[FUNDSERV EX MSFO]
PARTICIPATION AGREEMENT
BY AND AMONG
DFA INVESTMENT DIMENSIONS GROUP INC.,
DIMENSIONAL FUND ADVISORS LP,
DFA SECURITIES LLC
AND
FORETHOUGHT LIFE INSURANCE COMPANY
THIS AGREEMENT, made and entered into this 31day of March 2017, by and among
Forethought Life Insurance Company (the "Company"), on its own behalf and on
behalf of segregated asset accounts of the Company that may be established from
time to time (individually, an "Account" and collectively, the "Accounts"); DFA
Investment Dimensions Group Inc. (the "Fund"); the Fund's investment adviser,
Dimensional Fund Advisors LP (the "Adviser"); and DFA Securities LLC ("DFAS")
(individually, a "Party" and collectively, the "Parties").
The Company, the Fund, the Adviser and DFAS, intending to be legally bound,
hereby agree as follows:
1. SALES OF SHARES/PROCEDURES
1.1 Shares of the respective portfolios (individually, a "Portfolio" and
collectively, the "Portfolios") of the Fund listed on SCHEDULE 1.1
hereto, as amended from time to time by the Parties, shall be sold by
the Fund through its agent DFAS, and purchased by the Company for the
appropriate subaccount of each Account, at the net asset value
("NAV") next computed after receipt by the Fund or its designee of
each order of the Accounts, in accordance with the provisions of this
Agreement, the then current prospectus(es) and statement(s) of
additional information of the Fund that describe the Portfolios, and
the variable annuity contracts or variable life insurance contracts
(the "Contracts") that use the Portfolios as underlying investment
media; PROVIDED, HOWEVER, that if any conflicts exist among any such
documents, then the terms of the Fund's current prospectus(es) and
statement(s) of additional information shall control.
1.1(a) TRANSMISSION OF INSTRUCTIONS For each Portfolio and for each
account maintained by the Company with such Portfolio, the
Company shall transmit to National Securities Clearing
Corporation ("NSCC") (which shall forward the information to
the transfer agent of the Fund), no more than ten (10)
aggregate purchase orders as follows:
(i) five (5) purchase orders for the Accounts expressed in
dollars (sent via NSCC's DCC&S System); and
(ii) five (5) purchase orders for the Accounts expressed in
shares (sent via NSCC's DCC&S System); and
no more than ten (10) aggregate redemption orders as follows:
(i) five (5) redemption orders for the Accounts expressed
in dollars (sent via NSCC's DCC&S System); and
(ii) five (5) redemption orders for the Accounts expressed
in shares (sent via NSCC's DCC&S System);
each of which reflects the aggregated effect of all purchases
and all redemptions of shares of the Portfolios in such
categories, based upon instructions from each Account
(collectively, "Instructions") received prior to the Close of
Trading on a given Business Day (the "Trade Date"). "Close of
Trading" shall mean 4:00 p.m. Eastern Time on a Business Day
or at such other time as the NAV of a Portfolio is calculated,
as disclosed
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in the then current prospectus(es) of the Portfolios.
"Business Day" shall mean, unless otherwise noted in this
Agreement, any day on which the New York Stock Exchange (the
"NYSE") is open for trading and on which a Portfolio
calculates its NAV pursuant to the rules of the Securities and
Exchange Commission (the "SEC"). "Business Day," for the
purposes of Subsections 1.1(b)-(c) of this Agreement, shall
also include any day on which the NSCC's DCC&S System is open
to transmit and settle orders, even if the NYSE is closed for
trading on such day.
On any given Business Day, the Company shall accept
Instructions in proper form from an Account up to the Close of
Trading, but in no event shall the Company accept Instructions
that have been received by the Company or its designee after
the Close of Trading on such Business Day. Instructions
received in proper form by the Company after the Close of
Trading on any Business Day shall be treated as if accepted on
the next following Business Day. The Fund hereby appoints the
Company as a designee of the Fund for the limited purpose of
receipt of purchase and redemption orders on behalf of the
Accounts for shares of the Portfolios listed on Schedule 1.1
and receipt by the Company as designee shall constitute
receipt by the Fund; provided that the Fund receives notice of
such order by the transmission deadlines described in Section
1.1(b) below. Each transmission of Instructions by the Company
will constitute a representation that all purchase and
redemption orders from the Accounts were received by the
Company prior to 4:00 p.m. Eastern Time or the close of the
NYSE, whichever is earlier, on the Business Day on which the
purchase or redemption orders are transmitted, in accordance
with Rule 22c-1 under the Investment Company Act of 1940, as
amended (the "1940 Act").
1.1(b) TRANSMISSION DEADLINES FOR THE ACCOUNTS The transmission of
orders for the Accounts will be accepted by the Fund or its
transfer agent only if provided through NSCC's DCC&S System in
the file delivered to the Fund or its transfer agent prior to
6:30 a.m. Eastern Time (currently NSCC Cycle 8) on the next
Business Day following the Trade Date. Any information
delivered to the Fund after such 6:30 a.m. Eastern Time file
is received will be rejected by the Fund or its transfer
agent, subject to the Fund's sole discretion to accept any
trade.
In the event that NSCC systems are not functioning on a given
Business Day, the Company may transmit Instructions to the
Fund, its transfer agent or as otherwise directed by the Fund
or the Adviser via facsimile or other electronic transmission
approved by the Fund by 8:00 a.m. Eastern Time on the next
Business Day following the Trade Date; PROVIDED HOWEVER, that
the Company will notify the Fund and the Adviser prior to
transmitting Instructions via facsimile or Fund approved
electronic transmission. However, this paragraph will not be
applicable to Instructions which have already been entered via
NSCC but not received by the Fund or its transfer agent. The
Company must notify the Fund of
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the existence of any such Instructions, and the Fund and its
transfer agent will use commercially reasonable efforts to
process those Instructions in a mutually satisfactory manner.
Notwithstanding the foregoing, on a limited basis, the Company
may transmit Instructions until 9:00 a.m. Eastern Time via
NSCC Cycles 9 through 12 on the next Business Day following
the Trade Date for corrections to Instructions already
submitted for contingency purposes.
1.1(c) SETTLEMENT Aggregated purchase and net redemption
transactions shall be settled in accordance with NSCC rules
and procedures.
In the event that NSCC systems are not functioning on a given
Business Day, then (1) for net purchase Instructions, the
Company shall wire payment, or arrange for payment to be wired
by the Company's designated bank, in immediately available
funds, to the Portfolio's custodial account at the Fund's
custodian; and (2) for net redemption Instructions, the Fund
or its transfer agent shall wire payment, or arrange for
payment to be wired, in immediately available funds, to an
account designated by the Company in writing. Wires from the
Company must be received no later than the close of the
Federal Reserve Wire Transfer System on the next day on which
the Federal Reserve Wire Transfer System is open.
In the event that the total redemption order for any one
Business Day shall exceed dollar limits set for a Portfolio by
the Fund, such Portfolio shall have the option of (i) settling
the redemption on the second Business Day following trade date
through the NSCC's money settlement process; (ii) settling the
redemption outside of Fund/SERV, if necessary, as determined
in the sole discretion of the Adviser, at any time within
seven (7) days after receipt of the redemption order, in
accordance with relevant provisions of the 1940 Act; or (iii)
making redemptions in any other manner provided for in the
Portfolio's then current prospectus(es) or statement(s) of
additional information.
Nothing herein shall prevent the Fund, on behalf of a
Portfolio, from delaying or suspending the right of purchase
or redemption of shares of a Portfolio in accordance with the
provisions of the 1940 Act and the rules thereunder. The Fund
will have no responsibility for the proper disbursement or
crediting of redemption proceeds, and the Company will be
solely responsible for such actions.
