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Exhibit (3)(f)
PARTICIPATION AGREEMENT
THIS AGREEMENT, is made as of May 1, 1998, by and among The
Ohio National Life Insurance Company ("Company"), on its own behalf and on
behalf of The Ohio National Variable Account A, a segregated asset account of
the Company ("Account"), Strong Variable Insurance Funds, Inc. ("Strong
Variable") on behalf of the Portfolios of Strong Variable listed on the attached
Exhibit A as such Exhibit may be amended from time to time (the "Designated
Portfolios"), Strong Opportunity Fund II, Inc. ("Opportunity Fund II"), Strong
Capital Management, Inc. (the "Adviser"), the investment adviser and transfer
agent for the Opportunity Fund II and Strong Variable, and Strong Funds
Distributors, Inc. ("Distributors"), the distributor for Strong Variable and the
Opportunity Fund II (each, a "Party" and collectively, the "Parties").
PRELIMINARY STATEMENTS
A. Beneficial interests in Strong Variable are divided into several
series of shares, each representing the interest in a particular managed
portfolio of securities and other assets (each, a "Portfolio").
B. To the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares of Opportunity Fund II and
the Designated Portfolios ("Fund" or "Funds" shall be deemed to refer to each
Designated Portfolio and to the Opportunity Fund II to the extent the context
requires), on behalf of the Account to fund the variable annuity contracts that
use the Funds as an underlying investment medium (the "Contracts").
C. The Company, Adviser and Distributors desire to facilitate the
purchase and redemption of shares of the Funds by the Company for the Account
through one account in each Fund (each an "Omnibus Account") to be maintained of
record by the Company, subject to the terms and conditions of this Agreement.
D. The Company desires to provide administrative services and functions
(the "Services") for purchasers of Contracts ("Owners") who are beneficial
owners of shares of the Funds on the terms and conditions set forth in this
Agreement.
AGREEMENTS
The parties to this Agreement agree as follows:
1. Performance of Services. Company agrees to perform the administrative
functions and services specified in Exhibit B attached to this Agreement with
respect to the shares of the Funds beneficially owned by the Owners and included
in the Account.
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2. The Omnibus Accounts.
2.1 Each Omnibus Account will be opened based upon the information
contained in Exhibit C to this Agreement. In connection with each Omnibus
Account, Company represents and warrants that it is authorized to act on behalf
of each Owner effecting transactions in the Omnibus Account and that the
information specified on Exhibit C to this Agreement is correct.
2.2 Each Fund shall designate each Omnibus Account with an account
number. These account numbers will be the means of identification when the
Parties are transacting in the Omnibus Accounts. The assets in the Accounts are
segregated from the Company's own assets. The Adviser agrees to cause the
Omnibus Accounts to be kept open on each Fund's books, as applicable, regardless
of a lack of activity or small position size except to the extent the Company
takes specific action to close an Omnibus Account or to the extent a Fund's
prospectus reserves the right to close accounts which are inactive or of a small
position size. In the latter two cases, the Adviser will give prior notice to
the Company before closing an Omnibus Account.
2.3 The Company agrees to provide Adviser such information as Adviser
or Distributors may reasonably request concerning Owners as may be necessary or
advisable to enable Company and Distributors to comply with applicable laws,
including state "Blue Sky" laws relating to the sales of shares of the Funds to
the Accounts.
3. Fund Shares Transactions.
3.1 In General. Shares of the Funds shall be sold on behalf of the
Funds by Distributors and purchased by Company for the Account and, indirectly
for the appropriate subaccount thereof at the net asset value next computed
after receipt by Distributors of each order of the Company or its designee, in
accordance with the provisions of this Agreement, the then current prospectuses
of the Funds, and the Contracts. Company may purchase shares of the Funds for
its own account subject to (a) receipt of prior written approval by
Distributors; and (b) such purchases being in accordance with the then current
prospectuses of the Fund and the Contracts. The Board of Directors of each Fund
("Directors") may refuse to sell shares of the applicable Fund to any person, or
suspend or terminate the offering of shares of the Fund if such action is
required by law or by regulatory authorities having jurisdiction. Company agrees
to purchase and redeem the shares of the Funds in accordance with the provisions
of this Agreement, of the Contracts and of the then current prospectuses for the
Contracts and Funds. Except as necessary to implement transactions initiated by
Owners, or as otherwise permitted by state or federal laws or regulations,
Company shall not redeem shares of Funds attributable to the Contracts.
3.2 Purchase and Redemption Orders. On each day that a Fund is open for
business (a "Business Day"), the Company shall aggregate and calculate the net
purchase or redemption order it receives for the Account from the Owners for
shares of the Fund that it received prior to
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the close of trading on the New York Stock Exchange (the "NYSE") (i.e. 3:00
p.m., Central time, unless the NYSE closes at an earlier time in which case such
earlier time shall apply) and communicate to Distributors, by telephone or
facsimile (or by such other means as the Parties to this Agreement may agree to
in writing), the net aggregate purchase or redemption order (if any) for the
Omnibus Account for such Business Day (such Business Day is sometimes referred
to herein as the "Trade Date"). The Company will communicate such orders to
Distributors prior to 9:00 a.m., Central time, on the next Business Day
following the Trade Date. All trades communicated to Distributors by the
foregoing deadline shall be treated by Distributors as if they were received by
Distributors prior to the close of trading on the Trade Date.
3.3 Settlement of Transactions.
(a) Purchases. Company will wire, or arrange for the wire of,
the purchase price of each purchase order to the custodian for the Fund in
accordance with written instructions provided by Distributors to the Company so
that either (1) such funds are received by the custodian for the Fund prior to
10:30 a.m., Central time, on the next Business Day following the Trade Date, or
(2) Distributors is provided with a Federal Funds wire system reference number
prior to such 10:30 a.m. deadline evidencing the entry of the wire transfer of
the purchase price to the applicable custodian into the Federal Funds wire
system prior to such time. Company agrees that if it fails to provide funds to
the Fund's custodian by the close of business on the next Business Day following
the Trade Date, then, at the option of Distributors, (i) the transaction may be
canceled, or (ii) the transaction may be processed at the next-determined net
asset value for the applicable Fund after purchase order funds are received. In
such event, the Company shall indemnify and hold harmless Distributors, Adviser
and the Funds from any liabilities, costs and damages either may suffer as a
result of such failure.
