Exhibit (17)(c)
REIMBURSEMENT AGREEMENT
REIMBURSEMENT AGREEMENT (the "Agreement") made by and between XXXXXXX,
XXXXXXX & XXXXX, INC., a Delaware corporation ("SS&C"), with a principal place
of business in Boston, Massachusetts and WASHINGTON NATIONAL INSURANCE COMPANY,
an Illinois corporation (the "Company"), with a principal place of business in
Lincolnshire, Illinois on behalf of the Separate Account I, a separate account
of the Company, and any other separate account of the Company as designated by
the Company from time to time, upon written notice to the Fund in accordance
with Section 8 herein (the "Account").
WHEREAS, SS&C has caused to be organized Xxxxxxx Variable Life
Investment Fund (the "Fund"), a Massachusetts business trust created under a
Declaration of Trust dated March 15, 1985, as amended, the beneficial interest
in which is divided into several series, each designated a "Portfolio" and
representing the interest in a particular managed portfolio of securities; and
WHEREAS, the purpose of the Fund is to act as the investment vehicle
for the separate accounts established for variable life insurance policies and
variable annuity contracts to be offered by insurance companies which have
entered into reimbursement agreements substantially identical to this Agreement;
and
WHEREAS, the parties desire to express their agreement as to certain
other matters;
NOW THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements hereinafter contained, the parties hereto agree as
follows:
1. Additional Definitions.
For purposes of this Agreement, the following definitions shall apply:
(a) "Shares" means shares of beneficial interest, without par
value, of any Portfolio, now or hereafter created, of the
Fund.
2. Access to Other Products.
SS&C shall permit a Participating Shareholder to participate in any
registered investment company other than the Fund which is intended as the
funding vehicle for insurance products and for which SS&C or an affiliate of
SS&C acts as investment adviser, on the same basis as other insurance companies
are permitted to participate in such a registered investment company. This
provision shall not require SS&C to make available to the Company shares of any
investment company which is organized solely as the funding vehicle for
insurance products offered by a single insurance company or a group of
affiliated insurance companies.
3. Right to Review and Approve Sales Materials.
The Company shall furnish, or shall cause to be furnished, to SS&C or
its designee, at least twenty days prior to its intended use, each piece of
promotional material in which SS&C or the Fund is named. No such material shall
be used unless SS&C or its designee shall have approved such use in writing, or
twenty days shall have elapsed without approval, rejection or objection since
receipt by SS&C or its designee of such material.
SS&C shall furnish, or shall cause to be furnished, to the Company or
its designee, at least twenty days prior to its intended use, each piece of
promotional material in which the Company or its separate account(s) is named.
No such material shall be used unless the Company or its designee shall have
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approved such use in writing, or twenty days shall have elapsed without
approval, rejection or objection since receipt by the Company or its designee of
such material.
4. Sales Organization Meetings.
Representatives of SS&C or its designee shall meet with the sales
organizations of the Company at such reasonable times and places as may be
agreed upon by the Company and SS&C or its designee for the purpose of educating
sales personnel about the Fund.
5. Duration.
This Agreement shall continue in effect for five (5) years from the
date of its execution, except that the obligation of each party hereto to
indemnify the other party hereto shall continue with respect to all losses,
claims, damages, liabilities or litigation based upon the acquisition of Shares
purchased as the funding vehicle for any variable life insurance policy or
variable annuity contract issued by the Company or any affiliated insurance
company.
6. Indemnification.
(a) The Company agrees to indemnify and hold harmless SS&C and each of
its directors and officers and each person, if any, who controls SS&C within the
meaning of Section 15 of the Securities Act of 1933 (the "Act") or any person,
controlled by or under common control with SS&C ("affiliate") against any and
all losses, claims, damages, liabilities or litigation (including legal and
other expenses) to which SS&C or such directors, officers or controlling person
may become subject under the Act, under any other statute, at common law or
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otherwise, arising out of the acquisition of any Shares by any person which (i)
may be based upon any wrongful act by the Company, any of its employees or
representatives, any affiliate of or any person acting on behalf of the Company
or a principal underwriter of its insurance products, or (ii) may be based upon
any untrue statement or alleged untrue statement of a material fact contained in
a registration statement or prospectus covering Shares 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 SS&C or the Fund by the Company, provided, however,
that in no case (i) is the Company's indemnity in favor of a director or officer
or any other person deemed to protect such director or officer or other person
against any liability to which any such person would otherwise be subject by
reason of willful misfeasance, bad faith, or gross negligence in the performance
of his duties or by reason of his reckless disregard of obligations and duties
under this Agreement or (ii) is the Company to be liable under its indemnity
agreement contained in this Paragraph 6 with respect to any claim made against
SS&C or any person indemnified unless SS&C or such person, as the case may be,
shall have notified the Company in writing pursuant to Paragraph 8 within a
reasonable time after the summons or other first legal process giving
information of the nature of the claims shall have been served upon SS&C or upon
such person (or after SS&C or such person shall have received notice of such
service on any designated agent), but failure to notify the Company of any such
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claim shall not relieve the Company from any liability which it has to SS&C or
any person against whom such action is brought otherwise than on account of the
indemnity agreement contained in this Paragraph 6. The Company shall be entitled
to participate, at its own expense, in the defense, or, if it so elects, to
assume the defense of any suit brought to enforce any such liability, but, if it
elects to assume the defense, such defense shall be conducted by counsel chosen
by it and satisfactory to SS&C, to its officers and directors, or to any
controlling person or persons, defendant or defendants in the suit. In the event
that the Company elects to assume the defense of any such suit and retain such
counsel, SS&C, such officers and directors or controlling person or persons,
defendant or defendants in the suit, shall bear the fees and expenses of any
additional counsel retained by them, but, in case the Company does not elect to
assume the defense of any such suit, the Company will reimburse SS&C, such
officers and directors or controlling person or persons, defendant or defendants
in such suit, for the reasonable fees and expenses of any counsel retained by
them. The Company agrees promptly to notify SS&C pursuant to Paragraph 8 of the
commencement of any litigation or proceedings against it in connection with the
issue and sale of any Shares.
