PARTICIPATION AGREEMENT among VANGUARD VARIABLE INSURANCE FUND and THE VANGUARD GROUP, INC. and VANGUARD MARKETING CORPORATION and HORACE MANN LIFE INSURANCE COMPANY
among
VANGUARD VARIABLE INSURANCE FUND
and
THE VANGUARD GROUP, INC.
and
VANGUARD MARKETING CORPORATION
and
▇▇▇▇▇▇ ▇▇▇▇ LIFE INSURANCE COMPANY
THIS AGREEMENT, made and entered into as of the 27th day of June,
2017, by and among VANGUARD VARIABLE INSURANCE FUND (hereinafter the "Fund"), a Delaware business trust, THE VANGUARD GROUP, INC. (hereinafter the "Sponsor"), a Pennsylvania corporation, VANGUARD MARKETING CORPORATION (hereinafter the "Distributor"), a
Pennsylvania corporation, and ▇▇▇▇▇▇ ▇▇▇▇ LIFE INSURANCE COMPANY (hereinafter the "Company"), an Illinois corporation, on its own behalf and on behalf of each
segregated asset account of the Company named in Schedule A hereto as may be amended from time to time (each such account hereinafter referred to as the
"Account").
WHEREAS, the Fund was organized to act as the investment vehicle for variable life insurance policies and variable annuity contracts to be offered by separate accounts of insurance companies which have entered into participation agreements with the Fund and the Sponsor (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 registered as an open-end management investment company under the Investment Company Act of
1940, as amended (the "1940 Act") and its shares are registered under the Securities Act of 1933, as amended (the "1933 Act"); and
WHEREAS, the assets of each Portfolio of the Fund are managed by several entities (the "Advisers"), each of which is duly registered as an investment adviser under the federal Investment Advisers Act of 1940 and any applicable state securities laws; and
WHEREAS, the Company has established or will establish one or more Accounts to fund certain variable life insurance policies and/or variable annuity contracts (the "Variable Insurance Products"), which Accounts and Variable Insurance Products are registered under the 1940 Act and the 1933 Act, respectively; and
WHEREAS, each Account is a duly organized, validly existing
segregated asset account, established by resolution of the Board of Directors of the Company, on the date shown for each Account on Schedule A hereto, to set aside and
invest assets attributable to the Variable Insurance Products; and
WHEREAS, the Distributor is a wholly-owned subsidiary of the Sponsor,
is registered as a broker dealer with the Securities and Exchange Commission ("SEC") 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, Inc. ("FINRA"); and
WHEREAS, to the extent permitted by applicable insurance laws and regulations, the Company intends to purchase shares of the Portfolios on behalf of each Account to fund the Variable Insurance Products and the Sponsor is authorized to sell such shares to the Accounts at net asset value; and
WHEREAS, the Company has engaged State Street Bank and Trust Company
("State Street") to provide certain custody and/or other services with respect to the Accounts; and
WHEREAS, the Company and State Street have agreed that State Street may employ, engage, associate or contract with any such person or persons, including, without limitation of and subsidiaries of State Street, as State Street may deem desirable to assist it in performing certain of its obligations under its agreement with the Company without the consent of Company; provided, however, that the compensation of such person or persons shall be paid by State Street and that State Street shall be as fully responsible to the Company for the acts and omissions of any such person or persons as it is for its own acts and omissions under its agreement with the Company; and
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WHEREAS, the Company is informed that State Street has engaged
Benefit Trust Company ("Benefit Trust") to perform certain of its obligations to the Company, including without limitation certain account administration and trade
execution and settlement services, with respect to each Account; and
WHEREAS, the accounts held with the Sponsor reflecting the Accounts'
ownership of shares of the Portfolios and the Accounts' transactions involving such shares (such accounts held with the Sponsor, the "Vanguard Accounts") are held in the
name of the Company for benefit of the Accounts, and not in the name of State Street or Benefit Trust, and
WHEREAS, the Sponsor and Benefit Trust are parties to a Defined Contribution Clearance & Settlement Agreement dated as of January 22, 2007, as amended (such agreement, or any successor agreement, the "Benefit Trust DCC&S Agreement"), which agreement governs, among other things, Benefit Trust's submission of transactions in the Portfolios to the Sponsor (as transfer agent for the Fund) through the National Securities Clearing Corporation's Defined Contribution Clearance & Settlement service, and sets forth, among other things, certain operational and other provisions that apply to and govern the purchase and redemption of shares of the Portfolios by Benefit Trust on behalf of the Accounts and related matters;
NOW, THEREFORE, in consideration of their mutual promises, the
Company, the Fund, the Sponsor and the Distributor agree as follows:
ARTICLE I. Sale of Fund Shares
1.1
The Sponsor and the Distributor agree to sell to the Company those shares of the
Portfolios of the Fund listed on Schedule B which each Account orders, in accordance with the applicable provisions of the DCC&S Agreement and, with respect to all orders received by the Fund from or through Benefit Trust
(whether through the National Securities Clearing Corporation's Fund/SERV system or NETWORKING system or by any other means permitted by the Sponsor with respect to such orders), the Benefit Trust
DCC&S Agreement. If the Fund receives any orders for the purchase of shares of the Portfolios directly from the Company (i.e., such that the order is received by the Sponsor (on behalf of the Fund) directly from the Company and not from or through Benefit Trust) (any such order, a "Company Direct Purchase Order"),
all such Company Direct Purchase Orders shall be processed in accordance with the provisions set forth in Section 1.11 below, notwithstanding any terms of the Benefit Trust DCC&S Agreement.
1.2
The Fund, subject to the provisions of Article IX of this Agreement, agrees to make
its shares available indefinitely for purchase at the applicable net asset value per share by the Company and its Accounts on those days on which the Fund calculates its net asset value pursuant to the rules of the SEC and the Fund
shall use its best efforts to calculate such net asset value on each day which the NYSE is open for trading. Notwithstanding the foregoing, the Board of Trustees of the Fund (hereinafter the "Board") may refuse to
sell shares of any Portfolio to any person including, but not limited to, the Company, 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 Board, acting in good faith and in light of their fiduciary duties under federal and any applicable state laws, necessary in the best interests of the
shareholders of such Portfolio. Further, it is acknowledged and agreed that the availability of shares of the Fund shall be subject to the Fund's then current prospectus and statement of additional information, federal and state securities laws and applicable rules and regulations of the SEC and the FINRA.