(b) Redemptions. The Adviser will use its best efforts to
cause to be transmitted to such custodial account as Company shall direct in
writing, the proceeds of all redemption orders placed by Company by 9:00 a.m.,
Central time, on the Business Day immediately following the Trade Date, by wire
transfer on that Business Day. Should Company need to extend the settlement on a
trade, it will contact Adviser to discuss the extension. For purposes of
determining the length of settlement, Adviser agrees to treat the Account no
less favorably than other shareholders of the Funds. Each wire transfer of
redemption proceeds shall indicate, on the Federal Funds wire system, the amount
thereof attributable to each Fund; provided, however, that if the number of
entries would be too great to be transmitted through the Federal Funds wire
system, the Adviser shall, on the day the wire is sent, fax such entries to
Company or if possible, send via direct or indirect systems access until
otherwise directed by the Company in writing.
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(c) Authorized Persons. The following persons are each duly
authorized to act on behalf of the Company under this Agreement. The Funds,
Adviser and Distributors are entitled to conclusively rely on verbal or written
instructions that Adviser or Distributors reasonably believes were originated by
any one of said persons. The Company shall inform Adviser and Distributors of
additions to or subtractions from this list of authorized persons pursuant to
Section 13, hereof:
Xxxxxx Xxxxx
Xxxx Xxxxx
Xxxx Xxxxxxx
3.4 Book Entry Only. Issuance and transfer of shares of a Fund will be
by book entry only. Stock certificates will not be issued to the Company or the
Account. Shares of the Funds ordered from Distributors will be recorded in the
appropriate book entry title for the Account.
3.5 Distribution Information. The Adviser or Distributors shall provide
the Company with all distribution announcement information as soon as it is
announced by the Funds. The distribution information shall set forth, as
applicable, ex-dates, record date, payable date, distribution rate per share,
record date share balances, cash and reinvested payment amounts and all other
information reasonably requested by the Company. Where possible, the Adviser or
Distributors shall provide the Company with direct or indirect systems access to
the Adviser's systems for obtaining such distribution information.
3.6 Reinvestment. All dividends and capital gains distributions will be
automatically reinvested on the payable date in additional shares of the
applicable Fund at net asset value in accordance with each Fund's then current
prospectus.
3.7 Pricing Information. Distributors shall use its best efforts to
furnish to the Company prior to 6:00 p.m., Central time, on each Business Day
each Fund's closing net asset value for that day, and for those Funds for which
such information is calculated, the daily accrual for interest rate factor (mil
rate). Such information shall be communicated via fax, or indirect or direct
systems access acceptable to the Company.
3.8 Price Errors.
(a) Notification. If an adjustment is required in accordance
with a Fund's then current policies on reimbursement ("Fund Reimbursement
Policies") to correct any error in the computation of the net asset value of
Fund shares ("Price Error"), Adviser or Distributors shall notify Company as
soon as practicable after discovering the Price Error. Notice may be made via
facsimile or via direct or indirect systems access and shall state the incorrect
price, the correct price and, to the extent communicated to the Fund's
shareholders, the reason for the price change.
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(b) Underpayments. If a Price Error causes an Account to
receive less than the amount to which it otherwise would have been entitled,
Adviser shall make all necessary adjustments (subject to the Fund Reimbursement
Policies) so that the Account receives the amount to which it would have been
entitled
(c) Overpayments. If a Price Error causes an Account to
receive more than the amount to which it otherwise would have been entitled,
Company, when requested by Adviser (in accordance with the Fund Reimbursement
Policies), will use its best efforts to collect such excess amounts from the
applicable Owners.
(d) Fund Reimbursement Policies. Adviser agrees to treat
Company's customers no less favorably than Adviser treats its retail
shareholders in applying the provisions of paragraphs 3.8(b) and 3.8(c).
(e) Expenses. Adviser shall reimburse Company for all
reasonable and necessary out-of-pocket expenses incurred by Company for payroll
overtime, stationery and postage in adjusting Owner accounts affected by a Price
Error described in paragraphs 3.8(b) and 3.8(c). Company shall use its best
efforts to mitigate all expenses which may be reimbursable under this section
3.8(e) and agrees that payroll overtime shall not include any time spent
programming computers or otherwise customizing Company's recordkeeping system.
Upon requesting reimbursement, Company shall present an itemized xxxx to Adviser
detailing the costs for which it seeks reimbursement.
3.9 Agency. Distributors hereby appoints the Company as its agent for
the limited purpose of accepting purchase and redemption instructions from the
Owners for the purchase and redemption of shares of the Funds by the Company on
behalf of Account.
3.10 Quarterly Reports. Adviser agrees to provide Company a statement
of Fund assets as soon as practicable and in any event within 30 days after the
end of each fiscal quarter, and a statement certifying the compliance by the
Funds during that fiscal quarter with the diversification requirements and
qualification as a regulated investment company. In the event of a breach of
Section 6.4(a), Adviser will take all reasonable steps (a) to notify Company of
such breach and (b) to adequately diversify the Fund so as to achieve compliance
within the grace period afforded by Treasury Regulation 1.817-5.
4. Proxy Solicitations and Voting. The Company shall, at its expense, distribute
or arrange for the distribution of all proxy materials furnished by the Funds to
the Account and shall: (i) solicit voting instructions from Owners; (ii) vote
the Fund shares in accordance with instructions received from Owners; and (iii)
vote the Fund shares for which no instructions have been received, as well as
shares attributable to it, in the same proportion as Fund shares for which
instructions have been received from Owners, so long as and to the extent that
the Securities and Exchange Commission (the "SEC") continues to interpret the
Investment Company Act of 1940, as amended (the "1940 Act"), to require
pass-through voting privileges for various contract
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owners. The Company and its agents will not recommend action in connection with,
or oppose or interfere with, the solicitation of proxies for the Fund shares
held for Owners.
5. Customer Communications.
5.1 Prospectuses. The Adviser or Distributors, at its expense, will
provide the Company with as many copies of the current prospectus for the Funds
as the Company may reasonably request for distribution, at the Company's
expense, to existing or prospective Owners.
5.2 Shareholder Materials. The Adviser and Distributors shall, as
applicable, provide in bulk to the Company or its authorized representative, at
a single address and at no expense to the Company, the following shareholder
communications materials prepared for circulation to Owners in quantities
requested by the Company which are sufficient to allow mailing thereof by the
Company and, to the extent required by applicable law, to all Owners: proxy or
information statements, annual reports, semi-annual reports, and all initial and
updated prospectuses, supplements and amendments thereof. None of the Funds, the
Adviser or Distributors shall be responsible for the cost of distributing such
materials to Owners.