(b) SS&C 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 Act against any and all losses, claims,
damages, liabilities or litigation (including legal and other expenses) to which
it or such directors, officers or controlling persons may become subject under
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the Act, under any other statute, at common law or otherwise, arising out of the
acquisition of any Shares by any person which (i) may be based upon any wrongful
act by SS&C, any of its employees or representatives or a principal underwriter
of the Fund, or (ii) may be based upon any untrue statement or alleged untrue
statement of a material fact contained in a registration statement or prospectus
covering Shares 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 SS&C; provided, however, that in no case (i) is SS&C's indemnity in
favor of a director or officer or any other person deemed to protect such
director or officer or other person against any liability to which any such
person would otherwise be subject by reason of willful misfeasance, bad faith,
or gross negligence in the performance of his duties or by reason of his
reckless disregard of obligations and duties under this Agreement or (ii) is
SS&C to be liable under its indemnity agreement contained in this Paragraph 6
with respect to any claims made against the Company or any such director,
officer or controlling person unless it or such director, officer or controlling
person, as the case may be, shall have notified SS&C in writing pursuant to
Paragraph 8 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 it or upon such director, officer or controlling person (or after the
Company or such director, officer or controlling person shall have received
notice of such service on any designated agent), but failure to notify SS&C of
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any claim shall not relieve it from any liability which it may have to the
person against whom such action is brought otherwise than on account of its
indemnity agreement contained in this Paragraph 6. SS&C will be entitled to
participate at its own expense in the defense, or, if it so elects, to assume
the defense of any suit brought to enforce any such liability, but if SS&C
elects to assume the defense, such defense shall be conducted by counsel chosen
by it and satisfactory to the Company, its directors, officers or controlling
person or persons, defendant or defendants, in the suit. In the event SS&C
elects to assume the defense of any such suit and retain such counsel, the
Company, its directors, officers or controlling person or persons, defendant or
defendants in the suit, shall bear the fees and expenses of any additional
counsel retained by them, but, in case SS&C does not elect to assume the defense
of any such suit, it will reimburse the Company or such directors, officers or
controlling person or persons, defendant or defendants in the suit, for the
reasonable fees and expenses of any counsel retained by them. SS&C agrees
promptly to notify the Company pursuant to Paragraph 8 of the commencement of
any litigation or proceedings against it or any of its officers or directors in
connection with the issuance or sale of any Shares.
(c) SS&C agrees to indemnify and hold harmless the Company and each of
its directors and officers against any and all losses, claims, damages,
liabilities or litigation arising from the imposition of additional federal
income taxes on the Company or any policyholder solely as a result of a Final
Determination that any Portfolio has failed (x) to comply with the
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diversification requirements of section 817(h) of the Internal Revenue Code of
1986, as amended (the "Code"), relating to the diversification requirements for
variable annuity, endowment and life insurance contracts, or (y) to qualify as a
regulated investment company within the meaning of section 851 of the Code;
provided, however, that (i) SS&C shall have no liability under this Paragraph
6(c) if such failure is caused by a third party who is not an employee or agent
of SS&C (e.g., the Fund's custodian or another service provider), and (ii) in no
case is SS&C's indemnity under this Paragraph 6(c) deemed to protect any person
against any liability to which that person would otherwise be subject by reason
of willful misfeasance, bad faith or gross negligence in the performance of that
person's duties or by reason of reckless disregard by that person of obligations
under this Agreement.