1.1(d) ERRORS The Company shall be solely responsible for the
accuracy of any Instruction transmitted to the Fund or its
transfer agent via NSCC systems or otherwise, and the
transmission of such Instruction shall constitute the
Company's representation to the Fund that the Instruction is
accurate, complete and duly authorized by the Accounts whose
shares are the subject of the Instruction. The Company shall
assume responsibility for any loss to the Fund, the Portfolios
or their transfer agent caused by a cancellation or correction
made subsequent to the date as of which an
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Instruction has been placed, and the Company will immediately
pay such loss to the Adviser, the Fund or such Portfolios upon
notification.
Each Party shall notify the other Parties of any errors or
omissions in any information and interruptions in, or delay or
unavailability of, the means of transmittal of any such
information as promptly as possible. The Company agrees to
maintain reasonable errors and omissions insurance coverage
commensurate with the Company's responsibilities under this
Agreement.
In the event of an error in the computation of a Portfolio's
NAV per share, the Fund will follow its then current policy
adopted for the sale and distribution of shares of the
Portfolios regarding appropriate error correction standards,
which shall include adjustment with respect to the Portfolio
shares purchased or redeemed to reflect the correct net asset
value per share when deemed material by the Funds' policies
and procedures, and the error was not due to any fault of the
Company. Any gain to the Company or an Account attributable to
the incorrect calculation or reporting of a Portfolio's daily
NAV shall be immediately returned to the Portfolio. The
Company agrees to make commercially reasonable efforts to
recover from the Accounts any material losses incurred by the
Adviser, the Fund, or the Portfolios as a result of the
foregoing.
The Company shall maintain a record of the total number of
shares of the Portfolios which are so purchased, based on
information provided by the Fund or its designee to the
Company, and shall reconcile with the Fund on a periodic basis
the number of shares of each Portfolio attributable to each
Account. If an order to purchase shares of a Portfolio must be
canceled due to nonpayment, the Company will be responsible
for any loss incurred by the Fund or a Portfolio arising out
of such cancellation.
1.2 The Fund will redeem the shares of the Portfolios when requested on
behalf of the Company or the corresponding subaccount of the
applicable Accounts at the NAV next computed after receipt by the
Fund or its designee of each request for redemption, in accordance
with the provisions of this Agreement, the then current
prospectus(es) and the current statement(s) of additional information
of the Portfolios, and the Contracts; PROVIDED, HOWEVER, that if any
conflicts exist among any such documents, then the terms of the
Fund's current prospectus(es) and the statement(s) of additional
information describing the Portfolios shall control.
The Company shall apply any net redemption proceeds received by it in
accordance with the applicable Contracts. The Company shall not
process or effect any redemptions with respect to shares of any
Portfolio after receipt by the Company of notification of suspension
of the determination of the NAV of such Portfolio. The Board of
Directors of the Fund (the "Directors" or the "Board") may refuse to
sell shares of any Portfolio to any person, including the Company
with respect to the Accounts, or suspend or terminate the offering of
shares of any particular Portfolio, if such action is required by law
or by regulatory authorities
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having jurisdiction, or is deemed by the Directors, in their sole
discretion, acting in good faith and in light of the Directors'
duties under federal and any applicable state laws, necessary in the
best interests of the shareholders of the Portfolio.
1.3 The Company agrees to purchase and redeem the shares of each
Portfolio in accordance with the provisions of this Agreement, the
then current prospectus(es), and statement(s) of additional
information of the Fund that describe the Portfolios. Except as
necessary to implement transactions initiated by Contract holders, or
as otherwise may be required by applicable U.S. federal laws or
regulations with respect to maintaining the Contracts' status under
the Internal Revenue Code of 1986, as amended from time to time, and
any successor provisions thereto (the "Code"), the Company shall not
redeem shares of the Portfolios attributable to the Contracts.
1.4 Issuance and transfer of shares of each Portfolio will be by
book-entry only. Stock certificates will not be issued to the Company
or to the applicable Accounts. Shares of a Portfolio purchased from
the Fund will be recorded in appropriate book-entry titles for the
Accounts by the Fund or its designee. The Fund shall furnish to the
Company the CUSIP number assigned to each Portfolio as may be amended
from time to time.
1.5 The Fund shall make available to the Company of any income dividends
or capital gain distributions payable on the shares of any Portfolios
of the Fund as soon as reasonably practicable, but no later than ex
date. The Company will receive pricing and dividend rate and capital
gain distribution rate information and payments through the NSCC
System. The Company hereby elects to receive all such dividends and
distributions as are payable on shares of a Portfolio in additional
shares of that Portfolio. The Fund shall notify the Company or its
delegates of the number of shares of a Portfolio so issued as payment
of such dividends and distributions. The Company reserves the right
to revoke this election and to receive all such dividends and capital
gain distributions in cash.
1.6 The Company shall maintain a record of the number of shares of the
Portfolios held by the Accounts on behalf of each Contract holder,
and the Company shall maintain appropriate records of Contract holder
information.
1.7 The Company shall investigate all inquiries from Contract holders
relating to their interests in the Accounts and any Portfolio, and
shall respond to all communications from Contract holders and other
persons having an interest in the Contracts relating to the Company's
duties hereunder. The Company will consult the Fund and the Adviser
on the response for any inquiries related to a Portfolio, Fund and
the Adviser as deemed necessary by the Company.
2. PROXY SOLICITATIONS AND VOTING
2.1 To the extent permitted by applicable laws and regulations, the Fund
agrees it will use commercially reasonable efforts to provide the
Company ninety (90) days notice of anticipated Portfolio mergers or a
Portfolio liquidation. The Fund agrees that the terms on which the
shares of any Portfolio are offered to the Accounts will not be
materially altered without at least sixty (60) days' prior
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written notice to the Company during any period when an Account owns
shares of a Portfolio. This includes, but is not limited to, (a) a
change in the Portfolio's objective and (b) a replacement of the
Portfolio's adviser or an appointment of a sub-adviser not affiliated
with the Adviser.
2.2 If and to the extent required by applicable law or by the terms of
the Contracts, the Company shall:
(i) vote the shares of the Portfolios held by the Accounts in
accordance with instructions received from the Contract
holders; and
(ii) vote the shares of the Portfolios held by the Accounts for
which no timely instructions have been received from the
Contract holders in the same proportion as shares of the
Portfolios for which timely instructions have been received,
if and to the extent that (i) the SEC continues to interpret the
1940 Act to require pass-through voting privileges for various
variable contract holders, and (ii) such interpretation is deemed
applicable to the Contracts. The Company reserves the right to vote
Portfolio shares held in any Account in the Company's own right, to
the extent permitted by applicable law. The Company will calculate
voting privileges in accordance with applicable law. The Company
agrees to hold the Fund, the Portfolios, the Adviser and DFAS
harmless from and against any liability that may arise as a result of
the Company's voting Portfolio shares held in any Account in the
Company's own right.
3. REPRESENTATIONS AND WARRANTIES
3.1 The Company represents and warrants that it is a life insurance
company within the meaning of Section 816(a) of the Code, and is a
domestic corporation within the meaning of Section 7701(a)(4) of the
Code duly organized and in good standing under applicable law. The
Company will notify the Adviser and the Fund promptly upon having a
reasonable basis for believing that the Company has ceased to qualify
and be a life insurance company treated as a domestic corporation or
that it might not so qualify and be treated in the future. The
Company has legally and validly established each Account prior to any
issuance or sale thereof as a segregated asset account under
applicable state insurance laws, and that it has and will maintain
the capacity to issue all Contracts that may be sold; and that it is
properly licensed, qualified and in good standing to sell the
Contracts in all jurisdictions where the Company does business. The
Company represents and warrants that the Contracts will be issued and
sold in compliance, in all material respects, with all applicable
federal and state laws, and that the sale of the Contracts shall
comply in all material respects with state insurance suitability
requirements.
3.2 The Company represents and warrants that the Contracts are duly
registered under applicable laws and regulations to the extent
required or will be exempt from such registration.