6. Representations and Warranties.
6.1 The Company represents and warrants that:
(a) It is an insurance company duly organized and in good
standing under the laws of the State of Ohio and that it has legally and validly
established the Account prior to any issuance or sale thereof as a segregated
asset account and that the Company has and will maintain the capacity to issue
all Contracts that may be sold; and that it is and will remain duly registered,
licensed, qualified and in good standing to sell the Contracts in all the
jurisdictions in which such Contracts are to be offered or sold;
(b) It is and will remain duly registered and licensed in all
material respects under all applicable federal and state securities and
insurance laws and shall perform its obligations under this Agreement in
compliance in all material respects with any applicable state and federal laws;
(c) The Contracts are and will be registered under the
Securities Act of 1933, as amended (the "1933 Act"), and are and will be
registered and qualified for sale in the states where so required; and the
Account is and will be registered as a unit investment trust in accordance with
the 1940 Act and shall be a segregated investment account for the Contracts;
(d) The Contracts are currently treated as annuity contracts,
under applicable provisions of the Internal Revenue Code of 1986, as amended
(the "Code"), and the Company will maintain such treatment and will notify
Adviser, Distributors and Funds promptly upon
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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;
(e) It is registered as a transfer agent pursuant to Section
17A of the Securities Exchange Act of 1934, as amended (the "1934 Act"), or is
not required to be registered as such;
(f) The arrangements provided for in this Agreement will be
disclosed to the Owners; and
(g) It is registered as a broker-dealer under the 1934 Act and
any applicable state securities laws, including as a result of entering into and
performing the Services set forth in this Agreement, or is not required to be
registered as such.
6.2 The Funds each represent and warrant that Fund shares sold pursuant
to this Agreement are and will be registered under the 1933 Act and the Fund is
and will be registered as a registered investment company under the Investment
Company Act of 1940, in each case, except to the extent the Company is so
notified in writing;
6.3 Distributors represents and warrants that:
(a) It is and will be a member in good standing of the
National Association of Securities Dealers, Inc. ("NASD")and is and will be
registered as a broker-dealer with the SEC; and
(b) It will sell and distribute Fund shares in accordance with
all applicable state and federal laws and regulations.
6.4 Adviser represents and warrants that:
(a) It will cause each Fund to invest money from the Contracts
in such a manner as to ensure that the Contracts will be treated as variable
annuity contracts under the Code and the regulations issued thereunder, and that
each Fund will comply with Section 817(h) of the Code as amended from time to
time and with all applicable regulations promulgated thereunder;
(b) It is and will remain duly registered and licensed in all
material respects under all applicable federal and state securities and
insurance laws and shall perform its obligations under this Agreement in
compliance in all material respects with any applicable state and federal laws;
and
6.5 Each of the Parties to this Agreement represents and warrants to
the others that:
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(a) It has full power and authority under applicable law, and
has taken all action necessary, to enter into and perform this Agreement and the
person executing this Agreement on its behalf is duly authorized and empowered
to execute and deliver this Agreement;
(b) This Agreement constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms and it shall
comply in all material respects with all laws, rules and regulations applicable
to it by virtue of entering into this Agreement;
(c) No consent or authorization of, filing with, or other act
by or in respect of any governmental authority, is required in connection with
the execution, delivery, performance, validity or enforceability of this
Agreement;
(d) The execution, performance and delivery of this Agreement
will not result in it violating any applicable law or breaching or otherwise
impairing any of its contractual obligations;
(e) Each Party to this Agreement is entitled to rely on any
written records or instructions provided to it by another Party; and
(f) Its directors, officers, employees, and investment
advisers, and other individuals/entities dealing with the money or securities of
a Fund are and shall continue to be at all times covered by a blanket fidelity
bond or similar coverage for the benefit of the Fund in an amount not less than
the amount required by the applicable rules of the NASD and the federal
securities laws, which bond shall include coverage for larceny and embezzlement
and shall be issued by a reputable bonding company.
7. Sales Material and Information
7.1 NASD Filings. The Company shall promptly inform Distributors as to
the status of all sales literature filings pertaining to the Funds and shall
promptly notify Distributors of all approvals or disapprovals of sales
literature filings with the NASD. For purposes of this Section 7, the phrase
"sales literature or other promotional material" shall be construed in
accordance with all applicable securities laws and regulations.
7.2 Company Representations. The Company shall not make any material
representations concerning the Adviser, the Distributors, or a Fund other than
the information or representations contained in: (a) a registration statement of
the Fund or prospectus of a Fund, as amended or supplemented from time to time;
(b) published reports or statements of the Funds which are in the public domain
or are approved by Distributors or the Funds; or (c) sales literature or other
promotional material of the Funds.
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7.3 Adviser, Distributors and Fund Representations. None of Adviser,
Distributors or any Fund shall make any material representations concerning the
Company other than the information or representations contained in: (a) a
registration statement or prospectus for the Contracts, as amended or
supplemented from time to time; (b) published reports or statements of the
Contracts or the Account which are in the public domain or are approved by the
Company; or (c) sales literature or other promotional material of the Company.
7.4 Trademarks, etc. Except to the extent required by applicable law,
no Party shall use any other Party's names, logos, trademarks or service marks,
whether registered or unregistered, without the prior consent of such Party.
7.5 Information From Distributors and Adviser. Distributors or Adviser
will provide to Company at least one complete copy of all registration
statements, prospectuses, prospectus stickers, Statements of Additional
Information, reports, proxy statements, solicitations for voting instructions,
and upon request, applications for exemptions, requests for no action letters,
and all amendments to any of the above, that relate to the Funds, in final form
as filed with the SEC, NASD and other regulatory authorities.
7.6 Information From Company. Company will provide to Distributors at
least one complete copy of all registration statements, prospectuses, Statements
of Additional Information, reports, solicitations for voting instructions, sales
literature and other promotional materials, applications for exemptions,
requests for no action letters and all amendments to any of the above, that
relate to a Fund and the Contracts, in final form as filed with the SEC, NASD
and other regulatory authorities.
7.7 Review of Marketing Materials. If so requested by Company, the
Adviser or Distributors will use its best efforts to review sales literature and
other marketing materials prepared by Company which relate to the Funds, the
Adviser or Distributors for factual accuracy as to such entities, provided that
the Adviser or Distributors is provided at least five (5) Business Days to
review such materials. Neither the Adviser nor Distributors will review such
materials for compliance with applicable laws. Company shall provide the Adviser
with copies of all sales literature and other marketing materials which refer to
the Funds, the Company or Distributors within five (5) Business Days after their
first use, regardless of whether the Adviser or Distributors has previously
reviewed such materials. If so requested by the Adviser or Distributors, Company
shall cease to use any sales literature or marketing materials which refer to
the Funds, the Adviser or Distributors that the Adviser or Distributors
determines to be inaccurate, misleading or otherwise unacceptable.