The Company agrees that if the Internal Revenue Service
asserts in writing in connection with any governmental audit or review of the
Company or, to the Company's knowledge, of any policyholder, that any Portfolio
has failed to comply with the diversification requirements of section 817(h) of
the Code or the Company otherwise becomes aware of any facts that could give
rise to any claim against SS&C as a result of such a failure or alleged failure,
(i) the Company shall promptly notify SS&C of such assertion or potential claim;
(ii) the Company shall consult with SS&C as to how to minimize any liability
that may arise as a result of such failure or alleged failure; (iii) the Company
shall use its best efforts to minimize any liability of SS&C for indemnification
resulting from such failure, including, without limitation, demonstrating,
pursuant to Treasury Regulations Section 1.817-5(a) (2), to the Commissioner of
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the Internal Revenue Service that such failure was inadvertent; (iv) the Company
shall permit SS&C and its legal and accounting advisors to participate in any
conferences, settlement discussions or other administrative or judicial
proceedings or contests (including judicial appeals thereof) with the Internal
Revenue Service, any policyholder or any other claimant regarding any claims
that could give rise to indemnification by SS&C as a result of such a failure or
alleged failure; (v) any written materials to be submitted by the Company to the
Internal Revenue Service, any policyholder or any other claimant in connection
with any of the foregoing proceedings or contests (including, without
limitation, any such materials to be submitted to the Internal Revenue Service
pursuant to Treasury Regulations Section 1.817-5(a) (2)), (a) shall be provided
by the Company to SS&C (together with any supporting information or analysis) at
least 10 business days prior to the day on which such proposed materials are to
be submitted and (b) shall not be submitted by the Company to any such person
without the express written consent of SS&C, which shall not be unreasonably
withheld; (vi) the Company shall provide SS&C and its advisors with such
cooperation as SS&C shall reasonably request (including, without limitation, by
permitting SS&C and its accounting and legal advisors to review the relevant
books and records of the Company) in order to facilitate SS&C's review of any
written submissions provided to it pursuant to the preceding clause or its
assessment of the validity or amount of any claim against it arising from such a
failure or alleged failure; (vii) the Company shall not with respect to any
claim of the IRS or any policyholder that would give rise to a claim for
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indemnification against SS&C (a) compromise or settle any claim, (b) accept any
adjustment on audit, or (c) forego any allowable judicial appeals, without the
express written consent of SS&C, which shall not be unreasonably withheld,
provided that the Company shall not be required to appeal any adverse judicial
decision unless SS&C shall have provided an opinion of independent counsel to
the effect that a reasonable basis (consistent with Formal Opinion 85-352 of the
American Bar Association) exists for taking such appeal; and (viii) SS&C shall
have no liability as a result of such failure or alleged failure if the Company
fails to comply with any of the foregoing clauses (i) through (vii). Should SS&C
refuse to give its written consent to any compromise or settlement of any claim
or liability hereunder, the Company may, in its discretion, authorize SS&C to
act in the name of the Company in, and to control the conduct of, such
conferences, discussions, proceedings, contests or appeals and all
administrative or judicial appeals thereof, and in that event SS&C shall bear
the fees and expenses associated with the conduct of the proceedings that it is
so authorized to control.
For purposes of this Paragraph 6(c), "Final Determination" shall mean,
with respect to any claim, a settlement of such claim (including the acceptance
of an adjustment proposed by the Internal Revenue Service) or a decision of a
court of competent jurisdiction with respect to such claim that has become final
after either the (i) exhaustion of allowable appeals or (2) expiration of the
time to take any such appeal with respect to the claim.
7. Massachusetts Law to Apply.
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This Agreement shall be construed and the provisions hereof interpreted
under and in accordance with the laws of The Commonwealth of Massachusetts.
8. Notices.
Any notice shall be sufficiently given when sent by registered or
certified mail to the other party at the address of such party set forth below
or at such other address as such party may from time to time specify in writing
to the other party.
If to SS&C:
Xxxxxxx, Xxxxxxx & Xxxxx, Inc.
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
(000) 000-0000
Attn: Xxxxx X. Xxxxx
If to the Company:
Washington National Insurance Company
000 Xxxxx Xxxxxxx
Xxxxxxxxxxxx, XX 00000
Attn: Xxxxxx Xxxxx
9. Miscellaneous.
The captions in the 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. This Agreement may be executed
simultaneously in two or more counterparts, each of which taken together shall
constitute one and the same instrument.
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed in its name and behalf by its duly authorized
representative and its seal to be hereunder affixed hereto as of the day of
__________, 1995.
SEAL XXXXXXX, XXXXXXX & XXXXX, INC.
By: ____________________________
Xxxxx X. Xxx
Authorized Officer
SEAL WASHINGTON NATIONAL INSURANCE COMPANY
By: ____________________________
Name:
Title:
