shares calculates voting privileges
in the manner required by the Mixed and Shared Funding Exemptive Order. The
Trust and PIM will notify the Company of any changes of interpretations or
amendments to the Mixed and Shared Funding Exemptive Order.
ARTICLE IV. SALES MATERIAL AND INFORMATION
4.1. The Company shall furnish, or shall cause to be furnished, to PFD or
its designee, each piece of sales literature or other promotional material
in which the Trust, PIM, any other investment adviser to the Trust, or any
affiliate of PIM are named, at least five (5) Business Days prior to its
use. No such material shall be used if PFD or its designee reasonably
objects to such use within five (5) Business Days after receipt of such
material. PFD or its designee shall notify the Company within five (5)
Business Days of receipt of its approval or disapproval of such materials.
4.2. The Company shall not make any representation on behalf of the
Trust, PIM, any other investment adviser to the Trust or any affiliate of
PIM and shall not give any information on behalf of the Trust, PIM, any
other investment adviser to the Trust, or any affiliate of PIM or
concerning the Trust or any other such entity in connection with the sale
of the Contracts other than the information contained in the registration
statement, prospectus or statement of additional information for the
Shares, as such registration statement, prospectus and statement of
additional information may be amended or supplemented from time to time, or
in reports or proxy statements for the Trust, or in sales literature or
other promotional material approved by the Trust, PIM, PFD or their
respective designees, except with the permission of the Trust, PIM or their
respective designees. The Trust, PIM, PFD or their respective designees
each agrees to respond to any request for approval on a prompt and timely
basis. The Company shall adopt and implement procedures reasonably designed
to ensure that information concerning the Trust, PIM, PFD or any of their
affiliates which is intended for use only by brokers or agents selling the
Contracts (i.e., information that is not intended for distribution to
Contract owners or prospective Contract owners) is so used, and neither the
Trust, PIM, PFD nor any of their affiliates shall be liable for any losses,
damages or expenses relating to the improper use of such broker only
materials.
4.3. PFD shall furnish, or shall cause to be furnished, to the Company or
its designee, each piece of sales literature or other promotional material
in which the Company and/or the Accounts is named, at least five (5)
Business Days prior to its use. No such material shall be used if the
Company or its designee reasonably objects to such use within five (5)
Business Days after receipt of such material. The Company shall notify PFD
within five (5) Business Days of receipt of its approval or disapproval of
such materials.
8
4.4. The Trust, PIM and PFD shall not give any information or make any
representations on behalf of the Company or concerning the Company, the
Accounts, or the Contracts in connection with the sale of the Contracts
other than the information or representations contained in a registration
statement, prospectus, or statement of additional information for the
Contracts, as such registration statement, prospectus and statement of
additional information may be amended or supplemented from time to time, or
in reports for the Accounts, or in sales literature or other promotional
material approved by the Company or its designee, except with the
permission of the Company. The Company or its designee agrees to respond to
any request for approval on a prompt and timely basis. The parties hereto
agree that this Section 4.4. is neither intended to designate nor otherwise
imply that PIM is an underwriter or distributor of the Contracts.
4.5. The Company and the Trust shall provide, or shall cause to be
provided, to the other at least one complete copy of all registration
statements, prospectuses, statements of additional information, reports,
proxy statements, sales literature and other promotional materials, and all
amendments to any of the above, that relate to the Contracts, or to the
Trust or its Shares, prior to or contemporaneously with the filing of such
document with the SEC or other regulatory authorities.
4.6. For purpose of this Article IV and Article VIII, the phrase "sales
literature or other promotional material" includes but is not limited to
advertisements (such as material published, or designed for use in, a
newspaper, magazine, or other periodical, radio, television, telephone,
electronic messages or tape recording, videotape display, signs or
billboards, motion pictures, or other public media, including, for example,
on-line networks such as the Internet or other electronic media), and sales
literature (such as brochures, electronic messages, circulars, reprints or
excerpts or any other advertisement, sales literature, or published
articles), distributed or made generally available to customers or the
public, educational or training materials or communications distributed or
made generally available to some or all agents or employees, and
shareholder reports, proxy materials (including solicitations for voting
instructions) and any other material constituting sales literature or
advertising under the NASDR Conduct Rules, the 1933 Act or the 1940 Act.
However, such phrase "sales literature or other promotional material" shall
not include any material that simply lists the names of Portfolios of the
Trust in a list of investment options.
4.7. At the request of any party to this Agreement, each other party will
make available to the other party's independent auditors and/or
representative of the appropriate regulatory agencies, all records, data,
access to operating procedures that may be reasonably requesting in
connection with compliance and regulatory requirements related to the
Agreement or any party's obligations under this Agreement.
4.8 Subject to the terms of Sections 4.1 and 4.2 of this Agreement, the
Trust (and its Portfolios), PIM and PFD hereby each consents in connection
with the marketing of the Contracts to the Company's use of their names or
other identifying marks, including PIONEER INVESTMENTS(R) and Pioneer's
sail logo, in connection with the marketing of the Contracts. The Trust,
PIM or PFD or their affiliates may withdraw this authorization as to any
particular use of any such name or identifying xxxx at any time: (i) upon a
reasonable determination that such use would have a material adverse effect
on its reputation or marketing efforts or its affiliates or (ii) if any of
the Portfolios of the Trust cease to be available through the Company.
Except as set forth in the previous sentence, the Company will not cause or
permit, without prior written permission, the use, description or reference
to a Pioneer party's name, or to the relationship contemplated in this
Agreement, in any advertisement, or promotional materials or activities,
including without limitation, any advertisement or promotional materials
published, distributed,
9
or made available, or any activity conducted through, the Internet or any
other electronic medium.