8. Fees and Expenses.
8.1 Fund Registration Expenses. Fund or Distributors shall bear the
cost of registration and qualification of Fund shares; preparation and filing of
Fund prospectuses and registration statements, proxy materials and reports;
preparation of all other statements and
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notices relating to the Fund or Distributors required by any federal or state
law; payment of all applicable fees, including, without limitation, any fees due
under Rule 24f-2 of the 1940 Act, relating to a Fund; and all taxes on the
issuance or transfer of Fund shares on the Fund's records.
8.2 Contract Registration Expenses. The Company shall bear the expenses
for the costs of preparation and filing of the Company's prospectus and
registration statement with respect to the Contracts; preparation of all other
statements and notices relating to the Account or the Contracts required by any
federal or state law; expenses for the solicitation and sale of the Contracts
including all costs of printing and distributing all copies of advertisements,
prospectuses, Statements of Additional Information, proxy materials, and reports
to Owners or potential purchasers of the Contracts as required by applicable
state and federal law; payment of all applicable fees relating to the Contracts;
all costs of drafting, filing and obtaining approvals of the Contracts in the
various states under applicable insurance laws; filing of annual reports on form
N-SAR, and all other costs associated with ongoing compliance with all such laws
and its obligations under this Agreement.
9. Indemnification.
9.1 Indemnification By Company.
(a) Company agrees to indemnify and hold harmless the Funds,
Adviser and Distributors and each of their directors, officers, employees and
agents, and each person, if any, who controls any of them within the meaning of
Section 15 of the 1933 Act (each, an "Indemnified Party" and collectively, the
"Indemnified Parties" for purposes of this Section 9.1) from and against any and
all losses, claims, damages, liabilities (including amounts paid in settlement
with the written consent of Company), and expenses including reasonable legal
fees and expenses, (collectively, hereinafter "Losses"), to which the
Indemnified Parties may become subject under any statute, regulation, at common
law or otherwise insofar as such Losses:
(i) arise out of or are based upon any untrue
statements or alleged untrue statements of any material fact contained in the
registration statement, prospectus or sales literature for the Contracts or
contained in 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
paragraph 9.1(a) shall not apply as to any Indemnified Party if such statement
or omission or such alleged statement or omission was made in reliance upon and
in conformity with written information furnished to Company by or on behalf of a
Fund, Distributors or Adviser for use in the registration statement or
prospectus for the Contracts or in the Contracts (or any amendment or
supplement) or otherwise for use in connection with the sale of the Contracts or
Fund shares; or
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(ii) arise out of, or as a result of, statements or
representations or wrongful conduct of Company or its agents, 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, or sales literature covering a 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 written information furnished to a Fund, Adviser or Distributors by or on
behalf of Company; or
(iv) arise out of, or as a result of, any failure by
Company or persons under its control to provide the Services and furnish the
materials contemplated under the terms of this Agreement; or
(v) arise out of, or result from, any material breach
of any representation or warranty made by Company or persons under its control
in this Agreement or arise out of or result from any other material breach of
this Agreement by Company or persons under its control; as limited by and in
accordance with the provisions of Sections 9.1(b) and 9.1(c) hereof; or
(vi) arise out of, or as a result of, adherence by
Adviser or Distributors to instructions that it reasonably believes were
originated by persons specified in Section 3.3(c), hereof.
This indemnification provision is in addition to any liability
which the Company may otherwise have.
(b) Company shall not be liable under this indemnification
provision with respect to any Losses 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) 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 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 Company of any such
claim shall not relieve Company from any liability which it may have to the
Indemnified Party otherwise than on account of this indemnification provision.
In case any such action is brought against any Indemnified Party, and it
notified the indemnifying Party of the commencement thereof, the
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indemnifying Party will be entitled to participate therein and, to the extent
that it may wish, assume the defense thereof, with counsel satisfactory to such
Indemnified Party. After notice from the indemnifying Party of its intention to
assume the defense of an action, the Indemnified Party shall bear the expenses
of any additional counsel obtained by it, and the indemnifying Party shall not
be liable to such Indemnified Party under this Section for any legal or other
expenses subsequently incurred by such Indemnified Party in connection with the
defense thereof other than reasonable costs of investigation. The Indemnified
Party may not settle any action without the written consent of the indemnifying
Party. The indemnifying Party may not settle any action without the written
consent of the Indemnified Party unless such settlement completely and finally
releases the Indemnified Party from any and all liability. In either event,
consent shall not be unreasonably withheld.
(d) The Indemnified Parties will promptly notify Company of
the commencement of any litigation or proceedings against the Indemnified
Parties in connection with the issuance or sale of Fund shares or the Contracts
or the operation of a Fund.
9.2 Indemnification by Adviser and Distributors.
(a) Adviser and Distributors agrees to indemnify and hold
harmless Company and each of its directors, officers, employees and agents and
each person, if any, who controls Company within the meaning of Section 15 of
the 1933 Act (each, an "Indemnified Party" and collectively, the "Indemnified
Parties" for purposes of this Section 9.2) from and against any and all Losses
to which the Indemnified Parties may become subject under any statute,
regulation, at common law or otherwise, insofar as such Losses:
(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 sales literature of a Fund (or any
amendment or supplement to any of the foregoing), or arise out of or are based
upon the omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, provided that this Section 9.2(a) shall not apply as to any
Indemnified Party if such statement or omission or such alleged statement or
omission was made in reliance upon and in conformity with written information
furnished to a Fund, Adviser or Distributors by or on behalf of Company for use
in the registration statement or prospectus for a Fund or in sales literature
(or any amendment or supplement) 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 or wrongful conduct of Adviser or Distributors or persons under
its control, with respect to the sale or distribution of Fund shares; or
(iii) arise out of any untrue statement or alleged
untrue statement of a material fact contained in a registration statement,
prospectus, or sales literature covering the Contracts, or any amendment thereof
or supplement thereto, or the omission or alleged omission to state therein a
material fact required to be stated therein, or necessary to make the statements
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therein not misleading, if such statement or omission was made in reliance upon
written information furnished to Company by or on behalf of Adviser or
Distributors; or
(iv) arise out of, or as a result of, any failure by
Adviser or Distributors or persons under its control to provide the services and
furnish the materials contemplated under the terms of this Agreement; or
(v) arise out of or result from any material breach
of any representation or warranty made by Adviser or Distributors or persons
under its control in this Agreement or arise out of or result from any other
material breach of this Agreement by Adviser or Distributors or persons under
its control; as limited by and in accordance with the provisions of Sections
9.2(b) and 9.2(c) hereof.