3.3 The Company represents and warrants that it has or will have
registered each Account as a unit investment trust, in accordance
with the provisions of the 1940
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Act, or each such Account is, and will continue to be, exempt from
registration under Section 3(c) of the 1940 Act, to serve as a
segregated investment account for the Contracts.
3.4 The Company represents and warrants that the Contracts are currently
treated as variable contracts under Section 817(d) of the Code, and
that the Company will maintain such treatment, and that the Company
will notify the Adviser and the Fund promptly upon having a
reasonable basis for believing that the Contracts have ceased to be
so treated or that the Contracts might not be so treated in the
future.
3.5 This Agreement has been duly authorized, executed and delivered by
the Company, and is a valid and legally binding contract enforceable
in accordance with its terms. No consent, approval, authorization or
order of any court or governmental authority is required for the
consummation by the Company of the transactions contemplated by this
Agreement. The execution and delivery of this Agreement did not, and
the consummation of the transactions contemplated by this Agreement
will not, violate the Company's organizational documents or By-laws,
or any resolution, agreement or arrangement to which the Company is a
party or by which the Company is bound.
3.6 The Company and the Accounts are duly authorized to acquire shares of
the Portfolios as contemplated by the terms of this Agreement. To
facilitate compliance with Rule 22c-2 under the 1940 Act, the Company
will cooperate with the Fund in providing information as provided in
the Schedule 3.6 and will assist the Fund in preventing possible
market timing and other trading activities in violation of the Fund's
policies and procedures by restricting or prohibiting further
purchases or exchanges of the shares of the Portfolios as provided
therein. Except as set forth in Schedule 3.6 and as otherwise
required by applicable laws, nothing herein, nor any action by the
Company, shall be construed as, or infer that the Company has
undertaken any duty or obligation to detect abusive trading
activities pursuant to Fund policies.
3.7 There are no material legal, administrative or other proceedings
pending or, to the Company's knowledge, threatened against the
Company or its property or assets that could result in liability on
the Company's part. The Company knows of no facts that might form the
basis for the institution of such proceedings. Neither the Company
nor the Accounts are parties to or subject to the provisions of any
order, decree or judgment of any court or governmental body that
materially and adversely affects its or their business or its or
their ability to consummate the transactions herein contemplated.
3.8 To the best of the Company's knowledge, the disclosure contained in
the applicable prospectus(es) or offering documents for the Accounts
does not contain any untrue statements of a material fact or omit to
state any material fact required to be stated therein or necessary to
make the statements therein not misleading, and such disclosure meets
all legal requirements of applicable federal and state laws and
regulations. The Company represents and warrants that all current and
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future prospectus(es) or offering documents with respect to the
Accounts and other materials that mention the Company, the Fund, the
Portfolios, the Adviser, or DFAS shall meet the requirements
described in the first sentence of this subparagraph; PROVIDED,
HOWEVER, that the Company shall not be responsible for any disclosure
that is provided to the Company in the Fund's current prospectus(es)
and statement(s) of additional information describing the Portfolios
or the Fund's registration statement on Form N-1A (the "Fund
Registration Statement") as filed with the SEC.
3.9 The Fund represents and warrants that it is lawfully established and
validly existing under the laws of the State of Maryland. The Fund
represents that its operations are and shall at all times remain in
material compliance with the laws of the State of Maryland, to the
extent required to perform this Agreement.
3.10 The Fund represents and warrants that the shares of the Portfolios
sold pursuant to this Agreement are registered under the Securities
Act of 1933, as amended (the "1933 Act"), and duly authorized for
issuance; that the Fund shall amend the Fund Registration Statement
for the Portfolios under the 1933 Act and the 1940 Act, from time to
time, as required in order to effect the continuous offering of the
shares of the Portfolios; that the Fund will sell such shares in
compliance with all applicable federal and state laws; and that the
Fund is and will remain registered under, and complies and will
continue to comply, in all material respects, with the 1940 Act. The
Fund shall register and qualify the shares of the Portfolios for sale
in accordance with the laws of the various states only if, and to the
extent, deemed advisable by the Fund, the Adviser, or DFAS.
3.11 The Fund represents and warrants that the Portfolios will use best
efforts to comply with (or as to Portfolios that have not yet
commenced business, will use its best efforts to invest the money
received from the sale of shares of a Portfolio so as to satisfy) the
diversification requirements of Section 817(h) of the Code and the
Treasury Regulations promulgated thereunder, and that the Fund will
take all reasonable steps to ensure that the Portfolios continue to
satisfy such requirements. The Fund agrees to promptly notify the
Company upon having a reasonable basis for believing that any
Portfolio has ceased to satisfy such diversification requirements and
will take all steps reasonably necessary to adequately diversify the
Portfolios so as to achieve compliance within the grace period
afforded by Treasury Regulation Section1.817-5.
3.12 The Fund represents and warrants that the Portfolios qualify (or as
to Portfolios that have not yet commenced business, will qualify) as
regulated investment companies under Subchapter M of the Code (or any
successor or similar provision), and that the Fund will take all
reasonable steps to maintain such qualification, subject to the
reservation of the right of the Directors to not maintain the
qualification of a Portfolio as a regulated investment company if the
Directors determine this course of action to be beneficial to
shareholders. The Fund agrees to promptly notify the Company upon
having a reasonable basis for believing that any Portfolio has ceased
to so qualify or upon the Directors taking any such action.
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3.13 The Company shall inform a Portfolio in writing if the Company
determines that such Portfolio is not in compliance with applicable
insurance laws.
3.14 DFAS represents and warrants that it is and will remain a member in
good standing of the Financial Industry Regulatory Authority, Inc.
("FINRA"), and is and will be duly registered as a broker-dealer with
the SEC under the Securities Exchange Act of 1934, as amended (the
"1934 Act"). DFAS represents that its operations are, and shall at
all times remain, in material compliance with the laws of the State
of Delaware to the extent required to perform this Agreement. DFAS
further represents and warrants that it will sell and distribute the
shares of the Portfolios in accordance with any applicable state laws
and federal securities laws, including, without limitation, the 1933
Act, the 1934 Act and the 0000 Xxx.
3.15 The Parties represent and warrant to each other that all of their
directors, officers, employees, investment advisers, and other
individuals/entities dealing with the money and/or securities of the
Portfolios are and shall continue to be at all times covered by a
blanket fidelity bond or similar coverage for the benefit of the
Fund, in an amount not less than the amount required by the
applicable rules of FINRA and the federal securities laws, including
the 1940 Act, as applicable. The aforesaid bond shall include
coverage for larceny and embezzlement and shall be issued by a
reputable bonding company. The Parties agree to make all reasonable
efforts to assure that such bond or another bond containing these
provisions is continuously in effect, and each agrees to notify
promptly the other Parties in the event that such coverage no longer
applies.
