EXHIBIT 8
SHAREHOLDER SERVICES AGREEMENT
THIS SHAREHOLDER SERVICES AGREEMENT is made and entered into as of May 1,
2001 by and between JEFFERSON PILOT FINANCIAL INSURANCE COMPANY, JEFFERSON PILOT
LIFEAMERICA INSURANCE COMPANY (collectively, the "Company"), and AMERICAN
CENTURY INVESTMENT SERVICES, INC. ("Distributor").
WHEREAS, the Company offers to the public certain group and individual
variable annuity and variable life insurance contracts (the "Contracts"); and
WHEREAS, the Company wishes to make available as investment options under
the Contracts the funds set forth on EXHIBIT A (the "Funds"), each of which is a
series of mutual fund shares registered under the Investment Company Act of
1940, as amended, and issued by American Century Variable Portfolios, Inc. (the
"Issuer"); and
WHEREAS, on the terms and conditions hereinafter set forth, Distributor
desires to make shares of the Funds available as investment options under the
Contracts and to retain the Company to perform certain administrative services
on behalf of the Funds, and the Company is willing and able to furnish such
services;
NOW, THEREFORE, the Company and Distributor agree as follows:
1. TRANSACTIONS IN THE FUNDS. Subject to the terms and conditions of this
Agreement, Distributor will cause the Issuer to make shares of the Funds
available to be purchased, exchanged, or redeemed, by or on behalf of the
Accounts (defined in SECTION 7(a) below) through a single account per Fund per
Account at the net asset value applicable to each order. The Funds' shares shall
be purchased and redeemed on a net basis in such quantity and at such time as
determined by the Company to satisfy the requirements of the Contracts for which
the Funds serve as underlying investment media. Dividends and capital gains
distributions will be automatically reinvested in full and fractional shares of
the Funds.
2. ADMINISTRATIVE SERVICES. The Company agrees to provide all
administrative services for the Contract owners, including but not limited to
those services specified in EXHIBIT B (the "Administrative Services"). Neither
Distributor nor the Issuer shall be required to provide Administrative Services
for the benefit of Contract owners. The Company agrees that it will maintain and
preserve all records as required by law to be maintained and preserved in
connection with providing the Administrative Services, and will otherwise comply
with all laws, rules and regulations applicable to the marketing of the
Contracts and the provision of the Administrative Services. Upon request, the
Company will provide Distributor or its representatives reasonable information
regarding the quality of the Administrative Services being provided and its
compliance with the terms of this Agreement.
1
3. TIMING OF TRANSACTIONS. Distributor hereby appoints the Company as
agent for the Funds for the limited purpose of accepting purchase and redemption
orders for Fund shares from the Contract owners. On each day the New York Stock
Exchange (the "Exchange") is open for business (each, a "Business Day"), the
Company may receive instructions from the Contract owners for the purchase or
redemption of shares of the Funds ("Orders"). Orders received and accepted by
the Company prior to the close of regular trading on the Exchange (the "Close of
Trading") on any given Business Day (currently, 3:00 p.m. Central time) and
transmitted to the Funds' transfer agent by 9:00 a.m. Central time on the next
following Business Day will be executed at the net asset value determined as of
the Close of Trading on the previous Business Day. Any Orders received by the
Company on such day but after the Close of Trading, and all Orders that are
transmitted to the Funds' transfer agent after 9:00 a.m. Central time on the
next Business Day, will be executed at the net asset value determined as of the
Close of Trading on the next Business Day following the day of receipt of such
Order. The day as of which an Order is executed by the Funds' transfer agent
pursuant to the provisions set forth above is referred to herein as the "Trade
Date". All orders are subject to acceptance or rejection by Distributor or the
Funds in the sole discretion of either of them.
4. PROCESSING OF TRANSACTIONS.
(a) If transactions in Fund shares are to be settled through the National
Securities Clearing Corporation's Mutual Fund Settlement, Entry, and
Registration Verification (Fund/SERV) system, the terms of the Fund/SERV and
Networking Agreement, between Company and American Century Services Corporation,
an affiliate of Distributor, shall apply.
(b) If transactions in Fund shares are to be settled directly with the
Funds' transfer agent, the following provisions shall apply:
(1) By 5:30 p.m. Central time on each Business Day, Distributor (or
one of its affiliates) will provide to the Company via facsimile or other
electronic transmission acceptable to the Company the Funds' net asset value,
dividend and capital gain information and, in the case of income funds, the
daily accrual for interest rate factor (mil rate), determined at the Close of
Trading.
(2) By 9:00 a.m. Central time on each Business Day, the Company will
provide to Distributor via facsimile or other electronic transmission acceptable
to Distributor a report stating whether the instructions received by the Company
from Contract owners by the Close of Trading on the preceding Business Day
resulted in the Accounts being a net purchaser or net seller of shares of the
Funds. As used in this Agreement, the phrase "other electronic transmission
acceptable to Distributor" includes the use of remote computer terminals located
at the premises of the Company, its agents or affiliates, which terminals may be
linked electronically to the computer system of Distributor, its agents or
affiliates (hereinafter, "Remote Computer Terminals").
2
(3) Upon the timely receipt from the Company of the report described
in (2) above, the Funds' transfer agent will execute the purchase or redemption
transactions (as the case may be) at the net asset value computed as of the
Close of Trading on the Trade Date. Payment for net purchase transactions shall
be made by wire transfer to the applicable Fund custodial account designated by
the Funds on the Business Day next following the Trade Date. Such wire transfers
shall be initiated by the Company's bank prior to 3:00 p.m. Central time and
received by the Funds prior to 5:00 p.m. Central time on the Business Day next
following the Trade Date ("T+1"). If payment for a purchase Order is not timely
received, such Order will be, at Distributor's option, either (i) executed at
the net asset value determined on the Trade Date, and the Company shall be
responsible for all costs to Distributor or the Funds resulting from such delay,
or (ii) executed at the net asset value next computed following receipt of
payment. Payments for net redemption transactions shall be made by wire transfer
by the Issuer to the account(s) designated by the Company on T+1; PROVIDED,
HOWEVER, the Issuer reserves the right to settle redemption transactions within
the time period set forth in the applicable Fund's then-current prospectus. On
any Business Day when the Federal Reserve Wire Transfer System is closed, all
communication and processing rules will be suspended for the settlement of
Orders. Orders will be settled on the next Business Day on which the Federal
Reserve Wire Transfer System is open and the original Trade Date will apply.
5. PROSPECTUS AND PROXY MATERIALS.
(a) Distributor shall provide the Company with copies of the Issuer's
proxy materials, periodic fund reports to shareholders and other materials that
are required by law to be sent to the Issuer's shareholders. In addition,
Distributor shall provide the Company with a sufficient quantity of prospectuses
of the Funds to be used in conjunction with the transactions contemplated by
this Agreement, together with such additional copies of the Issuer's
prospectuses as may be reasonably requested by Company. If the Company provides
for pass-through voting by the Contract owners, or if the Company determines
that pass-through voting is required by law, Distributor will provide the
Company with a sufficient quantity of proxy materials for each, as directed by
the Company.
(b) The cost of preparing, printing and shipping of the prospectuses,
periodic fund reports and other materials of the Issuer to the Company shall be
paid by Distributor or its agents or affiliates; PROVIDED, HOWEVER, that if at
any time Distributor or its agent reasonably deems the usage by the Company of
such items to be excessive, it may, prior to the delivery of any quantity of
materials in excess of what is deemed reasonable, request that the Company
demonstrate the reasonableness of such usage. If Distributor believes the
reasonableness of such usage has not been adequately demonstrated, it may
request that the party responsible for such excess usage pay the cost of
printing (including press time) and delivery of any excess copies of such
materials. Unless the Company agrees to make such payments, Distributor may
refuse to supply such additional materials and Distributor shall be deemed in
compliance with this SECTION 5 if it delivers to the
3
Company at least the number of prospectuses and other materials as may be
required by the Issuer under applicable law. If requested by the Company in lieu
thereof, the Distributor or its agents or affiliates shall provide the Company
with a PDF file along with a postscript file and, if available, a camera ready
copy, of the Fund's prospectus and periodic reports in order for such prospectus
and periodic reports to be printed in one document with the prospectuses for the
Contracts or the periodic reports of the other mutual funds underlying the
Contracts, as applicable.
(c) The cost of any distribution of prospectuses, proxy materials,
periodic fund reports and other materials of the Issuer to the Contract owners
shall be paid by the Company and shall not be the responsibility of Distributor
or the Issuer.
6. COMPENSATION AND EXPENSES.
(a) The Accounts shall be the sole shareholder of Fund shares purchased
for the Contract owners pursuant to this Agreement (the "Record Owner").
(b) Distributor acknowledges that it will derive a substantial savings in
administrative expenses, such as a reduction in expenses related to postage,
shareholder communications and recordkeeping, by virtue of having a single
shareholder account per Fund for the Accounts rather than having each Contract
owner as a shareholder. In consideration of the Administrative Services and
performance of all other obligations under this Agreement by the Company,
Distributor will pay the Company a fee (the "Administrative Services Fee") equal
to basis points ( ) per annum of the average aggregate amount invested by the
Company under this Agreement.
(c) The payments received by the Company under this Agreement are for
administrative and shareholder services only and do not constitute payment in
any manner for investment advisory services or for costs of distribution.
(d) For the purposes of computing the payment to the Company contemplated
by this SECTION 6, the average aggregate amount invested by the Company on
behalf of the Accounts in the Funds over a one month period shall be computed by
totaling the Company's aggregate investment (share net asset value multiplied by
total number of shares of the Funds held by the Company) on each Business Day
during the month and dividing by the total number of Business Days during such
month.
(e) Distributor will calculate the amount of the payment to be made
pursuant to this SECTION 6 at the end of each calendar month and will make such
payment to the Company within 30 days thereafter. Such payment will be wired to
the Company pursuant to wire order instructions to be provided by the Company.
Notice of each wire order and statement showing the calculation of the amounts
being paid by Distributor for the relevant month and such other supporting data
as may be reasonably requested by the Company shall be mailed to:
4
Jefferson Pilot Financial Insurance Company
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Phone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
7. REPRESENTATIONS.
(a) The Company represents and warrants that (i) this Agreement has been
duly authorized by all necessary corporate action and, when executed and
delivered, shall constitute the legal, valid and binding obligation of the
Company, enforceable in accordance with its terms; (ii) it has established the
Separate Accounts listed in the attached Exhibit C (the "Accounts"), each of
which is a duly authorized and established separate account under Nebraska
and/or New Jersey applicable Insurance law, and has registered each Account as a
unit investment trust under the Investment Company Act of 1940 (the "1940 Act")
to serve as an investment vehicle for the Contracts; (iii) each Contract
provides for the allocation of net amounts received by the Company to an Account
for investment in the shares of one or more specified investment companies
selected among those companies available through the Account to act as
underlying investment media; (iv) selection of a particular investment company
is made by the Contract owner under a particular Contract, who may change such
selection from time to time in accordance with the terms of the applicable
Contract; and (v) the activities of the Company contemplated by this Agreement
comply in all material respects with all provisions of federal and state
securities laws applicable to such activities.
(b) Distributor represents that (i) this Agreement has been duly
authorized by all necessary corporate action and, when executed and delivered,
shall constitute the legal, valid and binding obligation of Distributor,
enforceable in accordance with its terms; (ii) the prospectus of each Fund
complies in all material respects with federal and state securities laws, and
(iii) shares of the Issuer are registered and authorized for sale in accordance
with all federal and state securities laws.
8. ADDITIONAL COVENANTS AND AGREEMENTS.
(a) Each party shall comply with all provisions of federal and state laws
applicable to its respective activities under this Agreement. All obligations of
each party under this Agreement are subject to compliance with applicable
federal and state laws.
(b) Each party shall promptly notify the other party in the event that it
is, for any reason, unable to perform any of its obligations under this
Agreement.
(c) The Company covenants and agrees that all Orders accepted and
transmitted by it
5
hereunder with respect to each Account on any Business Day will be based upon
instructions that it received from the Contract owners, in proper form prior to
the Close of Trading of the Exchange on that Business Day. The Company shall
time stamp all Orders or otherwise maintain records that will enable the Company
to demonstrate compliance with SECTION 8(c) hereof.
(d) The Company covenants and agrees that all Orders transmitted to the
Issuer, whether by telephone, telecopy, or other electronic transmission
acceptable to Distributor, shall be sent by or under the authority and direction
of a person designated by the Company as being duly authorized to act on behalf
of the owner of the Accounts. Distributor shall be entitled to rely on the
existence of such authority and to assume that any person transmitting Orders
for the purchase, redemption or transfer of Fund shares on behalf of the Company
is "an appropriate person" as used in Sections 8-107 and 8-401 of the Uniform
Commercial Code with respect to the transmission of instructions regarding Fund
shares on behalf of the owner of such Fund shares. The Company shall maintain
the confidentiality of all passwords and security procedures issued, installed
or otherwise put in place with respect to the use of Remote Computer Terminals
and assumes full responsibility for the security therefor. The Company further
agrees to be responsible for the accuracy, propriety and consequences of all
data transmitted to Distributor by the Company by telephone, telecopy or other
electronic transmission acceptable to Distributor.