ARTICLE V. FEES AND EXPENSES
5.1. Neither the Trust, PIM nor PFD shall pay any fee or other
compensation to the Company under this Agreement, other than pursuant to
Schedule B attached hereto, and the Company shall pay no fee or other
compensation to the Trust, PIM or PFD under this Agreement. Notwithstanding
the foregoing, the parties hereto will bear certain expenses under the
provisions of this Agreement and shall reimburse other parties for expenses
initially paid by one party but allocated to another party. In addition,
nothing herein shall prevent the parties hereto from otherwise agreeing to
perform, and arranging for appropriate compensation for, other services
relating to the Trust and/or to the Accounts pursuant to this Agreement.
5.2. The Trust or its designee shall bear the expenses for the cost of
registration and qualification of the Shares under all applicable federal
and state laws, including preparation and filing of the Trust's
registration statement, and payment of filing fees and registration fees;
preparation and filing of the Trust's proxy materials and reports to
Shareholders; setting in type and printing its prospectus and statement of
additional information (to the extent provided by and as determined in
accordance with Article III above); setting in type and printing the proxy
materials and reports to Shareholders (to the extent provided by and as
determined in accordance with Article III above); the preparation of all
statements and notices required of the Trust by any federal or state law
with respect to its Shares; all taxes on the issuance or transfer of the
Shares; and the costs of distributing the Trust's prospectuses, reports to
Shareholders and proxy materials to owners of Contracts and participants
funded by the Shares and any expenses permitted to be paid or assumed by
the Trust pursuant to a plan, if any, under Rule 12b-1 under the 1940 Act.
The Trust shall not bear any expenses of marketing the Contracts.
5.3. The Company shall bear the expenses of distributing the Shares'
prospectus or prospectuses in connection with new sales of the Contracts
and of distributing the Trust's Shareholder reports to Contract owners. The
Company shall bear all expenses associated with the registration,
qualification, and filing of the Contracts under applicable federal
securities and state insurance laws; the cost of preparing, printing and
distributing the Contract prospectus and statement of additional
information; and the cost of preparing, printing and distributing annual
individual account statements for Contract owners as required by state
insurance laws.
5.4. The Company agrees to provide certain administrative services,
specified in Schedule B attached hereto, in connection with the
arrangements contemplated by this Agreement. The parties intend that the
services referred to in the Section 5.4 be recordkeeping, shareholder
communication, and other transaction facilitation and processing, and
related administrative serves and are not the services of an underwriter or
principal underwriter of the Trust and the Company is not an underwriter
for Shares within the meaning of the 1933 Act.
ARTICLE VI. DIVERSIFICATION AND RELATED LIMITATIONS
6.1. The Trust and PIM represent and warrant that each Portfolio of the
Trust in which an Account invests will meet the diversification
requirements of Section 817(h)(1) of the Code and Treas. Reg. 1.817-5,
relating to the diversification requirements for variable annuity,
endowment,
10
or life insurance contracts, as they may be amended from time to time (and
any revenue rulings, revenue procedures, notices, and other published
announcements of the Internal Revenue Service interpreting these sections),
as if those requirements applied directly to each such Portfolio.
6.2. The Trust and PIM represent that each Portfolio will elect to be
qualified as a Regulated Investment Company under Subchapter M of the Code
and that they will maintain such qualification (under Subchapter M or any
successor or similar provision).
6.3. No Shares of the Trust will be sold directly to the general public.
ARTICLE VII. POTENTIAL MATERIAL CONFLICTS
7.1. The Trust agrees that the Board, constituted with a majority of
disinterested trustees, will monitor each Portfolio of the Trust for the
existence of any material irreconcilable conflict between the interests of
the variable annuity contract owners and the variable life insurance policy
owners of the Company and/or affiliated companies ("contract owners")
investing in the Trust. A material irreconcilable conflict may arise for a
variety of reasons, including: (a) an action by any state insurance
regulatory authority; (b) a change in applicable federal or state
insurance, tax, or securities laws or regulations, or a public ruling,
private letter ruling, no-action or interpretive letter, or any similar
action by insurance, tax or securities regulatory authorities; (c) an
administrative or judicial decision in nay relevant proceeding; (d) the
manner in which the investments of any Portfolio are being managed; (e) a
difference in voting instructions given by variable annuity contract and
variable life insurance contract owners or by contract owners of different
Participating Insurance Companies; or (f) a decision by a Participating
Insurance Company to disregard the voting instructions of contract owners.
The Board shall have the sole authority to determine if a material
irreconcilable conflict exists, and such determination shall be binding on
the Company only if approved in the form of a resolution by a majority of
the Board, or a majority of the disinterested trustees of the Board. The
Board will give prompt notice of any such determination to the Company.
