FUND PARTICIPATION AGREEMENT
American United Life Insurance Company
Columbia Funds Variable Insurance Trust
Columbia Management Advisors, LLC
and
Columbia Management Distributors, Inc.
May 1, 2008
TABLE OF CONTENTS
Article I. Sale of Fund Shares...............................................2
Article II. Representations and Warranties...................................5
Article III. Prospectuses and Proxy Statements; Voting.......................8
Article IV. Sales Material and Information...................................9
Article V. Fees and Expenses................................................10
Article VI. Diversification and Qualification...............................10
Article VII. Potential Conflicts and Compliance With Mixed and Shared Funding
Exemptive Order...............................................12
Article VIII. Indemnification...............................................14
Article IX. Applicable Law..................................................18
Article X. Termination......................................................18
Article XI. Notices.........................................................20
Article XII. Miscellaneous..................................................21
SCHEDULE A...................................................................24
SCHEDULE B...................................................................25
SCHEDULE C...................................................................26
PARTICIPATION AGREEMENT
Among
AMERICAN UNITED LIFE INSURANCE COMPANY
COLUMBIA FUNDS VARIABLE INSURANCE TRUST
COLUMBIA MANAGEMENT ADVISORS, LLC
and
COLUMBIA MANAGEMENT DISTRIBUTORS, INC.
THIS AGREEMENT, made and entered into as of this 1st day of May, 2008, by and
among AMERICAN UNITED LIFE INSURANCE COMPANY (the "Company"), an Indiana life
insurance company, on its own behalf and on behalf of its separate accounts (the
"Accounts"); COLUMBIA FUNDS VARIABLE INSURANCE TRUST, an open-end management
investment company organized under the laws of Massachusetts (the "Fund");
COLUMBIA MANAGEMENT ADVISORS, LLC (the "Adviser"), a Delaware limited liability
corporation; and COLUMBIA MANAGEMENT DISTRIBUTORS, INC. (the "Distributor"), a
Massachusetts corporation.
WHEREAS, the Fund engages in business as an open-end management investment
company and is available to act as the investment vehicle for separate accounts
established for variable life insurance policies and/or variable annuity
contracts (collectively, the "Variable Insurance Products") to be offered by
insurance companies, many of which have entered into participation agreements
similar to this Agreement (hereinafter "Participating Insurance Companies"); and
WHEREAS, the beneficial interest in the Fund is divided into several series of
shares, each designated a "portfolio" and representing the interest in a
particular managed portfolio of securities and other assets; and
WHEREAS, the Fund is able to rely on an order from the Securities and Exchange
Commission (hereinafter the "SEC") granting Participating Insurance Companies
and variable annuity and variable life insurance separate accounts exemptions
from the provisions of sections 9(a), 13(a), 15(a), and 15(b) of the Investment
Company Act of 1940, as amended, (hereinafter the "1940 Act") and Rules
6e-2(b)(15) and 6e-3(T)(b)(15) thereunder, to the extent necessary to permit
shares of the Fund to be sold to and held by variable annuity and variable life
insurance separate accounts of life insurance companies that may or may not be
affiliated with one another and qualified pension and retirement plans
("Qualified Plans") (hereinafter the "Mixed and Shared Funding Exemptive
Order"); and
WHEREAS, the Fund is registered as an open-end management investment company
under the 1940 Act and shares of the portfolios are registered under the
Securities Act of 1933, as amended (hereinafter the "1933 Act"); and
WHEREAS, the Adviser is duly registered as an investment adviser under the
Investment Advisers Act of 1940, as amended; and
WHEREAS, the Distributor is duly registered as a broker-dealer under the
Securities Exchange Act of 1934, as amended, (the "1934 Act") and is a member in
good standing of the Financial Industry Regulatory Authority ("FINRA"); and
WHEREAS, the Company has issued and plans to continue to issue certain variable
life insurance policies and/or variable annuity contracts supported wholly or
partially by the Accounts (the "Contracts"), and the Contracts are listed on
Schedule A attached hereto and incorporated herein by reference, as such
schedule may be amended from time to time by mutual written agreement of the
parties; and
WHEREAS, each Account is a duly organized, validly existing segregated asset
account, established by resolution of the Board of Directors of the Company
under the insurance laws of the State of Indiana, to set aside and invest assets
attributable to the Contracts; and
WHEREAS, the Company has registered each Account as a unit investment trust
under the 1940 Act, unless such Account is exempt from registration thereunder;
WHEREAS, to the extent permitted by applicable insurance laws and regulations,
the Company intends to purchase shares in the Portfolios listed on Schedule B
attached hereto and incorporated herein by reference, as such schedule may be
amended from time to time by mutual written agreement of the parties (the
"Portfolios"), on behalf of the Accounts to fund the Contracts, and the
Distributor is authorized to sell such shares to unit investment trusts such as
the Accounts at net asset value; and
WHEREAS, to the extent permitted by applicable insurance laws and regulations,
the Company also intends to continue to purchase shares in other open-end
investment companies or series thereof not affiliated with the Fund (the
"Unaffiliated Funds") on behalf of the Accounts to fund the Contracts.
NOW, THEREFORE, in consideration of their mutual promises, the Company, the
Fund, the Distributor and the Adviser agree as follows:
ARTICLE I. Sale of Fund Shares
1.1. The Distributor agrees to sell to the Company those shares of the
Portfolios which the Account orders, executing such orders on each Business Day
at the net asset value next computed after receipt by the Fund or its designee
of the order for the shares of the Portfolios, subject to the terms and
conditions set forth in the Fund's then-current prospectus. For purposes of this
Section 1.1, the Company shall be the designee of the Fund for receipt of such
orders and receipt by such designee shall constitute receipt by the Fund,
provided that the Fund receives
notice of any such order sufficiently in advance of 10:00 a.m. Eastern time on
the next following Business Day to effect any purchase by 10:00 a.m. Eastern
time on that Business Day. The parties agree that receipt by the Fund of notice
of such order prior to 9:00 a.m. Eastern time will be deemed to be sufficiently
in advance for purposes of the preceding sentence; receipt of such notice
between 9:00 a.m. and 10:00 a.m. Eastern time will be deemed to be sufficiently
in advance solely in the discretion of the Fund or its designee. "Business Day"
shall mean any day on which the New York Stock Exchange is open for trading and
on which a Portfolio calculates its net asset value pursuant to the rules of the
SEC.
1.2. The Fund agrees to make shares of the Portfolios available for purchase at
the applicable net asset value per share by the Company and the Accounts on
those days on which the Fund calculates its Portfolios' net asset value pursuant
to rules of the SEC, and the Fund shall calculate such net asset value on each
day on which the New York Stock Exchange is open for trading. Notwithstanding
the foregoing, the Fund may refuse to sell shares of any Portfolio to any
person, or suspend or terminate the offering of shares of any Portfolio if such
action is required by law or by regulatory authorities having jurisdiction or
is, in the sole discretion of the Fund acting in good faith, necessary or
appropriate in the best interests of the shareholders of such Portfolio. All
orders received by the Company shall be subject to the terms of the then current
prospectus of the Fund, including the Fund's excessive trading policies. The
Company shall use its best efforts, and shall reasonably cooperate with, the
Fund to enforce stated prospectus policies regarding transactions in Portfolio
shares. The Company acknowledges that orders received by it in violation of the
Fund's stated policies may be subsequently revoked or cancelled by the Fund and
that the Fund shall not be responsible for any losses incurred by the Company or
the Contract owner as a result of such cancellation. In addition, the Company
acknowledges that the Fund has the right to refuse any purchase order for any
reason, particularly if the Fund determines that a Portfolio would be unable to
invest the money effectively in accordance with its investment policies or would
otherwise be adversely affected due to the size of the transaction, frequency of
trading, or other factors.