(e) The Company agrees that, to the extent it is able to do so, it will
use its best efforts to give equal emphasis and promotion to shares of the Funds
as is given to other underlying investments of the Accounts, subject to
applicable Securities and Exchange Commission rules. In addition, the Company
shall not impose any fee, condition, or requirement for the use of the Funds as
investment options for the Contracts that operates to the specific prejudice of
the Funds VIS-A-VIS the other investment media made available for the Contracts
by the Company.
(f) The Company shall not, without the written consent of Distributor,
make representations concerning the Issuer or the shares of the Funds except
those contained in the then-current prospectus and in current printed sales
literature approved by Distributor or the Issuer.
(g) Advertising and sales literature with respect to the Issuer or the
Funds prepared by the Company or its agents, if any, for use in marketing shares
of the Funds as underlying investment media to Contract owners shall be
submitted to Distributor for review and approval before such material is used.
9. USE OF NAMES. Except as otherwise expressly provided for in this
Agreement, neither Distributor nor any of its affiliates nor the Funds shall use
any trademark, trade name, service ▇▇▇▇ or logo of the Company, or any variation
of any such trademark, trade name, service ▇▇▇▇ or logo, without the Company's
prior written consent, the granting of which shall be at the Company's sole
option. Except as otherwise expressly provided for in this Agreement, the
Company shall not use any trademark, trade name, service ▇▇▇▇ or logo of the
Issuer, Distributor or any variation of any such trademarks, trade names,
service marks, or logos, without the prior
6
written consent of either the Issuer or Distributor, as appropriate, the
granting of which shall be at the sole option of Distributor and/or the Issuer.
10. PROXY VOTING.
(a) The Company shall provide pass-through voting privileges to all
Contract owners so long as the SEC continues to interpret the 1940 Act as
requiring such privileges. It shall be the responsibility of the Company to
assure that it and the separate accounts of the other Participating Companies
(as defined in SECTION 12(a) below) participating in any Fund calculate voting
privileges in a consistent manner.
(b) The Company will distribute to Contract owners all proxy material
furnished by Distributor and will vote shares in accordance with instructions
received from such Contract owners. The Company shall vote Fund shares for which
no voting instructions are received in the same proportion as shares for which
such instructions have been received. The Company and its agents shall not
oppose or interfere with the solicitation of proxies for Fund shares held for
such Contract owners.
11. INDEMNITY.
(a) Distributor agrees to indemnify and hold harmless the Company and its
officers, directors, employees, agents, affiliates and each person, if any, who
controls the Company within the meaning of the Securities Act of 1933
(collectively, the "Indemnified Parties" for purposes of this SECTION 11(a))
against any losses, claims, expenses, damages or liabilities (including amounts
paid in settlement thereof) or litigation expenses (including legal and other
expenses) (collectively, "Losses"), to which the Indemnified Parties may become
subject, insofar as such Losses result from a breach by Distributor of a
material provision of this Agreement. Distributor will reimburse any legal or
other expenses reasonably incurred by the Indemnified Parties in connection with
investigating or defending any such Losses. Distributor shall not be liable for
indemnification hereunder if such Losses are attributable to the negligence or
misconduct of the Company in performing its obligations under this Agreement.
(b) The Company agrees to indemnify and hold harmless Distributor and the
Issuer, and their respective officers, directors, employees, agents, affiliates
and each person, if any, who controls Issuer or Distributor within the meaning
of the Securities Act of 1933 (collectively, the "Indemnified Parties" for
purposes of this SECTION 11(b)) against any Losses to which the Indemnified
Parties may become subject, insofar as such Losses result from a breach by the
Company of a material provision of this Agreement or the use by any person of
the Remote Computer Terminals. The Company will reimburse any legal or other
expenses reasonably incurred by the Indemnified Parties in connection with
investigating or defending any such Losses. The Company shall not be liable for
indemnification hereunder if such Losses are attributable to the negligence or
misconduct of Distributor or the Issuer in performing their obligations under
this
7
Agreement.
(c) Promptly after receipt by an indemnified party hereunder of notice of
the commencement of action, such indemnified party will, if a claim in respect
thereof is to be made against the indemnifying party hereunder, notify the
indemnifying party of the commencement thereof; but the omission so to notify
the indemnifying party will not relieve it from any liability which it may have
to any indemnified party otherwise than under this SECTION 11. In case any such
action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein and, to the extent that it may wish to, assume
the defense thereof, with counsel satisfactory to such indemnified party, and
after notice from the indemnifying party to such indemnified party of its
election to assume the defense thereof, the indemnifying party will not be
liable to such indemnified party under this SECTION 11 for any legal or other
expenses subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation.
(d) If the indemnifying party assumes the defense of any such action, the
indemnifying party shall not, without the prior written consent of the
indemnified parties in such action, settle or compromise the liability of the
indemnified parties in such action, or permit a default or consent to the entry
of any judgment in respect thereof, unless in connection with such settlement,
compromise or consent, each indemnified party receives from such claimant an
unconditional release from all liability in respect of such claim.
12. POTENTIAL CONFLICTS.
(a) The Company has received a copy of an application for exemptive
relief, as amended, filed by the Issuer on December 21, 1987, with the SEC and
the order issued by the SEC in response thereto (the "Shared Funding Exemptive
Order"). The Company has reviewed the conditions to the requested relief set
forth in such application for exemptive relief. As set forth in such
application, the Board of Directors of the Issuer (the "Board") will monitor the
Issuer for the existence of any material irreconcilable conflict between the
interests of the contract owners of all separate accounts ("Participating
Companies") investing in funds of the Issuer. An irreconcilable material
conflict may arise for a variety of reasons, including: (i) an action by any
state insurance regulatory authority; (ii) a change in applicable federal or
state insurance, tax, or securities laws or regulations, or a public ruling,
private letter ruling, no-action or interpretative letter, or any similar
actions by insurance, tax or securities regulatory authorities; (iii) an
administrative or judicial decision in any relevant proceeding; (iv) the manner
in which the investments of any portfolio are being managed; (v) a difference in
voting instructions given by variable annuity contract owners and variable life
insurance contract owners; or (vi) a decision by an insurer to disregard the
voting instructions of contract owners. The Board shall promptly inform the
Company if it determines that an irreconcilable material conflict exists and the
implications thereof.
8
(b) The Company will report any potential or existing conflicts of which
it is aware to the Board. The Company will assist the Board in carrying out its
responsibilities under the Shared Funding Exemptive Order by providing the Board
with all information reasonably necessary for the
9
Board to consider any issues raised. This includes, but is not limited to, an
obligation by the Company to inform the Board whenever contract owner voting
instructions are disregarded.
(c) If a majority of the Board, or a majority of its disinterested Board
members, determines that a material irreconcilable conflict exists with regard
to contract owner investments in a Fund, the Board shall give prompt notice to
all Participating Companies. If the Board determines that the Company is
responsible for causing or creating said conflict, the Company shall at its sole
cost and expense, and to the extent reasonably practicable (as determined by a
majority of the disinterested Board members), take such action as is necessary
to remedy or eliminate the irreconcilable material conflict. Such necessary
action may include but shall not be limited to:
(i) withdrawing the assets allocable to the Accounts from the Fund
and reinvesting such assets in a different investment medium or
submitting the question of whether such segregation should be
implemented to a vote of all affected contract owners and as
appropriate, segregating the assets of any appropriate group
(i.e., annuity contract owners, life insurance contract owners,
or variable contract owners of one or more Participating
Companies) that votes in favor of such segregation, or offering
to the affected contract owners the option of making such a
change; and/or
(ii) establishing a new registered management investment company or
managed separate account.
(d) If a material irreconcilable conflict arises as a result of a decision
by the Company to disregard its contract owner voting instructions and said
decision represents a minority position or would preclude a majority vote by all
of its contract owners having an interest in the Issuer, the Company at its sole
cost, may be required, at the Board's election, to withdraw an Account's
investment in the Issuer and terminate this Agreement; provided, however, that
such withdrawal and termination shall be limited to the extent required by the
foregoing material irreconcilable conflict as determined by a majority of the
disinterested members of the Board.
(e) For the purpose of this SECTION 12, a majority of the disinterested
Board members shall determine whether or not any proposed action adequately
remedies any irreconcilable material conflict, but in no event will the Issuer
be required to establish a new funding medium for any Contract. The Company
shall not be required by this SECTION 12 to establish a new funding medium for
any Contract if an offer to do so has been declined by vote of a majority of the
Contract owners materially adversely affected by the irreconcilable material
conflict.
13. TERMINATION; WITHDRAWAL OF OFFERING. This Agreement may be terminated
by either party upon 180 days' prior written notice to the other party.
Notwithstanding the above, the Issuer reserves the right, without prior notice,
to suspend sales of shares of any Fund, in whole or in part, or to make a
limited offering of shares of any of the Funds in the event that (A) any
regulatory
10
body commences formal proceedings against the Company, Distributor, affiliates
of Distributor, or the Issuer, which proceedings Distributor reasonably believes
may have a material adverse impact on the ability of Distributor, the Issuer or
the Company to perform its obligations under this Agreement or (B) in the
judgment of Distributor, declining to accept any additional instructions for the
purchase or sale of shares of any such Fund is warranted by market, economic or
political conditions. Notwithstanding the foregoing, this Agreement may be
terminated immediately (i) by any party as a result of any other breach of this
Agreement by another party, which breach is not cured within 30 days after
receipt of notice from the other party, or (ii) by any party upon a
determination that continuing to perform under this Agreement would, in the
reasonable opinion of the terminating party's counsel, violate any applicable
federal or state law, rule, regulation or judicial order. Termination of this
Agreement shall not affect the obligations of the parties to make payments under
SECTION 4 for Orders received by the Company prior to such termination and shall
not affect the Issuer's obligation to maintain the Accounts as set forth by this
Agreement. Following termination, Distributor shall not have any Administrative
Services payment obligation to the Company (except for payment obligations
accrued but not yet paid as of the termination date).
14. NON-EXCLUSIVITY. Both parties acknowledge and agree that this
Agreement and the arrangement described herein are intended to be non-exclusive
and that each party is free to enter into similar agreements and arrangements
with other entities.
15. SURVIVAL. The provisions of SECTION 9 (Use of Names) and SECTION 11
(Indemnity) of this Agreement shall survive termination of this Agreement.
16. AMENDMENT. Neither this Agreement, nor any provision hereof, may be
amended, waived, discharged or terminated orally, but only by an instrument in
writing signed by all of the parties hereto.
17. NOTICES. All notices and other communications hereunder shall be given
or made in writing and shall be delivered personally, or sent by telex,
telecopier, express delivery or registered or certified mail, postage prepaid,
return receipt requested, to the party or parties to whom they are directed at
the following addresses, or at such other addresses as may be designated by
notice from such party to all other parties.
To the Company:
Jefferson Pilot Financial Insurance Company
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. Lease, Esq.
(▇▇▇) ▇▇▇-▇▇▇▇ (office number)
(▇▇▇) ▇▇▇-▇▇▇▇ (telecopy number)
11
To the Issuer or Distributor:
American Century Investment Services, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, Esq.
(▇▇▇) ▇▇▇-▇▇▇▇ (office number)
(▇▇▇) ▇▇▇-▇▇▇▇ (telecopy number)
Any notice, demand or other communication given in a manner prescribed in this
SECTION 17 shall be deemed to have been delivered on receipt.
18. SUCCESSORS AND ASSIGNS. This Agreement may not be assigned without the
written consent of both parties to the Agreement at the time of such assignment.
This Agreement shall be binding upon and inure to the benefit both parties
hereto and their respective permitted successors and assigns.
19. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one agreement, and
any party hereto may execute this Agreement by signing any such counterpart.
20. SEVERABILITY. In case any one or more of the provisions contained in
this Agreement should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby.
21. ENTIRE AGREEMENT. This Agreement, including the attachments hereto,
constitutes the entire agreement between the parties with respect to the matters
dealt with herein, and supersedes all previous agreements, written or oral, with
respect to such matters.
If the foregoing correctly sets forth our understanding, please indicate
your agreement to and acceptance thereof by signing below, whereupon this
Agreement shall become a binding agreement between us as of the latest date
indicated.
AMERICAN CENTURY INVESTMENT
SERVICES INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------
Title: Executive Vice President
-------------------------
Date: 5/1/01
--------------------------
12
We agree to and accept the terms of the foregoing Agreement.