7.2. The Company agrees that it will be responsible for assisting the
Board in carrying out its responsibilities under the conditions set forth
in the Trust's exemptive application pursuant to which the SEC has granted
the Mixed and Shared Funding Exemptive Order by providing the Board, as it
may reasonably request, with all information necessary for the Board to
consider any issues raised and agrees that it will be responsible for
promptly reporting any potential or existing conflicts of which it is aware
to the Board including, but not limited to, an obligation by the Company to
inform the Board whenever contract owner voting instructions are
disregarded. The Company also agrees that, if a material irreconcilable
conflict arises, it will at its own cost remedy such conflict up to and
including (a) withdrawing the assets allocable to some or all of the
Accounts from the Trust or any Portfolio and reinvesting such assets in a
different investment medium, including (but not limited to) another
Portfolio of the Trust, or submitting to a vote of all affected contract
owners whether to withdraw assets from the Trust or any Portfolio and
reinvesting such assets in a different investment medium and, as
appropriate, segregating the assets attributable to any appropriate group
of contract owners (E.G., annuity contract owners, life insurance owners or
variable contract owners of one or more Participating Insurance Companies)
that votes in favor of such segregation, or offering to any of the affected
contract owners the option of segregating the assets attributable to their
contracts or policies, and (b) establishing a new registered management
investment company and segregating the assets underlying the Contracts,
11
unless a majority of Contract owners materially adversely affected by the
conflict have voted to decline the offer to establish a new registered
management investment company.
7.3. A majority of the disinterested trustees of the Board shall
determine whether any proposed action by the Company adequately remedies
any material irreconcilable conflict. In the event that the Board
determines that any proposed action does not adequately remedy any material
irreconcilable conflict, the Company will withdraw from investment in the
Trust each of the Accounts designated by the disinterested trustees and
terminate this Agreement within six (6) months after the Board informs the
Company in writing of the foregoing determination; provided, however, that
such withdrawal and termination shall be limited to the extent required to
remedy any such material irreconcilable conflict as determined by a
majority of the disinterested trustees of the Board.
7.4 If a material irreconcilable conflict arises because of a decision
by the Company to disregard Contract owner voting instructions and that
decision represents a minority position or would preclude a majority vote,
the Company may be required, at the Trust's election, to withdraw the
Account's investment in the Trust and terminate this Agreement; provided,
however, that such withdrawal and termination shall be limited to the
extent required by the foregoing material irreconcilable conflict as
determined by a majority of the Trust's independent trustees. Any such
withdrawal and termination must take place within six (6) months after the
Trust gives written notice that this provision is being implemented, and
until the end of that six-month period PFD and the Trust shall continue to
accept and implement orders by the Company for the purchase and redemption
of shares of the Trust.
7.5. If material irreconcilable conflict arises because of particular
state insurance regulator's decision applicable to the Company conflicts
with the majority of other state regulators, then the Company will withdraw
the Account's investment in the Trust and terminate this Agreement within
six (6) months after the Trust's Board informs the Company in writing that
it has determined that such decision has created a material irreconcilable
conflict; provided, however, that such withdrawal and termination shall be
limited to the extent required by the foregoing material irreconcilable
conflict as determined by a majority of the disinterested members of the
Trust's Board. Until the end of the foregoing six (6) month period, the
Trust and PFD shall continue to accept and implement orders by the Company
for the purchase and redemption of shares of the Trust.
7.6 For purposes of Sections 7.3 through 7.6 of this Agreement, a
majority of the disinterested members of the Board shall determine whether
any proposed action adequately remedies any material irreconcilable
conflict, but in no event will the Trust be required to establish a new
funding medium for the Contracts. The Company shall not be required by
Section 7.2 to establish a new funding medium for the contracts if an offer
to do so has been declined by vote of a majority of Contract owners
affected by the material irreconcilable conflict. In the event that the
Board determines that any proposed action does not adequately remedy any
material irreconcilable conflict, then the Company will withdraw the
Account's investment in the Trust and terminate this Agreement within six
(6) months after the Board informs the Company in writing of the foregoing
determination; provided, however, that such withdrawal and termination
shall be limited to the extent required by any such material irreconcilable
conflict as determined by a majority of the independent trustees.
7.7. If and to the extent that Rule 6e-2 and Rule 6e-3(T) are amended, or
Rule 6e-3 is adopted, to provide exemptive relief from any provision of the
1940 Act or the rules promulgated thereunder
12
with respect to mixed or shared funding (as defined in the Mixed and Shared
Funding Exemptive Order) on terms and conditions materially different from
those contained in the Mixed and Shared Funding Exemptive Order, then (a)
the Trust and/or the Participating Insurance Companies, as appropriate,
shall take such steps as may be necessary to comply with Rule 6e-2 and
6e-3(T), as amended, and Rule 6e-3, as adopted, to the extent such rules
are applicable; and (b) Sections 3.5, 3.6, 7.1, 7.2, 7.3 and 7.7 of this
Agreement shall continue in effect only to the extent that terms and
conditions substantially identical to such Sections are contained in such
Rule(s) as so amended or adopted.