3.16 The Parties will conduct their business at all times so that no
Contract holder will have such incidents of control as will cause a
Portfolio's income and gains to be taxable to the Contract holder as
a result of the application of the investor control doctrine
enunciated in a series of Revenue Rulings, including Revenue Ruling
00-00, Xxxxxxx Xxxxxx 00-000, Xxxxxxx Ruling 81-225, Revenue Ruling
82-54, Revenue Ruling 2003-91 and Revenue Ruling 2007-7, and adopted
by Xxxxxxxxxxxxxx v. Xxxxxx Xxxxxx, 000 X.0x 000 (0xx Xxx. 1985) and
Xxxxxxx X. Xxxxxx v. Commissioner, 144 T.C. No 17 (2015). In this
regard, the Parties agree to limit, and not facilitate, a Contract
holder's participation in each Portfolio's investment process in
contravention of the following, which the Parties represent and
warrant to each other to be true: (1) there is not, and there will
not be, any arrangement, plan, contract or agreement between the
Adviser (or a subadviser) and a Contract holder regarding the
availability of a Portfolio as an Account under the Contract, or the
specific assets to be held by a Portfolio; (2) other than a Contract
holder's ability to allocate Contract premiums and transfer amounts
in the Company's Account to and from the Company's Account
corresponding to a Portfolio, all investment decisions concerning a
Portfolio will be made by the Adviser, any subadviser(s) and the
Directors in their sole and absolute discretion; (3) a Contract
holder cannot, and will not be able to, direct a Portfolio's
investment in any particular asset or recommend a particular
investment or investment strategy; (4) there is not, and will not be,
any agreement or plan between the Adviser or a subadviser and a
Contract holder regarding a particular investment of a Portfolio;
(5) a Contract holder cannot, and will not be
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able to, communicate directly or indirectly with the Adviser or a
subadviser concerning the selection, quality or rate of return on
any specific investment or group of investments held by a Portfolio;
(6) a Contract holder does not have, and will not have, any current
knowledge of a Portfolio's specific assets other than as may be
required to be presented in periodic reports to a Portfolio's
shareholders or may be publicly available; (7) a Contract holder does
not have, and will not have, any legal, equitable, direct or indirect
ownership interest in any of the assets of a Portfolio; and (8) a
Contract holder only has, and only will have, a contractual
claim against the insurance company offering the Contract to receive
cash from the insurance company under the terms of the Contract
holder's Contract.
3.17 The Fund agrees that shares of the Fund or any of its Portfolios will
be sold only to insurance companies or funds of investment companies
for use in conjunction with variable life insurance policies or
variable annuities. No shares of the Portfolios listed on Schedule
1.1 will be sold directly to the general public.
4. SALES MATERIAL AND INFORMATION
4.1 The Company will shall furnish, or shall cause to be furnished, to
DFAS prior to use, each piece of sales literature or advertising
prepared by the Company in which the Adviser, the Fund or DFAS is
described. No sales literature or advertising will be used if the
Adviser, the Fund or DFAS reasonably objects to its use within ten
(10) Business Days following receipt by the Fund. The Company shall
promptly inform DFAS as to any disapprovals of sales literature
filings relating to any Fund or Portfolio with regulatory
authorities.
4.2 Except with the written consent of the Adviser, the Fund or DFAS, as
appropriate, the Company shall not make any oral or written material
representations or statements concerning or on behalf of the Adviser,
DFAS, the Fund or the Portfolios, other than the information or
representations contained in:
(a) the Fund Registration Statement or prospectus(es) for the
Fund, as amended or supplemented from time to time;
(b) published reports or statements of the Fund which are in the
public domain or are approved by the Fund; or
(c) sales literature or other promotional material of the Fund or
the Portfolios.
Notwithstanding the foregoing, this provision shall not be
interpreted to prevent the Company from providing information about
the Adviser, DFAS and the Fund or this Agreement to their directors,
regulators, accountants, legal counsel or otherwise in the ordinary
course of their business.
4.3 Except with the written consent of the Company, the Adviser, DFAS, or
the Fund shall not make any oral or written material representations
or statements concerning or on behalf of the Company, the Contracts
or the Accounts, other than the information or representations
contained in:
(a) a registration statement, prospectus, or offering memoranda
for the Contracts, as amended or supplemented from time to
time;
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(b) published reports or statements of the Contracts or the
Accounts which are in the public domain or are approved by the
Company; or
(c) sales literature or other promotional material of the Company.
Notwithstanding the foregoing, this provision shall not be
interpreted to prevent the Adviser, DFAS and the Fund from providing
information about the Company or this Agreement to their directors,
regulators, accountants, legal counsel or otherwise in the ordinary
course of their business.
4.4 No Party shall use any other Party's names, logos, trademarks or
service marks, whether registered or unregistered, without the prior
written consent of such Party.
4.5 The Fund will provide to the Company at least one complete copy of
all registration statements, prospectuses, statements of additional
information, reports, proxy statements, solicitations for voting
instructions, sales literature and other promotional materials,
applications for exemptions, requests for no-action letters, all
amendments to any of the above that relate to the Portfolios or their
shares, and any other applicable documents or materials, in final
form as filed with the SEC. If requested by the Company, the Fund
shall provide such documentation (including a final copy of the
amended prospectus(es) of the Portfolios as set in type (including an
8 1/2" x 11" size camera-ready stat) at the Fund's expense) and other
assistance as is reasonably necessary in order for the Company once
each year to have, at the Company's expense, the current
prospectus(es) for the Portfolios printed together in with the
document describing the Contracts.
4.6 If requested by the Fund, DFAS or the Adviser, the Company will
provide to the Fund a complete current copy of offering materials
describing the Fund, the Portfolios and the Contracts, including
application and investment election forms, sample illustrations,
reports, solicitations for voting instructions, sales literature and
any other promotional materials, applications for exemptions and
requests for no-action letters, all amendments to any of the above
and any other applicable documents or materials, that relate to the
Contracts and each Account. In the event any such documents are
required to be filed with any regulatory authority or body, the
Company shall provide such materials in final form as filed with such
regulatory authority or body. The Company represents and warrants
that the Contracts, registration statements, prospectuses, offering
memoranda and any other filing in connection therewith with respect
to the Accounts will not materially deviate from the form of such
documents provided to the Fund.
4.7 For purposes of this Section 4, the phrase "sales literature or other
promotional material" shall be construed in accordance with all
applicable securities laws and regulations.
4.8 To the extent required by applicable law, including the
administrative requirements of regulatory authorities, or as mutually
agreed between the Company and DFAS, the Company reserves the right
to modify any of the Contracts in any respect whatsoever. The Company
reserves the right, in its sole
11
discretion, to suspend the sale of any Contract, in whole or in
part, or to accept or reject any application for the sale of a
Contract. 4.9 The Parties agree to review the arrangements set forth
herein from time to time for possible changes and will make their
personnel reasonably available for this purpose.
5. FEES AND EXPENSES
5.1 The Fund shall bear the cost of registration and qualification of the
shares of the Portfolios; preparation and filing of the Portfolios'
prospectus(es) and the Fund Registration Statement, proxy materials
and reports relating to the Portfolios; preparation of all other
statements and notices relating to the Portfolios required by any
federal or state law; payment of all applicable fees, including,
without limitation, all fees due under Rule 24f-2 of the 1940 Act
relating to the Portfolios; and all taxes on the issuance or transfer
of the Portfolios' shares. The Fund shall bear the cost of text
composition, printing, processing, mailing, distributing or
electronically delivering and tabulation of proxy statements and
voting instruction solicitation materials to contract owners with
respect to proxies sponsored by the Fund.
5.2 The Company shall assure that the Contracts are registered under the
1933 Act or are properly exempt from such registration, and that each
Account is registered as a unit investment trust in accordance with
the 1940 Act or is properly exempt from such registration. In those
circumstances where the Company is relying upon a registration
exemption, the Company will make every effort to maintain such an
exemption and will notify the Fund, the Adviser and DFAS immediately
upon having a reasonable basis for believing that such exemption no
longer applies or might not in the future. The Company shall bear the
expenses for the costs of preparation and any required filing of the
Company's prospectus, offering memoranda, registration statement and
other materials and information with respect to the Contracts,
including the Application and investment selection forms; preparation
of all other statements and notices relating to the Accounts or the
Contracts required by any applicable federal or state law; all
expenses for the solicitation and sale of the Contracts, including
all costs of printing and distributing all copies of advertisements,
prospectuses, statements of additional information, and reports to
Contract holders and prospective purchasers of the Contracts as
required by applicable state and federal law; payment of all
applicable fees and taxes relating to the Contracts; all costs of
drafting, filing and obtaining approvals of the Contracts in the
various jurisdictions under applicable insurance laws; and all other
costs associated with ongoing compliance with all such laws and the
Company's obligations hereunder.