JEFFERSON PILOT FINANCIAL
INSURANCE COMPANY
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------
Title: Senior Vice President
-------------------------
Date: April 30, 2001
--------------------------
JEFFERSON PILOT LIFEAMERICA
INSURANCE COMPANY
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------
Title: Senior Vice President
-------------------------
Date: April 30, 2001
--------------------------
13
EXHIBIT A
FUNDS AVAILABLE
VP International Fund
14
EXHIBIT B
ADMINISTRATIVE SERVICES
Pursuant to the Agreement to which this is attached, the Company shall perform
all administrative and shareholder services required or requested under the
Contracts with respect to the Contract owners, including, but not limited to,
the following:
1. Maintain separate records for each Contract owner, which records shall
reflect the shares purchased and redeemed and share balances of such Contract
owners. The Company will maintain a single master account with each Fund on
behalf of the Contract owners and such account shall be in the name of the
Company (or its nominee) as the record owner of shares owned by the Contract
owners.
2. Disburse or credit to the Contract owners all proceeds of redemptions
of shares of the Funds and all dividends and other distributions not reinvested
in shares of the Funds.
3. Prepare and transmit to the Contract owners, as required by law or the
Contracts, periodic statements showing the total number of shares owned by the
Contract owners as of the statement closing date, purchases and redemptions of
Fund shares by the Contract owners during the period covered by the statement
and the dividends and other distributions paid during the statement period
(whether paid in cash or reinvested in Fund shares), and such other information
as may be required, from time to time, by the Contracts.
4. Transmit purchase and redemption orders to the Funds on behalf of the
Contract owners in accordance with the procedures set forth in SECTION 4 to the
Agreement.
5. Distribute to the Contract owners copies of the Funds' prospectus,
proxy materials, periodic fund reports to shareholders and other materials that
the Funds are required by law or otherwise to provide to their shareholders or
prospective shareholders.
6. Maintain and preserve all records as required by law to be maintained
and preserved in connection with providing the Administrative Services for the
Contracts.
A-1
EXHIBIT C
SEPARATE ACCOUNTS
Jefferson Pilot Financial Insurance Company Separate Accounts:
- JPF Separate Account A
- JPF Separate Account C
- JPF Variable Annuity Separate Account
- JPF Variable Annuity Separate Account II
Jefferson Pilot LifeAmerica Insurance Company Separate Account:
- JPF Separate Account B
A-1
PARTICIPATION AGREEMENT
AMONG
AYCO SERIES TRUST
▇▇▇▇▇▇ ALLIED COMPANY, L.P.
AND
JEFFERSON PILOT FINANCIAL INSURANCE COMPANY
THIS AGREEMENT, made and entered into as of this lst day of May, 2001 by
and among JEFFERSON PILOT FINANCIAL INSURANCE COMPANY, (hereinafter the
"Company"), organized under the laws of the State of Nebraska on its own behalf
and on behalf of each segregated asset account of the Company set forth on
Schedule A hereto as such schedule may be amended from time to time (each such
account hereinafter referred to as the "Account"), AYCO SERIES TRUST, a Delaware
business trust (hereinafter the "Fund") and ▇▇▇▇▇▇ ALLIED COMPANY, L.P.
(hereinafter the "Underwriter"), a Delaware limited partnership.
WHEREAS, the Fund engages in business as an open-end management investment
company and is available to act as the investment vehicle for separate accounts
established for variable life insurance policies and variable annuity contracts
to be offered by insurance companies which have entered into participation
agreements with the Fund and the Underwriter (hereinafter "Participating
Insurance Companies"); and
WHEREAS, the Fund has obtained an order from the Securities and Exchange
Commission (hereinafter "SEC"), dated December 18, 2000 (File No. 812-12260),
granting Participating Insurance Companies and variable annuity and variable
life insurance separate accounts exemptions from the provisions of sections
9(a), 13(a), 15(a), and 15(b) of the Investment Company Act of 1940, as amended,
(hereinafter the "1940 Act") and Rules 6e-2(b)(15) and 6e-3(T)(b)(15)
thereunder, to the extent necessary to permit shares of the Fund to be sold to
and held by variable annuity and variable life insurance separate accounts of
both affiliated and unaffiliated life insurance companies (hereinafter the
"Shared Funding Exemptive Order"); and
WHEREAS, the Fund is registered as an open-end management investment
company under the 1940 Act and its shares are registered under the Securities
Act of 1933, as amended (hereinafter the "1933 Act"); and
WHEREAS, the Fund intends to offer shares of the series set forth on
Schedule C (each hereinafter a "Portfolio"), as may be amended from time to time
by mutual agreement of the parties hereto; under this Agreement to the Accounts
of the Company; and
WHEREAS, The Ayco Company, L.P. (the "Adviser") is duly registered as an
investment adviser under the Investment Advisers Act of 1940 and any applicable
state securities law; and
WHEREAS, the Company has registered or will register certain variable life
insurance policies and/or variable annuity contracts under the 1933 Act; 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 such Account on Schedule hereto, to set aside and
invest assets attributable to one or more variable life insurance policies
and/or variable annuity contracts; and
WHEREAS, the Underwriter is registered as a broker-dealer with the SEC
under the Securities Exchange Act of 1934, as amended (hereinafter the "1934
Act"), and is a member in good standing of the National Association of
Securities Dealers, Inc. (hereinafter "NASD"); and
WHEREAS, the Company has registered or will register each Account as a unit
investment trust under the 1940 Act; and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares in the Fund at net asset
value on behalf of each Account to fund certain of the aforesaid variable life
insurance policies and/or variable annuity contracts.
NOW THEREFORE, in consideration of their mutual promises, the Company, the
Fund and the Underwriter agree as follows:
ARTICLE I. SALE OF FUND SHARES
1.1. The Fund agrees to make available to the Company those shares of
each Portfolio which each Account orders, executing such orders on a daily basis
at the net asset value next computed after receipt by the Fund or its designee
of the order for the shares of that Portfolio. For purposes of this Section 1.1,
the Company shall be the designee of the Fund for receipt of such orders from
each Account and receipt by such designee shall constitute receipt by the Fund;
provided that the Fund receives notice of such order by 9:30 a.m. Eastern time
on the next following Business Day. "Business Day" shall mean any day on which
the New York Stock Exchange is open for trading and on which the Fund calculates
its net asset value pursuant to the rules of the SEC.
2
1.2 The Fund agrees to make shares of each Portfolio available
indefinitely for purchase at the applicable net asset value per share by the
Company and its Accounts on those days on which that Portfolio calculates its
net asset value pursuant to rules of the SEC and the Fund shall use reasonable
efforts to calculate such net asset value on each day which the New York Stock
Exchange 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, or suspend or terminate the offering of its shares if
such action is required by law or by regulatory authorities having jurisdiction.
Notice of election to suspend or terminate shall be furnished in writing, by the
Fund, said termination to be effective 10 Business Days after receipt of such
notice by the Company in order to give the Company sufficient time to take
appropriate steps in response to such suspension or termination.
1.3 The Fund and the Underwriter agree that shares of the Portfolios
will only be made available to Participating Insurance Companies, their separate
accounts and certain qualified retirement plans. No shares of any Portfolio sold
to any insurance company separate account will also be sold to the general
public.
1.4 The Fund and the Underwriter will not make available shares of any
Portfolio to any insurance company or separate account unless an agreement
containing provisions substantially the same as Articles I, III, V, VII and
Section 2.5 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 request, any
full or fractional shares of any Portfolio held by the Company, executing such
requests on a daily basis at the net asset value next computed after receipt by
the Fund or its designee of the request for redemption. For purposes of this
Section 1.5, the Company shall be the designee of the Fund for receipt of
requests for redemption from each Account and receipt by such designee shall
constitute receipt by the Fund; provided that the Fund receives notice of such
request for redemption on the next following Business Day no later than 9:30
a.m. Eastern time. Proceeds shall be wired to Company within three (3) Business
Days or such longer period permitted by the Investment Company Act of 1940, as
amended (the "1940 Act") or the rules, orders or regulations thereunder, and the
Fund shall notify the person designated in writing by Company as the recipient
for such notice of such delay by 4:00 p.m. Eastern time the same Business Day
that Company transmits the redemption order to the Fund.
1.6 The Company agrees to purchase and redeem the shares of the
Portfolios in accordance with the provisions of this Agreement. The Company
agrees that all net amounts available under the variable life insurance policies
and/or variable annuity contracts with the form number(s) which are listed on
Schedule B attached hereto and incorporated herein by this reference, as such
Schedule B may be amended from time to time hereafter by mutual written
agreement of all the parties hereto (the "Contracts"), shall be invested in the
Fund, in such other
3
Funds advised by the Adviser as may be mutually agreed to in writing by the
parties hereto, in the Company's general account, or in an investment company
other than the Fund.
1.7 The Company shall pay for shares of each Portfolio on the next
Business Day after an order to purchase shares of that Portfolio is made in
accordance with the provisions of Section 1.1 hereof. Payment shall be in
federal funds transmitted by wire. For purpose of Section 2.10 and 2.11, upon
receipt by the Fund of the federal funds so wired, such funds shall cease to be
the responsibility of the Company and shall become the responsibility of the
Fund.
1.8 Issuance and transfer of the Fund's shares will be by book entry
only. Stock certificates will not be issued to the Company or any Account.
Shares ordered from the Fund will be recorded in an appropriate title for each
Account or the appropriate subaccount of each Account.
1.9 The Fund shall furnish same day notice (by wire or telephone,
followed by written confirmation) to the Company of any income, dividends or
capital gain distributions payable on any Portfolio's shares. Notwithstanding
this Section 1.9, the Fund shall utilize its best efforts to provide the Company
with at least ten (10) Business Days advance notice of any forthcoming dividend
or capital gain distributions with respect to any Portfolio. The Company hereby
elects to receive all such 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 such dividends and
distributions.
1.10 The Fund shall make each Portfolio's net asset value per share
available to the Company on a daily basis as soon as reasonably practicable
after the net asset value per share is calculated and shall make such net asset
value per share available by 7:00 p.m. Eastern time. If the Fund is unable to
meet the 7:00 p.m. time stated herein with respect to any Portfolio, it shall
provide additional time for the Company to place orders for the purchase and
redemption of shares and make any applicable purchase payments with respect to
that Portfolio.
1.11 If the Fund provides the Company with materially incorrect net asset
value information with respect to any Portfolio through no fault of the Company,
the Company shall be entitled to an adjustment with respect to that Portfolio's
shares purchased or redeemed to reflect the correct net asset value per share.
The determination of materiality of any net asset value pricing error shall be
based on the SEC's recommended guidelines regarding such errors. Any material
error in the calculation or reporting of net asset value per share, dividend or
capital gain information shall be reported promptly upon discovery by the Fund
to the Company.
1.12 The Fund shall provide written confirmation to the Company of the
amount of shares traded and the associated net asset value total trade amount
and the outstanding share
4
balances held in the Account(s) as of the end of each Business Day. Such
information shall be furnished by 1:00 p.m. Eastern time on the next Business
Day.
1.13 The parties hereto acknowledge that the arrangement contemplated by
this Agreement is not exclusive; Portfolio shares may be sold to other insurance
companies (subject to Section 1.4 hereof) and the cash value of the Contracts
may be invested in other investment companies, provided, however, that until
this Agreement is terminated pursuant to Article X, the Company shall promote
the Fund on the same basis as other investment companies or series thereof
("funding options") available under the Contracts.
ARTICLE II. REPRESENTATIONS AND WARRANTIES
2.1 The Company represents and warrants that the Contracts are or will
be registered under the 1933 Act; that the Contracts will be issued and sold in
compliance in all material respects with all applicable federal and state laws
and that the sale of the Contracts shall comply in all material respects with
state insurance suitability requirements. The Company further represents and
warrants that it is an insurance company duly organized and in good standing
under applicable law and that it has legally and validly established each
Account prior to any issuance or sale of Contracts funded thereof as a
segregated asset account under the Insurance Code of the State of Nebraska and
has registered or, prior to any issuance or sale of the Contracts, will register
each Account as a unit investment trust in accordance with the provisions of the
1940 Act to serve as a segregated investment account for the Contracts.
2.2 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 Delaware, and all
applicable federal and state securities laws and that the Fund is and shall
remain registered under the ▇▇▇▇ ▇▇▇. 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 or the
Underwriter.
2.3 The Fund will at all times invest money from the Contracts in such a
manner as to ensure that the Contracts will be treated as variable contracts
under the Code and the regulations issued thereunder. Without limiting the scope
of the foregoing, the Fund will at all times comply with Section 817(h) of the
Code of Treasury Regulation 1.817-5, relating to the diversification
requirements for variable annuity, endowment, or life insurance contracts and
any amendments or other modifications to such Section or Regulations. The Fund
represents that, under the terms of its investment advisory agreements with
Adviser, the Adviser is and will be responsible for managing each Portfolio in
compliance with that Portfolio's investment objectives, policies and
restrictions as set forth in the Fund Prospectus. The Fund represents that these
objectives, policies and restrictions do and will include operating as a
regulated investment company
5
("RIC") in compliance with Subchapter M of the Code ("Subchapter M") and Section
817(h) of the Code ("Section 817(h)") and regulations thereunder. The Fund has
adopted and will maintain procedures for ensuring that each Portfolio is managed
in compliance with Subchapter M and Section 817(h) and regulations thereunder.
