FORM OF SERVICES AGREEMENT
This Agreement is made as of _____________________, 2000 between Xxxxxxxx
Capital Markets, Inc. ("RCM") and ____________________ ("Company").
WHEREAS, RCM serves as principal distributor for the Class B shares of the
various Series of The Potomac Insurance Trust ("Trust"), which are sold to the
separate accounts ("Separate Accounts") of insurance companies that issue
variable annuity or variable life contracts ("Variable Contracts"); and
WHEREAS, the Company and the Trust have entered into a Trust Participation
Agreement ("Participation Agreement") with respect to the purchase by the
Company on behalf of the Company's Separate Accounts of Class B shares of the
Series of the Trust listed on Exhibit A to this Agreement, as amended from time
to time ("Shares"); and
WHEREAS, RCM and the Company desire that the Company provide certain
services concerning the Shares to current and prospective owners of Variable
Contracts;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. SERVICES TO BE PROVIDED. The Company agrees to provide certain
services with respect to the Shares to current and prospective owners of
Variable Contracts. These services include, but are not limited to, any
combination of the following: (a) printing and mailing of Trust prospectuses,
statements of additional information, any supplements thereto and shareholder
reports for existing and prospective Variable Contract owners; (b) services
relating to the development, preparation, printing and mailing of Trust
advertisements, sales literature and other promotional materials describing
and/or relating to the Shares and including materials intended for use within
the Company or for broker-dealer use only or retail use; (c) holding seminars
and sales meetings designed to promote the distribution of the Shares; (d)
obtaining information and providing explanations to Variable Contract owners
regarding the investment objectives and policies and other information about the
Trust and its Series, including the performance of the Series; (e) training
sales personnel regarding the Fund and its Series; (f) compensating sales
personnel with respect to the Trust and its Series; (g) providing personal
services and/or maintenance of the Variable Contract owner accounts with respect
to the Shares attributable to such accounts; and (h) financing any other
activity that is primarily intended to result in the sale of the Shares.
2. COMPENSATION. In consideration for these services, RCM agrees to
pay the Company (or to direct the Trust to pay the Company) a fee for so long as
this agreement is in effect, calculated daily, at the annual rate of ____% of
the average daily net asset value of the Shares held in the Company's Separate
Accounts. Each payment is to be made to the Company within 30 days after the end
of the calendar month to which it relates.
The Company agrees that (1) the Company has no right to receive payment of
any amounts otherwise payable to it by RCM under the Trust's Plan of
Distribution until such time as RCM is in receipt of such fee from the Trust and
(2) RCM's liability to the Trust for the payment of any such fees is limited
solely to the amount of the applicable fee received by RCM.
3. RECORDS. The Company agrees to maintain and preserve all records
as required by law to be maintained and preserved in connection with providing
services under this Agreement. The Company agrees to provide RCM and the Trust
with copies of such records upon their reasonable request and to cooperate with
RCM in providing information to the Trust and its board of trustees with respect
to amounts expended and services provided under this Agreement.
4. INDEMNIFICATION.
(a) The Company will indemnify and hold RCM and the Trust harmless from
any claim, demand, loss, expense or cause of action resulting from the
misconduct or negligence, as measured by industry standards, of the Company, its
agents or employees, in carrying out the Company's obligations under this
Agreement.
(b) RCM will indemnify and hold the Company harmless from any claim, loss,
expense or cause of action resulting from the misconduct or negligence, as
measured by industry standards, of RCM, its agents or employees, in carrying out
RCM's obligations under this Agreement.
(c) These indemnification provisions will survive the termination of this
Agreement.
5. AMENDMENT AND TERMINATION. This Agreement may be amended only
upon written agreement of the parties. Either party to the Agreement may
terminate the Agreement, without cause or penalty, by giving the other party at
least thirty (30) days' written notice of its intention to terminate. This
Agreement may be terminated at any time without penalty with respect to the
Trust or a particular Series if a majority of the Trust's trustees who are not
interested persons of the Trust (as defined in the Investment Company Act of
1940 (the "1940 Act"), or a majority of the Shares of the Trust or a Series (as
defined in the 0000 Xxx) vote to terminate the Agreement. This Agreement may
terminate in the event of its assignment (as defined in the 0000 Xxx) or upon
termination of the Participation Agreement.
6. OTHER DOCUMENTS. Nothing in this Agreement shall amend, modify
or supersede any contractual terms, obligations or covenants between the Company
and RCM previously or currently in effect, including the contractual terms,
obligations or covenants contained in the Participation Agreement.
7. NOTICES. All notices required or permitted to be given under
this Agreement shall be given in writing and delivered by personal delivery, by
postage prepaid mail, or by facsimile machine or a similar means of same day
delivery (with a confirming copy by mail). All notices to RCM shall be given or
sent to its offices located at 0000 Xxxxxxxxxx Xxxxxx, Xxxxx Xxxxxx, Xxx Xxxx
00000, ATTN: ______________. All notices to the Company shall be given or sent
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to it at the address specified by it below. Either party may change the address
to which notices shall be sent by giving notice to the other party in accordance
with this paragraph.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated as of the day and year first above
written.
XXXXXXXX CAPITAL MARKETS, INC.
By:___________________________
Name and Title:
COMPANY
By:___________________________
Name and Title:
Address:______________________
______________________________
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EXHIBIT A
SERIES OF THE POTOMAC INSURANCE TRUST
The Potomac VP OTC Plus Fund
The Potomac VP OTC/Short Fund
The Potomac XX Xxx 30 Plus Fund
The Potomac XX Xxx 30/Short Fund
The Potomac VP Small Cap Plus Fund
The Potomac VP Small Cap/Short Fund
The Potomac VP Internet Plus Fund
The Potomac VP Internet/Short Fund
The Potomac VP U.S. Plus Fund
The Potomac VP U.S./Short Fund
The Potomac VP Japan Plus Fund
The Potomac VP Japan/Short Fund
The Potomac VP Money Market Fund
Dated: ___________, 2000
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