1.3. The Fund will not sell shares of the Portfolios to any other Participating
Insurance Company separate account unless an agreement containing provisions the
substance of which are the same as Sections 2.1, 2.2 (except with respect to
designation of applicable law), 3.5, 3.6, 3.7, and Article VII of this Agreement
is in effect to govern such sales.
1.4. The Fund agrees to redeem for cash, on the Company's request, any full or
fractional shares of the Portfolios held by the Company, executing such requests
on each Business Day at the net asset value next computed after receipt by the
Fund or its designee of the request for redemption. For purposes of this Section
1.4, the Company shall be the designee of the Fund for receipt of requests for
redemption and receipt by such designee shall constitute receipt by the Fund,
provided that the Fund receives notice of any such request for redemption
sufficiently in advance of 10:00 a.m. Eastern time on the next following
Business Day to effect any redemption by 10:00 a.m. Eastern time on that
Business Day. The parties agree that receipt by the Fund of notice of such order
prior to 9:00 a.m. Eastern time will be deemed to be sufficiently in advance for
purposes of the preceding sentence; receipt of such notice between 9:00 a.m. and
10:00 a.m. Eastern time will be deemed to be sufficiently in advance solely in
the discretion of the Fund or its designee.
1.5. The parties hereto acknowledge that the arrangement contemplated by this
Agreement is not exclusive; the Fund's shares may be sold to other Participating
Insurance Companies (subject to Section 1.3) and the cash value of the Contracts
may be invested in other investment companies.
1.6. In the event of net purchases, the Company shall pay for Fund shares by
3:00 p.m. Eastern time on the next Business Day after an order to purchase Fund
shares is received in accordance with the provisions of Section 1.1 hereof.
Payment shall be in federal funds transmitted by wire and/or by a credit for any
shares redeemed the same day as the purchase.
1.7. The Fund shall pay and transmit the proceeds of redemptions of Fund shares
by 2:00 p.m. Eastern Time on the next Business Day after a redemption order is
received in accordance with Section 1.4 hereof; provided, however, that the Fund
may delay payment in extraordinary circumstances to the extent permitted under
Section 22(e) of the 1940 Act. Payment shall be in federal funds transmitted by
wire and/or a credit for any shares purchased the same day as the redemption.
Each party has the right to rely on information or confirmations provided by the
other party (or by an affiliate of the other party), and shall not be liable in
the event that an error is a result of any misinformation supplied by the other
party.
1.8. Issuance and transfer of the Fund's shares will be by book entry only.
Stock certificates will not be issued to the Company or the Accounts. Shares
purchased from the Fund will be recorded in an appropriate title for the
relevant Account or the relevant sub-account of an Account.
1.9. The Fund shall furnish same day notice (by electronic communication or
telephone, followed by electronic confirmation) to the Company of any income,
dividends or capital gain distributions payable on a Portfolio's shares. The
Company hereby elects to receive all such income dividends and capital gain
distributions as are payable on a Portfolio's shares in additional shares of
that Portfolio. The Company reserves the right to revoke this election and to
receive all such income dividends and capital gain distributions in cash. The
Fund shall notify the Company by the end of the next following Business Day of
the number of shares so issued as payment of such dividends and distributions.
1.10. The Fund shall make the net asset value per share for each Portfolio
available to the Company on each Business Day as soon as reasonably practicable
after the net asset value per share is calculated and shall use its best efforts
to make such net asset value per share available by 7:00 p.m. Eastern time. In
the event of an error in the computation of a Portfolio's net asset value per
share ("NAV") or any dividend or capital gain distribution (each, a "pricing
error"), the Adviser or the Fund shall notify the Company as soon as possible
after discovery of the error. Such notification may be oral, but shall be
confirmed promptly in writing. A pricing error shall be corrected in accordance
with the Fund's policies and procedures, which comply in all material respects
with applicable law. Upon notification by the Adviser of any overpayment due to
a material error, the Company shall promptly remit to the Adviser any
overpayment that has not been paid to Contract owners. In no event shall the
Company be liable to Contract owners for
any such adjustments or underpayment amounts. Only the following pricing errors
shall be deemed to be "materially incorrect" or constitute a "material error"
for purposes of this Agreement: pricing errors that result in a difference
between the erroneous NAV and the correct NAV equal to or greater than $0.01 per
share.
1.11. The parties agree to mutually cooperate with respect to any state
insurance law restriction or requirement applicable to the Fund's investments;
provided, however, that the Fund reserves the right not to implement
restrictions or take other actions required by state insurance law if the Fund
or the Adviser determines that the implementation of the restriction or other
action is not in the best interest of Fund shareholders.
ARTICLE II. Representations and Warranties
2.1. The Company represents and warrants that: (a) Contracts or interests in the
Accounts are or will be registered under the 1933 Act, or are not so registered
in proper reliance upon an exemption from such registration requirements (in the
event the Company of the Account relies upon an exemption from such registration
requirements, the Company undertakes to promptly so notify the Fund); (b) the
Contracts will be issued and sold in compliance in all material respects with
all applicable federal and state laws; and (c) the sale of the Contracts shall
comply in all material respects with state insurance suitability requirements.
2.2. The Company represents and warrants that: (a) it is an insurance company
duly organized and in good standing under applicable law; (b) it has legally and
validly established each Account prior to any issuance or sale of units thereof
as a segregated asset account under Indiana law; and (c) it has registered each
Account as a unit investment trust in accordance with the provisions of the 1940
Act to serve as a segregated investment account for the Contracts and will
maintain such registration for so long as any Contracts are outstanding as
required by applicable law or, alternatively, the Company has not registered one
or more Accounts in proper reliance upon an exclusion from such registration
requirements.
2.3. The Fund represents and warrants that: (a) the Fund shares sold pursuant to
this Agreement shall be registered under the 1933 Act; (b) the Fund shares sold
pursuant to this Agreement shall be duly authorized for issuance and sold in
compliance with all applicable state and federal securities laws including
without limitation the 1933 Act, the 1934 Act, and the 1940 Act; (c) the Fund is
and shall remain registered under the 1940 Act; and (d) the Fund shall amend the
registration statement for its shares under the 1933 Act and the 1940 Act from
time to time as required in order to effect the continuous offering of its
shares.
2.4. The Fund has adopted a plan pursuant to Rule 12b-1 under the 1940 Act. The
Fund reserves the right to modify its existing plan or to adopt additional plans
pursuant to Rule 12b-1 under the 1940 Act and to impose an asset-based or other
charge to finance distribution expenses as permitted by applicable law and
regulation. The Fund and the Adviser agree to comply with applicable provisions
and SEC interpretations of the 1940 Act with respect to any distribution plan.
The Fund currently does not intend to make any payments to finance distribution
expenses pursuant to Rule 12b-1 under the 1940 Act, although it may make such
payments in the future subject to applicable law and after providing notice to
the Company.