On request, the Fund shall also provide the Company with such materials,
cooperation and assistance as may be reasonably necessary for the Company or any
appropriate person designated by the Company to review from time to time the
procedures and practices of the Adviser or each sub-investment adviser to each
Portfolio for ensuring that that Portfolio is managed in compliance with
Subchapter M and Section 817(h) and regulations thereunder.
In the event of any noncompliance regarding the status of any
Portfolio as a RIC in compliance with Subchapter M and/or noncompliance under
Section 817(h), the Fund will pursue those efforts necessary to enable that
Portfolio to qualify once again for treatment as a RIC in compliance with
Subchapter M and/or to be in compliance with Section 817(h), including
cooperation in good faith with the Company. If the Fund does not so cure the
noncompliance regarding that Portfolio's status as a RIC under Subchapter M
and/or the noncompliance under Section 817(h), the Fund will cooperate in good
faith with the Company's efforts to obtain a ruling and closing agreement, as
provided in Revenue Procedure 92-25 issued by the Internal Revenue Service (or
any applicable ruling or procedure subsequently issued by the Internal Revenue
Service), that the Portfolio satisfies the requirements of Subchapter M and/or
compliance with Section 817(h), for the period or periods of non-compliance.
2.4 The Company represents that the Contracts are currently treated as
endowment, annuity 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 Underwriter immediately upon having a reasonable
basis for believing that the Contracts have ceased to be so treated or that they
might not be so treated in the future.
2.5 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,
although it may make such payments in the future. To the extent that it decides
to finance distribution expenses pursuant to Rule 12b-1, the Fund undertakes to
have a board of trustees, a majority of whom are not interested persons of the
Fund, formulate and approve any plan under Rule 12b-1 to finance distribution
expenses.
2.6 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.
2.7 The Underwriter represents and warrants that it is duly organized
and in good standing under the laws of the State of Delaware. The Underwriter
represents and warrants that it is a member in good standing of the NASD and is
registered as a broker-dealer with the SEC.
6
The Underwriter further represents that it will sell and distribute the Fund
shares in accordance with all applicable state and federal securities laws,
including without limitation the 1933 Act, the 1934 Act and the ▇▇▇▇ ▇▇▇.
2.8 The Underwriter represents and warrants that the Adviser is and
shall remain duly registered in all material respects under all applicable
federal or state securities laws and that the Adviser shall perform its
obligations for the Fund in compliance in all material respects with any
applicable state and federal securities laws.
2.9 The Fund and Underwriter represent and warrant that all of their
directors, officers, employees, investment advisers, and other
individuals/entities dealing with the money 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 minimal
coverage as required currently by Rule 17g-1 under the 1940 Act or related
provisions 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.
2.10 The Company represents and warrants that all of its directors,
officers, employees, investment advisers, and other entities dealing with the
money 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 two million dollars ($2 million). The aforesaid
Bond shall include coverage for larceny and embezzlement and shall be issued by
a reputable bonding company.
ARTICLE III. PROSPECTUSES AND PROXY STATEMENTS; VOTING
3.1 The Underwriter shall provide the Company with as many copies of the
Fund's current prospectus as the Company may reasonably request. If requested by
the Company in lieu thereof, the Fund shall provide camera-ready film or an
electronic file containing the Fund's prospectus and Statement of Additional
Information, and such other assistance as is reasonably necessary in order for
the Company once each year (or more frequently if the prospectus and/or
Statement of Additional Information for the Fund is amended during the year) to
have the prospectus for the Contracts and the Fund's prospectus printed together
in one document, and to have the Statement of Additional Information for the
Fund and the Statement of Additional Information for the Contracts printed
together in one document. Alternatively, the Company may print the Fund's
prospectus and/or its Statement of Additional Information in combination with
other fund companies' prospectuses and statements of additional information. The
Company may also utilize the Fund's current prospectus on the Company's intranet
and internet sites and other electronic and/or public media. Except as provided
in the following three sentences, all expenses of printing and distributing Fund
prospectuses and Statements of Additional Information shall be the expense of
the Company. For prospectuses and Statements of Additional Information provided
by the Company to its existing owners of Contracts in order
7
to update disclosure as required by the 1933 Act and/or the 1940 Act, the cost
of printing shall be borne by the Fund. If the Company chooses to receive
camera-ready film in lieu of receiving printed copies of the Fund's prospectus,
the Fund will reimburse the Company in an amount equal to the product of A and B
where A is the number of such prospectuses distributed to owners of the
Contracts, and B is the Fund's per unit cost of typesetting and printing the
Fund's prospectus. The same procedures shall be followed with respect to the
Fund's Statement of Additional Information.
The Company agrees to provide the Fund or its designee with such
information as may be reasonably requested by the Fund to assure that the Fund's
expenses do not include the cost of printing any prospectuses or Statements of
Additional Information other than those actually distributed to existing owners
of the Contracts.
3.2 The Fund's prospectus shall state that the Statement of Additional
Information for the Fund is available from the Underwriter or the Fund, at its
expense.
3.3 The Fund, at its expense, shall provide the Company with copies of
its proxy material, reports to shareholders, and other communications to
shareholders in such quantity as the Company shall reasonably require for
distribution to Contract owners.
3.4 If and to the extent required by law the Company shall:
(i) solicit voting instructions from Contract owners;
(ii) vote the shares of each Portfolio in accordance with
instructions received from Contract owners; and
(iii) vote shares of each Portfolio for which no instructions have
been received in the same proportion as shares of such
Portfolio for which instructions have been received,
so long as and to the extent that the SEC continues to interpret the 1940 Act to
require pass-through voting privileges for variable contract owners. The Company
reserves the right to vote Fund shares held in any segregated asset account in
its own right, to the extent permitted by law. Participating Insurance Companies
shall be responsible for assuring that each of their separate accounts
participating in the Fund calculates voting privileges in a manner consistent
with the above standards.
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, any
8
Portfolio, the Adviser or the Underwriter is named, at least fifteen Business
Days prior to its use. No such material shall be used if the Fund or its
designee object to such use within fifteen Business Days after receipt of such
material. The Fund, the Adviser, the Underwriter, or its designee reserves the
right to reasonably object to the continued use of any such sales literature or
other promotional material in which the Fund, any Portfolio, the Adviser or the
Underwriter is named, and no such material shall be used if the Fund, the
Adviser, the Underwriter, or its designee so object.
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 Contracts 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 Underwriter, except with the permission of the Fund or the
Underwriter or the designee of either.
4.3 The Fund, the Underwriter, or its 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 its Account(s),
is named at least fifteen Business Days prior to its use. No such material shall
be used if the Company or its designee object to such use within fifteen
Business Days after receipt of such material. Notwithstanding that the Company
did not initially object, the Company reserves the right to object at any time
thereafter to the continued use of any such sales literature or other
promotional material in which the Company is named, and no such material shall
be used thereafter if the Company so objects.
4.4 The Fund and the Underwriter shall not give any information or make
any representations on behalf of the Company or concerning the Company, each
Account, or the Contracts other than the information or representations
contained in a registration statement or prospectus for the Contracts, as such
registration statement and 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 Contract 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 notices, orders
or responses relating thereto and all supplements and amendments to any of the
above, that relate to the Fund or its shares, contemporaneously with the filing
of such document with, or the issuance of such documents by, the SEC or other
regulatory authorities.
9
4.6 The Company will provide to the Fund 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 notices, orders or responses relating thereto and all supplements
and amendments to any of the above, that relate to the Fund or its shares,
contemporaneously with the filing of such document with, or the issuance of such
documents by, the SEC or other regulatory authorities.
4.7 For purposes of this Article IV, the phrase "sales literature or
other promotional material" includes, but is not limited to, advertisements
(such as material published, or designed for use in, a newspaper, magazine, or
other periodical, radio, television, telephone or tape recording, videotape
display, signs or billboards, motion pictures, telephone directories (other than
routine listings), electronic or other pubic media), sales literature (I.E., any
written or electronic communication distributed or made generally available to
customers or the public, including brochures, circulars, research reports,
market letters, performance reports or summaries, form letters, telemarketing
scripts, seminar texts, reprints or excerpts of any other advertisement, sales
literature, or published article), educational or training materials or other
communications distributed or made generally available to some or all agents or
employees.
4.8 The Fund 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 or prospectus, particularly
any change resulting in a change to the registration statement or prospectus for
any Account. The Fund will work with the Company so as to enable the Company to
solicit proxies from Contract owners, or to make changes to its registration
statement and prospectus, in an orderly manner. The Fund will make reasonable
efforts to attempt to have changes affecting Contract prospectuses become
effective simultaneously with the annual updates for such prospectuses.
ARTICLE V. FEES AND EXPENSES
5.1 The Fund and Underwriter shall pay no fee or other compensation to
the Company for services to be provided by the Company under this Agreement,
except that if the Fund adopts and implements a plan pursuant to Rule 12b-1 to
finance distribution expenses, then the Underwriter may make payments to the
Company or to the underwriter for the Contracts if and in amounts agreed to by
the Underwriter in writing and such payments will be made out of existing fees
otherwise payable to the Underwriter, past profits of the Underwriter or other
resources available to the Underwriter. No such payments shall be made directly
by the Fund. Currently, no such payments are contemplated.
5.2 All expenses incident to performance by the Fund under this
Agreement shall be paid by the Fund. The Fund shall be responsible for ensuring
that all its shares are registered and authorized for issuance in accordance
with applicable federal law and, if and to the extent
10
deemed advisable by the Fund, in accordance with applicable state laws prior to
their sale. The Fund shall bear the 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 distributing the
Fund's prospectus to existing owners of Contracts issued by the Company and of
distributing the Fund's proxy materials and reports to such Contract owners.
ARTICLE VI. FOREIGN TAX CREDITS
6.1 The Fund agrees to consult in advance with the Company concerning
any decision to elect or not to elect pursuant to Section 853 of the Code to
pass through the benefit of any foreign tax credits to its shareholders.
ARTICLE VII. POTENTIAL CONFLICTS
7.1 The Board will monitor the Fund for the existence of any material
irreconcilable conflict between the interests of the contract owners of all
separate accounts investing in any Portfolio. An irreconcilable material
conflict may arise for a variety of reasons, including: (a) an action by any
state insurance regulatory authority; (b) a change in applicable federal or
state insurance, tax, or securities laws or regulations, or a public ruling,
private letter ruling, no-action or interpretative letter, or any similar action
by insurance, tax, or securities regulatory authorities; (c) an administrative
or judicial decision in any relevant proceeding; (d) the manner in which the
investments of a Portfolio are being managed; (e) a difference in voting
instructions given by variable annuity contract and variable life insurance
contract owners; or (f) a decision by an insurer to disregard the voting
instructions of contract owners. The Board shall promptly inform the Company if
it determines that a material irreconcilable conflict exists and the
implications thereof.
7.2 The Company will report any potential or existing conflicts of which
it is aware to the Board. The Company will assist the Board in carrying out its
responsibilities under the Shared Funding Exemptive Order, by providing the
Board with all information reasonably necessary for the Board to consider any
issues raised. This includes, but is not limited to, an obligation by the
Company to inform the Board whenever Contract owner voting instructions are
disregarded.
7.3 If it is determined by a majority of the Board, or a majority of its
disinterested directors, that a material irreconcilable conflict exists, the
Company and other Participating
11
Insurance Companies shall, at their expense and to the extent reasonably
practicable (as determined by a majority of the disinterested trustees), take
whatever steps are necessary to remedy or eliminate the irreconcilable material
conflict, up to and including: (a), withdrawing the assets allocable to some or
all of the separate accounts from the affected Portfolio and reinvesting such
assets in a different investment medium or submitting the question whether such
segregation should be implemented to a vote of all affected Contract owners and,
as appropriate, segregating the assets of any appropriate group (I.E., annuity
contract owners, life insurance contract owners, or variable contract owners of
one or more Participating Insurance Companies) that votes in favor of such
segregation, or offering to the affected contract owners the option of making
such a change; and (b), establishing a new registered management investment
company or managed separate account.
7.4 If a material irreconcilable conflict arises because of a decision
by the Company to disregard Contract owner voting instructions and that decision
represents a minority position or would preclude a majority vote, the Company
may be required, at the Fund's election, to withdraw the affected Account's
investment in the affected Portfolio and terminate this Agreement with respect
to such Account; 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 members of the Board. Any such
withdrawal and termination must take place within six (6) months after the Fund
gives written notice that this provision is being implemented, and until the end
of that six month period the Fund shall continue to accept and implement orders
by the Company for the purchase (and redemption) of shares of the affected
Portfolio.