1.3
The Fund and the Sponsor agree that shares of the Fund will be sold only to
Participating Insurance Companies and their separate accounts. No shares of any Portfolio will be sold to the general public.
1.4
The Fund and the Sponsor will not sell Fund shares to any Participating Insurance
Company or its separate account unless an agreement containing a provision substantially the same as Section 2.6 of Article II of this Agreement is in effect to govern such sales.
1.5
The Fund agrees to redeem for cash, on the Company's (or Benefit Trust's) request
(including, without limitation, an exchange request), any full or fractional shares of the Fund held by an Account, in accordance with the applicable provisions of this Agreement and, with respect to all requests received by the Fund from or through Benefit Trust (whether through the National Securities Clearing Corporation's Fund/SERV
system or NETWORKING system or by any other means permitted by The Sponsor with respect to such requests), the Benefit Trust DCC&S Agreement. If the Fund receives any requests for the redemption of
shares of the Portfolios directly from the Company (i.e., such that the request is received by the Sponsor (on behalf of the Fund) directly from the Company and not from or through Benefit Trust) (any such order, a
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"Company Direct Redemption Order" and, together with each Company Direct Purchase Order, a "Company Direct Order"), all such Company Direct Redemption Orders shall be processed in accordance with
the provisions set forth in Section 1.11 below, notwithstanding any terms of the Benefit Trust DCC&S Agreement. The Fund reserves the right to suspend redemption
privileges or pay redemptions in kind, as disclosed in the Fund's prospectus or statement of additional information. The Fund agrees to treat the Company like any other shareholder in similar circumstances in making these determinations.
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The Company agrees to purchase and redeem the shares of each Portfolio offered by
the then current prospectus of the Fund and in accordance with the provisions of such prospectus and the accompanying statement of additional information.
1.7
Issuance and transfer of a Fund's shares will be by book entry only. Stock
certificates will not be issued to the Company or any Account. Shares ordered from the Fund will be recorded in an appropriate title for each Account or the appropriate subaccount of each Account. The Fund shall furnish to the Company the
CUSIP number assigned to each Portfolio of the Fund identified in Schedule B hereto.
1.8
The Company hereby elects to receive all income, dividends and capital gain
distributions as are payable on the Portfolio 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 of the number of shares so issued as payment of dividends and distributions.
1.9
The parties acknowledge that the Company will register (or that State Street will
cause Benefit Trust to register) the Vanguard Accounts in the name of the Company for benefit of each Account.
1.10
Benefit Trust.
(a)
The Company acknowledges that State Street has informed it that Benefit Trust will
be able to (i) transact on (including, without limitation, giving instructions for the purchase, sale, exchange, and transfer of shares of the Portfolios), and submit other instructions with respect to, the Vanguard Account(s), including, without limitation, submitting instructions, information requests, transaction requests, and administrative requests (regardless of how received) with respect to each such Vanguard Account, (ii) open and register
accounts in the Portfolios in connection with the Company and the Accounts, (iii) sign any required documentation in connection with any of the foregoing, and (iv) perform, with respect to the Vanguard
Accounts, any activity permitted under the Benefit Trust DCC&S Agreement or that an intermediary is permitted to perform under the Sponsor's then-current applicable policies and procedures. There will be
no obligation on the part of the Sponsor, the Distributor or the Fund to confirm any such action with the Company, or to confirm that such action was at the direction of, or authorized by, the Company or any
Account. The Sponsor, the Distributor, and the Fund shall have no liability to the Company or the Accounts in connection with any actions taken in accordance with requests and instructions believed by
the Sponsor to have been received by it from Benefit Trust in connection with a Vanguard Account.
(b)
The Company acknowledges that the Sponsor requires that any activities of Benefit
Trust in connection with the Vanguard Accounts, including with respect to transactions by the Accounts involving shares of the Portfolios, be subject to an appropriate Defined Contribution Clearance & Settlement Agreement by and
between the Sponsor and Benefit Trust, and that an appropriate Defined Contribution Clearance & Settlement Agreement must be and remain in effect in order for Benefit Trust to act on the Vanguard
Accounts as contemplated under this Agreement. For the purposes of this Section 1.10(b), an "appropriate Defined Contribution Clearance & Settlement Agreement" shall mean a Defined Contribution Clearance
& Settlement Agreement (and, if applicable, a NETWORKING Agreement) that the Sponsor, in its sole judgment, considers to be appropriate, complete, up to date, and relevant to the Vanguard Accounts.
Without limiting any of the Sponsor's or the Fund's rights or remedies under this Agreement or otherwise, the Sponsor shall have the right, in its sole discretion, to take any such actions it deems necessary with
respect to the Sponsor's acceptance and processing of orders or other activity from Benefit Trust in connection with any Vanguard Accounts in existence on or after the date of execution of this Agreement
(including, without limitation, interrupting, suspending or discontinuing such acceptance and processing), if at any time (x) an appropriate Defined Contribution Clearance & Settlement Agreement has not been
entered into, or ceases to be in effect (whatever the reason), by and between the Sponsor and Benefit Trust, or (y) Benefit Trust fails to comply (or the Sponsor suspects that Benefit Trust is failing to comply) with
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its obligations under a Defined Contribution Clearance & Settlement Agreement then in effect between the Sponsor and Benefit Trust. To the extent practicable, the Sponsor will provide the Company with
reasonable advance notice of its intent to take any such actions. The Sponsor shall have no obligation to enter into or to continue to maintain any intermediary trading relationship (including without limitation
any Defined Contribution Clearance & Settlement Agreement) with Benefit Trust, or with State Street, in connection with, or as a result of, this Agreement.
(c)
The Company acknowledges that the acceptance and processing of orders (and any
corrections or adjustments thereto) involving shares of the Portfolios in connection with the Accounts, and any other instructions or activity related to the Vanguard Accounts, from or through Benefit Trust will be dependent
upon and subject to Benefit Trust's compliance with all applicable requirements and obligations under the Defined Contribution Clearance & Settlement Agreement then in effect by and between Benefit Trust and
the Sponsor. Neither the Sponsor, the. Distributor, nor the Fund shall be responsible for any errors or failures by Benefit Trust in connection with any such orders, or for Benefit Trust's failure to comply with any requirements or obligations under such agreement, or any actions taken by the Sponsor or the Fund as
a result thereof.