2.5. The Fund represents and warrants that it shall register and qualify the
shares for sale in accordance with the laws of the various states if and to the
extent required by applicable law.
2.6. The Fund represents and warrants that it is lawfully organized and validly
existing under the laws of the State of Indiana and that it does and will comply
in all material respects with the 1940 Act.
2.7. The Fund makes no representation as to whether any aspect of its operations
(including, but not limited to, fees and expenses and investment policies)
complies with the insurance laws or regulations of the various states.
2.8. The Adviser represents and warrants that it is and shall remain duly
registered under all applicable federal and state securities laws and that it
shall perform its obligations for the Fund in compliance in all material
respects with any applicable state and federal securities laws.
2.9. The Distributor represents and warrants that it is and shall remain duly
registered as a broker-dealer under all applicable federal and state securities
laws and is a member in good standing with FINRA, and that it shall perform its
obligations for the Fund in compliance in all material respects with the laws of
any applicable state and federal securities laws.
2.10. The Fund and the Adviser represent and warrant that all of their
respective officers, employees, investment advisers, and other individuals or
entities dealing with the money and/or securities of the Fund are, and shall
continue to be at all times, covered by one or more blanket fidelity bonds or
similar coverage for the benefit of the Fund in an amount not less than the
minimal coverage required by Rule 17g-1 under the 1940 Act or related provisions
as may be promulgated from time to time. The aforesaid bonds shall include
coverage for larceny and embezzlement and shall be issued by a reputable bonding
company.
2.11. The Fund and the Adviser represent and warrant that they will provide the
Company with as much advance notice as is reasonably practicable of any material
change affecting the Portfolios (including, but not limited to, any material
change in the registration statement or prospectus affecting the Portfolios) and
any proxy solicitation affecting the Portfolios and consult with the Company in
order to implement any such change in an orderly manner, recognizing the
expenses of changes and attempting to minimize such expense by implementing them
in conjunction with regular annual updates of the prospectus for the Contracts
where reasonably practicable.
2.12. The Company represents and warrants, for purposes other than
diversification under Section 817 of the Internal Revenue Code of 1986 as
amended (the "Code"), that the Contracts are currently and at the time of
issuance will be treated as annuity contracts or life insurance policies under
applicable provisions of the Code, and that it will make every effort to
maintain such treatment and that it will notify the Fund, the Distributor and
the Adviser immediately upon having a reasonable basis for believing that the
Contracts have ceased to be so treated or that they might not be so treated in
the future. In addition, the Company represents and
warrants that each Account is a "segregated asset account" and that interests in
each Account are offered exclusively through the purchase of or transfer into a
"variable contract" within the meaning of such terms under Section 817 of the
Code and the regulations thereunder. The Company will use every effort to
continue to meet such definitional requirements, and it will notify the Fund,
the Distributor and the Adviser immediately upon having a reasonable basis for
believing that such requirements have ceased to be met or that they might not be
met in the future. The Company represents and warrants that it will not purchase
Fund shares with assets derived from tax-qualified retirement plans except,
indirectly, through Contracts purchased in connection with such plans.
2.13. The Company represents and warrants that it is currently in compliance,
and will remain in compliance, with all applicable anti-money laundering laws,
regulations, and requirements. In addition, the Company represents and warrants
that it has adopted and implemented policies and procedures reasonably designed
to achieve compliance with the applicable requirements administered by the
Office of Foreign Assets Control ("OFAC") of the U.S. Department of the
Treasury.
2.14. The Company represents and warrants that it is currently in compliance,
and will remain in compliance, with all applicable laws, rules and regulations
relating to consumer privacy, including, but not limited to, Regulation S-P.
2.15. The Company represents and warrants that it has adopted, and will at all
times during the term of this Agreement maintain, reasonable and appropriate
procedures ("Late Trading Procedures") reasonably designed to ensure that any
and all orders relating to the purchase, sale or exchange of Fund shares
communicated to the Fund to be treated in accordance with Article I of this
Agreement as having been received on a Business Day, have been received by the
Valuation Time on such Business Day and were not modified after the Valuation
Time, and that all orders received from Contract owners but not rescinded by the
Valuation Time were communicated to the Fund or its agent as received for that
Business Day. The Company represents and warrants that it has adopted and
implemented controls reasonably designed to ensure that all orders received by
the Company after the close of the New York Stock Exchange on a particular
Business Day will not be aggregated with orders received by the Company before
the close of the New York Stock Exchange on such Business Day. "Valuation Time"
shall mean the time as of which the Fund calculates net asset value for the
shares of the Portfolios on the relevant Business Day.
2.16. Each transmission of orders by the Company shall constitute a
representation by the Company that such orders are accurate and complete and
relate to orders received by the Company by the Valuation Time on the Business
Day for which the order is to be priced and that such transmission includes all
orders relating to Fund shares received from Contract owners but not rescinded
by the Valuation Time. The Company agrees to provide the Fund or its designee
with a copy of the Late Trading Procedures and such certifications and
representations regarding the Late Trading Procedures as the Fund or its
designee may reasonably request. The Company will promptly notify the Fund in
writing of any material change to the Late Trading Procedures.
2.17 The Company and Columbia Management Services, Inc. have entered into a
separate Rule 22c-2 Agreement effective as of the date hereof (as amended from
time to time, the "Rule 22c-2 Agreement"). The terms and conditions of the Rule
22c-2 Agreement are incorporated by reference herein as though the Company
entered into such agreement with the Fund, the Adviser and the Distributor.
2.18 The Company agrees to cooperate fully with any and all efforts by the Fund
to assure the Fund that the Company has implemented effective compliance
policies and procedures administered by qualified personnel as required by and
in accordance with any and all applicable laws, rules and regulations. The
Company will provide to the Fund or its designee on a daily basis, or with such
other frequency as the Fund may reasonably request, a feed containing data
sufficient to allow the Fund to monitor purchases, exchanges and redemptions
("Transactions") of shares issued by a Portfolio for the purpose of allowing the
Fund to ensure that such Transactions are consistent with the terms and
conditions of each Portfolio's Prospectus regarding any restrictions or
prohibitions relating to frequent purchases, exchanges and redemptions (i.e.,
market timing) of Portfolio shares.
2.19 Each party represents that the execution and delivery of this Agreement and
the consummation of the transactions contemplated herein have been duly
authorized by all necessary corporate or board action, as applicable, by such
party and when so executed and delivered this Agreement will be the valid and
binding obligation of such party enforceable in accordance with its terms.
ARTICLE III. Prospectuses and Proxy Statements; Voting
3.1. At least annually, the Adviser or Distributor shall provide the Company
with as many copies of the Fund's current prospectus as the Company may
reasonably request, with expenses to be borne in accordance with Schedule C
hereof. If requested by the Company in lieu thereof, the Adviser, Distributor or
Fund shall provide such documentation (including an electronic version of the
current prospectus) and other assistance as is reasonably necessary in order for
the Company once each year (or more frequently if the prospectus for the Fund is
amended) to have the prospectus for the Contracts and the prospectus for the
Fund printed together in one document.
3.2. If applicable state or federal laws or regulations require that the
Statement of Additional Information ("SAI") for the Fund be distributed to all
Contract owners, then the Fund, Distributor and/or the Adviser shall provide the
Company with copies of the Fund's SAI in such quantities, with expenses to be
borne in accordance with Schedule C hereof, as the Company may reasonably
require to permit timely distribution thereof to Contract owners. The Adviser,
Distributor and/or the Fund shall also provide an SAI to any Contract owner or
prospective owner who requests such SAI from the Fund.