ARTICLE VIII. INDEMNIFICATION
8.1. INDEMNIFICATION BY THE COMPANY
The Company agrees to indemnify and hold harmless the Trust, PIM,
PFD, any affiliates of PIM, and each of their respective directors,
trustees, officers and each person, if any, who controls the Trust or PIM
within the meaning of Section 15 of the 1933 Act, and any agents or
employees of the foregoing (each an "Indemnified Party," or collectively,
the "Indemnified Parties" for purposes of this Section 8.1) against any and
all losses, claims, damages, liabilities (including amounts paid in
settlement with the written consent of the Company) or expenses (including
reasonable counsel fees) to which any Indemnified Party may become subject
under any statute, regulation, at common law or otherwise, insofar as such
losses, claims, damages, liabilities or expenses (or actions in respect
thereof) or settlements:
(a) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the
registration statement, prospectus or statement of additional
information for the Contracts or contained in the Contracts or
sales literature or other promotional material for the
Contracts (or any amendment or supplement to any of the
foregoing), or arise out of or are based upon the omission or
the alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements
therein not misleading, provided that this Agreement to
indemnify shall not apply as to any Indemnified Party if such
statement or omission or such alleged statement or omission
was made in reasonable reliance upon and in conformity with
information furnished to the Company or its designee by or on
behalf of the Trust, PIM or PFD for use in the registration
statement, prospectus or statement of additional information
for the Contracts or in the Contracts or sales literature or
other promotional material (or any amendment or supplement) or
otherwise for use in connection with the sale of the Contracts
or Shares; or
(b) arise out of or as a result of statements or representations
not supplied by the Company or its designee, or persons under
its control (other than statements or representations
contained in the Trust's registration statement, prospectus,
statement of additional information or in sales literature or
other promotional material of the Trust and on which the
Company has reasonably relied) or wrongful conduct of the
Company or persons under its control, with respect to the sale
or distribution of the Contracts or Shares; or
(c) arise out of any untrue statement or alleged untrue statement
of a material fact contained in the registration statement,
prospectus, statement of additional
13
information, or sales literature or other promotional
literature of the Trust, or any amendment thereof or
supplement thereto, or the omission or alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statement or statements therein not
misleading, if such statement or omission was made in reliance
upon information furnished to the Trust by or on behalf of the
Company; or
(d) arise out of or result from any material breach of any
representation and/or warranty made by the Company in this
Agreement or arise out of or result from any other material
breach of this Agreement by the Company; or
(e) arise as a result of any failure by the Company to perform any
of its obligations under this Agreement;
as limited by and in accordance with the provisions of this Article VIII.
8.2. INDEMNIFICATION BY PIM AND PFD
PIM and PFD agree to indemnify and hold harmless the Company and
Policy Underwriter and each of their trustees and officers and each person,
if any, who controls the Company or Policy Underwriter within the meaning
of Section 15 of the 1933 Act, and any agents or employees of the foregoing
(each an "Indemnified Party," or collectively, the "Indemnified Parties"
for purposes of this Section 8.2) against any and all losses, claims,
damages, liabilities (including amounts paid in settlement with the written
consent of the Trust) or expenses (including reasonable counsel fees) to
which any Indemnified Party may become subject under any statute, at common
law or otherwise, insofar as such losses, claims, damages, liabilities or
expenses (or actions in respect thereof) or settlements are related to the
sale or acquisition of the Shares or the Contracts and:
(a) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the
registration statement, prospectus, statement of additional
information or sales literature or other promotional material
of the Trust (or any amendment or supplement to any of the
foregoing), or arise out of or are based upon the omission or
the alleged omission to state therein a material fact required
to be stated therein or necessary to make the statement
therein not misleading, provided that this agreement to
indemnify shall not apply as to any Indemnified Party if such
statement or omission or such alleged statement or omission
was made in reasonable reliance upon and in conformity with
information furnished to the Trust, PIM, PFD or their
respective designees by or on behalf of the Company for use in
the registration statement, prospectus or statement of
additional information for the Trust or in sales literature or
other promotional material for the Trust (or any amendment or
supplement) or otherwise for use in connection with the sale
of the Contracts or Shares; or
(b) arise out of or as a result of statements or representations
(other than statements or representations contained in the
Contract's registration statement, prospectus, statement of
additional information or in sales literature or other
promotional material for the Contracts not supplied by the
Trust, PIM, PFD or any of their respective designees or
persons under their respective control and on which any such
entity has reasonably relied) or wrongful conduct of the
Trust, PIM, PFD or
14
persons under their control, with respect to the sale or
distribution of the Contracts or Shares; or
(c) arise out of any untrue statement or alleged untrue statement
of a material fact contained in the registration statement,
prospectus, statement of additional information, or sales
literature or other promotional literature of the Accounts or
relating to the Contracts, or any amendment thereof or
supplement thereto, or the omission or alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statement or statements therein not
misleading, if such statement or omission was made in reliance
upon information furnished to the Company by or on behalf of
the Trust, PIM or PFD; or
(d) arise out of or result from any material breach of any
representation and/or warranty made by the Trust in this
Agreement (including a failure, whether unintentional or in
good faith or otherwise, to comply with the diversification
requirements specified in Article VI of this Agreement) or
arise out of or result from any other material breach of this
Agreement by the Trust; or
(e) arise out of or result from the materially incorrect or
untimely calculation or reporting of the daily net asset value
per share or dividend or capital gain distribution rate; or
(f) arise as a result of any failure by PIM or PFD to perform any
of their respective obligations under this Agreement;
as limited by and in accordance with the provisions of this Article VIII.
8.3. In no event shall the Trust, PIM or PFD be liable under the
indemnification provisions contained in this Agreement to any individual or
entity, including without limitation, the Company, or any Participating
Insurance Company or any Contract owner, with respect to any losses,
claims, damages, liabilities or expenses that arise out of or result from
(i) a breach of any representation, warranty, and/or covenant made by the
Company hereunder or by any Participating Insurance Company under an
agreement containing substantially similar representations, warranties and
covenants; (ii) the failure by the Company or any Participating Insurance
Company to maintain its segregated asset account (which invests in any
Portfolio) as a legally and validly established segregated asset account
under applicable state law and as a duly registered unit investment trust
under the provisions of the 1940 Act (unless exempt therefrom); or (iii)
the failure by the Company or any Participating Insurance Company to
maintain its variable annuity and/or variable life insurance contracts
(with respect to which any Portfolio serves as an underlying funding
vehicle) as life insurance, endowment or annuity contracts under applicable
provisions of the Code.