(d)
The acknowledgements and other information contained in this Article I concerning
State Street and Benefit Trust are included strictly as an acknowledgement of the trading arrangement through which the Accounts' transactions in shares of the Portfolios will be processed, and of certain conditions related
thereto. Nothing in this Agreement shall be deemed to imply that any contractual or other relationship exists directly between Company and Benefit Trust, or to require that any such relationship exist.
1.11
Company Direct Orders.
(a)
The Company acknowledges that any Company Direct Orders will be required to be
submitted manually (such as by telephone or through a written letter or form of instruction (if and as - permitted by the Sponsor in accordance with its then-current policies and procedures) or, if and as applicable and available for the Vanguard Accounts in accordance with the Sponsor's then-current policies and procedures, through
the Sponsor's institutional trading website), in accordance with, and subject to, the Sponsor's then-current policies and procedures applicable to manual processing.
(b)
In the case of any Company Direct Order received by the Fund (i.e., by the Sponsor
on behalf of the Fund) from the Company on any Business Day prior to the close of trading on the New York Stock Exchange (generally 4:00 p.m. Eastern time) (the "market close"), the order shall be accorded a trade date on the
Fund's accounting system that is the date of receipt of the order by the Fund. In the case of any such order received by the Fund from the Company on any Business Day after the market close, the order shall be
accorded a trade date on the Fund's accounting system that is the next Business Day. "Business Day" shall mean any day on which the New York Stock Exchange ("NYSE") is open for trading and on which the Fund
calculates its net asset value pursuant to the rules of the SEC.
(c)
All Company Direct Orders shall settle in accordance with the following
provisions.
(i)
Purchases. The Company shall pay for purchases of Fund shares by 4:00 p.m.
Eastern time on the trade date. If the Company fails to pay for a purchase of Fund shares as required by this Section 1.11, then the Sponsor shall have no obligation to process the Company Direct Purchase Order.
(ii)
Redemptions. The Sponsor shall pay the redemption proceeds for any Company Direct
Redemption Order by 4:00 p.m. Eastern time on the Business Day following the trade date (T+1), subject to the provisions of this Agreement regarding delayed or in-kind settlement of redemptions.
(iii)
Method of Payment. Payment shall be in federal funds transmitted by wire, unless
otherwise agreed by the parties with respect to one or more Company Direct Orders.
(d)
The Fund shall make the daily net asset value, dividend and capital gain
information for each Portfolio available on a per share basis to the Company as soon as reasonably practical after the information is calculated (normally by 6:30 p.m. Eastern time) and shall use its best efforts to make such net asset value per share available by 7:00 p.m. Eastern time on each Business Day. Related to this obligation, the Fund
shall provide a contact name or names and telephone numbers of the persons responsible for providing daily net asset value, dividend and capital gain information to the Company. In the event of an error in the
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computation of the Fund's net asset value per share which, in accordance with procedures adopted by the Fund's Board of Trustees consistent with views expressed by the staff of the Securities and Exchange
Commission regarding appropriate error correction standards, as shall be in effect or amended from time to time, requires adjustment to transactions previously effected on behalf of an Account (a "Pricing Error"), the Sponsor shall notify the Company as soon as possible after discovery of the Pricing Error. Such
notification may be oral, but shall be confirmed promptly in writing. In such event, the Sponsor shall reimburse the Fund for any loss (without taking into consideration any positive effect of such Pricing
Error) and shall make appropriate adjustments to the Accounts' accounts, which adjustments shall net the impact of individual gains and losses; this will result in either a net payment to an Account from the
Sponsor (in the event of net Account losses) or from an Account to the Sponsor (in the event of net Account gains). In addition, in the event that the Pricing Error causes the Company to incur any direct
costs for re-processing accounts under an Account, such as preparing and mailing revised statements, the Sponsor shall reimburse the Company for all such reasonable costs upon receipt from the Company of an
invoice or other statement documenting such costs in reasonable detail.
(e)
The Company will notify the Sponsor by telephone on any Business Day, not later than
one hour prior to Market Close on such Business Day, if the Company becomes aware that that day's net Company Direct Purchase or net Company Direct Redemption Order, or any individual Company Direct Purchase or Company
Direct Redemption Order, for a Portfolio is expected to equal or exceed the applicable "Large Transaction Amount" for the Portfolio (as specified in Schedule C hereto),
where such order is the result of an "Extraordinary Event". For these purposes, an "Extraordinary Event" shall mean an event outside normal operations, such as a policy surrender, an entire Account (or subaccount thereof) or Variable
Insurance Product moving into or out of a Portfolio, or an asset transfer or merger arising from a merger, acquisition or divestiture. The Sponsor reserves the right to refuse any purchase order, or to delay
settlement of or settle in kind any redemption order, which equals or exceeds the applicable Large Transaction Amount and which the Sponsor, in its sole discretion, deems disruptive or detrimental to the
applicable Portfolio. The Sponsor reserves the right to amend or revise Schedule C at any time and will provide at least 24 hours' notice of such revision to the Company.
ARTICLE II. Representations and Warranties
2.1
The Company represents and warrants that it is an insurance company duly organized
and in good standing under applicable law; that it has legally and validly established each Account prior to any issuance or sale thereof as a segregated asset account under Section 5/245.21 of the Illinois Insurance Code; that it has and will maintain the capacity to issue all Variable Insurance Products that may be sold; and that it is properly licensed, qualified and in good standing to sell the Variable Insurance Products in forty-eight states and the District of Columbia. The Company does not currently issue Variable Insurance Products in New York or
New Jersey, but reserves the right to do so. The Company further represents and warrants that it will not issue Variable Insurance Products in New York or New Jersey, or in any other state or territory, unless it is properly licensed, qualified, and in good standing to do so.
2.2
The Company represents and warrants that the Variable Insurance Products are
registered under the 1933 Act.
2.3
The Company represents and warrants it has registered each Account as a unit
investment trust in accordance with the provisions of the 1940 Act to serve as segregated investment accounts for the Variable Insurance Products.