3.3. The Fund, Distributor and/or Adviser shall provide the Company with copies
of the Fund's proxy materials, reports to shareholders and other communications
to shareholders in such quantity, with expenses to be borne in accordance with
Schedule C hereof, as the Company may reasonably require to permit timely
distribution thereof to Contract owners.
3.4. It is understood and agreed that, except with respect to information
regarding the Company provided in writing by that party, the Company shall not
be responsible for the content of the prospectus or SAI for the Fund. It is also
understood and agreed that, except with respect to information regarding the
Fund, the Distributor, the Adviser or the Portfolios provided in writing by the
Fund, the Distributor or the Adviser, neither the Fund, the Distributor nor
Adviser are responsible for the content of the prospectus or SAI for the
Contracts.
3.5. If and to the extent required by law the Company shall:
(a) solicit voting instructions from Contract owners;
(b) vote the Portfolio shares held in the Accounts in accordance with
instructions received from Contract owners;
(c) vote Portfolio shares held in the Accounts for which no instructions
have been received in the same proportion as Portfolio shares for which
instructions have been received from Contract owners, so long as and to the
extent that the SEC continues to interpret the 1940 Act to require
pass-through voting privileges for variable contract owners; and
(d) vote Portfolio shares held in its general account or otherwise in the
same proportion as Portfolio shares for which instructions have been
received from Contract owners, so long as and to the extent that the SEC
continues to interpret the 1940 Act to require such voting by the insurance
company. The Company reserves the right to vote Fund shares in its own
right, to the extent permitted by law.
3.6. The Company shall be responsible for assuring that each of its separate
accounts holding shares of a Portfolio calculates voting privileges as directed
by the Fund and agreed to by the Company and the Fund. The Fund agrees to
promptly notify the Company of any changes of interpretations or amendments of
the Mixed and Shared Funding Exemptive Order.
3.7. The Fund will comply with all provisions of the 1940 Act requiring voting
by shareholders. Further, the Fund will act in accordance with the SEC's
interpretation of the requirements of Section 16(a) with respect to periodic
elections of directors or trustees and with whatever rules the SEC may
promulgate with respect thereto.
ARTICLE IV. Sales Material and Information
4.1. The Company shall furnish, or shall cause to be furnished, to the Fund or
its designee, a copy of each piece of sales literature or other promotional
material that the Company develops or proposes to use and in which the Fund (or
Portfolio thereof), the Adviser or the Distributor is named in connection with
the Contracts, at least ten (10) business days prior to its use. No such
material shall be used if the Fund objects to such use within five (5) business
days after receipt of such material.
4.2. The Company shall not give any information or make any representations or
statements on behalf of the Fund in connection with the sale of the Contracts
other than the information or representations contained in the registration
statement, including the prospectus or
SAI for the Fund shares, as the same may be amended or supplemented from time to
time, or in sales literature or other promotional material approved by the Fund,
Distributor or Adviser, except with the permission of the Fund, Distributor or
Adviser.
4.3. The Fund, the Adviser or the Distributor shall furnish, or shall cause to
be furnished, to the Company, a copy of each piece of sales literature or other
promotional material in which the Company and/or its Accounts are named at least
ten (10) business days prior to its use. No such material shall be used if the
Company objects to such use within five (5) business days after receipt of such
material.
4.4. The Fund, the Distributor and the Adviser shall not give any information or
make any representations on behalf of the Company or concerning the Company, the
Accounts, or the Contracts other than the information or representations
contained in a registration statement, including the prospectus or SAI for the
Contracts, as the same may be amended or supplemented from time to time, or in
sales literature or other promotional material approved by the Company or its
designee, except with the permission of the Company.
4.5. For purposes of Articles IV and VIII, the phrase "sales literature and
other promotional material" includes, but is not limited to, advertisements
(such as material published, or designed for use in, a newspaper, magazine, or
other periodical, radio, television, telephone or tape recording, videotape
display, signs or billboards, motion pictures, or other public media; e.g.,
on-line networks such as the Internet or other electronic media), sales
literature (i.e., any written communication distributed or made generally
available to customers or the public, including brochures, circulars, research
reports, market letters, form letters, seminar texts, reprints or excerpts of
any other advertisement, sales literature, or published article), educational or
training materials or other communications distributed or made generally
available to some or all agents or employees, and shareholder reports, and proxy
materials (including solicitations for voting instructions) and any other
material constituting sales literature or advertising under the FINRA rules, the
1933 Act or the 0000 Xxx.
4.6. At the request of any party to this Agreement, each other party will make
available to the other party's independent auditors and/or representatives of
the appropriate regulatory agencies, all records, data and access to operating
procedures that may be reasonably requested in connection with compliance and
regulatory requirements related to this Agreement or any party's obligations
under this Agreement.
ARTICLE V. Fees and Expenses
5.1. The Fund, the Distributor and the Adviser shall pay no fee or other
compensation to the Company under this Agreement, and the Company shall pay no
fee or other compensation to the Fund, the Distributor or Adviser under this
Agreement; provided, however, (a) the parties will bear their own expenses as
reflected in Schedule C and other provisions of this Agreement, and (b) the
parties may enter into other agreements relating to the Company's investment in
the Fund, including services agreements.
Each Party agrees to cooperate with the others, as applicable, in arranging to
print, mail and/or deliver, in a timely manner, combined or coordinated
prospectuses or other materials of the Portfolio and the Accounts.
ARTICLE VI. Diversification and Qualification
6.1. The Fund, Distributor and Adviser represent and warrant that the Fund and
each Portfolio thereof will at all times comply with Section 817(h) of the Code
and Treasury Regulation section 1.817-5, as amended from time to time, and any
Treasury interpretations thereof, relating to the diversification requirements
for variable annuity, endowment, or life insurance contracts and any amendments
or other modifications or successor provisions to such Section or Regulations.
The Fund, the Distributor or the Adviser shall, upon request, provide to the
Company a quarterly written diversification report, which shall show the results
of the quarterly Section 817(h) diversification test and include a certification
as to whether each Portfolio complies with the Section 817(h) diversification
requirement.
6.2. The Fund, the Distributor and the Adviser agree that shares of the
Portfolios will be sold only to Participating Insurance Companies and their
separate accounts and to Qualified Plans. No shares of any Portfolio of the Fund
will be sold to the general public. However, it is understood by the Company
that the Fund may sell shares of any Portfolio to any person eligible to invest
in that Portfolio in accordance with applicable provisions of Section 817(h)
under the Code and the regulations thereunder, and that if such provisions are
not applicable, then the Fund may sell shares of any Portfolio to any person,
including members of the general public.
6.3. The Fund, the Distributor and the Adviser represent and warrant that the
Fund and each Portfolio is currently qualified as a Regulated Investment Company
under Subchapter M of the Code, and that each Portfolio will maintain such
qualification (under Subchapter M or any successor or similar provisions) as
long as this Agreement is in effect.