7.5 If a material irreconcilable conflict arises because a particular
state insurance regulator's decision applicable to the Company conflicts with
the majority of other state regulators, then the Company will withdraw the
affected Account's investment in the affected Portfolio and terminate this
Agreement with respect to such Account within six months after the Board informs
the Company in writing that it has determined that such decision has created an
irreconcilable material conflict; provided, however, that such withdrawal and
termination shall be limited to the extent required by the foregoing material
irreconcilable conflict as determined by a majority of the disinterested members
of the Board. Until the end of the foregoing six month period, the Fund shall
continue to accept and implement orders by the Company for the purchase (and
redemption) of shares of the affected Portfolio.
7.6 For purposes of Sections 7.3 through 7.6 of this Agreement, a
majority of the disinterested members of the Board shall determine whether any
proposed action adequately remedies any irreconcilable material conflict, but in
no event will the Fund be required to establish a new funding medium for the
Contracts. The Company shall not be required by Section 7.3 to establish a new
funding medium for the Contracts if an offer to do so has been declined by vote
of a majority of Contract owners materially adversely affected by the
irreconcilable material conflict. In the event that the Board determines that
any proposed action
12
does not adequately remedy any irreconcilable material conflict, then the
Company will withdraw the Account's investment in the Fund and terminate this
Agreement within six (6) months after the Board informs the Company in writing
of the foregoing determination, provided, however, that such withdrawal and
termination shall be limited to the extent required by an such material
irreconcilable conflict as determined by a majority of the disinterested members
of the Board.
7.7 If and to the extent that Rule 6e-2 and Rule 6e-3(T) are amended, or
Rule 6e-3 is adopted, to provide exemptive relief from any provision of the Act
of the rules promulgated thereunder with respect to mixed or shared funding (as
defined in the Shared Funding Exemptive Order) on terms and conditions
materially different from those contained in the Shared Funding Exemptive Order,
then (a) the Fund or the Participating Insurance Companies, as appropriate,
shall take such steps as may be necessary to comply with Rules 6e-2 and 6e-3(T),
as amended and Rule 6e-3, as adopted, to the extent such rules are applicable;
and (b) Sections 3.4, 3.5, 7.1, 7.2, 7.3, 7.4, and 7.5 of this Agreement shall
continue in effect only to the extent that terms and conditions substantially
identical to such Sections are contained in such Rule(s) as so amended or
adopted.
ARTICLE VIII. INDEMNIFICATION
8.1 INDEMNIFICATION BY THE COMPANY
8.1(a) The Company agrees to indemnify and hold harmless the Fund and each
director of the Board and officers (collectively, the "Indemnified Parties" for
purposes of this Section 8.1) 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 a Portfolio's shares or the Contracts and:
(i) arise out of or are based upon any untrue statements or alleged
untrue statements of any material fact contained in the Registration
Statement or prospectus for the Contracts or contained in the
Contracts or advertisements or sales literature for the Contracts
(or any amendment or supplement to any of the foregoing), or arise
out of or are based upon the omission or the alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, provided
that this 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
Contracts or in the Contracts or
13
advertisements or sales literature (or any amendment or supplement)
or otherwise for use in connection with the sale of the Contracts or
shares of that Portfolio; 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 wrongful conduct of
the Company or persons under its control, with respect to the sale
or distribution of the Contracts or shares of that Portfolio; or
(iii) arise out of any untrue statement or alleged untrue statement of a
material fact contained in a Registration Statement, prospectus,
advertisements or sales literature of the Fund or any amendment
thereof or supplement thereto or the omission or alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading if such a
statement or omission was made in reliance upon information
furnished to the Fund by or on behalf of the Company; or
(iv) arise as a result of any failure by the Company to provide the
services and furnish the materials under the terms of this
Agreement; or
(v) arise out of or result from any material breach of any
representation or warranty made by the Company in this Agreement or
arise out of or result from any other material breach of this
Agreement by the Company, as limited by and in accordance with the
provisions of Sections 8.1 (b) and 8.1 (c) hereof.
8.1(b) The Company shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
incurred or assessed against an Indemnified Party as such may arise from 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 or to
the Fund, whichever is applicable.
8.1(c) The Company shall not be liable under this indemnification provision
with respect to any claim made against an Indemnified Party unless such
Indemnified Party shall have notified the Company in writing within a reasonable
time after the summons or other first legal process giving information of the
nature of the claim shall have been served upon such Indemnified Party (or after
such Indemnified Party shall have received notice of such service on any
designated agent), but failure to notify the Company of any such claim shall not
relieve the Company from any liability which it may have to the Indemnified
Party 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
14
defense thereof, with counsel satisfactory to the party named in the action.
After notice from the Company to such party of the Company's election to assume
the defense thereof, the Indemnified Party shall bear the fees and expenses of
any additional counsel retained by it, and the Company will not be liable to
such party under this Agreement for any legal or other expenses subsequently
incurred by such party independently in connection with the defense thereof
other than reasonable costs of investigation.
8.1(d) The Indemnified Parties will promptly notify the Company of the
commencement of any litigation or proceedings against them in connection with
the issuance or sale of the shares of any Portfolio or the Contracts or the
operation of the Fund.
8.2 INDEMNIFICATION BY THE UNDERWRITER
8.2(a) The Underwriter agrees to indemnify and hold harmless the Company
and the principal underwriter for the Contracts and each of their respective
directors and officers and the principal underwriter for the Contracts and each
person, if any, who controls the Company within the meaning of Section 15 of the
1933 Act (collectively, the "Indemnified Parties" for purposes of this Section
8.2) against any and all losses, claims, damages, liabilities (including amounts
paid in settlement with the written consent of the Underwriter) 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 shares of any
Portfolio or the Contracts and:
(i) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the Registration
Statement or prospectus or advertisements 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 Underwriter 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) or otherwise for use in connection with the sale of the
Contracts or shares of that Portfolio; 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 Contracts not
supplied by the Underwriter or persons under its control) or
wrongful conduct of the Fund, Adviser or Underwriter or persons
15
under their control, with respect to the sale or distribution of the
Contracts or shares of that Portfolio; or
(iii) arise out of any untrue statement or alleged untrue statement of a
material fact contained in a Registration Statement, prospectus,
advertisements 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 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) 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 whether unintentional or in good faith or
otherwise, to comply with the diversification requirements specified
in Article II, Section 2.3 of this Agreement, or to qualify as a
regulated investment company under Subchapter M of the Code); or
(v) arise as a result of the Fund's or Adviser's (or their designated
agent's) (i) incorrect calculation of the daily net asset value,
dividend rate or capital gain distribution rate; (ii) incorrect
reporting of the daily net asset value, dividend rate or capital
gain distribution rate; or (iii) untimely reporting of the net asset
value, dividend rate or capital gain distribution rate. Any gain
accruing to the Company attributable to the Fund's or Adviser's (or
their designated agent's) incorrect calculation or reporting of the
daily net asset value shall be returned to the Fund by the Company
upon receipt of notice from the Fund or the Adviser regarding such
incorrect calculation or reporting; or
(vi) arise out of or result from any material breach of any
representation or warranty made by the Fund or the Underwriter in
this Agreement or arise out of or result from any other material
breach of this Agreement by the Fund or the Underwriter; as limited
by and in accordance with the provisions of Section 8.2(b) and
8.2(c) hereof.
8.2(b) The Underwriter 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
each Company or the Account, whichever is applicable.
8.2(c) The Underwriter shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have
16
notified the Underwriter 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 Underwriter of any such claim shall not relieve the Underwriter
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
Underwriter also shall be entitled to assume the defense thereof, with counsel
satisfactory to the party named in the action. After notice from the Underwriter
to such party of the Underwriter'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 Underwriter 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.
8.2(d) The Company agrees promptly to notify the Underwriter 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 Contracts or the
operation of each Account, if such litigation or proceeding might adversely
impact the Fund.
8.3 INDEMNIFICATION BY THE FUND
8.3(a) The Fund agrees to indemnify and hold harmless the Company and the
principal underwriter for Contracts and each of their respective directors and
officers and each person, if any, who controls the Company within the meaning of
Section 15 of the 1933 Act (collectively, the "Indemnified Parties" for purposes
of this Section 8.3) 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 actions in respect
thereof) or settlements result 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 II, Section 2.3 of this Agreement, or to
qualify as a regulated investment company under Subchapter M of the
Code); or
(ii) arise as a result of the Fund's (or its designated agent's) (i)
incorrect calculation of the daily net asset value, dividend rate or
capital gain distribution rate of any Portfolio; (ii) incorrect
reporting of the daily net asset value, dividend rate or capital
gain distribution rate of any Portfolio; or (iii) untimely reporting
of the net
17
asset value, dividend rate or capital gain distribution rate any
Portfolio. Any gain accruing to the Company attributable to the
Fund's (or its designated agent's) incorrect calculation or
reporting of the daily net asset value shall be returned to the Fund
by the Company upon receipt of notice from the Fund regarding such
incorrect calculation or reporting; or
(iii) arise out of or result from any material breach of any
representations 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 8.3(b) and
8.3(c) hereof.
8.3(b) The Fund shall not be liable under this indemnification provision
with respect to any losses, claims, damages, liabilities or litigation incurred
or assessed against on Indemnified Party as such may arise from 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 Underwriter or each Account, whichever is applicable.
8.3(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 of 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
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.
8.3(d) The Company and the Underwriter 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 Contracts, with respect to the operation of either Account, or
the sale or acquisition of shares of the Fund, if such litigation or proceeding
might adversely impact the Fund.
ARTICLE IX. APPLICABLE LAW
18
9.1 This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the State of New York.
9.2 This Agreement shall be subject to the provisions of the 1933 Act,
1934 Act and 1940 Act, and the rules and regulations and rulings thereunder,
including such exemptions from those statutes, rules and regulations as the SEC
may grant (including, but not limited to, the Shared Funding Exemptive Order)
and the terms hereof shall be interpreted and construed in accordance therewith.
ARTICLE X. TERMINATION
10.1 This Agreement shall continue in full force and effect with respect
to the Portfolios until the first to occur of:
(a) termination by any party for any reason by one hundred eighty
(180) day's advance written notice delivered to the other
parties; or
(b) termination by the Company with respect to any Portfolio by
written notice to the Fund and Underwriter based upon the
Company's reasonable determination that shares of that
Portfolio are not reasonably available to meet the requirements
of the Contracts, provided, however, that the Company shall
provide the Fund and the Underwriter a reasonable opportunity
to make shares of that Portfolio reasonably available to meet
the requirements of the Contracts before exercising its right
to terminate this Agreement with respect to that Portfolio
pursuant to this Section 10.1(b); or
(c) termination by the Company by written notice to the Fund and
the Underwriter in the event the Fund's 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; or
(d) termination by the Company with respect to any Portfolio by
written notice to the Fund and the Underwriter in the event
that that 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 that Portfolio may fail to do so qualify; or
(e) termination by the Company with respect to any Portfolio by
written notice to the Fund and the Underwriter in the event
that that Portfolio fails
19
to meet the diversification requirements specified in Article
II, Section 2.3 hereof; or
(f) termination by either the Fund or the Underwriter by written
notice to the Company, if either one or both of the Fund or the
Underwriter respectively, shall determine, in their sole
judgment exercised in good faith, that the Company or its
affiliated companies 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
(g) termination by the Company by written notice to the Fund and
the Underwriter, if the Company shall determine, in its sole
judgment exercised in good faith, that either the Fund, the
Adviser or the Underwriter 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
(h) termination by any party by written notice upon the institution
of formal proceedings against the Company, the Fund, the
Adviser or the Underwriter by the NASD, the SEC or other
regulatory body; or
(i) termination by the Company or the Fund with respect to a
Portfolio by written notice to the other party upon a
determination by the majority of the Board that, with respect
to that Portfolio, a material irreconcilable conflict exists
among the interests of (i) all contract owners of all separate
accounts or (ii) the interests of the Participating Insurance
Companies; or
(j) termination by any party by advance written notice upon the
"assignment" of the Agreement (as defined under the ▇▇▇▇ ▇▇▇)
unless made with the written consent of each party to the
Agreement; or
(k) termination by the Company by written notice upon the sale,
acquisition or change of control of the Adviser, unless done
with the written consent of each party to the agreement; or
(1) termination by the Company with respect to a Portfolio arising
from the substitution of that Portfolio's shares with the
shares of another investment company for the Contracts for
which the Portfolio's shares have been selected to serve as the
underlying investment medium, subject to compliance with the
1940 Act and applicable regulations of the SEC,
20
Company will give 60 day's written notice to the Fund and the
Underwriter of any proposed action to replace shares of any
Portfolio; or
(m) termination by the Company, the Fund or the Underwriter by
written notice to the other parties upon a material breach of
the Agreement by the other party.