8.4. Neither the Company, the Trust, PIM nor PFD shall be liable under
the indemnification provisions contained in this Agreement with respect to
any losses, claims, damages, liabilities or expenses to which an
Indemnified Party would otherwise be subject by reason of such Indemnified
Party's willful misfeasance, willful misconduct, or gross negligence in the
performance of such Indemnified Party's duties or by reason of such
Indemnified Party's reckless disregard of obligations and duties under this
Agreement.
8.5. Promptly after receipt by an Indemnified Party under this
Section 8.5. of notice of commencement of any action, such Indemnified
Party will, if a claim in respect thereof is to be
15
made against the indemnifying party under this section, notify the
indemnifying party of the commencement thereof; but the omission so to
notify the indemnifying party will not relieve it from any liability which
it may have to any Indemnified Party otherwise than under this section. In
case any such action is brought against any Indemnified Party, and it
notified the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the
extent that it may wish, assume the defense thereof, with counsel
satisfactory to such Indemnified Party. After notice from the indemnifying
party of its intention to assume the defense of an action, the Indemnified
Party shall bear the expenses of any additional counsel obtained by it, and
the indemnifying party shall not be liable to such Indemnified Party under
this section for any legal or other expenses subsequently incurred by such
Indemnified Party in connection with the defense thereof other than
reasonable costs of investigation.
8.6. A successor by law of the parties to this Agreement shall be
entitled to the benefits of the indemnification contained in this Article
VIII. The indemnification provisions contained in this Article VIII shall
survive any termination of this Agreement.
ARTICLE IX. APPLICABLE LAW
9.1. This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of The Commonwealth of
Massachusetts.
9.2. This Agreement shall be subject to the provisions of the 1933, 1934
and 1940 Acts, and the rules and regulations and rulings thereunder,
including such exemptions from those statutes, rules and regulations as the
SEC may grant (including, but not limited to, the Mixed and Shared Funding
Exemptive Order) and the terms hereof shall be interpreted and construed in
accordance therewith.
ARTICLE X. NOTICE OF FORMAL PROCEEDINGS OR LITIGATION
The Trust, PIM, PFD and the Company agree that each such party shall
promptly notify the other parties to this Agreement, in writing, of the
institution of any formal proceedings brought against such party or its
designees by the NASD, the SEC, or any insurance department or any other
regulatory body regarding such party's duties under this Agreement or
related to the sale of the Contracts, the operation of the Accounts, or the
purchase of the Shares. Each of the parties further agrees promptly to
notify the other parties of the commencement of any litigation or
proceeding against it or any of its respective officers, directors,
trustees, employees or 1933 Act control persons in connection with this
Agreement, the issuance or sale of the Contracts, the operation of the
Accounts, or the sale or acquisition of Shares. The indemnification
provisions contained in this Article X shall survive any termination of
this Agreement.
ARTICLE XI. TERMINATION
11.1. This Agreement shall terminate with respect to the Accounts, or one,
some, or all Portfolios:
(a) at the option of any party upon six (6) months' advance
written notice delivered to the other parties; provided,
however, that such notice shall not be given earlier than six
(6) months following the date of this Agreement; or
16
(b) at the option of the Company to the extent that the Shares of
Portfolios are not reasonably available to meet the
requirements of the Contracts or are not "appropriate funding
vehicles" for the Contracts, as reasonably determined by the
Company. Without limiting the generality of the foregoing, the
Shares of a Portfolio would not be "appropriate funding
vehicles" if, for example, such Shares did not meet the
diversification or other requirements referred to in Article
VI hereof; or if the Company would be permitted to disregard
Contract owner voting instructions pursuant to Rule 6e-2 or
6e-3(T) under the 1940 Act. Prompt notice of the election to
terminate for such cause and an explanation of such cause
shall be furnished to the Trust by the Company; or
(c) at the option of the Trust, PIM or PFD upon institution of
formal proceedings against the Company by the NASD, the SEC,
or any insurance department or any other regulatory body
regarding the Company's duties under this Agreement or related
to the sale of the Contracts, the operation of the Accounts,
or the purchase of the Shares; provided that the party
terminating this Agreement under this provision shall give
notice of such termination to the other parties to this
Agreement; or
(d) at the option of the Company upon institution of formal
proceedings against the Trust by the NASD, the SEC, or any
state securities or insurance department or any other
regulatory body regarding the duties of the Trust, PIM or PFD
under this Agreement or related to the sale of the Shares;
provided that the party terminating this Agreement under this
provision shall give notice of such termination to the other
parties to this Agreement; or
(e) at the option of the Company, the Trust, PIM or PFD upon
receipt of any necessary regulatory approvals and/or the vote
of the Contract owners having an interest in the Accounts (or
any subaccounts) to substitute the shares of another
investment company for the corresponding Portfolio Shares in
accordance with the terms of the Contracts for which those
Portfolio Shares had been selected to serve as the underlying
investment media. The Company will give thirty (30) days'
prior written notice to the Trust of the Date of any proposed
vote or other action taken to replace the Shares; or
(f) at the option of the Trust, PIM or PFD by written notice to
the Company, if any one or all of the Trust, PIM or PFD
respectively, shall determine, in their sole judgment
exercised in good faith, that the Company has suffered a
material adverse change in its business, operations, financial
condition, or prospects since the date of this Agreement or is
the subject of material adverse publicity; or
(g) at the option of the Company by written notice to the Trust,
PIM or PFD, if the Company shall determine, in its sole
judgment exercised in good faith, that the Trust, PIM or PFD
has suffered a material adverse change in this business,
operations, financial condition or prospects since the date of
this Agreement or is the subject of material adverse
publicity; or
(h) at the option of any party to this Agreement, upon another
unaffiliated party's material breach of any provision of or
representation contained in this Agreement.