2.4
The Fund represents and warrants that Fund shares sold pursuant to this Agreement
shall be registered under the 1933 Act, duly authorized for issuance and sold in compliance with the laws of the State of Illinois and all applicable federal and state securities laws and that the Fund is and shall remain registered under the 1940 Act. 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. The Fund shall register and qualify the shares for sale in accordance with the laws of the various states only if and to the extent deemed advisable by the Fund, the Distributor, or the Sponsor.
2.5
The Fund represents that it is qualified as a Regulated Investment Company under
Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"), and that it will make every effort to maintain
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qualification (under Subchapter M or any successor or similar provision) and (ii) it will notify the Company immediately upon having a reasonable basis for believing that it ceased to so qualify or that it might not so qualify in the future. The Fund acknowledges that any failure to qualify as a Regulated Investment
Company will eliminate the ability of the subaccounts to avail themselves of the "look through" provisions of Section 817(h) of the Code, and that as a result the Variable Insurance Products will almost certainly fail to qualify as annuity, endowment or life insurance contracts under Section 817(h) of the Code.
2.6
The Company represents that the Variable Insurance Products will be treated as
annuity, endowment or life insurance contracts under applicable provisions of the Code and that it will make every effort to maintain such treatment and that it will notify the Fund and the Sponsor immediately upon having a reasonable basis
for believing that the Variable Insurance Products have ceased to be so treated or that they might not be so treated in the future.
2.7
The Fund currently does not intend to make any payments to finance distribution
expenses pursuant to Rule 12b-1 under the 1940 Act or otherwise.
2.8
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 except that the Fund represents that the Fund's investment policies, fees and expenses are and shall at all times remain in compliance with the laws of the State of Illinois and the Fund and the Sponsor represent that their respective operations are and shall at all times remain in material compliance with the laws of the State of Illinois to the extent required to perform this Agreement.
2.9
The Distributor represents and warrants that it is a member in good standing of
FINRA and is registered as a broker-dealer with the SEC. The Distributor further represents that it will sell and distribute the Fund shares in accordance with the laws of the State of Illinois and all applicable state and federal securities laws, including without limitation the 1933 Act, the 1934 Act, and the 1940 Act.
2.10
The Fund represents that it is lawfully organized and validly existing under the
laws of the State of Delaware and that it does and will comply in all material respects with the 1940 Act and any applicable regulations thereunder.
2.11
The Sponsor represents and warrants that the Advisers to the Fund are, and the
Sponsor shall use its best effort to cause the Advisers to remain, duly registered in all material respects under all applicable federal and state securities laws and to perform their obligations for the Fund in compliance in all material respects with the laws of the State of Illinois and any applicable state and federal securities laws.
2.12
The Fund and the Sponsor represent and warrant that all of their trustees,
directors, officers, employees, investment advisers, and other individuals/entities dealing with the money and/or securities of the 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 minimum coverage required currently by Rule 17g-1 under the 1940
Act or other applicable laws or regulations as may be promulgated from time to time. The aforesaid bond shall include coverage for larceny and embezzlement and shall be
issued by a reputable bonding company.
2.13
With respect to the Variable Insurance Products, which are registered under the
1933 Act, the Company represents and warrants that:
(a)
▇▇▇▇▇▇ ▇▇▇▇ Investors, Inc. is the principal underwriter for each such Variable
Insurance Product/Account and any subaccounts thereof and is a registered broker-dealer with the SEC under the 1934 Act;
(b)
the shares of the Portfolios of the Fund are and will continue to be the only
investment securities held by the corresponding subaccounts;
(c)
the number of Portfolios of the Fund available for investment by the Accounts will
not constitute a majority of the total number of mutual funds or portfolio selections available for investment by the Accounts in any Variable Insurance Product that is a variable annuity; and
(d)
with regard to each Portfolio, the Company, if permitted by law, on behalf of the
corresponding subaccount, will:
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(i)
vote such shares held by it in the same proportion as the vote of all other holders
of such shares; and
(ii)
refrain from substituting shares of another security for such shares unless the
SEC has approved such substitution in the manner provided in Section 26 of the 1940 Act.
2.14
The Fund represents that it will comply with all provisions of the 1940 Act
requiring voting by shareholders, and in particular the Fund will either provide for annual meetings or comply with Section 16(c) of the 1940 Act (although the Fund is not one of the trusts described in Section 16(c) of that Act) as well as with Sections 16(a) and, if and when applicable, 16(b). 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 trustees and with whatever rules the SEC may promulgate with respect thereto.
ARTICLE III. Offering Documents and Reports
3.1
The fund, the Sponsor or their assignee shall provide the company (at the
Sponsor’s expense) with as many copies of the Fund's current prospectus as the Company may reasonably request. The Company shall provide a copy of the Fund's prospectus to each Variable Insurance Product owner. If requested by the
Company in lieu thereof, the Fund or the Sponsor shall provide such documentation (including a final copy of the new prospectus as set in type at the Fund's or the Sponsor's expense) 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 Variable Insurance Products and the Fund's prospectus
printed together in one document (such printing to be at the Company's expense).
3.2
The Fund's prospectus shall state that the statement of additional information for
the Fund is available from the Sponsor (or in the Fund's discretion, the prospectus shall state that the statement of additional information is available from the Fund) and the Sponsor (or the Fund), at its expense, shall print and
provide such statement free of charge to the Company and to any owner of a Variable Insurance Product or prospective owner who requests such statement.
3.3
The Fund, at its own expense, shall provide the Company with copies of its reports
to shareholders, other communications to shareholders, and, if required by applicable law, proxy material, in such quantity as the Company shall reasonably require for distributing to Variable Insurance Product owners. The Fund shall
provide to the Company the prospectuses and annual reports referenced in this Agreement within fifteen (15) days prior to the Company's obligation to mail, and the Company agrees to provide the Fund with
advance notice of such date. If the documents are not delivered to the Company within ten (10) days of the Company's obligation to mail, the Fund shall reimburse the Company for any extraordinary out-of-pocket
costs (including, but not limited to, overtime for printing and mailing).
ARTICLE IV. Sales Material and Information
4.1
The Company shall furnish, or shall cause to be furnished, to the Fund or its
designee, each piece of sales literature or other promotional material in which the Fund, its Advisers or the Sponsor is named, at least ten Business Days prior to its use. The Company may use such material in fewer than ten Business Days if it
receives the written consent of the Fund or its designee. No such material shall be used if the Fund or its designee reasonably objects to such use within ten Business Days after receipt of such material. In
connection with the identification of the Portfolios in any such material, the use of the Sponsor's name or identification of the Portfolios shall be given no greater prominence than any other mutual fund or portfolio selection offered in a Variable Insurance Product that is a variable annuity.