6. INDEMNIFICATION
6.1 INDEMNIFICATION BY THE COMPANY
6.1(a) The Company agrees to indemnify, defend and hold harmless the
Fund, the Portfolios, DFAS and the Adviser, and each of their
directors and
12
officers (as applicable), and each person, if any, who
controls any of them within the meaning of Section 15 of the
1933 Act (collectively, the "Indemnified Parties" for purposes
of this Section 6.1) against any and all losses, claims,
damages, liabilities (including amounts paid in settlement
with the written consent of the Company) or litigation
(including legal and other expenses) (except in all cases,
excluding consequential or special damages), to which the
Indemnified Parties may become subject under any statute,
regulation, at common law or otherwise, and:
(i) arise out of or are based upon any untrue statements
or alleged untrue statements of any material fact
contained in the registration statement, prospectus,
offering memoranda or sales literature 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 Section 6.1(a) shall
not apply as to any Indemnified Party if such
statement or omission or such alleged statement or
omission was made in reliance upon and in conformity
with information furnished to the Company by or on
behalf of the Fund for use in the registration
statement, prospectus or offering memoranda for the
Contracts (or any amendment or supplement thereto) or
otherwise for use in connection with the sale of the
Contracts or the shares of the Portfolios; or
(ii) arise out of, or as a result of, statements or
representations or wrongful conduct of the Company or
persons under its control, with respect to the sale or
distribution of the Contracts or the shares of the
Portfolios; or
(iii) arise out of any untrue statement or alleged untrue
statement of a material fact contained in a
registration statement, prospectus, or sales
literature covering the Fund and the Portfolios, 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 statements therein not
misleading, if such a statement or omission was made
in reliance upon information furnished to the Fund by
or on behalf of the Company; or
(iv) arise out of, or as a result of, any failure by the
Company or persons under its control to provide the
services and furnish the materials contemplated under
the terms of this Agreement; or
(v) arise out of, or result from, any material breach of
any representation and/or warranty made by the Company
or persons under its control in this Agreement or
arise out of or result from any other material breach
of this Agreement by the Company or persons under its
control;
13
as limited by and in accordance with the provisions of
Sections 6.1(b) and 6.1(c) hereof.
6.1(b) The Company shall not be liable under this indemnification
provision with respect to any losses, claims, damages,
liabilities or litigation to which an Indemnified Party would
otherwise be subject by reason of such Indemnified Party's
willful misfeasance, bad faith, or gross negligence in the
performance of such Indemnified Party's duties or by reason of
such Indemnified Party's reckless disregard of its obligations
or duties under this Agreement or to the Fund, whichever is
applicable, or to the extent of such Indemnified Party's gross
negligence.
6.1(c) The Company shall not be liable under this indemnification
provision with respect to any claim made against an
Indemnified Party unless such Indemnified Party shall have
notified the Company in writing within a reasonable time after
the summons or other first legal process giving information of
the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have
received notice of such service on any designated agent), but
failure to notify the Company of any such claim shall not
relieve the Company from any liability which it may have to
the Indemnified Party otherwise than on account of this
indemnification provision. In case any such action is brought
against the Indemnified Parties, the Company shall be entitled
to participate, at its own expense, in the defense of such
action, provided that the Company gives written notice of such
intention to the Indemnified Parties. The Company also shall
be entitled to assume and to control the defense thereof.
After notice from the Company to such Party of the Company's
election to assume the defense thereof, the Indemnified Party
shall bear the fees and expenses of any additional counsel
retained by the Indemnified Party, and the Company will not be
liable to such Party under this Agreement for any legal or
other expenses subsequently incurred by such Party
independently in connection with the defense thereof other
than reasonable costs of investigation.
6.1(d) The Indemnified Parties will promptly notify the Company of
the commencement of any litigation or proceedings against them
in connection with the issuance or sale of the shares of the
Portfolios or the Contracts that use the Portfolios or the
operation of the Portfolios.
6.2 INDEMNIFICATION BY DFAS
6.2(a) DFAS agrees to indemnify, defend and hold harmless the Company
and each of its directors and officers and each person, if
any, who controls the Company within the meaning of Section 15
of the 1933 Act (collectively, the "Indemnified Parties" for
purposes of this Section 6.2) against any and all losses,
claims, damages, liabilities (including amounts paid in
settlement with the written consent of the Fund or DFAS) or
litigation (including legal and other expenses) (except in all
cases, excluding consequential or special damages), to which
the Indemnified Parties may
14
become subject under any statute, regulation, at common law or
otherwise, and:
(i) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact
contained in the Fund Registration Statement or
current prospectus(es) or sales literature of the Fund
and the Portfolios (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 Section 6.2(a) shall
not apply as to any Indemnified Party if such
statement or omission or such alleged statement or
omission was made in reliance upon and in conformity
with information furnished to the Fund by or on behalf
of the Company for use in the Fund Registration
Statement or prospectus(es) for the Portfolios or in
sales literature (or any amendment or supplement
thereto) or otherwise for use in connection with the
sale of the shares of the Portfolios; or
(ii) arise out of, or as a result of, statements or
representations or wrongful conduct of DFAS or the
Fund or persons under their control, with respect to
the sale or distribution of the shares of the
Portfolios (it is understood that the persons who are
involved in the sale or distribution of the Contracts
are not under the control of DFAS, the Adviser or the
Fund); or
(iii) arise out of any untrue statement or alleged untrue
statement of a material fact contained in a
registration statement, prospectus, offering memoranda
or sales literature covering the Contracts, or any
amendment thereof or supplement thereto, or the
omission or alleged omission to state therein a
material fact required to be stated therein, or
necessary to make the 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 Fund; or
(iv) arise out of, or as a result of, any failure by DFAS,
the Fund or persons under their control to provide the
services and furnish the materials contemplated under
the terms of this Agreement; or
(v) arise out of or result from any material breach of any
representation and/or warranty made by DFAS, the Fund
or persons under their control in this Agreement or
arise out of or result from any other material breach
of this Agreement by DFAS, the Fund or persons under
their control;
as limited by and in accordance with the provisions of
Sections 6.2(b) and 6.2(c) hereof.
15
6.2(b) DFAS shall not be liable under this indemnification provision
with respect to any losses, claims, damages, liabilities or
litigation to which an Indemnified Party would otherwise be
subject by reason of such Indemnified Party's willful
misfeasance, bad faith, or gross negligence in the performance
of such Indemnified Party's duties or by reason of such
Indemnified Party's reckless disregard of its obligations and
duties under this Agreement or to the Company or the Accounts,
whichever is applicable, or to the extent of such Indemnified
Party's gross negligence.
6.2(c) DFAS shall not be liable under this indemnification provision
with respect to any claim made against an Indemnified Party
unless such Indemnified Party shall have notified DFAS in
writing within a reasonable time after the summons or other
first legal process giving information of the nature of the
claim shall have been served upon such Indemnified Party (or
after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify
DFAS of any such claim shall not relieve DFAS from any
liability which it may have to the Indemnified Party otherwise
than on account of this indemnification provision. In case any
such action is brought against the Indemnified Parties, DFAS
will be entitled to participate, at its own expense, in the
defense thereof, provided that DFAS gives written notice of
such intention to the Indemnified Parties. DFAS also shall be
entitled to assume and to control the defense thereof. After
notice from DFAS to such Party of DFAS's election to assume
the defense thereof, the Indemnified Party shall bear the fees
and expenses of any additional counsel retained by the
Indemnified Party, and DFAS will not be liable to such Party
under this Agreement for any legal or other expenses
subsequently incurred by such Party independently in
connection with the defense thereof other than reasonable
costs of investigation.
6.2(d) The Indemnified Parties will promptly notify DFAS of the
commencement of any litigation or proceedings against them in
connection with the issuance or sale of the Contracts that use
the Portfolios or the operation of the Accounts that use the
Portfolios.