6.4. The Company agrees that if the Internal Revenue Service ("IRS") asserts in
writing in connection with any governmental audit or review of the Company (or,
to the Company's knowledge, of any Contract owner) that any Portfolio has failed
to comply with the diversification requirements of Section 817(h) of the Code or
the Company otherwise becomes aware of any facts that could give rise to any
claim against the Fund, Distributor or Adviser as a result of such a failure or
alleged failure:
(a) The Company shall promptly notify the Fund, the Distributor and the
Adviser of such assertion or potential claim;
(b) The Company shall consult with the Fund, the Distributor and the
Adviser as to how to minimize any liability that may arise as a result of
such failure or alleged failure;
(c) The Company shall use its best efforts to minimize any liability of the
Fund, the Distributor and the Adviser resulting from such failure,
including, without limitation, demonstrating, pursuant to Treasury
Regulations, Section 1.817-5(a)(2), to the commissioner of the IRS that
such failure was inadvertent;
(d) Any written materials to be submitted by the Company to the IRS, any
Contract owner or any other claimant in connection with any of the
foregoing proceedings or contests (including, without limitation, any such
materials to be submitted to the IRS pursuant to Treasury Regulations,
Section 1.817-5(a)(2)) shall be provided by the Company to the Fund, the
Distributor and the Adviser (together with any supporting information or
analysis) within at least two (2) business days prior to submission;
(e) The Company shall provide the Fund, the Distributor and the Adviser
with such cooperation as the Fund, the Distributor and the Adviser shall
reasonably request (including, without limitation, by permitting the Fund,
the Distributor and the Adviser to review the relevant books and records of
the Company) in order to facilitate review by the Fund, the Distributor and
the Adviser of any written submissions provided to it or its assessment of
the validity or amount of any claim against it arising from such failure or
alleged failure;
(f) The Company shall not with respect to any claim of the IRS or any
Contract owner that would give rise to a claim against the Fund, the
Distributor and the Adviser (i) compromise or settle any claim, (ii) accept
any adjustment on audit, or (iii) forego any allowable administrative or
judicial appeals, without the express written consent of the Fund, the
Distributor and the Adviser, which shall not be unreasonably withheld;
provided that, the Company shall not be required to appeal any adverse
judicial decision unless the Fund and the Adviser shall have provided an
opinion of independent counsel to the effect that a reasonable basis exists
for taking such appeal; and further provided that the Fund, the Distributor
and the Adviser shall bear the costs and expenses, including reasonable
attorney's fees, incurred by the Company in complying with this clause (f).
ARTICLE VII. Potential Conflicts and Compliance With Mixed and Shared Funding
Exemptive Order
7.1. The Board of Trustees of the Fund (the "Board") will monitor the Fund for
the existence of any material irreconcilable conflict between the interests of
the Contract owners of all separate accounts investing in the Fund. An
irreconcilable material conflict may arise for a variety of reasons, including:
(a) an action by any state insurance regulatory authority; (b) a change in
applicable federal or state insurance, tax, or securities laws or regulations,
or a public ruling, private letter ruling, no-action or interpretative letter,
or any similar action by insurance, tax, or securities regulatory authorities;
(c) an administrative or judicial decision in any relevant proceeding; (d) the
manner in which the investments of any Portfolio is being managed; (e) a
difference in voting instructions given by variable annuity contract and
variable life insurance contract owners or by contract owners of different
Participating Insurance Companies; or (f) a decision by a Participating
Insurance Company to disregard the voting instructions of Contract owners. The
Board shall promptly inform the Company if it determines that an irreconcilable
material conflict exists and the implications thereof.
7.2. The Company will report any potential or existing conflicts of which it is
aware to the Board. The Company will assist the Board in carrying out its
responsibilities under the Mixed and Shared Funding Exemptive Order, by
providing the Board with all information reasonably necessary for the Board to
consider any issues raised. This includes, but is not limited
to, an obligation by the Company to inform the Board whenever Contract owner
voting instructions are to be disregarded. Such responsibilities shall be
carried out by the Company with a view only to the interests of its Contract
owners.
7.3. If it is determined by a majority of the Board, or a majority of its
directors who are not interested persons of the Fund, the Distributor, the
Adviser or any subadviser to any of the Portfolios (the "Independent
Directors"), that a material irreconcilable conflict exists, the Company and
other Participating Insurance Companies shall, at their expense and to the
extent reasonably practicable (as determined by a majority of the Independent
Directors), take whatever steps are necessary to remedy or eliminate the
irreconcilable material conflict, up to and including: (1) withdrawing the
assets allocable to some or all of the separate accounts from the Fund or any
Portfolio and reinvesting such assets in a different investment medium,
including (but not limited to) another Portfolio, or submitting the question
whether such segregation should be implemented to a vote of all affected
Contract owners and, as appropriate, segregating the assets of any appropriate
group (i.e., annuity contract owners, life insurance contract owners, or
variable contract owners of one or more Participating Insurance Companies) that
votes in favor of such segregation, or offering to the affected contract owners
the option of making such a change; and (2) establishing a new registered
management investment company or managed separate account.
7.4. If a material irreconcilable conflict arises because of a decision by the
Company to disregard Contract owner voting instructions and that decision
represents a minority position or would preclude a majority vote, the Company
may be required, at the Fund's election, to withdraw the Account's investment in
the Fund and terminate this Agreement; provided, however, that such withdrawal
and termination shall be limited to the extent required by the foregoing
material irreconcilable conflict as determined by a majority of the Independent
Directors. Any such withdrawal and termination must take place within six (6)
months after the Fund gives written notice that this provision is being
implemented, and until the end of that six-month period the Adviser, the
Distributor and the Fund shall continue to accept and implement orders by the
Company for the purchase (and redemption) of shares of the Fund, subject to the
terms of the Fund's then-current prospectus.
7.5. If a material irreconcilable conflict arises because a particular state
insurance regulator's decision applicable to the Company conflicts with the
majority of other state regulators, then the Company will withdraw the Account's
investment in the Fund and terminate this Agreement within six months after the
Board informs the Company in writing that it has determined that such decision
has created an irreconcilable material conflict; provided, however, that such
withdrawal and termination shall be limited to the extent required by the
foregoing material irreconcilable conflict as determined by a majority of the
Independent Directors. Until the end of the foregoing six-month period, the Fund
shall continue to accept and implement orders by the Company for the purchase
(and redemption) of shares of the Fund, subject to the terms of the Fund's
then-current prospectus.
7.6. For purposes of Sections 7.3 through 7.5 of this Agreement, a majority of
the Independent Directors shall determine whether any proposed action adequately
remedies any irreconcilable material conflict, but in no event will the Fund be
required to establish a new
funding medium for the Contracts. The Company shall not be required by Section
7.3 to establish a new funding medium for the Contracts if an offer to do so has
been declined by vote of a majority of Contract owners affected by the
irreconcilable material conflict. In the event that the Board determines that
any proposed action does not adequately remedy any irreconcilable material
conflict, then the Company will withdraw the Account's investment in the Fund
and terminate this Agreement within six (6) months after the Board informs the
Company in writing of the foregoing determination; provided, however, that such
withdrawal and termination shall be limited to the extent required by any such
material irreconcilable conflict as determined by a majority of the Independent
Directors.