17
11.2. The notice shall specify the Portfolio or Portfolios, Contracts and,
if applicable, the Accounts as to which the Agreement is to be terminated.
11.3. It is understood and agreed that the right of any party hereto to
terminate this Agreement pursuant to Section 11.1(a) may be exercised for
cause or for no cause.
11.4. Except as necessary to implement Contract owner initiated
transactions, or as required by state insurance laws or regulations, the
Company shall not redeem the Shares attributable to the Contracts (as
opposed to the Shares attributable to the Company's assets held in the
Accounts), and the Company shall not prevent Contract owners from
allocating payments to a Portfolio that was otherwise available under the
Contracts, until thirty (30) days after the Company shall have notified the
Trust of its intention to do so.
11.5. Notwithstanding any termination of this Agreement, the Trust and PFD
shall, at the option of the Company, continue for a period not exceeding
six (6) months to make available additional shares of the Portfolios
pursuant to the terms and conditions of this Agreement, for all Contracts
in effect on the effective date of termination of this Agreement (the
"Existing Contracts"), except as otherwise provided under Article VII of
this Agreement; provided, however, that in the event of a termination
pursuant to Section 11.1. (c), (f) or (h), the Trust, PIM and PFD shall at
their option have the right to terminate immediately all sales of Shares to
the Company. Specifically, without limitation, the owners of the Existing
Contracts shall be permitted to transfer or reallocate investment under the
Contracts, redeem investments in any Portfolio and/or invest in the Trust
upon the making of additional purchase payments under the Existing
Contracts.
11.6 Notwithstanding any termination of this Agreement, each party's
obligations under Article VIII to indemnify the other parties shall survive
and not be affected by any termination of this Agreement. In addition, with
respect to Existing Contracts, all provisions of this Agreement shall also
survive and not be affected by any termination of this Agreement
ARTICLE XII. NOTICES
Any notice shall be sufficiently given when sent by registered or certified
mail, overnight courier or facsimile to the other party at the address of such
party set forth below or at such other address as such party may from time to
time specify in writing to the other party.
If to the Trust:
PIONEER VARIABLE CONTRACTS TRUST
x/x Xxxx xxx Xxxx
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxx, Secretary
If to the Company:
(NAME) INSURANCE AND ANNUITY COMPANY
(address)
(city, state and zip code)
18
Attn: (name, title)
If to PIM:
PIONEER INVESTMENT MANAGEMENT, INC.
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxxx, General Counsel
If to PFD:
PIONEER FUNDS DISTRIBUTOR, INC.
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxx, Senior Vice President
ARTICLE XIII. MISCELLANEOUS
13.1. Subject to the requirements of legal process and regulatory
authority, each party hereto shall treat as confidential all
information reasonably identified as confidential in writing by any
party hereto and, except as permitted by this Agreement or as
otherwise required by applicable law or regulation, shall not
disclose, disseminate or utilize such other confidential information
without the express written consent of the affected party until such
time as it may come into the public domain. Notwithstanding anything
to the contrary in this Agreement, in addition to and not in lieu of
other provisions in this Agreement:
(a) "Confidential Information" includes without limitation all
information regarding the customers of the Company, the Trust,
PIM, PFD or any of their subsidiaries, affiliates or
licensees; or the accounts, account numbers, names, addresses,
social security numbers or any other personal identifier of
such customers; or any information derived therefrom.
(b) Neither the Company, the Trust, PIM or PFD may disclose
Confidential Information for any purpose other than to carry
out the purpose for which Confidential Information was
provided to the Company, the Trust, PIM or PFD as set forth in
this Agreement; and the Company, the Trust, PIM and PFD agree
to cause their employees, agents and representatives, or any
other party to whom the Company, the Trust, PIM or PFD may
provide access to or disclose Confidential Information to
limit the use and disclosure of Confidential Information to
that purpose.
(c) The Company, the Trust, PIM and PFD agree to implement
appropriate measures designed to ensure the security and
confidentiality of Confidential Information, to protect such
information against any anticipated threats or hazards to the
security and integrity of such information, and to protect
against unauthorized access to, or use of, Confidential
Information that could result in substantial harm or
inconvenience to any of the customers of the Company or any of
its subsidiaries, affiliates or licensees; the Company, the
Trust, PIM and PFD further agree to cause
19
all their respective agents, representatives or
subcontractors, or any other party to whom they provide access
to or disclose Confidential Information, to implement
appropriate measures to meet the objectives set forth in this
Section 13.1.
13.2. The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions
hereof or otherwise affect their construction or effect.
13.3. This Agreement may be executed simultaneously in one or more
counterparts, each of which taken together shall constitute one and the
same instrument.
13.4. If any provision of this Agreement shall be held or made invalid by
a court decision, statute, rule or otherwise, the remainder of the
Agreement shall not be affected thereby.
13.5. The Schedule attached hereto, as modified from time to time, is
incorporated herein by reference and is part of this Agreement.
13.6. Each party hereto shall cooperate with each other party in
connection with inquiries by appropriate governmental authorities
(including without limitation the SEC, the NASD, and state insurance
regulators) and shall permit such authorities reasonable access to its
books and records in connection with any investigation or inquiry relating
to this Agreement or the transactions contemplated hereby.
13.7. The rights, remedies and obligations contained in this Agreement are
cumulative and are in addition to any and all rights, remedies and
obligations, at law or in equity, which the parties hereto are entitled to
under state and federal laws.