This indemnification provision is in addition to any liability
which Adviser and Distributors may otherwise have.
(b) Adviser and Distributors shall not be liable under this
indemnification provision with respect to any Losses 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 and duties under this Agreement.
(c) Adviser and Distributors 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 Adviser and Distributors
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 Adviser
and Distributors of any such claim shall not relieve Adviser and Distributors
from any liability which it may have to the Indemnified Party otherwise than on
account of this indemnification provision. In case any such action is brought
against any Indemnified Party, and it notified the indemnifying Party of the
commencement thereof, the indemnifying Party will be entitled to participate
therein and, to the extent that it may wish, assume the defense thereof, with
counsel satisfactory to such Indemnified Party. After notice from the
indemnifying Party of its intention to assume the defense of an action, the
Indemnified Party shall bear the expenses of any additional counsel obtained by
it, and the indemnifying Party shall not be liable to such Indemnified Party
under this Section for any legal or other expenses subsequently incurred by such
Indemnified Party in connection with the defense thereof other than reasonable
costs of investigation. The Indemnified Party may not settle any action without
the written consent of the indemnifying Party. The indemnifying Party may not
settle any action without the written consent of the Indemnified Party unless
such settlement completely and finally releases the Indemnified Party from any
and all liability. In either event, consent shall not be unreasonably withheld.
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(d) The Indemnified Parties will promptly notify Adviser and
Distributors of the commencement of any litigation or proceedings against the
Indemnified Parties in connection with the issuance or sale of the Contracts or
the operation of the Account.
10. Potential Conflicts.
10.1 Monitoring by Directors for Conflicts of Interest. The Directors
of each Fund will monitor the Fund for any potential or existing material
irreconcilable conflict of interest between the interests of the contract owners
of all separate accounts investing in the Fund, including such conflict of
interest with any other separate account of any other insurance company
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 interpretive 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 the Fund are
being managed; (e) a difference in voting instructions given by variable annuity
contract owners and variable life insurance contract owners or by contract
owners of different life insurance companies utilizing the Fund; or (f) a
decision by Company to disregard the voting instructions of Owners. The
Directors shall promptly inform the Company, in writing, if they determine that
an irreconcilable material conflict exists and the implications thereof.
10.2 Monitoring by the Company for Conflicts of Interest. The Company
will promptly notify the Directors, in writing, of any potential or existing
material irreconcilable conflicts of interest, as described in Section 10.1
above, of which it is aware. The Company will assist the Directors in carrying
out their responsibilities under any applicable provisions of the federal
securities laws and any exemptive orders granted by the SEC ("Exemptive Order"),
by providing the Directors, in a timely manner, with all information reasonably
necessary for the Directors to consider any issues raised. This includes, but is
not limited to, an obligation by the Company to inform the Directors whenever
Owner voting instructions are disregarded.
10.3 Remedies. If it is determined by a majority of the Directors, or a
majority of disinterested Directors, that a material irreconcilable conflict
exists, as described in Section 10.1 above, the Company shall, at its own
expense take whatever steps are necessary to remedy or eliminate the
irreconcilable material conflict, up to and including, but not limited to: (a),
withdrawing the assets allocable to some or all of the separate accounts from
the applicable Fund and reinvesting such assets in a different investment
medium, including (but not limited to) another fund managed by the Adviser, or
submitting the question whether such segregation should be implemented to a vote
of all affected Owners and, as appropriate, segregating the assets of any
particular group that votes in favor of such segregation, or offering to the
affected owners the option of making such a change; and (b), establishing a new
registered management investment company or managed separate account.
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10.4 Causes of Conflicts of Interest.
(a) State Insurance Regulators. 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 affected Account's investment in the
applicable Fund and terminate this Agreement with respect to such Account within
the period of time permitted by such decision, but in no event later than six
months after the Directors inform 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 disinterested Directors. Until the end of the foregoing period,
the Distributors and Funds shall continue to accept and implement orders by the
Company for the purchase (and redemption) of shares of the Fund to the extent
such actions do not violate applicable law.
(b) Disregard of Owner Voting. If a material irreconcilable
conflict arises because of Company's decision to disregard Owner voting
instructions and that decision represents a minority position or would preclude
a majority vote, Company may be required, at the applicable Fund's election, to
withdraw the Account's investment in said Fund. No charge or penalty will be
imposed against the Account as a result of such withdrawal.
10.5 Limitations on Consequences. For purposes of Sections 10.3 through
10.5 of this Agreement, a majority of the disinterested Directors shall
determine whether any proposed action adequately remedies any irreconcilable
material conflict. In no event will a Fund, the Adviser or the Distributors be
required to establish a new funding medium for any of the Contracts. The Company
shall not be required by Section 10.3 to establish a new funding medium for the
Contracts if an offer to do so has been declined by vote of a majority of Owners
affected by the irreconcilable material conflict. In the event that the
Directors determine that any proposed action does not adequately remedy any
irreconcilable material conflict, then the Company will withdraw the Account's
investment in the applicable Fund and terminate this Agreement as quickly as may
be required to comply with applicable law, but in no event later than six (6)
months after the Directors inform 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.
10.6 Changes in Laws. 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 Act or the rules promulgated thereunder with respect to
mixed or shared funding (as defined in the Funds' Exemptive Order) on terms and
conditions materially different from those contained in the Funds' Exemptive
Order, then (a) the Funds and/or the Company, 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
10.1, 10.2, 10.3 and
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10.4 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.
11. Maintenance of Records.
(a) Recordkeeping and other administrative services to Owners
shall be the responsibility of the Company and shall not be the responsibility
of the Funds, Adviser or Distributors. None of the Funds, the Adviser or
Distributors shall maintain separate accounts or records for Owners. Company
shall maintain and preserve all records as required by law to be maintained and
preserved in connection with providing the Services and in making shares of the
Funds available to the Account.