4.2
The Company shall not give any information or make any representations or
statements on behalf of the Fund or concerning the Fund in connection with the sale of the Variable Insurance Products other than the information or representations contained in the registration statement or prospectus for the Fund shares, as such registration statement and prospectus may be amended or supplemented from time to time, or in
reports or proxy statements for the Fund, or in sales literature or other promotional material approved by the Fund or its designee or by the Sponsor, except with the permission of the Fund or the Sponsor or the
designee of either.
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4.3
The Fund, Sponsor, Distributor or their designee shall furnish, or shall cause to
be furnished, to the Company or its designee, each piece of sales literature or other promotional material in which the Company or an Account is named at least ten Business Days prior to its use. No such material shall be used if the
Company or its designee reasonably objects to such use within ten Business Days after receipt of such material.
4.4
The Fund, the Distributor and the Sponsor shall not give any information or make
any representations on behalf of the Company or concerning the Company, each Account, or the Variable Insurance Products other than the information or representations contained in a prospectus for the Variable Insurance Products, as
such prospectus may be amended or supplemented from time to time, or in published reports for each Account which are in the public domain or approved by the Company for distribution to Variable Insurance
Product owners, or in sales literature or other promotional material approved by the Company or its designee, except with the permission of the Company.
4.5
The Fund will provide to the Company at least one complete copy of all registration
statements, prospectuses, statements of additional information, reports, proxy statements, 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 the Fund or its shares, prior to or contemporaneously with the filing of each document with the SEC or other regulatory authorities.
4.6
The Company will provide to the Fund at least one complete copy of all
prospectuses, reports, solicitations for voting instructions, sales literature and other promotional materials, applications for exemption, requests for no-action letters, and all amendments to any of the above, that relate to the Variable Insurance Products or each Account, prior to or contemporaneously with the filing of such document with the SEC or
other regulatory authorities.
4.7
The Company and the Fund shall also each promptly inform the other of the results
of any examination by the SEC (or other regulatory authorities) that relates to the Variable Insurance Products, the Fund or its shares, and the party that was the subject of the examination shall provide the other party with a copy of
relevant portions of any "deficiency letter" or other correspondence or written report regarding any such examination.
4.8
The Fund and the Sponsor will provide the Company with as much notice as is
reasonably practicable of any proxy solicitation for any Portfolio, and of any material change in the Fund's registration statement, particularly any change resulting in a change to the prospectus for any Account. The Fund and the Sponsor
will cooperate with the Company so as to enable the Company to solicit voting instructions from owners of Variable Insurance Products, to the extent a solicitation is required by applicable law, or to make changes to its prospectus in an orderly manner.
4.9
For purposes of this Article IV, the phrase "sales literature and other promotional
material" includes, but is not limited to, sales literature (i.e., any written communication distributed or made generally available to customers, including brochures, circulars, research reports, market letters, form letters, seminar texts,
reprints or excerpts of any other advertisement, sales literature, or published articles), educational or training materials or other communications distributed or made generally available to some or all agents or employees, and prospectuses, shareholder reports, and proxy materials.
4.10
Certain Transactions and Restrictions.
(a)
The Company agrees that it will provide, not later than five Business Days after
receipt of a written request by the Sponsor on behalf of the Fund, the Taxpayer Identification Number of any or all Variable Insurance Product owner(s) and the amount, date, name of investment professional associated with the Variable
Insurance Product owner (if any), and transaction type (purchase, redemption, transfer, or exchange) of every purchase, redemption, transfer, or exchange transaction by such Variable Insurance Product owner(s)
in an Account investing in the Fund through an account maintained by the Company during the specific period covered by the request. Unless required by applicable law, rule or regulation, the Sponsor and the
Fund agree not to use the information received under this Section for marketing or any other purpose not related to (i) limiting or reducing abusive trading in shares issued by the Fund or (ii) collecting purchase or redemption fees (if any).
7
(b)
The Company agrees that it will execute written instructions from the Sponsor on
behalf of the Fund, including instructions to restrict or prohibit purchases or exchanges of Fund shares in specific accounts or by or on behalf of specific Variable Insurance Product owners identified by the Fund as having engaged in
transactions in Fund shares that violate policies established by the Fund for the purpose of eliminating or reducing any dilution of the value of the outstanding securities issued by the Fund. Any such instructions
by the Sponsor shall include the Taxpayer Identification Number or equivalent identifying number of the Variable Insurance Product owner(s) to which the instructions relate and the specific restriction(s) to be
executed. The Company agrees that it will execute any such instructions as soon as reasonably practicable, but not later than five Business Days after receipt of the instructions by the Company.
ARTICLE V. Fees and Expenses
5.1
The Fund and Sponsor shall pay no fee or other compensation to the Company under
this Agreement. Nothing herein shall prevent the parties hereto from otherwise agreeing to perform, and arranging for appropriate compensation for, other services relating to the Fund and or to the Accounts.
5.2
All expenses incident to performance by the Fund under this Agreement shall be paid
by the Fund. The Fund shall see to it that all its shares are registered and authorized for issuance in accordance with applicable federal law and, if and to the extent deemed advisable by the Fund, in accordance with applicable state laws prior to their sale. The Fund shall bear the fees and expenses for the cost of registration and
qualification of the Fund's shares, preparation and filing of the Fund's prospectus and registration statement, proxy materials and reports, setting the prospectus in type, setting in type and printing the proxy materials and reports to shareholders (including the costs of printing a prospectus that constitutes an annual report), the preparation of all statements and notices required by any federal or state law, all taxes on the issuance or transfer of the Fund's shares.
5.3
The Fund shall bear the expenses of printing, and the Company shall bear the
expenses of distributing, the Fund's prospectus to owners of Variable Insurance Products issued by the Company. The Company shall bear the expenses of distributing the Fund's proxy materials (to the extent such proxy solicitation is
required by law) and reports to owners of Variable Insurance Products.