7.7. If and to the extent that Rule 6e-2 and Rule 6e-3(T) are amended, or Rule
6e-3 is adopted, to provide exemptive relief from any provision of the 1940 Act
or the rules promulgated thereunder with respect to mixed or shared funding (as
defined in the Mixed and Shared Funding Exemptive Order) on terms and conditions
materially different from those contained in the Mixed and Shared Funding
Exemptive Order, then (a) the Fund and/or the Participating Insurance Companies,
as appropriate, shall take such steps as may be necessary to comply with Rules
6e-2 and 6e-3(T), as amended, and Rule 6e-3, as adopted, to the extent such
rules are applicable: and (b) Sections 3.5, 3.6, 3.7, 7.1, 7.2, 7.3, 7.4, and
7.5 of this Agreement shall continue in effect only to the extent that terms and
conditions substantially identical to such Sections are contained in such
Rule(s) as so amended or adopted.
ARTICLE VIII. Indemnification
8.1. Indemnification by the Company
(a) The Company agrees to indemnify and hold harmless the Fund, the
Distributor and the Adviser and each of their respective officers and
directors or trustees and each person, if any, who controls the Fund,
Distributor or Adviser within the meaning of Section 15 of the 1933 Act
(collectively, the "Indemnified Parties" for purposes of this Section 8.1)
against any and all losses, claims, expenses, damages and liabilities
(including amounts paid in settlement with the written consent of the
Company) or litigation (including reasonable legal and other expenses) to
which the Indemnified Parties may become subject under any statute or
regulation, at common law or otherwise, insofar as such losses, claims,
expenses, damages or liabilities (or actions in respect thereof) or
settlements are related to the sale or acquisition of the Fund's shares or
the Contracts and:
(i) arise out of or are based upon any untrue statements or alleged
untrue statements of any material fact contained in the registration
statement or prospectus or SAI covering the Contracts or contained in
the Contracts or sales literature or other promotional material for
the Contracts (or any amendment or supplement to any of the
foregoing), or arise out of or are based upon the omission or the
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading, provided that this Agreement to indemnify shall not apply
as to any Indemnified Party if such statement or omission or such
alleged statement or omission was made in reliance upon and in
conformity with information furnished in writing to
the Company by or on behalf of the Fund for use in the registration
statement or prospectus for the Contracts or in the Contracts or sales
literature or other promotional material (or any amendment or
supplement to any of the foregoing) or otherwise for use in connection
with the sale of the Contracts or Fund shares; or
(ii) arise out of or as a result of statements or representations
(other than statements or representations contained in the
registration statement, prospectus or sales literature or other
promotional material of the Fund not supplied by the Company or
persons under its control) or wrongful conduct of the Company or
persons under its control, with respect to the sale or distribution of
the Contracts or Fund Shares; or
(iii) arise out of any untrue statement or alleged untrue statement of
a material fact contained in a registration statement, prospectus,
SAI, or sales literature or other promotional material of the Fund, or
any amendment thereof or supplement thereto, or the omission or
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading, if such a statement or omission was made in reliance upon
information furnished in writing to the Fund by or on behalf of the
Company; or
(iv) arise as a result of any failure by the Company to provide the
services and furnish the materials 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 in this Agreement
or arise out of or result from any other material breach of this
Agreement by the Company, including without limitation Section 2.12
and Section 6.4 hereof,
as limited by and in accordance with the provisions of Sections 8.1(b) and
8.1(c) hereof.
(b) The Company shall not be liable under this indemnification provision
with respect to any losses, claims, expenses, damages, liabilities or
litigation to which an Indemnified Party would otherwise be subject by
reason of such Indemnified Party's willful misfeasance, bad faith, or gross
negligence in the performance of such Indemnified Party's duties or by
reason of such Indemnified Party's reckless disregard of obligations or
duties under this Agreement.
(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 against whom such action is
brought otherwise than on account of this indemnification provision, except
to the extent that the Company has been prejudiced by such failure to give
notice. In case any such
action is brought against the Indemnified Parties, the Company shall be
entitled to participate, at its own expense, in the defense of such action.
The Company also shall be entitled to assume the defense thereof, with
counsel satisfactory to the party named in the action. After notice from
the Company to such party of the Company's election to assume the defense
thereof, the Indemnified Party shall bear the fees and expenses of any
additional counsel retained by it, and the Company will not be liable to
such party under this Agreement for any legal or other expenses
subsequently incurred by such party independently in connection with the
defense thereof other than reasonable costs of investigation.
(d) The Indemnified Parties will promptly notify the Company of (i) the
issuance by any court or regulatory body of any stop order, cease and
desist order, or other similar order with respect to the Fund's
registration statement under the 1933 Act or prospectus, (ii) any request
by the SEC for any amendment to such registration statement or prospectus
that may affect the offering of shares of the Fund, (iii) the initiation of
any litigation or proceedings for that purpose or for any other purpose
relating to the registration or offering of the Fund's shares, or (iv) any
other action or circumstances that may prevent the lawful offer or sale of
shares of any Fund in any state or jurisdiction, including, without
limitation, any circumstances in which (a) such shares are not registered
and, in all material respects, issued and sold in accordance with
applicable state and federal law, or (b) such law precludes the use of such
shares as an underlying investment medium of the Contracts issued or to be
issued by the Company. The Fund and Adviser will make every reasonable
effort to prevent the issuance, with respect to any Fund, of any such stop
order, cease and desist order or similar order and, if any such order is
issued, to obtain the lifting thereof at the earliest possible time.
8.2. Indemnification by the Adviser
(a) The Adviser agrees to indemnify and hold harmless the Company and its
directors and officers and each person, if any, who controls the Company
within the meaning of Section 15 of the 1933 Act (collectively, the
"Indemnified Parties" for purposes of this Section 8.2) against any and all
losses, claims, expenses, damages, liabilities (including amounts paid in
settlement with the written consent of the Adviser) or litigation
(including reasonable legal and other expenses) to which the Indemnified
Parties may become subject under any statute or regulation, at common law
or otherwise, insofar as such losses, claims, damages, liabilities or
expenses (or actions in respect thereof) or settlements are related to the
sale or acquisition of the Portfolios or the Contracts and:
(i) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the registration
statement or prospectus or SAI or sales literature or other
promotional material of the Fund prepared by the Fund, the Distributor
or the Adviser (or any amendment or supplement to any of the
foregoing), or arise out of or are based upon the omission or the
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading, provided that this Agreement to indemnify shall not apply
as to any Indemnified Party if such statement or omission or such
alleged statement or omission was made in reliance upon and in
conformity with information furnished in writing to
the Adviser, the Distributor or the Fund by or on behalf of the
Company for use in the registration statement, prospectus or SAI for
the Fund or in sales literature or other promotional material (or any
amendment or supplement to any of the foregoing) or otherwise for use
in connection with the sale of the Contracts or the Portfolios; or
(ii) arise out of or as a result of statements or representations
(other than statements or representations contained in the
registration statement, prospectus, SAI or sales literature or other
promotional material for the Contracts not supplied by the Adviser or
persons under its control) or wrongful conduct of the Fund, the
Distributor or the Adviser or persons under their control, with
respect to the sale or distribution of the Contracts or Portfolios; or
(iii) arise out of any untrue statement or alleged untrue statement of
a material fact contained in a registration statement, prospectus,
SAI, or sales literature or other promotional material covering the
Contracts, or any amendment thereof or supplement thereto, or the
omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statement or statements
therein not misleading, if such statement or omission was made in
reliance upon information furnished in writing to the Company by or on
behalf of the Adviser, the Distributor or the Fund; or
(iv) arise as a result of any failure by the Fund, the Distributor or
the Adviser to provide the services and furnish the materials under
the terms of this Agreement (including a failure, whether
unintentional or in good faith or otherwise, to comply with the
diversification and other qualification requirements specified in
Article VI of this Agreement); or
(v) arise out of or result from any material breach of any
representation and/or warranty made by the Fund, the Distributor or
the Adviser in this Agreement or arise out of or result from any other
material breach of this Agreement by the Adviser, the Distributor or
the Fund; or
(vi) arise out of or result from the incorrect or untimely calculation
or reporting by the Fund, the Distributor or the Adviser of the daily
net asset value per share (subject to Section 1.10 of this Agreement)
or dividend or capital gain distribution rate;
as limited by and in accordance with the provisions of Sections 8.2(b) and
8.2(c) hereof. This indemnification is in addition to and apart from the
responsibilities and obligations of the Adviser specified in Article VI hereof.