(b) Upon the request of the Adviser or Distributors, the
Company shall provide copies of all the historical records relating to
transactions between the Funds and the Account, written communications regarding
the Funds to or from the Account and other materials, in each case (1) as are
maintained by the Company in the ordinary course of its business and in
compliance with applicable law, and (2) as may reasonably be requested to enable
the Adviser and Distributors, or its representatives, including without
limitation its auditors or legal counsel, to (A) monitor and review the
Services, (B) comply with any request of a governmental body or self-regulatory
organization or the Owners, (C) verify compliance by the Company with the terms
of this Agreement, (D) make required regulatory reports, or (E) perform general
customer supervision. The Company agrees that it will permit the Adviser and
Distributors or such representatives of either to have reasonable access to its
personnel and records in order to facilitate the monitoring of the quality of
the Services.
(c) Upon the request of the Company, the Adviser and
Distributors shall provide copies of all the historical records relating to
transactions between the Funds and the Account, written communications regarding
the Funds to or from the Account and other materials, in each case (1) as are
maintained by the Adviser and Distributors, as the case may be, in the ordinary
course of its business and in compliance with applicable law, and (2) as may
reasonably be requested to enable the Company, or its representatives, including
without limitation its auditors or legal counsel, to (A) comply with any request
of a governmental body or self-regulatory organization or the Owners, (B) verify
compliance by the Adviser and Distributors with the terms of this Agreement, (C)
make required regulatory reports, or (D) perform general customer supervision.
(d) The Parties agree to cooperate in good faith in providing
records to one another pursuant to this Section 11.
12. Term and Termination.
12.1 Term and Termination Without Cause. The initial term of this
Agreement shall be for a period of one year from the date hereof. Unless
terminated as to any Fund upon not less
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than thirty (30) days prior written notice to the other Parties, this Agreement
shall thereafter automatically renew for the remaining Funds from year to year,
subject to termination at the next applicable renewal date upon not less than 30
days prior written notice. Any Party may terminate this Agreement as to any Fund
following the initial term upon six (6) months advance written notice to the
other Parties.
12.2 Termination by Fund, Distributors or Adviser for Cause. Adviser,
Fund or Distributors may terminate this Agreement by written notice to the
Company, if any of them shall determine, in its sole judgment exercised in good
faith, that (a) the Company has suffered a material adverse change in its
business, operations, financial condition or prospects since the date of this
Agreement or is the subject of material adverse publicity; or (b) any of the
Contracts are not registered, issued or sold in accordance with applicable state
and federal law or such law precludes the use of Fund shares as the underlying
investment media of the Contracts issued or to be issued by the Company.
12.3 Termination by Company for Cause. Company may terminate this
Agreement by written notice to the Adviser, Funds and Distributors in the event
that (a) any of the Fund shares are not registered, issued or sold in accordance
with applicable state 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; (b) the Funds cease to qualify as Regulated Investment
Companies under Subchapter M of the Code or under any successor or similar
provision, or if the Company reasonably believes that the Funds may fail to so
qualify; or (c) a Fund fails to meet the diversification requirements specified
in Section 6.4(a).
12.4 Termination by any Party. This Agreement may be terminated as to
any Fund by any Party at any time (A) by giving 30 days' written notice to the
other Parties in the event of a material breach of this Agreement by the other
Party or Parties that is not cured during such 30-day period, and (B) (i) upon
institution of formal proceedings relating to the legality of the terms and
conditions of this Agreement against the Account, Company, Funds, Adviser or
Distributors by the NASD, the SEC or any other regulatory body provided that the
terminating Party has a reasonable belief that the institution of formal
proceedings is not without foundation and will have a material adverse impact on
the terminating Party, (ii) by the non-assigning Party upon the assignment of
this Agreement in contravention of the terms hereof, or (iii) as is required by
law, order or instruction by a court of competent jurisdiction or a regulatory
body or self-regulatory organization with jurisdiction over the terminating
Party.
12.5 Limit on Termination. Notwithstanding the termination of this
Agreement with respect to any or all Funds, for so long as any Contracts remain
outstanding and invested in a Fund each Party to this Agreement shall continue
to perform such of its duties under this Agreement as are necessary to ensure
the continued tax deferred status thereof and the payment of benefits
thereunder, except to the extent proscribed by law, the SEC or other regulatory
body. Notwithstanding the foregoing, nothing in this Section 12.5 obligates a
Fund to continue in existence. In the event that any Fund elects to terminate
its operations, the Company shall, as
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soon as practicable, obtain an exemptive order or order of substitution from the
SEC to remove all Owners from the applicable Fund.
13. Notices.
All notices under this Agreement shall be given in writing (and shall
be deemed to have been duly given upon receipt) by delivery in person, by
facsimile, by registered or certified mail or by overnight delivery (postage
prepaid, return receipt requested) to the respective Parties as follows:
If to Strong Variable:
Strong Variable Insurance Funds, Inc.
000 Xxxxxxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: General Counsel
Facsimile No.: 414/359-3948
If to Opportunity Fund II:
Strong Opportunity Fund II, Inc.
000 Xxxxxxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: General Counsel
Facsimile No.: 414/359-3948
If to Adviser:
Strong Capital Management, Inc.
000 Xxxxxxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: General Counsel
Facsimile No.: 414/359-3948
If to Distributors:
Strong Funds Distributors, Inc.
000 Xxxxxxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: General Counsel
Facsimile No.: 414/359-3948
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If to Company:
Ohio National Life Insurance Company
Xxx Xxxxxxxxx Xxx
Xxxxxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxx
Facsimile No.: (000) 000-0000
14. Miscellaneous.
14.1. Captions. The captions in this Agreement are included for
convenience of reference only and in no way affect the construction or effect of
any provisions hereof.
14.2. Enforceability. If any portion of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the remainder of
the Agreement shall not be affected thereby.
14.3. Counterparts. This Agreement may be executed simultaneously in
two or more counterparts, each of which taken together shall constitute one and
the same instrument.
14.4. Remedies not Exclusive. 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 to this
Agreement are entitled to under state and federal laws.
14.5. Confidentiality. Subject to the requirements of legal process and
regulatory authority, the Funds and Distributors shall treat as confidential the
names and addresses of the owners of the Contracts and all information
reasonably identified as confidential in writing by the Company to this
Agreement 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 Company until such time
as it may come into the public domain.
14.6. Governing Law. This Agreement shall be governed by and
interpreted in accordance with the internal laws of the State of Wisconsin
applicable to agreements fully executed and to be performed therein; exclusive
of conflicts of laws.
14.7. Survivability. Sections 6, 7.2, 7.3, 7.4, 9, 11 and 12.5 hereof
shall survive termination of this Agreement. In addition, all provisions of this
Agreement shall survive termination of this Agreement in the event that any
Contracts are invested in a Fund at the time the termination becomes effective
and shall survive for so long as such Contracts remain so invested.