ARTICLE VI. Diversification
6.1
The Fund will at all times invest money from the Variable Insurance Products in
such a manner as to ensure that the Variable Insurance Products will be treated as variable contracts under the Code and the regulations issued thereunder. Without limiting the scope of the foregoing, the Fund and the Sponsor represent and
warrant that each Portfolio of the Fund will meet the diversification requirements of Section 817(h) of the Code and Treasury Regulation 1.817-5, relating to the diversification requirements for annuity, endowment
or life insurance contracts and any amendments or other modifications to such Section or Regulations, as if those requirements applied directly to each such Portfolio. In the event of a breach of this Article VI by the Fund, it will take all reasonable steps (a) to notify Company of such breach and (b) to adequately diversify, each Portfolio of the Fund so as to achieve compliance within the grace period afforded by Regulation
817-5.
6.2
The Fund and the Sponsor represent that each Portfolio will elect to be qualified
as a Regulated Investment Company under Subchapter M of the Code and they will maintain such qualification (under Subchapter M or any successor or similar provision).
ARTICLE VII. Indemnification
7.1
Indemnification by the Company
(a)
The Company agrees to indemnify and hold harmless the Fund and each trustee of the
Board and officers and each person, if any, who controls the Fund within the meaning of Section 15 of the 1933 Act, the Sponsor and the Distributor (collectively, the "Indemnified Parties" for purposes of this Section 7.1)
against any and all losses, claims, damages, liabilities (including amounts paid in settlement with the written consent of the Company) or litigation (including legal and other expenses) to which the
Indemnified Parties may become subject under any statute, 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 Fund's shares or the Variable Insurance Products and:
8
(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 for the Variable Insurance Products or contained in the contract or policy or sales literature for the Variable Insurance Products (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 to the Company by or on behalf of the Fund for use in the registration statement or prospectus for the Variable
Insurance Products or in the contract or policy sales literature (or any amendment or supplement) or otherwise for use in connection with the sale of the Variable Insurance Products or the 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 of the Fund not supplied by the Company, or persons under its control) or unlawful conduct of the Company or persons under its control,
with respect to the sale or distribution of the Variable Insurance Products 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 of the Fund (or any amendment or supplement thereto), or the omission or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, if such statement or omission was made in reliance upon information furnished to the Fund by or on behalf of the Company; or
(iv)
result from 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 material breach of this Agreement by the Company;
as limited by and in accordance with the provisions of Section 7.1(b) and 7.1(c) hereof.
(b)
The Company shall not be liable under this indemnification provision with respect
to any losses, claims, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party's willful misfeasance, bad faith, or gross negligence in the performance of such
Indemnified Party's duties or by reason of such Indemnified Party's reckless disregard of obligations and duties under this Agreement or to the Fund, whichever is applicable.
(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 a 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. 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 a 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 the commencement of
any litigation or proceedings against them in connection with the issuance or sale of the Fund shares or the Variable Insurance Products or the operation of the Fund.
7.2
Indemnification by the Sponsor
9
(a)
The Sponsor agrees to indemnify and hold harmless the Company and each of its
directors and officers and each person, if any, who controls the Company within the meaning of Section 15 of the 1933Act (collectively, the "Indemnified Parties" for purposes of this Section 7.2) against any and all losses, claims, damages, liabilities (including amounts paid in settlement with the written consent of the Sponsor) or
litigation (including legal and other expenses) to which the Indemnified Parties may become subject under any statute, 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 Fund's shares or the Variable Insurance Products 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 sales literature of the 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 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 to the Sponsor or Fund by or on
behalf of the Company for use in the registration statement or prospectus for the Fund or in sales literature (or any amendment or supplement thereto) or otherwise for use in connection with the sale of
the Variable Insurance Products 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 for the Variable Insurance Products not supplied by the Sponsor or persons under its control) or unlawful conduct of the Fund, the
Advisers or persons under their control, with respect to the sale or distribution of the Variable Insurance Products 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 the Variable Insurance Products (or any amendment 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 to the Company by or on behalf of the Fund; or
(iv)
result from any failure by the Sponsor or the Fund to provide the services and
furnish the materials under the terms of this Agreement (including a failure to comply with the diversification 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 Sponsor or the Fund in this Agreement or arise out of or result from any other material breach of this Agreement by the Sponsor or the Fund;
as limited by and in accordance with the provisions of Sections 7.2(b) and 7.2(c) hereof.
(b)
The Sponsor shall not be liable under this indemnification provision with respect
to any losses, claims, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party's willful misfeasance, bad faith, or gross negligence in the performance of such
Indemnified Party's duties or by reason of such Indemnified Party's reckless disregard of obligations and duties under this Agreement or to the Company or the Accounts, whichever is applicable.
(c)
The Sponsor 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 Sponsor 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 any such service on any designated agent), but failure to notify the Sponsor of any such claim shall not relieve the Sponsor 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. In any case any such action is brought against the Indemnified Parties, the Sponsor will be entitled to participate, at its own expense, in the defense thereof. The Sponsor also shall be entitled to assume the defense thereof, with counsel satisfactory to the party named in the action. After notice from the Sponsor to such party of the
10
Sponsor'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 Sponsor will not be liable to such party under this Agreement for any legal or other expenses subsequently incurred by each party independently in connection with the
defense thereof other than reasonable costs of investigation.
(d)
The Company agrees promptly to notify the Sponsor of the commencement of any
litigation or proceedings against it or any of its officers or directors in connection with the issuance or sale of the Variable Insurance Products or the operation of each Account.
7.3
Indemnification by the Fund
(a)
The Fund agrees to indemnify and hold harmless the Company, and each of its
directors and officers and each person, if any, who controls the Company within the meaning of Section 15 of the 1933 Act (collectively, the "Indemnified Parties" for purposes of this Section 7.3) against any and all losses, claims, damages, liabilities (including amounts paid in settlement with the written consent of the Fund) or
litigation (including legal and other expenses) to which the Indemnified Parties may become subject under any statute, at common law or otherwise, insofar as such losses, claims damages, liabilities or expenses (or action in respect thereof) or settlements resulting from the gross negligence, bad faith or willful
misconduct of the Board or any member thereof, are related to the operations of the Fund and:
(i)
arise as a result of any failure by the Fund to provide the services and furnish
the materials under the terms of this Agreement (including a failure to comply with the diversification requirements specified in Article VI of this Agreement); or
(ii)
arise out of or result from any material breach of any representation and/or
warranty made by the Fund in this Agreement or arise out of or result from any other material breach of this Agreement by the Fund;
as limited by and in accordance with the provisions of Sections 7.3(b) and 7.3(c) hereof.