(b) The Adviser shall not be liable under this indemnification provision
with respect to any losses, claims, expenses, damages, liabilities or
litigation to which an Indemnified Party would otherwise be subject by
reason of 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
obligations or duties under this Agreement.
(c) The Adviser shall not be liable under this indemnification provision
with respect to any claim made against an Indemnified Party unless such
Indemnified Party shall have notified the Adviser in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received
notice of such service on any designated agent), but failure to notify the
Adviser of any such claim shall not relieve the Adviser from any liability
which it may have to the Indemnified Party against whom such action is
brought otherwise than on account of this indemnification provision, except
to the extent that the Adviser has been prejudiced by such failure to give
notice. In case any such action is brought against the Indemnified Parties,
the Adviser will be entitled to participate, at its own expense, in the
defense thereof. The Adviser also shall be entitled to assume the defense
thereof, with counsel satisfactory to the party named in the action. After
notice from the Adviser to such party of the Adviser's election to assume
the defense thereof, the Indemnified Party shall bear the fees and expenses
of any additional counsel retained by it, and the Adviser will not be
liable to such party under this Agreement for any legal or other expenses
subsequently incurred by such party independently in connection with the
defense thereof other than reasonable costs of investigation.
(d) The Company and its broker-dealer subsidiary agree promptly to notify
the Fund, the Distributor or the Adviser of (i) the issuance by any court
or regulatory body of any stop order, cease and desist order, or other
similar order with respect to each Account relating to the Contracts,
(ii) any request by the SEC for any amendment to the registration statement
or Account prospectus that may affect the offering of shares of the Fund,
(iii) the initiation of any litigation or proceedings against it or any of
its officers or directors in connection with the issuance or sale of the
Contracts or the operation of the Account for that purpose or for any other
purpose relating to the registration or offering of each Account's
interests pursuant to the Contracts, or (iv) any other action or
circumstances that may prevent the lawful offer or sale of said interests
in any state or jurisdiction, including, without limitation, any
circumstances in which said interests are not registered and, in all
material respects, issued and sold in accordance with applicable state and
federal law. The Company will make every reasonable effort to prevent the
issuance of any such stop order, cease and desist order or similar order
and, if any such order is issued, to obtain the lifting thereof at the
earliest possible time.
ARTICLE IX. Applicable Law
9.1. This Agreement shall be construed and the provisions hereof interpreted
under and in accordance with the laws of the Commonwealth of Massachusetts,
without regard to conflict of laws provisions.
9.2. This Agreement shall be subject to the provisions of the 1933, 1934 and
1940 Acts, and the rules and regulations and rulings thereunder, including such
exemptions from those statutes, rules and regulations as the SEC may grant
(including, but not limited to, the Mixed and Shared Funding Exemptive Order)
and the terms hereof shall be interpreted and construed in accordance therewith.
ARTICLE X. Termination
10.1. This Agreement shall terminate:
(a) at the option of any party, with or without cause, with respect to some
or all Portfolios, upon sixty (60) days advance written notice delivered to
the other parties; or
(b) at the option of the Company by written notice to the other parties
with respect to any Portfolio based upon the Company's determination that
shares of such Portfolio are not reasonably available to meet the
requirements of the Contracts; or
(c) at the option of the Company by written notice to the other parties
with respect to any Portfolio in the event any of the Portfolio's shares
are not registered, issued or sold in accordance with applicable state
and/or federal law or such law precludes the use of such shares as the
underlying investment media of the Contracts issued or to be issued by the
Company; or
(d) at the option of the Fund, Distributor or Adviser in the event that
formal administrative proceedings are instituted against the Company by
FINRA, the SEC, the Insurance Commissioner or like official of any state or
any other regulatory body regarding the Company's duties under this
Agreement or related to the sale of the Contracts, the operation of any
Account, or the purchase of the Fund shares, if, in each case, the Fund,
Distributor or Adviser, as the case may be, reasonably determines in its
sole judgment exercised in good faith, that any such administrative
proceedings will have a material adverse effect upon the ability of the
Company to perform its obligations under this Agreement; or
(e) at the option of the Company in the event that formal administrative
proceedings are instituted against the Fund, the Distributor or the Adviser
by FINRA, the SEC, or any state securities or insurance department or any
other regulatory body, if the Company reasonably determines in its sole
judgment exercised in good faith, that any such administrative proceedings
will have a material adverse effect upon the ability of the Fund, the
Distributor or the Adviser to perform their obligations under this
Agreement; or
(f) At the option of the Company by written notice to the Fund, the Adviser
and the Distributor, in the event that any Portfolio (i) ceases to qualify,
or the Company reasonably believes such Portfolio may fail to so qualify,
as a Regulated Investment Company under Subchapter M or (ii) fails to
comply with the Section 817(h) diversification requirements specified in
Article VI hereof; or
(g) at the option of any non-defaulting party hereto in the event of a
material breach of this Agreement by any party hereto (the "defaulting
party") other than as described in Section 10.1(a)-(h); provided, that the
non-defaulting party gives written notice thereof to the defaulting party,
with copies of such notice to all other non-defaulting parties, and if such
breach shall not have been remedied within thirty (30) days after such
written notice is given, then the non-defaulting party giving such written
notice may terminate this Agreement by giving thirty (30) days written
notice of termination to the defaulting party; or
(h) at any time upon written agreement of all parties to this Agreement.
10.2. Notice Requirement
No termination of this Agreement shall be effective unless and until the party
terminating this Agreement gives prior written notice to all other parties of
its intent to terminate, which notice shall set forth the basis for the
termination. Furthermore,
(a) in the event any termination is based upon the provisions of Article
VII, or the provisions of Section 10.1(a) of this Agreement, the prior
written notice shall be given in advance of the effective date of
termination as required by those provisions unless such notice period is
shortened by mutual written agreement of the parties;
(b) in the event any termination is based upon the provisions of Section
10.1(d), 10.1(e) or 10.1(g) of this Agreement, the prior written notice
shall be given at least sixty (60) days before the effective date of
termination; and
(c) in the event any termination is based upon the provisions of Section
10.1(b), 10.1(c) or 10.1(f), the prior written notice shall be given in
advance of the effective date of termination, which date shall be
determined by the party sending the notice.