14.8. Amendment and Waiver. No modification of any provision of this
Agreement will be binding unless in writing and executed by the Party to be
bound thereby. No waiver of
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any provision of this Agreement will be binding unless in writing and executed
by the Party granting such waiver. Notwithstanding anything in this Agreement to
the contrary, the Company may unilaterally amend Exhibit A to this Agreement to
add additional series of Strong Variable Funds ("New Funds") as Funds by sending
to the Company a written notice of the New Funds. Any valid waiver of a
provision set forth herein shall not constitute a waiver of any other provision
of this Agreement. In addition, any such waiver shall constitute a present
waiver of such provision and shall not constitute a permanent future waiver of
such provision.
14.9. Assignment. This Agreement shall be binding upon and shall inure
to the benefit of the Parties and their respective successors and assigns;
provided, however, that neither this Agreement nor any rights, privileges,
duties or obligations of the Parties may be assigned by any Party without the
written consent of the other Parties or as expressly contemplated by this
Agreement.
14.10. Entire Agreement. This Agreement contains the full and complete
understanding between the Parties with respect to the transactions covered and
contemplated under this Agreement, and supersedes all prior agreements and
understandings between the Parties relating to the subject matter hereof,
whether oral or written, express or implied.
14.11. Relationship of Parties; No Joint Venture, Etc. Except for the
limited purpose provided in Section 3.8, it is understood and agreed that the
Company shall be acting as an independent contractor and not as an employee or
agent of the Adviser, Distributors or the Funds, and none of the Parties shall
hold itself out as an agent of any other Party with the authority to bind such
Party. Neither the execution nor performance of this Agreement shall be deemed
to create a partnership or joint venture by and among any of the Company, Funds,
Adviser, or Distributors.
14.12. Expenses. All expenses incident to the performance by each Party
of its respective duties under this Agreement shall be paid by that Party.
14.13. Time of Essence. Time shall be of the essence in this Agreement.
14.14. Non-Exclusivity. Each of the Parties acknowledges and agrees
that this Agreement and the arrangements described herein are intended to be
non-exclusive and that each of the Parties is free to enter into similar
agreements and arrangements with other entities.
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14.15. Operations of Funds. In no way shall the provisions of this
Agreement limit the authority of the Funds, the Company or Distributors to take
such action as it may deem appropriate or advisable in connection with all
matters relating to the operation of such Fund and the sale of its shares. In no
way shall the provisions of this Agreement limit the authority of the Company to
take such action as it may deem appropriate or advisable in connection with all
matters relating to the provision of Services or the shares of funds other than
the Funds offered to the Account.
THE OHIO NATIONAL LIFE INSURANCE COMPANY
/s/ XXXX X. XXXXXX
-------------------------------------------
Name: Xxxx X. Xxxxxx
Title: Senior V.P., Strategic Initiatives
STRONG CAPITAL MANAGEMENT, INC.
/s/ XXXXXX X. XXXXX
-------------------------------------------
Xxxxxx X. Xxxxx, Senior Vice President
Strong Intermediary Services
STRONG FUNDS DISTRIBUTORS, INC.
/s/ XXXXXXX X. XXXXXXXXXXX
-------------------------------------------
Xxxxxxx X. Xxxxxxxxxxx, Vice President
STRONG VARIABLE INSURANCE FUNDS,
INC. on behalf of the Designated Portfolios
/s/ XXXXXXX X. XXXXXXXXXXX
----------------------------------------
Xxxxxxx X. Xxxxxxxxxxx, Vice President
STRONG OPPORTUNITY FUND II, INC.
/s/ XXXXXXX X. XXXXXXXXXXX
----------------------------------------
Xxxxxxx X. Xxxxxxxxxxx, Vice President
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EXHIBIT A
The following is a list of Designated Portfolios under this Agreement:
Strong Growth Fund II
Strong Xxxxxxx Value Fund II
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EXHIBIT B
THE SERVICES
Company shall perform the following services. Such services
shall be the responsibility of the Company and shall not be the responsibility
of the Funds, Adviser or Distributors.
1. Maintain separate records for each Account, which records shall
reflect Fund shares ("Shares") purchased and redeemed, including the date and
price for all transactions, Share balances, and the name and address of each
Owner, including zip codes and tax identification numbers.
2. Credit contributions to individual Owner accounts and invest such
contributions in shares of the Funds to the extent so designated by the Owner.
3. Disburse or credit to the Owners, and maintain records of, all
proceeds of redemptions of Fund shares and all other distributions not
reinvested in shares.
4. Prepare and transmit to the Owners, periodic account statements
showing, among other things, the total number of Fund shares owned as of the
statement closing date, purchases and redemptions of shares during the period
covered by the statement, the net asset value of the Funds as of a recent date,
and the dividends and other distributions paid during the statement period
(whether paid in cash or reinvested in shares).
5. Transmit to the Owners, as required by applicable law, prospectuses,
proxy materials, shareholder reports, and other information provided by the
Adviser, Distributors or Funds and required to be sent to shareholders under the
Federal securities laws.
6. Transmit to Distributors purchase orders and redemption requests
placed by the Account and arrange for the transmission of funds to and from the
Funds.
7. Transmit to Distributors such periodic reports as Distributors shall
reasonably conclude is necessary to enable the Funds to comply with applicable
Federal securities and state Blue Sky requirements.
8. Transmit to each Account confirmations of purchase orders and
redemption requests placed by each Account.
9. Maintain all account balance information for the Account and daily
and monthly purchase summaries expressed in shares and dollar amounts.
10. Prepare, transmit and file any Federal, state and local government
reports and returns as required by law with respect to each account maintained
on behalf of the Account.
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11. Respond to Owners' inquiries regarding, among other things, share
prices, account balances, dividend options, dividend amounts, and dividend
payment dates.
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EXHIBIT C
ACCOUNT INFORMATION
1. Entity in whose name each Account will be opened: The Ohio National Life Insurance Company
----------------------------------------
Mailing address: Xxx Xxxxxxxxx Xxx
----------------------------------------
Xxxxxxxxxx, Xxxx 00000
----------------------------------------
2. Employer ID number (For internal usage only): 00-0000000
----------------------------------------
3. Authorized contact persons: The following persons are authorized on behalf of
the Company to effect transactions in each Account:
Name: Xxxxxx X. Xxxxx Name: Xxxx X. Xxxxx
------------------------------------------- ---------------------------------
Phone: 000-000-0000 Phone: 000-000-0000
------------------------------------------- ---------------------------------
4. Will the Accounts have telephone exchange? X Yes No
--- ---
(This option lets Company redeem shares by telephone and apply the proceeds
for purchase in another identically registered Strong Funds account.)