13.8. A copy of the Trust's Certificate of Trust is on file with the
Secretary of State of Delaware. The Company acknowledges that the
obligations of or arising out of this instrument are not binding upon any
of the Trust's trustees, officers, employees, agents or shareholders
individually, but are binding solely upon the assets and property of the
Trust in accordance with its proportionate interest hereunder. The Company
further acknowledges that the assets and liabilities of each Portfolio are
separate and distinct and that the obligations of or arising out of this
instrument are binding solely upon the assets or property of the Portfolio
on whose behalf the Trust has executed this instrument. The Company also
agrees that the obligations of each Portfolio hereunder shall be several
and not joint, in accordance with its proportionate interest hereunder, and
the Company agrees not to proceed against any Portfolio for the obligations
of another Portfolio.
13.9. Any controversy or claim arising out of or relating to this
Agreement, or breach thereof, shall be settled by arbitration in a forum
jointly selected by the relevant parties (but if applicable law requires
some other forum, then, such other forum) in accordance with the Commercial
Arbitration Rules of the American Arbitration Association, and judgment
upon the award rendered by the arbitrators may be entered in any court
having jurisdiction thereof.
13.10. Neither this Agreement nor any of the rights and obligations
hereunder may be assigned by any party without the prior written consent of
all parties hereto.
13.11. The Trust, PIM and PFD agree that the obligations assumed by the
Company shall be limited in any case to the Company and its assets and
neither the Trust, PIM nor PFD shall seek satisfaction of any such
obligation from the shareholders of Company, the directors, officers,
employees or agents of the Company, or any of them.
20
13.12. No provision of the Agreement may be deemed or construed to modify
or supersede any contractual rights, duties, or indemnifications, as
between PIM and the Trust and PFD and the Trust.
13.13. This Agreement, including any Schedules or Exhibits hereto, may be
amended only by a written instrument executed by each party hereto.
21
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed in its name and on its behalf by its duly authorized representative
and its seal to be hereunder affixed hereto as of the date specified above.
(NAME) INSURANCE AND ANNUITY COMPANY
By its authorized officer,
By:
------------------
Name:
Title:
Date:
PIONEER VARIABLE CONTRACTS TRUST,
ON BEHALF OF THE PORTFOLIOS
By its authorized officer and not individually,
By:
------------------
Xxxxxx X. Xxxxx
Secretary
Date:
PIONEER INVESTMENT MANAGEMENT, INC.
By its authorized officer,
By:
------------------
Xxxxxx X. Xxxxxx
President and Chief Executive Officer
Date:
22
SCHEDULE A
ACCOUNTS, CONTRACTS AND PORTFOLIOS
SUBJECT TO THE
PARTICIPATION AGREEMENT
As of (date)
NAME OF SEPARATE PORTFOLIOS AND
ACCOUNT AND DATE CONTRACTS FUNDED CLASS OF SHARES
ESTABLISHED BY BOARD OF DIRECTORS BY SEPARATE ACCOUNT AVAILABLE TO CONTRACTS
----------------------------------------------------------------------------------------------------
VARIABLE ANNUITY ACCOUNT ___, VARIABLE ANNUITY PIONEER ____ VCT PORTFOLIO
ESTABLISHED _____ (CLASS I AND CLASS II)
VARIABLE ANNUITY ACCOUNT ___, VARIABLE ANNUITY PIONEER ____ VCT PORTFOLIO
ESTABLISHED _____ (CLASS I AND CLASS II)
VARIABLE ANNUITY ACCOUNT ___, VARIABLE ANNUITY PIONEER ____ VCT PORTFOLIO
ESTABLISHED _____ (CLASS I AND CLASS II)
VARIABLE LIFE ACCOUNT ___, VARIABLE LIFE
ESTABLISHED _____
23
SCHEDULE B
1. ADMINISTRATIVE SERVICES
Administrative services to Contract owners and participants shall be the
responsibility of the Company and shall not be the responsibility of the Trust
or PFD. The Company will provide properly registered and licensed personnel and
any systems needed for all Contract owners servicing and support - for both fund
and annuity and life insurance information and questions, including:
- Communicate all purchase, withdrawal, and exchange orders it receives
from its customers to PFD;
- Respond to Contract owner and participant inquires;
- Delivery of both Trust and Contract prospectuses as required under
applicable law;
- Entry of initial and subsequent orders;
- Transfer of cash to Portfolios;
- Explanations of Portfolio objectives and characteristics;
- Entry of transfers between Portfolios;
- Portfolio balance and allocation inquires; and
- Mail Trust proxies.
2. ADMINISTRATIVE SERVICE FEES
For the administrative services set forth above, PIM or any of its affiliates
shall pay a servicing fee based on the annual rate of 0.xx% of the average
aggregate net daily assets invested in the Class I Shares of the Portfolios and
0.xx% of the average aggregate net daily assets invested in the Class II Shares
of the Portfolios through the Accounts at the end of each calendar quarter. Such
payments will be made to the Company within thirty (30) days after the end of
each calendar quarter. Such fees shall be paid quarterly in arrears. Each
payment will be accompanied by a statement showing the calculation of the fee
payable to the Company for the quarter and such other supporting data as may be
reasonably requested by the Company. The Company will calculate the asset
balance on each day on which the fee is to be paid pursuant to this Agreement
with respect to each Portfolio for the purpose of reconciling its calculation of
average aggregate net daily assets with PIM's calculation. Annually (as of
December 31) or upon reasonable request of PIM, Company will provide PIM a
statement showing the number of subaccounts in each Class of Shares of each
Portfolio as of the most recent calendar quarter end.