10.2. EFFECT OF TERMINATION. Notwithstanding any termination of this
Agreement, the Fund and the Underwriter shall at the option of the Company,
continue to make available additional shares of the Portfolios pursuant to the
terms and conditions of this Agreement, for all Contracts in effect on the
effective date of termination of this Agreement (hereinafter referred to as
"Existing Contracts"). Specifically, without limitation the owners of the
Existing Contracts shall be permitted to reallocate investments in the
Portfolios, redeem investments in the Portfolios or invest in the Portfolios
upon the making of additional purchase payments under the Existing Contracts.
The parties agree that this Section 10.2 shall not apply to any terminations
under Article VII and the effect of such Article VII terminations shall be
governed by Article VII of this Agreement.
ARTICLE XI. NOTICES
Any notice shall be sufficiently given when sent by registered or
certified mail, overnight delivery 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:
Ayco Series Trust
c/o Ayco Asset Management
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
c/o ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
copies to General Counsel
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇
21
If to the Underwriter:
▇▇▇▇▇▇ Allied Company, L.P.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
copies to General Counsel
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇
If to the Company:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇
copies to ▇▇▇▇▇ Lease
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇
ARTICLE XII. MISCELLANEOUS
12.1 All persons dealing with the Fund must look solely to the
property of the Fund for the enforcement of any claims against the Fund as
neither the Board, officers, agents or shareholders assume any personal
liability for obligations entered into on behalf of the Fund.
12.2 Subject to the requirements of legal process and regulatory
authority, each party hereto shall treat as confidential the names and addresses
of the owners of the Contracts and all information reasonably identified as
confidential in writing by any other party hereto and, except as permitted by
this Agreement, shall not disclose, disseminate or utilize such names and
addresses and other confidential information until such time as it may come into
the public domain without the express written consent of the affected party.
12.3 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.
12.4 This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
12.5 If any provision of this Agreement shall be held or made invalid by
a court decision, statute, rule or otherwise, the remainder of the Agreement
shall not be affected thereby.
22
12.6 Each party hereto shall cooperate with each other party and all
appropriate governmental authorities (including without limitation the SEC, the
NASD 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 to
the extent practicable and except where a party's respective interests are
adverse to or in conflict with another party's interests.
12.7 The rights, remedies and obligations contained in this Agreement are
cumulative and are in addition to any and all rights, remedies and obligations,
at law or in equity, which the parties hereto are entitled to under state and
federal laws.
12.8 This Agreement or any of the rights and obligations hereunder may
not be assigned by any party without the prior consent of all parties hereto;
provided, however, that the Underwriter may assign this Agreement or any rights
or obligations hereunder to any affiliate of or company under common control
with the Underwriter, if such assignee is duly organized, licensed and
registered to perform the obligations of the Underwriter under this Agreement.
23
IN WITNESS HEREOF, each of the parties has caused this Agreement to
be executed in its name and on its behalf by its duly authorized representative
and its seal to be hereunder affixed as of the date specified below.
JEFFERSON PILOT FINANCIAL
INSURANCE COMPANY AYCO SERIES TRUST
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, III
---------------------------- ------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, III
Title: Senior Vice President Title: Chief Financial Officer and Controller
------------------------- --------------------------------------
Date: April 27, 2001 Date: 5/01/01
-------------------------- -----------------------------
▇▇▇▇▇▇ ALLIED COMPANY, L.P.
By: Breham, Inc.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
----------------------------
Date: 5/01/01
-----------------------------
24
SCHEDULE A
ACCOUNTS
25
SCHEDULE B
CONTRACTS
Ensemble II Variable Life Insurance Form #86-01
Ensemble III Variable Life Insurance Form #VUL D5000
Ensemble SL Variable Life Insurance Form #JLS A2010
Ensemble Exec Variable Life Insurance Form #VUL D5005
Allegiance Variable Annuity Form #22161
Pilot Classic Variable Annuity Form #94-516
Pilot Elite Variable Annuity Form #94-516
26
SCHEDULE C
SERIES OF THE FUND
Ayco Large Cap Growth Fund I
27
ADMINISTRATIVE SERVICES
AGREEMENT
THIS ADMINISTRATIVE SERVICES AGREEMENT ("Agreement") made as of May 1, 2001, is
by and among AYCO SERIES TRUST, a Delaware business trust ("Trust") on behalf of
the series of the Trust set forth in SCHEDULE ONE hereto ("SCHEDULE ONE," as the
same may be amended from time to time) (such series of the Trust are hereinafter
collectively referred to as the "Fund" or "Funds"), THE AYCO COMPANY, L.P., a
Delaware limited partnership ("Adviser"), and JEFFERSON PILOT FINANCIAL
INSURANCE COMPANY, a Nebraska corporation ("Life Company").
WITNESSETH:
WHEREAS, the Trust is registered as an open-end management investment company
under the Investment Company Act of 1940, as amended (the "1940 Act");
WHEREAS, each of the Funds is available as an investment vehicle for certain of
the Life Company's separate accounts in order to fund the variable life
insurance and variable annuity contracts ("Contracts") listed on Schedule Two of
this Agreement ("Schedule Two"), as the same may be amended from time to time;
and
WHEREAS, the Life Company has entered into a participation agreement dated
May 1, 2001, among the Life Company, the Trust and the Adviser ("Participation
Agreement"), as the same may be amended from time to time; and
WHEREAS, the Adviser provides, among other things, investment advisory and
certain administrative services to the Trust and the Funds; and
WHEREAS, the Adviser and the Trust, on behalf of each of its Funds, desire the
Life Company to provide the administrative services specified in Section 1 of
this Agreement ("Administrative Services"), in connection with the Contracts and
for the benefit of persons who maintain their ownership interests in one or more
separate accounts of the Life Company ("Shareholders"), whose interests may be
included in one or more accounts of the Life Company in respect of each such
separate account (each, an "Account"), and the Life Company is willing and able
to provide such Administrative Services on the terms and conditions hereinafter
set forth;
NOW, THEREFORE, in consideration of the premises and mutual covenants and
agreements hereinafter contained in this Agreement, each party hereto severally
agrees as follows:
1. SERVICES TO BE PROVIDED BY THE LIFE COMPANY.
The Life Company or its affiliates agree to perform the Administrative
Services specified below for the benefit of the Shareholders:
1.1. Maintain separate records for each Shareholder, which records
shall reflect shares purchased and redeemed for the benefit of the
Shareholder and share balances held
for the benefit of the Shareholder. The Life Company may maintain each
Account with the transfer agent of the Fund on behalf of the Shareholders
and each such Account shall be in the name of the Life Company or its
nominee as the record owner of the shares held for such Shareholders.
1.2. For each Fund, disburse or credit to Shareholders all proceeds of
any redemption of shares of the Fund and all dividends and other
distributions not reinvested in shares of the Fund or paid to one or more
separate accounts holding the Shareholders' interests.
1.3. Prepare and transmit to each Shareholder periodic account
statements showing the total number of shares held for the benefit of each
Shareholder as of the statement closing date (converted to interests in
one or more separate accounts), all purchases and redemptions of shares of
the Funds for the benefit of each Shareholder during the period covered by
the statement, and the dividends and other distributions paid for the
benefit of each Shareholder during the statement period (whether paid in
cash or reinvested in Fund shares).
1.4. Transmit to each Shareholder proxy materials and reports and
other information received by the Life Company from any of the Funds and
required to be sent to Shareholders under the federal securities laws and,
upon request of the Trust's transfer agent, transmit to Shareholders
communications deemed by the Trust, through its Board of Trustees
("Board"), to be necessary and proper for receipt by all owners of
beneficial interests in any Fund.
1.5. Transmit to the Trust's transfer agent purchase and redemption
orders on behalf of Shareholders.
1.6. Provide to the Funds, or to the transfer agent for any of the
Funds, or any of the agents designated by any of them, such periodic
reports as shall reasonably be concluded to be necessary to enable each of
the Funds to comply with any applicable federal and state securities law
requirements.
1.7. Provide Shareholders with telephone servicing support and other
support services in connection with the Funds, including providing
information about the Trust and any Fund previously approved by the Trust
or its designee pursuant to Article IV of the Participation Agreement and
answering questions concerning the Trust and its Funds, including questions
respecting Shareholders' interests in one or more Funds.
1.8. Assist the Trust in tabulating Shareholders' voting instructions
in the event of a proxy solicitation by the Trust, including receiving,
tabulating and transmitting voting instructions executed by or on behalf of
Shareholders.
1.9. Provide sub-accounting services and such similar services as the
Trust may reasonably request to the extent that the Life Company is
permitted to do so under applicable statutes, rules or regulations.
2
2. RECORDS.
2.1. The Life Company represents and agrees that it will maintain and
preserve all records as required by law to be maintained and preserved in
connection with providing the duties and responsibilities set forth in this
Agreement and will otherwise comply with all laws, rules and regulations
applicable to maintaining and preserving such books and records.
2.2. The Life Company agrees to provide copies of all the historical
records relating to transactions between the Funds and Shareholders, and
all written communications and other related materials regarding the
Fund(s) to or from such Shareholders, as reasonably requested by the Trust,
the Adviser or their representatives (which representatives, include,
without limitation, the auditors or legal counsel of the Trust, the Adviser
or the Trust's distributor as the case may be), to enable the Trust or the
Adviser or their representatives to monitor and review the Administrative
Services performed by the Life Company, or comply with any request of the
Board or of a governmental body, self-regulatory organization or any
Shareholder, provided, however that, unless otherwise required by law, the
Life Company shall not provide the Trust, the Adviser or their
representatives with any information specifically identifying or relating
to an individual Shareholder. In addition, the Life Company agrees that it
will permit the Trust, the Adviser or their representatives to have
reasonable access to its personnel and records in order to facilitate the
monitoring of the quality of the Administrative Services.
2.3. This Agreement shall not require the Life Company to preserve any
records (in any medium or format) relating to this Agreement beyond the
time periods otherwise required by the laws to which the Life Company, the
Trust and the Adviser are subject, provided that such records shall be
provided to the Trust and the Adviser in the event that the Life Company
decides to no longer preserve such records following such time periods.
3. LIFE COMPANY'S USE OF THE SERVICES OF OTHERS; NOTICE OF INCAPACITY
3.1. The Life Company may, with the consent of the Trust and the
Adviser, contract with or establish relationships with other parties for
the provision of the Administrative Services or other activities of the
Life Company required by this Agreement, or the Participation Agreement,
provided that the Life Company shall be fully responsible for the acts and
omissions of such other parties.
3.2. The Life Company hereby agrees to notify Adviser promptly if for
any reason it is unable to perform fully and promptly any of its
obligations under this Agreement.
4. AUTHORITY OF THE LIFE COMPANY
4.1. The Life Company represents further that it has appropriate
authority and is duly empowered to enter into this Agreement and performing
the Administrative Services and other obligations of the Life Company set
forth in this Agreement.
3
4.2. The provisions of the Agreement shall in no way limit the
authority of Adviser, or any Fund to take such action as any of such
parties may deem appropriate or advisable in connection with all matters
relating to the operations of any such Fund and/or the sale of its shares.
5. COMPENSATION
5.1. In consideration of the performance of the Administrative
Services by the Life Company as described in this Agreement, beginning on
the date hereof and during the term of the Participation Agreement, the
Funds and the Adviser agree to pay the Life Company an annual fee with
respect to the value of each Fund's average daily net assets in the
Contracts maintained in the separate accounts or in the Master Account for
the Shareholders (excluding all assets invested during any guarantee
periods available under the Contracts) as specified in Exhibit A to this
Agreement. The determination of the applicable average daily net assets for
this purpose shall be made by averaging the net assets in each Fund on each
Valuation Date or similar term (as defined in the prospectus relating to
the Contracts) within the applicable calendar year. The foregoing fee will
be accrued daily and paid by the Funds and/or the Adviser to the Life
Company on a quarterly basis, and in this regard, payment of such fee will
be made by the Funds and/or the Adviser to the Life Company within thirty
(30) days following the end of each calendar quarter. The proportion of the
annual fee to be paid by the Funds and the Adviser will be determined by
the Board after its consideration of appropriate information concerning the
purposes of the compensation to be paid to the Life Company.
5.2. Notwithstanding anything in this Agreement or the Participation
Agreement appearing to the contrary, any payments by the Funds and/or the
Adviser to the Life Company relate solely to the performance by the Life
Company of the Administrative Services described herein only, and do not
constitute payment in any manner for services provided by the Life
Company's to the Life Company Contract owners, or to any separate account
organized by the Life Company, or for any investment advisory services, or
for costs associated with the distribution of any Contracts.