5. Will the Accounts have telephone redemption? X Yes No
--- ---
(This option lets Company sell shares by telephone. The proceeds will be
wired to the bank account specified below.)
6. All dividends and capital gains will be reinvested automatically.
7. Instructions for all outgoing wire transfers:
-----------------------------
-----------------------------
-----------------------------
-----------------------------
8. If this Account Information Form contains changed information, the
undersigned authorized officer has executed this amended Account Information
Form as of the date set forth below and acknowledges the agreements and
representations set forth in the Participation Agreement between the Company,
the Funds, Adviser and Distributors:
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9. Company represents under penalty of perjury that:
(i) The employer ID number on this form is correct; and
(ii) Company is not subject to backup withholding because (a) Company
is exempt from backup withholding, (b) Company has not been notified by the IRS
that it is subject to backup withholding as a result of failure to report all
interest or dividends, or (c) the IRS has notified the Company that it is no
longer subject to backup withholding. (Cross out (ii) if Company has been
notified by the IRS that it is subject to backup withholding because of
underreporting interest or dividends on its tax return.)
/s/ XXXX X. XXXXXX March 23, 1998
-------------------------------------- --------------------------------
(Signature of Authorized Officer) (Date)
Please Note: Distributors employs reasonable procedures to confirm that
instructions communicated by telephone are genuine and may not be liable for
losses due to unauthorized or fraudulent instructions. Please see the prospectus
for the applicable Fund for more information on the telephone exchange and
redemption privileges.
For Strong Internal Use: This Account Information Form may be a copy. The
original Account Information Form is attached to the Participation Agreement
with the Adviser and retained in the legal department.
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Re: Fee Letter Relating to the Ohio National Life Insurance
Company Participation Agreement.
Dear Xxxx:
Pursuant to the Participation Agreement by and among Strong Capital
Management, Inc. ("Strong"), Ohio National Life Insurance Company (the
"Company"), Strong Variable Insurance Funds, Inc., Strong Opportunity Fund II,
Inc. and Strong Funds Distributors, Inc. ("Distributors") dated as of May 1,
1998 (the "Participation Agreement"), the Company will provide certain
administrative services on behalf of the registered investment companies or
series thereof specified in Exhibit A (each a "Fund" and collectively the
"Funds").
In recognition of the reduction in administrative expenses that derives
from the performance of said administrative services, Strong agrees to pay the
Company the fee specified below for each Fund specified in Exhibit A to this
Agreement.
(a) For average aggregate amounts (as calculated in paragraph
(b), below) invested through variable insurance products issued by the
Company with the Funds, the monthly fee shall equal the percentage
(calculated in paragraph (b), below) of the applicable annual fee for
each Fund specified in Exhibit A.
(b) For purposes of computing the fee contemplated in
paragraph (a) above, Strong shall calculate and pay to the Company an
amount with respect to each Fund equal to the product of: (a) the
product of (i) the number of calendar days in the applicable month
divided by the number of calendar days in that year (365 or 366 as
applicable) and (ii) the applicable percentage specified in Exhibit A,
to this Agreement, multiplied by (b) the average daily market value of
the investments held in such Fund pursuant to the Participation
Agreement computed by totaling the aggregate investment (share net
asset value multiplied by the total number of shares held) on each day
during the calendar month and dividing by the total number of days
during such month.
(c) Strong shall calculate the amount of the payment to be
made pursuant to this Letter Agreement at the end of each calendar
month and will make such payment to the Company within 30 days after
receiving the report referenced in paragraph (e), below. Fees will be
paid, at Strong's election, by wire transfer or by check. All payments
under this Agreement shall be considered final unless disputed by the
Company in writing within 60 days of receipt.
(d) The parties agree that the fees contemplated herein are
solely for shareholder servicing and other administrative services
provided by the Company and do not constitute payment in any manner for
investment advisory, distribution, trustee, or custodial services.
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(e) The Company agrees to provide Strong by the 15th day of
each month with a report which indicates the number of Owners that hold
through a Contract interests in each Account as of the last day of the
prior month.
(f) If requested in writing by Strong, and at Strong's
expense, the Company shall provide to Strong, by February 14th of each
year, a "Special Report" from a nationally recognized accounting firm
reasonably acceptable to Strong which substantiates for each month of
the prior calendar year: (a) the number of Owners that hold, through an
Account, interests in each Account maintained by the Company on the
last day of each month which held shares for which the fee provided for
in this Letter Agreement was received by the Company, (b) that any fees
billed to Strong for such month were accurately determined in
accordance with this Letter Agreement, and (c) such other information
in connection with this Agreement and the Participation Agreement as
may be reasonably requested by Strong.
(g) The parties to this Agreement agree that Strong may
unilaterally amend Schedule A to this Agreement to add additional
investment companies or series thereof ("New Funds") as Funds subject
to the provisions of this Letter Agreement by sending to the Company a
written notice of the New Funds and indicating therein the fees to be
paid to the Company with respect to the administrative services
provided pursuant to the Participation Agreement in connection with
such New Funds.
(h) This Letter Agreement shall terminate upon termination of
the Participation Agreement. Accordingly, all payments pursuant to this
Letter Agreement shall cease upon termination of the Participation
Agreement.
(i) Capitalized terms not otherwise defined herein shall have
the meaning assigned to them in the Participation Agreement.
If you are in agreement with the foregoing, please sign and date below
where indicated and return one copy of this signed letter agreement to me.
Very truly yours,
--------------------------------------
Xxxxxx X. Xxxxx, Senior Vice President
Strong Intermediary Services
Accepted and agreed to this 26 day of
March, 1998.
OHIO NATIONAL LIFE INSURANCE COMPANY
/s/ XXXX X. XXXXXX
----------------------------------------
Name: Xxxx X. Xxxxxx
Title: Senior V.P., Strategic Initiatives
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EXHIBIT A TO FEE LETTER
The Funds subject to this Agreement and applicable annual fees are as follows:
Fund Annual Fee
---- ----------
Strong Opportunity Fund II, Inc. .25%
Strong Variable Insurance Funds, Inc.
Strong Growth Fund II .25%
Strong Xxxxxxx Value Fund II .25%
29