(b)
The Fund shall not be liable under this indemnification provision with respect to
any losses, claims, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party's willful misfeasance, bad faith, or gross negligence in the performance of such
Indemnified Party's duties or by reason of such Indemnified Party's reckless disregard of obligations and duties under this Agreement or to the Company, the Fund, the Sponsor or each Account, whichever is
applicable.
(c)
The Fund shall not be liable under this indemnification provision with respect to
any claim made against an Indemnified Party unless such Indemnified Party shall have notified the Fund in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Indemnified Party (or after such Indemnified Party shall have received
notice of such service on any designated agent), but failure to notify the Fund of any such claim shall not relieve the Fund 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. In case any such action is brought against the Indemnified Parties, the Fund will be entitled to participate, at its own expense, in the defense thereof. The Fund also shall be entitled to assume the defense thereof, with counsel satisfactory to the
party named in the action. After notice from the Fund to such party or the Fund'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 Fund will not be liable to such party independently in connection with the defense thereof other than reasonable costs of investigation.
(d)
The Company and the Sponsor agree promptly to notify the Fund of the commencement
of any litigation or proceedings against it or any of its respective officers or directors in connection with this Agreement, the issuance or sale of the Variable Insurance Products, with respect to the operation of an Account, or the sale or acquisition of shares of the Fund.
7.4
Indemnification by the Distributor
(a)
The Distributor agrees to indemnify and hold harmless the Company and each of its
directors and officers and each person, if any, who controls the Company within the meaning of Section 15 of the 1933 Act
11
(collectively, the "Indemnified Parties" for purposes of this Section 7.4) against any and all losses, claims, damages, liabilities (including amounts paid in settlement with the written consent of the Sponsor) or
litigation (including legal and other expenses) to which the Indemnified Parties may become subject under any statute, 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 Fund's shares or the Variable Insurance Products 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 sales literature of the 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 'emu' a material fact required to be stated therein or accessary 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 to the Distributor or the Fund by or
on behalf of the Company for use in the registration statement or prospectus for the Fund or in sales literature (or any amendment or supplement thereto) or otherwise for
use in connection with the sale of the Variable Insurance Products 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 for the Variable Insurance Products not supplied by the Distributor or persons under its control) or unlawful conduct of the Fund,
the Advisers or persons under their control, with respect to the sale or distribution of the Variable Insurance Products 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 the Variable Insurance Products (or any amendment 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 to the Company by or on behalf of the Fund; or
(iv)
result from any failure by the Distributor or the Fund 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 Distributor or the Fund in this Agreement or arise out of or result from any other material breach of this Agreement by the Distributor or the Fund;
as limited by and in accordance with the provisions of Sections 7.4(b) and 7.4(c)
hereof.
(b)
The Distributor shall not be liable under this indemnification provision with
respect to any losses, claims, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party's willful misfeasance, bad faith, or gross negligence in the performance of such
Indemnified Party's duties or by reason of such Indemnified Party's reckless disregard of obligations and duties under this Agreement or to the Company or the Accounts, whichever is applicable.
(c)
The Distributor 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 Distributor 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 any such service on any designated agent), but failure to notify the Distributor of any such claim shall not relieve the Distributor 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. In any case any such action is brought against the Indemnified Parties, the Distributor will be entitled to
participate, at its own expense, in the defense thereof. The Sponsor also shall be entitled to assume the defense thereof, with counsel satisfactory to the party named in the action. After notice from the
Distributor to such party of the Distributor's election to assume the defense thereof, the Indemnified Party
12
shall bear the fees and expenses of any additional counsel retained by it, and the Distributor will not be liable to such party under this Agreement for any legal or other expenses subsequently incurred by each
party independently in connection with the defense thereof other than reasonable costs of investigation.
(d)
The Company agrees promptly to notify the Distributor of the commencement of any
litigation or proceedings against it or any of its officers or directors in connection with the issuance or sale of the Variable Insurance Products or the operation of each Account.
ARTICLE VIII. Applicable Law
8.1
This Agreement shall be construed and the provisions hereof interpreted under and
in accordance with the laws of the State of Illinois.
8.2
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, and the terms hereof shall be interpreted and construed in accordance therewith.
ARTICLE IX. Termination
9.1
This Agreement shall continue in full force and effect until the first to occur
of:
(a)
termination by any party for any reason by sixty (60) days' advance written notice
delivered to the other parties; or
(b)
termination by the Company by written notice to the Fund and the Sponsor 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 Variable Insurance Products; or
(c)
termination by the Company by written notice to the Fund and the Sponsor 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
Variable Insurance Products issued or to be issued by the Company; or
(d)
termination by the Company by written notice to the Fund and the Sponsor with
respect to any Portfolio in the event that such Portfolio ceases to qualify as a Regulated Investment Company under Subchapter M of the Code or under any successor or similar provision, or if the Company reasonably believes that the
Portfolio may fail to so qualify (in the event of such termination, the Company shall withdraw all assets allocable to the separate accounts from the Portfolio and shall reinvest such assets in a different investment medium, including, but not limited to, another Portfolio of the Fund); or
(e)
termination by the Company by written notice to the Fund and the Sponsor with
respect to any Portfolio in the event that such Portfolio fails to meet the diversification requirements as specified in Article VI hereof (in the event of such termination, the Company shall withdraw all assets allocable to the Accounts from the Portfolio and shall reinvest such assets in a different investment medium, including, but not limited to,
another Portfolio of the Fund); or
(f)
termination by the Fund, the Sponsor, or the Distributor by written notice to the
Company, if any of the Fund, the Sponsor, or the Distributor shall determine, in its sole judgment exercised in good faith, that the Company and/or its affiliated companies has suffered a material adverse change in its business, operations, or financial condition since the date of this Agreement or is the subject of material adverse publicity; or
(g)
termination by the Company by written notice to the Fund and the Sponsor, if the
Company shall determine, in its sole judgment exercised in good faith, that either the Fund, the Sponsor, or the Distributor has suffered a material adverse change in its business, operations or financial condition since the date of this Agreement or is the subject of material adverse publicity.