6.3 INDEMNIFICATION BY THE ADVISER
6.3(a) The Adviser agrees to indemnify and hold harmless the Company
and each of its directors and officers and each person, if
any, who controls the Company within the meaning of Section 15
of the 1933 Act (collectively, the "Indemnified Parties" for
purposes of this Section 6.3) against any and all losses,
claims, damages, liabilities (including amounts paid in
settlement with the written consent of the Fund or the
Adviser) or litigation (including legal and other expenses)
(except in all cases, excluding consequential or special
damages) to which the Indemnified Parties may become subject
under any statute, regulation, at common law or otherwise,
and:
16
(i) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact
contained in the Fund Registration Statement or
current prospectus(es) or sales literature of the Fund
and the Portfolios (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 Section 6.3(a) shall
not apply as to any Indemnified Party if such
statement or omission or such alleged statement or
omission was made in reliance upon and in conformity
with information furnished to the Fund or the Adviser
by or on behalf of the Company for use in the Fund
Registration Statement or prospectus(es) for the
Portfolios or in sales literature (or any amendment or
supplement thereto) or otherwise for use in connection
with the sale of the shares of the Portfolios; or
(ii) arise out of, or as a result of, statements or
representations or wrongful conduct of DFAS, the Fund
or the Adviser or persons under their control, with
respect to the sale or distribution of the shares of
the Portfolios (it is understood that the persons who
are involved in the sale or distribution of the
Contracts are not under the control of DFAS, the
Adviser or the Fund); or
(iii) arise out of any untrue statement or alleged untrue
statement of a material fact contained in a
registration statement, prospectus, offering memoranda
or sales literature covering the Contracts, or any
amendment thereof or supplement thereto, or the
omission or alleged omission to state therein a
material fact required to be stated therein, or
necessary to make the 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 Fund or the Adviser; or
(iv) arise out of, or as a result of, any failure by DFAS,
the Adviser, the Fund or persons under their control
to provide the services and furnish the materials
contemplated under the terms of this Agreement; or
(v) arise out of or result from any material breach of any
representation and/or warranty made by DFAS, the Fund,
the Adviser or persons under their control in this
Agreement or arise out of or result from any other
material breach of this Agreement by DFAS, the
Adviser, the Fund or persons under their control;
as limited by and in accordance with the provisions of
Sections 6.3(b) and 6.3(c) hereof.
6.3(b) The Adviser shall not be liable under this indemnification
provision with respect to any losses, claims, damages,
liabilities or litigation to which an
17
Indemnified Party would otherwise be subject by reason of such
Indemnified Party's willful misfeasance, bad faith, or gross
negligence in the performance of such Indemnified Party's
duties or by reason of such Indemnified Party's reckless
disregard of its obligations and duties under this Agreement
or to the Company or the Accounts, whichever is applicable, or
to the extent of such Indemnified Party's gross negligence.
6.3(c) The Adviser shall not be liable under this indemnification
provision with respect to any claim made against an
Indemnified Party unless such Indemnified Party shall have
notified the Fund or the Adviser in writing within a
reasonable time after the summons or other first legal process
giving information of the nature of the claim shall have been
served upon such Indemnified Party (or after such Indemnified
Party shall have received notice of such service on any
designated agent), but failure to notify the Fund or the
Adviser of any such claim shall not relieve the Adviser from
any liability which it may have to the Indemnified Party
otherwise than on account of this indemnification provision.
In case any such action is brought against the Indemnified
Parties, the Adviser will be entitled to participate, at its
own expense, in the defense thereof, provided that the Adviser
gives written notice of such intention to the Indemnified
Parties. The Adviser also shall be entitled to assume and to
control the defense thereof. After notice from the Adviser to
such Party of the Adviser's election to assume the defense
thereof, the Indemnified Party shall bear the fees and
expenses of any additional counsel retained by the Indemnified
Party, and the Adviser will not be liable to such Party under
this Agreement for any legal or other expenses subsequently
incurred by such Party independently in connection with the
defense thereof, other than reasonable costs of investigation.
6.3(d) The Indemnified Parties will promptly notify the Fund and the
Adviser of the commencement of any litigation or proceedings
against them in connection with the issuance or sale of the
Contracts that use the Portfolios or the operation of the
Accounts that use the Portfolios.
7. COMPANY ASSISTANCE TO DIRECTORS
The Company will assist the Directors in carrying out their
responsibilities under any applicable provisions of the federal securities
laws and/or any exemptive orders granted by the SEC by providing the
Directors with all information reasonably necessary for the Directors to
consider any issues raised.
8. TERM AND TERMINATION
8.1 This Agreement may be terminated by any Party with or without cause
ninety (90) days' advance written notice.
8.2 Notwithstanding any other provision of this Agreement, DFAS, the
Adviser or the Fund may terminate this Agreement for cause on not
less than thirty (30) days' prior written notice to the Company,
unless the Company has cured such cause
18
within thirty (30) days of receiving such notice, for any material
breach by the Company of any representation, warranty, covenant or
obligation hereunder.
8.3 Notwithstanding any other provision of this Agreement, the Company
may terminate this Agreement for cause on not less than thirty (30)
days' prior written notice to DFAS, the Adviser and the Fund, unless
DFAS, the Adviser or the Fund, as appropriate, has cured such cause
within thirty (30) days of receiving such notice, for any material
breach by DFAS, the Adviser or the Fund of any representation,
warranty, covenant or obligation hereunder.
8.4 Notwithstanding any other provision of this Agreement, the Company
may terminate this Agreement by written notice to the Fund and DFAS
with respect to any Portfolio based upon the Company's determination
that shares of such Portfolio are not reasonably available to meet
the requirements of the Contracts.
8.5 Notwithstanding any other provision of this Agreement, the Company
may terminate this Agreement by written notice to the Fund, the
Adviser and DFAS with respect to any Portfolio in the event any of
the Portfolio's shares are not registered, issued or sold in
accordance with applicable state and/or federal law, or such law
precludes the use of such shares as the underlying investment media
of the Contracts that are issued or to be issued by the Company.
8.6 Notwithstanding any other provision of this Agreement, the Company
may terminate this Agreement by written notice to the Fund, the
Adviser and DFAS with respect to any Portfolio in the event that such
Portfolio ceases to qualify as a "regulated investment company" under
Subchapter M of the Code or under any successor or similar provision,
or if the Company reasonably believes that any such Portfolio may
fail to so qualify.
8.7 Notwithstanding any other provision of this Agreement, the Company
may terminate this Agreement by written notice to the Fund, the
Adviser and DFAS with respect to any Portfolio in the event that such
Portfolio fails to satisfy the diversification requirements of
Section 817 of the Code and the Treasury Regulations promulgated
thereunder.
8.8 Notwithstanding any other provision of this Agreement, the Fund, the
Adviser or DFAS may terminate this Agreement by written notice to the
Company, if any one or all shall determine, in its or their, as
applicable, 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.
8.9 Notwithstanding any other provision of this Agreement, the Company
may terminate this Agreement by written notice to the Fund, the
Adviser and DFAS, if the Company shall determine, in its sole
judgment, exercised in good faith, that any of the Fund, the
Portfolios, the Adviser or DFAS 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.
8.10 Notwithstanding any other provision of this Agreement, any Party may
terminate this Agreement for cause on not less than thirty (30) days'
prior written notice to
19
the other Parties, unless any of the other Parties has cured such
cause within thirty (30) days of receiving such notice, for any one
of the following reasons:
(a) a change in control of any Party or such Party's ultimate
controlling person; however, a change in the name of the Party
will not constitute a change in control;
(b) a material change in, or other material revision to, the
Contracts or the prospectus(es) of the Fund that describe the
Portfolios, which material change or revision is not
acceptable to any of the other Parties; or
(c) any action taken by federal, state or other regulatory
authorities of competent jurisdiction which, in the reasonable
judgment of any of the Parties, either (i) materially and
adversely alters the terms, advantages and/or benefits of the
Contracts to current or prospective purchasers; or (ii)
materially or adversely alters the terms or conditions of such
Party's participation in the subject matter of this Agreement.