6. INDEMNIFICATION
The Life Company shall indemnify and hold harmless each of the Funds,
Adviser, and each of their respective officers, trustees, Directors,
partners, employees and agents from and against any and all losses, claims,
damages, expenses, or liabilities that any one or more of them may incur
including, without limitation, reasonable attorneys' fees, expenses and
costs arising out of or related to the performance or non-performance by
the Life Company of the Administrative Services under this Agreement.
7. TERM AND TERMINATION
7.1. This Agreement may be terminated without penalty at any time by
any party to this Agreement, upon one hundred and twenty days (120) written
notice to the
4
other party. Notwithstanding the foregoing, the provisions of Sections 6
and 7.2 of this Agreement, shall continue in full force and effect after
termination of this Agreement.
7.2. After the date of any termination of this Agreement, no fee will
be due with respect to any amounts in the Contracts first maintained in the
separate accounts or first placed in the Master Account for the benefit of
Shareholders after the date of such termination. However, notwithstanding
any such termination, the Trust and/or the Adviser will remain obligated to
pay the Life Company the fee specified in Section 5 of this Agreement, with
respect to the value of each Fund's average daily net assets maintained in
the separate accounts or the Master Account with respect to the Contracts
as of the date of such termination, for so long as those assets are so held
and the Life Company continues to provide the Administrative Services with
respect to such Shareholders in conformity with this Agreement. This
Agreement, or any provision hereof, shall survive termination to the extent
necessary for each party to perform its obligations with respect to amounts
for which a fee continues to be due subsequent to such termination.
8. MISCELLANEOUS
8.1. It is understood and agreed that in performing the services under
this Agreement, the Life Company, acting in its capacity described herein,
shall at no time be acting as an agent for any of the Funds or the Adviser.
The Life Company agrees, and agrees to cause its agents, not to make any
representations concerning a Fund except those contained in the Fund's
then-current prospectus; in current sales literature furnished by the Trust
or Adviser to the Life Company; in the then-current prospectus for any
Contract issued by the Life Company or then current sales literature with
respect to such Contract, approved by the Adviser and the Trust.
8.2. This Agreement may only be amended pursuant to a written
instrument signed by the party to be charged. This Agreement may not be
assigned by a party hereto, by operation of law or otherwise, without the
prior written consent of the other party.
8.3. This Agreement shall be governed by the laws of the State of
Delaware without giving effect to the principles of conflicts of law of
such jurisdiction.
8.4. This Agreement, including Schedule One and Schedule Two,
constitutes the entire agreement between the parties with respect to the
matters dealt with herein and supersedes any previous agreements and
documents with respect to such matters. The parties agree that Schedule One
and/or Schedule Two may be replaced from time to time with a new Schedule
One and/or Schedule Two to accurately reflect any changes in the Funds
available as investment vehicles and/or the Contracts available, under the
Participation Agreement, respectively.
5
IN WITNESS HEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
JEFFERSON PILOT FINANCIAL INSURANCE COMPANY
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title Senior Vice President
AYCO SERIES TRUST
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, III
------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, III
Title Chief Financial Officer and Controller
THE AYCO COMPANY, L.P.
By: Hambre, Inc.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title Vice President
6
SCHEDULE ONE
INVESTMENT COMPANY NAME: FUND NAME(S):
------------------------ -------------
Ayco Series Trust Ayco Large Cap Growth Fund I
S-1
SCHEDULE TWO
List of Contracts
ENSEMBLE II VARIABLE LIFE INSURANCE
ENSEMBLE III VARIABLE LIFE INSURANCE
ENSEMBLE SL VARIABLE LIFE INSURANCE
ENSEMBLE EXEC VARIABLE LIFE INSURANCE
ALLEGIANCE VARIABLE ANNUITY
PILOT CLASSIC VARIABLE ANNUITY
PILOT ELITE VARIABLE ANNUITY
S-2
PARTICIPATION AGREEMENT
AMONG
JEFFERSON PILOT FINANCIAL INSURANCE COMPANY AND
JEFFERSON PILOT LIFE AMERICA INSURANCE COMPANY,
PIMCO VARIABLE INSURANCE TRUST,
AND
PIMCO FUNDS DISTRIBUTORS LLC
THIS AGREEMENT, dated as of the 1st day of May, 2001, by and among
Jefferson Pilot Financial Insurance Company, a Nebraska life insurance company
and Jefferson Pilot Life America Insurance Company, a New Jersey life insurance
company, (collectively, the "Company"), on their own behalf and on behalf of
each segregated asset account of the Company set forth on Schedule A hereto as
may be amended from time to time (each account hereinafter referred to as the
"Account"), PIMCO Variable Insurance Trust (the "Fund"), a Delaware business
trust, and PIMCO Funds Distributors LLC (the "Underwriter"), a Delaware limited
liability company.
WHEREAS, the Fund engages in business as an open-end management investment
company and is available to act as the investment vehicle for separate accounts
established for variable life insurance and variable annuity contracts (the
"Variable Insurance Products") to be offered by insurance companies which have
entered into participation agreements with the Fund and Underwriter
("Participating Insurance Companies");
WHEREAS, the shares of beneficial interest of the Fund are divided into
several series of shares, each designated a "Portfolio" and representing the
interest in a particular managed portfolio of securities and other assets;
WHEREAS, the Fund has obtained an order from the Securities and Exchange
Commission (the "SEC") granting Participating Insurance Companies and variable
annuity and variable life insurance separate accounts exemptions from the
provisions of sections 9(a), 13(a), 15(a), and 15(b) of the Investment Company
Act of 1940, as amended, (the "1940 Act") and Rules 6e-2(b)(15) and
6e-3(T)(b)(15) thereunder, if and to the extent necessary to permit shares of
the Fund to be sold to and held by variable annuity and variable life insurance
separate accounts of both affiliated and unaffiliated life insurance companies
(the "Mixed and Shared Funding Exemptive Order");
WHEREAS, the Fund is registered as an open-end management investment
company under the 1940 Act and shares of the Portfolios are registered under the
Securities Act of 1933, as amended (the "1933 Act");
WHEREAS, Pacific Investment Management Company (the "Adviser"), which
serves as investment adviser to the Fund, is duly registered as an investment
adviser under the federal Investment Advisers Act of 1940, as amended;
WHEREAS, the Company has issued or will issue certain variable life
insurance and/or variable annuity contracts supported wholly or partially by the
Account (the "Contracts"), and said Contracts are listed in Schedule A hereto,
as it may be amended from time to time by mutual written agreement;
WHEREAS, the Account is duly established and maintained as a segregated
asset account, duly established by the Company, on the date shown for such
Account on Schedule A hereto, to set aside and invest assets attributable to
the aforesaid Contracts;
WHEREAS, the Underwriter, which serves as distributor to the Fund, is
registered as a broker dealer with the SEC under the Securities Exchange Act of
1934, as amended (the "1934 Act"), and is a member in good standing of the
National Association of Securities Dealers, Inc. (the "NASD"); and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase Administrative Class shares in the
Portfolios listed in Schedule A hereto, as it may be amended from time to time
by mutual written agreement (the "Designated Portfolios") on behalf of the
Account to fund the aforesaid Contracts, and the Underwriter is authorized to
sell such shares to the Account at net asset value;
NOW, THEREFORE, in consideration of their mutual promises, the Company, on
its own behalf and on behalf of its affiliates, the Fund and the Underwriter
agree as follows:
ARTICLE I. SALE OF FUND SHARES
1.1. The Fund has granted to the Underwriter exclusive authority to
distribute the Fund's shares, and has agreed to instruct, and has so instructed,
the Underwriter to make available to the Company for purchase on behalf of the
Account Fund shares of those Designated Portfolios selected by the Underwriter.
Pursuant to such authority and instructions, and subject to Article X hereof,
the Underwriter agrees to make available to the Company for purchase on behalf
of the Account, shares of those Designated Portfolios listed on Schedule A to
this Agreement, such purchases to be effected at net asset value in accordance
with Section 1.3 of this Agreement. Notwithstanding the foregoing, (i) Fund
series (other than those listed on Schedule A) in existence now or that may be
established in the future will be made available to the Company only as the
Underwriter may so provide, and (ii) the Board of Trustees of the Fund (the
"Board") may suspend or terminate the offering of Fund shares of any Designated
Portfolio or class thereof, if such action is required by law or by regulatory
authorities having jurisdiction or if, in the sole discretion of the Board
acting in good faith and in light of its fiduciary duties under federal and any
applicable state laws, suspension or termination is necessary in the best
interests of the shareholders of such Designated Portfolio.
1.2. The Fund shall redeem, at the Company's request, any full or
fractional Designated Portfolio shares held by the Company on behalf of the
Account, such redemptions to be effected at net asset value in accordance with
Section 1.3 of this Agreement. Notwithstanding the foregoing, (i) the Company
shall not redeem Fund shares attributable to Contract owners except in the
circumstances permitted in Section 10.3 of this Agreement, and (ii) the Fund may
delay redemption of Fund shares of any Designated Portfolio to the extent
permitted by the 1940 Act, and any rules, regulations or orders thereunder.
2
1.3. PURCHASE AND REDEMPTION PROCEDURES
(a) The Fund hereby appoints the Company as an agent of the
Fund for the limited purpose of receiving purchase and redemption requests
on behalf of the Account (but not with respect to any Fund shares that may
be held in the general account of the Company) for shares of those
Designated Portfolios made available hereunder, based on allocations of
amounts to the Account or subaccounts thereof under the Contracts and other
transactions relating to the Contracts or the Account. Receipt of any such
request (or relevant transactional information therefor) on any day the New
York Stock Exchange is open for trading and on which the Fund calculates
its net asset value pursuant to the rules of the SEC (a "Business Day") by
the Company as such limited agent of the Fund prior to the time that the
Fund ordinarily calculates its net asset value as described from time to
time in the Fund Prospectus (which as of the date of execution of this
Agreement is 4:00 p.m. Eastern Time) shall constitute receipt by the Fund
on that same Business Day, provided that the Fund receives notice of such
request by 9:30 a.m. Eastern Time on the next following Business Day.
(b) The Company shall pay for shares of each Designated
Portfolio on the same day that it notifies the Fund of a purchase request
for such shares. Payment for Designated Portfolio shares shall be made in
federal funds transmitted to the Fund by wire to be received by the Fund by
4:00 p.m. Eastern Time on the day the Fund is notified of the purchase
request for Designated Portfolio shares (unless the Fund determines and so
advises the Company that sufficient proceeds are available from redemption
of shares of other Designated Portfolios effected pursuant to redemption
requests tendered by the Company on behalf of the Account). If federal
funds are not received on time, such funds will be invested, and Designated
Portfolio shares purchased thereby will be issued, as soon as practicable
and the Company shall promptly, upon the Fund's request, reimburse the Fund
for any charges, costs, fees, interest or other expenses incurred by the
Fund in connection with any advances to, or borrowing or overdrafts by, the
Fund, or any similar expenses incurred by the Fund, as a result of
portfolio transactions effected by the Fund based upon such purchase
request. Upon receipt of federal funds so wired, such funds shall cease to
be the responsibility of the Company and shall become the responsibility of
the Fund.
(c) Payment for Designated Portfolio shares redeemed by the
Account or the Company shall be made in federal funds transmitted by wire
to the Company or any other designated person on the next Business Day
after the Fund is properly notified of the redemption order of such shares
(unless redemption proceeds are to be applied to the purchase of shares of
other Designated Portfolios in accordance with Section 1.3(b) of this
Agreement), except that the Fund reserves the right to redeem Designated
Portfolio shares in assets other than cash and to delay payment of
redemption proceeds to the extent permitted under Section 22(e) of the 1940
Act and any Rules thereunder, and in accordance with the procedures and
policies of the Fund as described in the then current prospectus. The Fund
shall not bear any responsibility whatsoever for the proper disbursement or
crediting of redemption proceeds by the Company; the Company alone shall be
responsible for such action.
(d) Any purchase or redemption request for Designated
Portfolio shares held or to be held in the Company's general account shall
be effected at the net asset value per share next determined after the
Fund's receipt of such request, provided that, in the case of a purchase
request, payment for Fund shares so requested is received by the Fund in
federal funds prior to
3
close of business for determination of such value, as defined from time to
time in the Fund Prospectus.
1.4. The Fund shall use its best efforts to make the net asset
value per share for each Designated Portfolio available to the Company by 7:00
p.m. Eastern Time each Business Day, and in any event, as soon as reasonably
practicable after the net asset value per share for such Designated Portfolio is
calculated, and shall calculate such net asset value in accordance with the
Fund's Prospectus. Neither the Fund, any Designated Portfolio, the Underwriter,
nor any of their affiliates shall be liable for any information provided to the
Company pursuant to this Agreement which information is based on incorrect
information supplied by the Company or any other Participating Insurance Company
to the Fund or the Underwriter.