9.2
Notwithstanding any termination of this Agreement, the Fund and the Sponsor shall,
at the option of the Company, continue to make available shares of the Fund pursuant to the terms and conditions of this Agreement, for all Variable Insurance Products in effect on the effective date of termination of this
13
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.
9.3
The Company shall not redeem Fund shares attributable to the Variable Insurance
Products (as opposed to Fund shares attributable to the Company's assets held in the Accounts) except (a) as necessary to implement Variable Insurance Products owner initiated or approved transactions, or (b) as required by state and/or federal laws or regulations or judicial or other legal precedent of general application (hereinafter referred to as a "Legally Required Redemption"). Upon request, the Company will promptly furnish to the
Fund and the Sponsor the opinion of counsel for the Company (which counsel shall be reasonably satisfactory to the Fund and the Sponsor) to the effect that any redemption pursuant to clause (b) above is a Legally Required Redemption. Furthermore, except in cases where permitted under the terms of the
Variable Insurance Products, the Company shall not prevent owners of Variable Insurance Products from allocating payments to a Portfolio that was otherwise available under the Variable Insurance Products
without first giving the Fund or the Sponsor 90 days' notice of its intention to do so.
ARTICLE X Notices
Any notice shall be sufficiently given when sent by registered or certified mail, overnight
courier or facsimile to the other party at the address of such party set forth below or at such other address as such party may from time to time specify in writing to
the other party.
If to the Fund:
Vanguard Variable Insurance Fund
P.O. Box 2600
Valley Forge, PA 19482
Attn: ▇▇▇▇▇ ▇▇▇▇
P.O. Box 2600
Valley Forge, PA 19482
Attn: ▇▇▇▇▇ ▇▇▇▇
If to the Sponsor:
The Vanguard Group, Inc.
P.O. Box 2600
Valley Forge, PA 19482
Attn: ▇▇▇▇▇ ▇▇▇▇
P.O. Box 2600
Valley Forge, PA 19482
Attn: ▇▇▇▇▇ ▇▇▇▇
If to Distributor:
Vanguard Marketing Corporation
P.O. Box 2600
Valley Forge, PA 19482
Attn: ▇▇▇▇▇ ▇▇▇▇
P.O. Box 2600
Valley Forge, PA 19482
Attn: ▇▇▇▇▇ ▇▇▇▇
If to the Company:
▇▇▇▇▇▇ ▇▇▇▇ Life Insurance Company
Attn: General Counsel
▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
With a copy to
14
▇▇▇▇▇▇ ▇▇▇▇ Life Insurance Company
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
ARTICLE XI Miscellaneous
11.1
It is understood and stipulated that neither the shareholders of any Portfolio nor
the officers or trustees of the Fund shall be personally liable hereunder.
11.2
Subject to the requirements of the legal process and regulatory authority, each
party hereto shall treat as confidential the names and addresses of the owners of the Variable Insurance Products and all information reasonably identified as confidential in writing by any other party hereto and, except as permitted by this Agreement, shall not (unless it has obtained the express written consent of the affected party) disclose,
disseminate or utilize such names and addresses and other confidential information until such time as it may come into the public domain.
11.3
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.
11.4
This Agreement may be executed simultaneously in two or more counterparts, each of
which taken together shall constitute one and the same instrument.
11.5
If any provision of this Agreement shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement shall not be affected thereby.
11.6
Each party hereto shall cooperate with each party and all appropriate governmental
authorities (including without limitation the SEC, the 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.
11.7
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.
11.8
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.
11.9
The Company shall furnish, or cause to be furnished, to the Fund or its designee
upon request copies of the following reports:
(a)
the Company's Annual Financial Statement on Statutory Basis; and
(b)
any registration statement, prospectus or other materials distributed in
connection with the sale of the Variable Insurance Products to the extent such registration statement, prospectus or other materials reference the Fund.
11.10
This Agreement, including any Schedule hereto, may be amended or modified only by
written instrument, executed by duly authorized officers of the parties.
15
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 as of the date specified above.
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VANGUARD VARIABLE INSURANCE FUND |
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By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ |
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Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ |
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Title: Assistant Secretary
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THE VANGUARD GROUP, INC. |
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By: /s/ ▇▇▇▇ ▇▇▇▇▇▇ |
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Name: ▇▇▇▇ ▇▇▇▇▇▇ |
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Title: FAS Department Head
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VANGUARD MARKETING CORPORATION |
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By: /s/ ▇▇▇▇ ▇▇▇▇▇▇ |
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Name: ▇▇▇▇ ▇▇▇▇▇▇ |
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Title: FAS Department Head
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▇▇▇▇▇▇ ▇▇▇▇ LIFE INSURANCE COMPANY |
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By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇▇▇▇▇▇▇ |
| |
|
Title: EVP & CFO |
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SCHEDULE A
SEPARATE ACCOUNTS AND ASSOCIATED CONTRACTS
| Name of Separate Account |
|
Contracts Funded by Separate Account |
| ▇▇▇▇▇▇ ▇▇▇▇ Life Insurance Company Separate Account |
|
Personal Retirement Planner Qualified Annuity |
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SCHEDULE B
PORTFOLIOS
The following Portfolios of the Vanguard Variable Insurance Funds shall be made available
as investments underlying the Variable Insurance Products, subject to the limitations set forth in Section 2.13(c) hereof:
Money Market Portfolio
Total Bond Market Index Portfolio
High-Yield Bond Portfolio
Short-Term Investment Grade Portfolio
Balanced Portfolio
Diversified Value Portfolio
Equity Income Portfolio
Equity Index Portfolio
Growth Portfolio
Mid-Cap Index Portfolio
REIT Index Portfolio
Small Company Growth Portfolio
International Portfolio
Total Stock Market Index Portfolio
Capital Growth Portfolio
Conservative Allocation Portfolio
Moderate Allocation Portfolio
Total Bond Market Index Portfolio
High-Yield Bond Portfolio
Short-Term Investment Grade Portfolio
Balanced Portfolio
Diversified Value Portfolio
Equity Income Portfolio
Equity Index Portfolio
Growth Portfolio
Mid-Cap Index Portfolio
REIT Index Portfolio
Small Company Growth Portfolio
International Portfolio
Total Stock Market Index Portfolio
Capital Growth Portfolio
Conservative Allocation Portfolio
Moderate Allocation Portfolio
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