8.11 Notwithstanding the termination of this Agreement, each Party shall
continue for so long as any Contracts remain outstanding to perform
such of its duties hereunder as are necessary to ensure the continued
tax status thereof and the payment of benefits thereunder, with
respect to a Portfolio and the corresponding subaccount of each
Account.
8.12 Notwithstanding any termination of this Agreement, the Fund shall, at
the option of the Company, allow all Contracts in effect on the
effective date of termination of this Agreement (the Existing
Contracts") to continue to hold shares of the Portfolios; however
Existing Contracts may not direct any additional allocation or
reallocation of investments in the Portfolios. Existing Contracts
will be permitted to redeem investments in the Portfolios.
The Company agrees not to redeem Series shares attributable to the
Contracts except (i) as necessary to implement Contract owner
initiated or approved transactions, or (ii) as required by state
and/or federal laws or regulations or judicial or other legal
precedent of general application or (iii) as permitted by an order of
the SEC. Upon request, the Company will promptly furnish to the Fund,
the opinion of counsel for the Company to the effect that any
redemption pursuant to clause (ii) above is a legally required
redemption. The Fund, the Adviser and DFAS will in no way recommend
action in connection with, or oppose or interfere with any
application made to the SEC by the Company with regard to, the
substitution of Fund shares with shares of another investment
company.
In addition to the forgoing, Section 6 Indemnification shall survive
any termination of this Agreement.
9. NOTICES
Any notice shall be deemed sufficiently given when sent by registered or
certified mail, to the other Parties at the address of such Parties set forth
below or at such other address as such Parties may from time to time specify in
writing to the other Parties.
20
If to the Fund:
Xxxxxxxxx X. Xxxxxx, Esq.
Vice President and Secretary
DFA Investment Dimensions Group Inc.
0000 Xxx Xxxx Xxxx, Xxxxxxxx Xxx
Xxxxxx, XX 00000
Facsimile: (000) 000-0000
If to the Adviser:
Xxxxxxxxx X. Xxxxxx, Esq.
Vice President and Secretary
Dimensional Fund Advisors LP
0000 Xxx Xxxx Xxxx, Xxxxxxxx Xxx
Xxxxxx, XX 00000
Facsimile: (000) 000-0000
If to DFAS:
Xxxxxxxxx X. Xxxxxx, Esq.
Vice President and Secretary
DFA Securities LLC
0000 Xxx Xxxx Xxxx, Xxxxxxxx Xxx
Xxxxxx, XX 00000
Facsimile: (000) 000-0000
If to the Company:
Forethought Life Insurance Company
00 Xxxx Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxxxx, XX 00000
Attn: Xxxx Xxxx
10. MISCELLANEOUS
10.1 The captions in this Agreement are included for convenience of
reference only and in no way affect the construction or effect of any
provisions hereof.
10.2 If any portion 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.
10.3 This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and
the same instrument.
21
10.4 Each Party shall cooperate with the other Parties and all appropriate
governmental authorities (including, without limitation, the SEC,
FINRA, and any applicable insurance, securities or other regulator of
competent jurisdiction), and shall permit such authorities reasonable
access to its books and records as required by applicable law in
connection with any investigation or inquiry relating to this
Agreement.
10.5 Each Party hereto grants to the other Parties the right to audit the
Party's records relating to the terms and conditions of this
Agreement upon reasonable notice during reasonable business hours in
order to confirm compliance with this Agreement.
10.6 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, to which the Parties hereto are
entitled under state and federal laws.
10.7 Each Party will treat as confidential any and all "Nonpublic
Personal Financial Information" and all information reasonably
identified as confidential (collectively, "Confidential
Information") and not release any Confidential Information unless
(a) the other party provides written consent to do so; (b) a party
is compelled to do so by court order, subpoena or comparable request
or a request issued in connection with a regulatory examination or
investigation by any governmental agency, regulator or other
competent authority; (c) a disclosure is made to such Party's legal
counsel, auditors, or third-party service providers who has agreed
to keep such information confidential and reasonably requires such
information for a Party to meet the obligations set forth herein; or
(d) permitted by applicable law. Each Party shall safeguard
Confidential Information as required by applicable law and provide
reasonable confirmation upon request. As used above, (i) "Nonpublic
Personal Financial Information" shall refer to personally
identifiable financial information about any prospective or then
existing customer of the Company including customer lists, names,
addresses, account numbers and any other data provided by customers
to the Company in connection with the purchase or maintenance of a
product or service that is not Publicly Available; and (ii)
"Publicly Available" shall mean any information that the disclosing
party has a reasonable basis to believe is lawfully made available
to the general public from federal, state, or local government
records, widely distributed media, or disclosures made to the
general public that are required by federal, state, or local law.
The Fund and its affiliates agree that it and they shall not use the
information received pursuant to this Agreement, including any
Confidential Information, for marketing or solicitation purposes.
10.8 This Agreement or any of the rights and obligations hereunder may not
be assigned by any Party without the prior written consent of the
other Parties hereto.
10.9 In any dispute arising hereunder, each Party waives its right to
demand a trial by jury and hereby consents to a bench trial of all
such disputes.
10.10 The terms of this Agreement shall be construed and the provisions
hereof interpreted under and in accordance with the laws of the State
ofNew York, without regard to the conflicts of law principles
thereof; PROVIDED, HOWEVER, that
22
all performances rendered hereunder shall be subject to compliance
with all applicable state and federal laws and regulations.
To the extent such laws are applicable, this Agreement shall be
subject to the provisions of the 1933 Act, the 1934 Act and the 1940
Act and the rules and regulations and interpretations thereunder,
including such exemptions from those statutes, rules and regulations
as the SEC may grant, and any applicable FINRA regulations or
interpretations, and the terms hereof shall be interpreted and
construed in accordance therewith.
10.12 The Company agrees that upon execution of this Agreement, and
thereafter promptly upon the earlier of (i) reasonable demand by the
Adviser or Fund, or (ii) learning that documentation (as defined
below) is required, Company shall deliver to the Fund any
certification, form, document or information (collectively,
"documentation") that may be required or reasonably requested in
order to allow the Fund to make any payments or distributions,
whether in-kind or in cash or reinvested in additional Fund shares,
to the Company without any deduction or withholding for or on account
of any tax including, without limitation, an executed United States
Internal Revenue Service Form W-9 (and successor forms thereto) and
any other documentation required to be delivered pursuant to Section
1471(b) or section 1472(b)(1) of the Code.
10.13 This Agreement may not be amended or modified except by a written
amendment, which includes any amendments to the Schedules, executed
by all Parties to the Agreement.
23
IN WITNESS WHEREOF, each of the Parties hereto has caused this Agreement
to be duly executed as of the date first set forth above.
COMPANY:
FORETHOUGHT LIFE INSURANCE COMPANY
By: /s/ Xxxxxx X. Arena, JR.
------------------------------
Name: Xxxxxx X. Arena, JR.
------------------------------
Title: President
------------------------------
FUND:
DFA INVESTMENT DIMENSIONS GROUP INC.