3. 12b-1 DISTRIBUTION RELATED FEES (CLASS II SHARES ONLY)
In accordance with the Portfolios' plans pursuant to Rule 12b-1 under the
Investment Company Act of 1940, PFD will make payments to the Company at an
annual rate of 0.xx% of the average daily net assets invested in the Class II
shares of the Portfolios through the Accounts in each calendar quarter. PFD will
make such payments to the Company within thirty (30) days after the end of each
calendar quarter. Each payment will be accompanied by a statement showing the
calculation of the fee payable to the Company for the quarter and such other
supporting data as may be reasonably requested by the Company. The Rule 12b-1
distribution related fees will be paid to the Company for as long as the
Accounts own any Shares of a Portfolio and (i) distribution services are being
provided pursuant to this Agreement and (ii) a Rule 12b-1 plan is in effect with
respect to such Portfolio.
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EXHIBIT I
TO
PARTICIPATION AGREEMENT
Procedures for Pricing and Order/Settlement Through National Securities Clearing
Corporation's Mutual Fund Profile System and Mutual Fund Settlement, Entry and
Registration Verification System
1. As provided in Section 1.1 of the Participation Agreement, the parties
hereby agree to provide pricing information, execute orders and wire
payments for purchases and redemptions of Fund shares through National
Securities Clearing Corporation ("NSCC") and its subsidiary systems as
follows:
(a) Distributor or the Funds will furnish to Company or its affiliate
through NSCC's Mutual Fund Profile System ("MFPS") (1) the most
current net asset value information for each Fund, (2) a schedule of
anticipated dividend and distribution payment dates for each Fund,
which is subject to change without prior notice, ordinary income and
capital gain dividend rates on the Fund's ex-date, and (3) in the case
of fixed income funds that declare daily dividends, the daily accrual
or the interest rate factor. All such information shall be furnished
to Company or its affiliate by 6:30 p.m. Eastern Time on each business
day that the Fund is open for business (each a "Business Day") or at
such other time as that information becomes available. Changes in
pricing information will be communicated to both NSCC and Company.
(b) Upon receipt of Fund purchase, exchange and redemption instructions
for acceptance as of the time at which a Fund's net asset value is
calculated as specified in such Fund's prospectus ("Close of Trading")
on each Business Day ("Instructions"), and upon its determination that
there are good funds with respect to Instructions involving the
purchase of Shares, Company or its affiliate will calculate the net
purchase or redemption order for each Fund. Orders for net purchases
or net redemptions derived from Instructions received by Company or
its affiliate prior to the Close of Trading on any given Business Day
will be sent to the Defined Contribution Interface of NSCC's Mutual
Fund Settlement, Entry and Registration Verification System
("Fund/SERV") by 5:00 a.m. Eastern Time on the next Business Day.
Subject to Company's or its affiliate's compliance with the foregoing,
Company or its affiliate will be considered the agent of the
Distributor and the Funds, and the Business Day on which Instructions
are received by Company or its affiliate in proper form prior to the
Close of Trading will be the date as of which shares of the Funds are
deemed purchased, exchanged or redeemed pursuant to such Instructions.
Instructions received in proper form by Company or its affiliate after
the Close of Trading on any given Business Day will be treated as if
received on the next following Business Day. Dividends and capital
gains distributions will be automatically reinvested at net asset
value in accordance with the Fund's then current prospectuses.
(c) Company or its affiliate will wire payment for net purchase orders by
the Fund's NSCC Firm Number, in immediately available funds, to an
NSCC settling bank account designated by Company or its affiliate no
later than 5:00 p.m. Eastern time on the same Business Day such
purchase orders are communicated to NSCC. For purchases of shares of
daily dividend accrual funds, those shares will not begin to accrue
dividends until the day the payment for those shares is received.
(d) NSCC will wire payment for net redemption orders by Fund, in
immediately available funds, to an NSCC settling bank account
designated by Company or its affiliate, by 5:00 p.m. Eastern Time on
the Business Day such redemption orders are communicated to NSCC,
except as provided in a Fund's prospectus and statement of additional
information.
25
(e) With respect to (c) or (d) above, if Distributor does not send a
confirmation of Company's or its affiliate's purchase or redemption
order to NSCC by the applicable deadline to be included in that
Business Day's payment cycle, payment for such purchases or
redemptions will be made the following Business Day.
(f) If on any day Company or its affiliate, or Distributor is unable to
meet the NSCC deadline for the transmission of purchase or redemption
orders, it may at its option transmit such orders and make such
payments for purchases and redemptions directly to Distributor or
Company or its affiliate, as applicable, as is otherwise provided in
the Agreement.
(g) These procedures are subject to any additional terms in each Fund's
prospectus and the requirements of applicable law. The Funds reserve
the right, at their discretion and without notice, to suspend the sale
of shares or withdraw the sale of shares of any Fund.
2. Company or its affiliate, Distributor and clearing agents (if applicable)
are each required to have entered into membership agreements with NSCC and met
all requirements to participate in the MFPS and Fund/SERV systems before these
procedures may be utilized. Each party will be bound by the terms of their
membership agreement with NSCC and will perform any and all duties, functions,
procedures and responsibilities assigned to it and as otherwise established by
NSCC applicable to the MFPS and Fund/SERV system and the Networking Matrix Level
utilized.
3. Except as modified hereby, all other terms and conditions of the Agreement
shall remain in full force and effect. Unless otherwise indicated herein, the
terms defined in the Agreement shall have the same meaning as in this Exhibit.