10.3. Effect of Termination
Notwithstanding any termination of this Agreement, other than as a result of a
failure by either the Fund or the Company to meet Section 817(h) of the Code
diversification requirements, the Fund, the Distributor and the Adviser shall,
at the option of the Company, continue to make available additional shares of
the Fund pursuant to the terms and conditions of this Agreement, for all
Contracts in effect on the effective date of termination of this Agreement
(hereinafter referred to as "Existing Contracts"). Specifically, without
limitation, the owners of the Existing Contracts shall be permitted to
reallocate investments in the Fund, redeem investments in the Fund and/or invest
in the Fund upon the making of additional purchase payments under the Existing
Contracts. The parties agree that this Section 10.3 shall not apply to any
terminations under Article VII and the effect of such Article VII terminations
shall be governed by Article VII of this Agreement.
10.4. Surviving Provisions
Notwithstanding any termination of this Agreement, each party's obligations
under Article VIII to indemnify other parties shall survive and not be affected
by any termination of this Agreement. In addition, with respect to Existing
Contracts, all provisions of this Agreement shall also survive and not be
affected by any termination of this Agreement.
ARTICLE XI. Notices
Any notice shall be sufficiently given when sent by registered or certified mail
to the other party at the address of such party set forth below or at such other
address as such party may from time to time specify in writing to the other
parties.
If to the Company:
American United Life Insurance Company
Xxxxxxx X. Xxxxxx
Xxx Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xx 00000
If to the Fund:
Columbia Management Variable Insurance Trust
Xxx Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Secretary
If to the Adviser:
Columbia Management Advisors, LLC
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Secretary
If to the Distributor:
Columbia Management Distributors, Inc.
Xxx Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Secretary
ARTICLE XII. Miscellaneous
12.1. Subject to the requirements of legal process and regulatory authority,
each party hereto shall treat as confidential the names and addresses of the
owners of the Contracts and all information reasonably identified as
confidential in writing by any other party hereto and, except as permitted by
this Agreement, shall not disclose, disseminate or utilize such names and
addresses and other confidential information without the express written consent
of the affected party until such time as such information may come into the
public domain. Without limiting the foregoing, no party hereto shall disclose
any information that another party has designated as proprietary.
12.2. The captions in this Agreement are included for convenience of reference
only and in no way define or delineate any of the provisions hereof or otherwise
affect their construction or effect.
12.3. This Agreement may be executed simultaneously in two or more counterparts,
each of which taken together shall constitute one and the same instrument.
12.4. If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the Agreement shall
not be affected thereby.
12.5. Each party hereto shall cooperate with each other party and all
appropriate governmental authorities (including without limitation the SEC,
FINRA and state insurance regulators) and shall permit such authorities
reasonable access to its books and records in connection with any investigation
or inquiry relating to this Agreement or the transactions contemplated hereby.
12.6. Any controversy or claim arising out of or relating to this Agreement, or
breach thereof, shall be settled by arbitration in a forum jointly selected by
the relevant parties (but if applicable law requires some other forum, then such
other forum) in accordance with the Commercial Arbitration Rules of the American
Arbitration Association, and judgment upon the award rendered by the arbitrators
may be entered in any court having jurisdiction thereof.
12.7. The rights, remedies and obligations contained in this Agreement are
cumulative and are in addition to any and all rights, remedies and obligations,
at law or in equity, which the parties hereto are entitled to under state and
federal laws.
12.8. This Agreement or any of the rights and obligations hereunder may not be
assigned by any party without the prior written consent of all parties hereto.
12.9. The Company agrees that the obligations assumed by the Fund, Distributor
and the Adviser pursuant to this Agreement shall be limited in any case to the
Fund, Distributor and Adviser and their respective assets and the Company shall
not seek satisfaction of any such obligation from the shareholders of the Fund,
Distributor or the Adviser, the Directors, officers, employees or agents of the
Fund, Distributor or Adviser, or any of them.
12.10. The Fund, the Distributor and the Adviser agree that the obligations
assumed by the Company pursuant to this Agreement shall be limited in any case
to the Company and its assets and neither the Fund, Distributor nor Adviser
shall seek satisfaction of any such obligation from the shareholders of the
Company, the directors, officers, employees or agents of the Company, or any of
them.
12.11. No provision of this Agreement may be deemed or construed to modify or
supersede any contractual rights, duties, or indemnifications, as between the
Adviser and the Fund, and the Distributor and the Fund.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed in its name and on its behalf by its duly authorized representative and
its seal to be hereunder affixed hereto as of the date specified below.
AMERICAN UNITED LIFE INSURANCE COMPANY
By its authorized officer,
By:
Title: Vice President, Marketing Operations
COLUMBIA FUNDS VARIABLE INSURANCE TRUST
By its authorized officer,
By:
Title:
COLUMBIA MANAGEMENT ADVISORS, LLC
By its authorized officer,
By:
Title:
COLUMBIA MANAGEMENT DISTRIBUTORS INC.
By its authorized officer,
By:____________________________
Title:
SCHEDULE A
CONTRACTS
Voyage Protector - Individual Flexible Premium Deferred Variable Annuity
StarPoint - Individual Flexible Premium Deferred Variable Annuity
DirectPoint -Individual Flexible Premium Deferred Variable Annuity
SelectPoint - Individual Flexible Premium Deferred Variable Annuity
IVA - AUL American Individual Unit Trust Individual Variable Annuity Contracts
FPVUL - Flexible Premium Adjustable Variable Life
SPVUL - Modified Single Premium Variable Life
SCHEDULE B
DESIGNATED PORTFOLIO(S)
Columbia Federal Securities Fund, Variable Series
Columbia Small Cap Value Fund, Variable Series
SCHEDULE C
EXPENSES
The Fund and/or the Distributor and/or Adviser, and the Company will coordinate
the functions and pay the costs of the completing these functions based upon an
allocation of costs in the tables below. Costs shall be allocated to reflect the
Fund's share of the total costs determined according to the number of pages of
the Fund's respective portions of the documents.
Item Function Party Responsible for Party Responsible for
Coordination Expense
Mutual Fund Prospectus Electronic copy of Company Current - Fund
combined prospectuses Prospective - Company
made available
Distribution (including Company Fund
postage) to Current
Clients
Distribution (including Company Company
postage) to Prospective
Clients
Product Prospectus Printing and Distribution Company Company
for Current and
Prospective Clients
Mutual Fund Prospectus Electronic copy, if Fund, Distributor or Fund, Distributor or
Update & Distribution Required by Fund, Adviser Adviser
Distributor or Adviser
If Required by Company Company (Fund, Company
Distributor or Adviser to
provide Company with
document in PDF format)
Product Prospectus Update & If Required by Fund, Company Fund, Distributor or
Distribution Distributor or Adviser Adviser
If Required by Company Company Company
Item Function Party Responsible for Party Responsible for
Coordination Expense
Company
Mutual Fund SAI Printing Fund, Distributor or Fund, Distributor or
Adviser Adviser-
Distribution (including Party who receives the Party who receives the
postage) request request
Product SAI Printing Company Company
Distribution Company Company
Proxy Material for Mutual Electronic copy of proxy Fund, Distributor or Fund, Distributor or
Fund if required by Law Adviser Adviser
Distribution (including Company Fund, Distributor or
labor) if proxy required Adviser
by Law
Printing & distribution Company Company
if required by Company
Mutual Fund Annual & Electronic copy made Fund, Distributor or Fund, Distributor or
Semi-Annual Report available Adviser Adviser
Distribution Company Fund, Distributor or
Adviser
Operations of the Accounts Federal registration of Company Company
units of separate account
(24f-2 fees)