By: /s/ Xxxx X. Xxxx
------------------------------
Name: Xxxx X. Xxxx
------------------------------
Title: Vice President
------------------------------
ADVISER:
DIMENSIONAL FUND ADVISORS LP
By: Dimensional Holdings Inc.,
general partner
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxx
------------------------------
Title: Vice President
------------------------------
DFAS:
DFA SECURITIES LLC
By: /s/ Xxxxxxx O
------------------------------
Name: Xxxxxxx O
------------------------------
Title: Vice President
------------------------------
24
[FUNDSERV EX MSFO]
SCHEDULE 1.1
VA U.S. Targeted Value Portfolio
VA U.S. Large Value Portfolio
VA International Value Portfolio
VA International Small Portfolio
VA Short-Term Fixed Portfolio
VA Global Bond Portfolio
SCHEDULE 3.6: Rule 22c-2 Provisions
1. AGREEMENT TO PROVIDE INFORMATION. The Company (hereafter, an
"Intermediary") agrees to provide the Fund or its designee, upon written
request, the taxpayer identification number ("TIN"), the
Individual/International Taxpayer Identification Number ("ITIN")(1), or
other government-issued identifier ("GII"), if known, of any or all
Contract holders or shareholder(s) of the account (together,
"Shareholder(s)") and the amount, date, and transaction type (purchase,
redemption, transfer, or exchange) of every purchase, redemption, transfer,
or exchange of Fund shares ("Shares") held through an account maintained by
the Intermediary during the period covered by the request.
All requests must contain the relevant fund account number, CUSIP, trade
amount and date. Requests must be made directly to us via e-mail at:
XX0Xxxx00x-0@xx.0.xxx
or such other address we may communicate to you in writing from time to
time.
1.1. PERIOD COVERED BY REQUEST. Requests to provide the information
specified in Section 1 shall set forth the specific period for which
it is sought, not to exceed 180 calendar days from the date of the
request for which the information is sought. The Fund shall not
request the information specified in Section 1 more frequently than
monthly, or older than 180 calendar days from the date of the
request, except as you deem reasonably necessary to investigate
compliance with Fund policies.
1.2. FORM AND TIMING OF RESPONSE.
1.2.1. Intermediary agrees to provide, promptly upon request of the
Fund or its designee, the requested information specified in
Section 1. If requested by the Fund or its designee,
Intermediary agrees to use its best efforts to determine
promptly whether any specific person about whom it has
received the identification and transaction information
specified in Section 1 is itself a financial intermediary
("indirect intermediary") and, upon further request of the
Fund or its designee, promptly either (i) provide (or arrange
to have provided) the information set forth in Section 1 for
those shareholders who hold an account with an indirect
intermediary, or (ii) restrict or prohibit the indirect
intermediary from purchasing, in nominee name on behalf of
other persons, securities issued
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(1) According to the IRS' website, the ITIN refers to the Individual
Taxpayer Identification number, which is a nine-digit number that
always begins with the number 9 and has a 7 or 8 in the fourth digit,
example 9XX-7X-XXXX .. The IRS issues ITINs to individuals who are
required to have a U.S. taxpayer identification number but who do not
have, and are not eligible to obtain a Social Security Number (SSN)
from the Social Security Administration (SSA). SEC Rule 22c-2
inadvertently refers to the ITIN as the International Taxpayer
Identification Number.
by the Fund. Intermediary additionally agrees to inform the
Fund whether it plans to perform (i) or (ii).
1.2.2. Responses required by this paragraph must be communicated in
writing and in a format mutually agreed upon by the Parties.
1.2.3. To the extent practicable, the format for any transaction
information provided to the Fund should be consistent with the
NSCC Standardized Data Reporting Format.
1.3. LIMITATIONS ON USE OF INFORMATION. The Fund agrees not to use the
information received from the Intermediary for the Fund's use in
external solicitation or marketing to shareholders without the prior
written consent of the Intermediary. The Fund is permitted to use the
information received from the Intermediary for the Fund's internal
purposes, including monitoring compliance with the Fund's internal
policies, procedures and practices. The Fund agrees to keep any
non-public information furnished by the Intermediary confidential
consistent with the Fund's then current privacy policy, except as
necessary to comply with federal, state, or local laws, rules, or
other applicable legal requirements.
2. AGREEMENT TO RESTRICT TRADING. Intermediary agrees to execute written
instructions from the Fund to restrict or prohibit further purchases or
exchanges of Shares by a Shareholder that has been identified by the Fund
as having engaged in transactions in the Fund's Shares (directly or
indirectly through the Intermediary's account) that violate policies
established by the Fund for the purpose of eliminating or reducing any
dilution of the value of the outstanding Shares issued by the Fund.
Intermediary will execute such restrictions with respect to the
Shareholder, but only for the Contract through which such transactions in
the Fund's shares occurred. Instructions must be received by us via email
at:
XX0Xxxx00x-0@xx.0.xxx
or such other address we may communicate to you in writing from time to
time.
2.1. FORM OF INSTRUCTIONS. Instructions to restrict or prohibit trading
must include the TIN, ITIN, or GII, if known, the specific individual
Contract owner number (if known) and the specific restriction(s) to
be executed. If the TIN, ITIN, or GII is not known, the instructions
must include an equivalent identifying number of the Shareholder(s)
or Accounts or other agreed upon information to which the instruction
relates.
2.2. TIMING OF RESPONSE. Intermediary agrees to execute instructions from
the Fund to restrict or prohibit trading as soon as reasonably
practicable, but not later than ten (10) business days after receipt
of the instructions by the Intermediary.
2.3. CONFIRMATION BY INTERMEDIARY. Intermediary must provide written
confirmation to the Fund that instructions have been executed.
Intermediary
agrees to provide confirmation as soon as reasonably practicable,
but not later than ten (10) business days after the instructions
have been executed.
3. DEFINITIONS. For purposes of this SCHEDULE 3.6:
3.1. The term "Fund" includes the Fund's principal underwriter and
transfer agent. The term not does include any "excepted funds" as
defined in SEC Rule 22c-2(b) under the 1940 Act.(2)
3.2. The term "Shares" means the interests of Shareholders corresponding
to the redeemable securities of record issued by the Fund under the
1940 Act that are held by the Intermediary.
3.3. The term "Shareholder" means the beneficial owner of Shares, whether
the Shares are held directly or by the Intermediary in nominee name;
except:
3.3.1. with respect to retirement plan recordkeepers, the term
"Shareholder" means the Plan participant notwithstanding that
the Plan may be deemed to be the beneficial owner of Shares;
and
3.3.2. with respect to insurance companies, the term "Shareholder"
means the holder of interests in a variable annuity or
variable life insurance contract issued by the Intermediary.
3.4. The term "written" includes electronic writings and facsimile
transmissions.
3.5. The term "Intermediary" shall mean a "financial intermediary" as
defined in SEC Rule 22c-2.(3)
3.6. The term "purchase" does not include: (i) the automatic reinvestment
of dividends; (ii) transactions that are executed automatically
pursuant to contractual or systematic programs or enrollments such as
transfers of assets within a Contract to a Fund as a result of
"dollar cost averaging" programs, asset allocation programs and
automatic rebalancing programs; (iii) pursuant to a Contract death
benefit; (iv) a step-up (or comparable benefit) in Contract value (or
comparable benefit base pursuant to a Contract death benefit or
guaranteed minimum withdrawal benefit; or (v) allocation of assets to
a Fund through a Contract as a result of premium payments.
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(2) As defined in SEC Rule 22c-2(b), the term "excepted fund" means any: (1)
money market fund; (2) fund that issues securities that are listed on a
national exchange; and (3) fund that affirmatively permits short-term
trading of its securities, if its prospectus clearly and prominently
discloses that the fund permits short-term trading of its securities and
that such trading may result in additional costs for the fund.
(3) "Financial intermediary" is defined in SEC Rule 22c-2(c)(1) as: "(i) any
broker, dealer, bank, or other entity that holds securities of record
issued by the fund, in nominee name; (ii) a unit investment trust or fund
that invests in the fund in reliance on section 12(d)(1)(E) of the Act (15
U.S.C. 80a-12(d)(1)(E)); and (iii) in the case of a participant-directed
employee benefit plan that owns the securities issued by the fund, a
retirement plan's administrator under section 3(16)(A) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1002(16)(A)) or any
entity that maintains the plan's participant records."
3.7. The term "promptly" as used in Section 1.2 shall mean as soon as
practicable but in no event later than 10 business days from the
Intermediary's receipt of the request for information from the Fund
or its designee.