1.5. The Fund shall furnish notice (by wire or telephone followed
by written confirmation) to the Company as soon as reasonably practicable of any
income dividends or capital gain distributions payable on any Designated
Portfolio shares. The Company, on its behalf and on behalf of the Account,
hereby elects to receive all such dividends and distributions as are payable on
any Designated Portfolio shares in the form of additional shares of that
Designated Portfolio. The Company reserves the right, on its behalf and on
behalf of the Account, to revoke this election and to receive all such dividends
and capital gain distributions in cash. The Fund shall notify the Company
promptly of the number of Designated Portfolio shares so issued as payment of
such dividends and distributions.
1.6. Issuance and transfer of Fund shares shall be by book entry
only. Stock certificates will not be issued to the Company or the Account.
Purchase and redemption orders for Fund shares shall be recorded in an
appropriate ledger for the Account or the appropriate subaccount of the Account.
1.7. (a) The parties hereto acknowledge that the arrangement
contemplated by this Agreement is not exclusive; the Fund's shares may be sold
to other insurance companies (subject to Section 1.8 hereof) and the cash value
of the Contracts may be invested in other investment companies, provided,
however, that until this Agreement is terminated pursuant to Article X, the
Company shall promote the Designated Portfolios on the same basis as other
funding vehicles available under the Contracts. Funding vehicles other than
those listed on Schedule A to this Agreement may be available for the investment
of the cash value of the Contracts.
(b) The Company shall not, without prior notice to the
Underwriter (unless otherwise required by applicable law), take any action to
operate the Account as a management investment company under the 1940 Act.
(c) The Company shall not, without prior notice to the
Underwriter (unless otherwise required by applicable law), induce Contract
owners to change or modify the Fund or change the Fund's distributor or
investment adviser.
(d) The Company shall not, without prior notice to the Fund,
induce Contract owners to vote on any matter submitted for consideration by the
shareholders of the Fund in a manner other than as recommended by the Board of
Trustees of the Fund.
4
1.8. The Underwriter and the Fund shall sell Fund shares only to
Participating Insurance Companies and their separate accounts and to persons or
plans ("Qualified Persons") that communicate to the Underwriter and the Fund
that they qualify to purchase shares of the Fund under Section 817(h) of the
Internal Revenue Code of 1986, as amended (the "Code") and the regulations
thereunder without impairing the ability of the Account to consider the
portfolio investments of the Fund as constituting investments of the Account for
the purpose of satisfying the diversification requirements of Section 817(h).
The Underwriter and the Fund shall not sell Fund shares to any insurance company
or separate account unless an agreement complying with Article VI of this
Agreement is in effect to govern such sales, to the extent required. The Company
hereby represents and warrants that it and the Account are Qualified Persons.
The Fund reserves the right to cease offering shares of any Designated Portfolio
in the discretion of the Fund.
ARTICLE II. REPRESENTATIONS AND WARRANTIES
2.1. The Company represents and warrants that the Contracts (a)
are, or prior to issuance will be, registered under the 1933 Act, or (b) are not
registered because they are properly exempt from registration under the 1933 Act
or will be offered exclusively in transactions that are properly exempt from
registration under the 1933 Act. The Company further represents and warrants
that the Contracts will be issued and sold in compliance in all material
respects with all applicable federal securities and state securities and
insurance laws and that the sale of the Contracts shall comply in all material
respects with state insurance suitability requirements. The Company further
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
the Account prior to any issuance or sale thereof as a segregated asset account
under Nebraska insurance laws, and that it (a) has registered or, prior to any
issuance or sale of the Contracts, will register the Account as a unit
investment trust in accordance with the provisions of the 1940 Act to serve as a
segregated investment account for the Contracts, or alternatively (b) has not
registered the Account in proper reliance upon an exclusion from registration
under the 1940 Act. The Company shall register and qualify the Contracts or
interests therein as securities in accordance with the laws of the various
states only if and to the extent deemed advisable by the Company.
2.2. 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 applicable state and federal
securities laws and that the Fund is and shall remain registered under the ▇▇▇▇
▇▇▇. 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 or the Underwriter.
2.3. The Fund may make payments to finance distribution expenses
pursuant to Rule 12b-1 under the 1940 Act. Prior to financing distribution
expenses pursuant to Rule 12b-1, the Fund will have the Board, a majority of
whom are not interested persons of the Fund, formulate and approve a plan
pursuant to Rule 12b-1 under the 1940 Act to finance distribution expenses.
2.4. The Fund makes no representations as to whether any aspect of
its operations, including, but not limited to, investment policies, fees and
expenses, complies with the insurance and other applicable laws of the various
states.
5
2.5. 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.
2.6. The Underwriter represents and warrants that it is a member in
good standing of the NASD and is registered as a broker-dealer with the SEC. The
Underwriter further represents that it will sell and distribute the Fund shares
in accordance with any applicable state and federal securities laws.
2.7. The Fund and the Underwriter represent and warrant that all of
their trustees/directors, officers, employees, investment advisers, and other
individuals or entities dealing with the money and/or securities of the Fund are
and shall continue to be at all times covered by a blanket fidelity bond or
similar coverage for the benefit of the Fund in an amount not less than the
minimum coverage as required currently by Rule 17g-1 of the 1940 Act or related
provisions 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.
2.8. The Company represents and warrants that all of its directors,
officers, employees, and other individuals/entities employed or controlled by
the Company dealing with the money and/or securities of the Account are covered
by a blanket fidelity bond or similar coverage for the benefit of the Account,
in an amount not less than $5 million. The aforesaid bond includes coverage for
larceny and embezzlement and is issued by a reputable bonding company. The
Company agrees to hold for the benefit of the Fund and to pay to the Fund any
amounts lost from larceny, embezzlement or other events covered by the aforesaid
bond to the extent such amounts properly belong to the Fund pursuant to the
terms of this Agreement. The Company agrees to make all reasonable efforts to
see that this bond or another bond containing these provisions is always in
effect, and agrees to notify the Fund and the Underwriter in the event that such
coverage no longer applies.
ARTICLE III. PROSPECTUSES AND PROXY STATEMENTS; VOTING
3.1. The Underwriter shall provide the Company with as many copies
of the Fund's current prospectus (describing only the Designated Portfolios
listed on Schedule A) or, to the extent permitted, the Fund's profiles as the
Company may reasonably request. The Fund shall bear the expense of printing
copies of the current prospectus and profiles for the Contracts that will be
distributed to existing Contract owners, and the Company shall bear the expense
of printing copies of the Fund's prospectus and profiles that are used in
connection with offering the Contracts issued by the Company. If requested by
the Company in lieu thereof, the Fund shall provide such documentation
(including a final copy of the new prospectus on diskette at the Fund'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 Contracts and the Fund's prospectus or profile printed
together in one document (the proportionate share of such printing to be at the
Fund's expense).
3.2. The Fund's prospectus shall state that the current Statement
of Additional Information ("SAI") for the Fund is available, and the Underwriter
(or the Fund), at its expense, shall provide a reasonable number of copies of
such SAI free of charge to the Company for itself and for any owner of a
Contract who requests such SAI.
3.3. The Fund shall provide the Company with information regarding
the Fund's expenses, which information may include a table of fees and related
narrative disclosure for use in any prospectus or other descriptive document
relating to a Contract. The Company agrees that it will use
6
such information in the form provided. The Company shall provide prior written
notice of any proposed modification of such information, which notice will
describe in detail the manner in which the Company proposes to modify the
information, and agrees that it may not modify such information in any way
without the prior consent of the Fund.
3.4. The Fund, at its expense, shall provide the Company with
copies of its proxy material, reports to shareholders, and other communications
to shareholders in such quantity as the Company shall reasonably require for
distributing to Contract owners.
3.5. The Company shall:
(i) solicit voting instructions from Contract owners;
(ii) vote the Fund shares in accordance with instructions
received from Contract owners; and
(iii) vote Fund shares for which no instructions have been
received in the same proportion as Fund shares of such
portfolio for which instructions have been received,
so long as and to the extent that the SEC continues to interpret the 1940 Act to
require pass-through voting privileges for variable contract owners or to the
extent otherwise required by law. The Company will vote Fund shares held in any
segregated asset account in the same proportion as Fund shares of such portfolio
for which voting instructions have been received from Contract owners, to the
extent permitted by law.
3.6. Participating Insurance Companies shall be responsible for
assuring that each of their separate accounts participating in a Designated
Portfolio calculates voting privileges as required by the Shared Funding
Exemptive Order and consistent with any reasonable standards that the Fund may
adopt and provide in writing.
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 that the Company develops and in which the Fund (or a Designated
Portfolio thereof) or the Adviser or the Underwriter is named. No such material
shall be used until approved by the Fund or its designee, and the Fund will use
its best efforts for it or its designee to review such sales literature or
promotional material within ten Business Days after receipt of such material.
The Fund or its designee reserves the right to reasonably object to the
continued use of any such sales literature or other promotional material in
which the Fund (or a Designated Portfolio thereof) or the Adviser or the
Underwriter is named, and no such material shall be used if the Fund or its
designee so object.
4.2. The Company shall not give any information or make any
representations or statements on behalf of the Fund or concerning the Fund or
the Adviser or the Underwriter in connection with the sale of the Contracts
other than the information or representations contained in the registration
statement or prospectus or SAI for the Fund shares, as such registration
statement and prospectus or SAI 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
Underwriter, except with the permission of the Fund or the Underwriter or the
designee of either.
7
4.3. The Fund and the Underwriter, or their designee, shall
furnish, or cause to be furnished, to the Company, each piece of sales
literature or other promotional material that it develops and in which the
Company, and/or its Account, is named. No such material shall be used until
approved by the Company, and the Company will use its best efforts to review
such sales literature or promotional material within ten Business Days after
receipt of such material. The Company reserves the right to reasonably object to
the continued use of any such sales literature or other promotional material in
which the Company and/or its Account is named, and no such material shall be
used if the Company so objects.
4.4. The Fund and the Underwriter shall not give any information or
make any representations on behalf of the Company or concerning the Company, the
Account, or the Contracts other than the information or representations
contained in a registration statement, prospectus (which shall include an
offering memorandum, if any, if the Contracts issued by the Company or interests
therein are not registered under the 1933 Act), or SAI for the Contracts, as
such registration statement, prospectus, or SAI may be amended or supplemented
from time to time, or in published reports for the Account which are in the
public domain or approved by the Company for distribution to Contract 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, SAIs, 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, promptly after the filing of such
document(s) with the SEC or other regulatory authorities.
4.6. The Company will provide to the Fund at least one complete
copy of all registration statements, prospectuses (which shall include an
offering memorandum, if any, if the Contracts issued by the Company or interests
therein are not registered under the 1933 Act), SAIs, reports, solicitations for
voting instructions, applications for exemptions, requests for no-action
letters, and all amendments to any of the above, that relate to the Contracts or
the Account, promptly after the filing of such document(s) with the SEC or other
regulatory authorities. The Company shall provide to the Fund and the
Underwriter any complaints received from the Contract owners pertaining to the
Fund or the Designated Portfolio.
4.7. The Fund will provide the Company with as much notice as is
reasonably practicable of any proxy solicitation for any Designated Portfolio,
and of any material change in the Fund's registration statement, particularly
any change resulting in a change to the registration statement or prospectus for
any Account. The Fund will work with the Company so as to enable the Company to
solicit proxies from Contract owners, or to make changes to its prospectus or
registration statement, in an orderly manner. The Fund will make reasonable
efforts to attempt to have changes affecting Contract prospectuses become
effective simultaneously with the annual updates for such prospectuses.
4.8. For purposes of this Article IV, the phrase "sales literature
and other promotional materials" includes, but is not limited to, any of the
following that refer to the Fund or any affiliate of the Fund: advertisements
(such as material published, or designed for use in, a newspaper, magazine, or
other periodical, radio, television, telephone or tape recording, videotape
display, signs or billboards, motion pictures, or other public media), sales
literature (I.E., any written communication distributed or made generally
available to customers or the public, including brochures, circulars, reports,
market letters, form letters, seminar texts, reprints or excerpts of any other
advertisement, sales literature, or published article), educational or training
materials or other communications distributed or made
8
generally available to some or all agents or employees, and registration
statements, prospectuses, SAIs, shareholder reports, proxy materials, and any
other communications distributed or made generally available with regard to the
Fund.
ARTICLE V. FEES AND EXPENSES
5.1. The Fund and the Underwriter shall pay no fee or other
compensation to the Company under this Agreement, except that if the Fund or any
Portfolio adopts and implements a plan pursuant to Rule 12b-1 to finance
distribution expenses, then the Fund or Underwriter may make payments to the
Company or to the underwriter for the Contracts if and in amounts agreed to by
the Underwriter in writing, and such payments will be made out of existing fees
otherwise payable to the Underwriter, past profits of the Underwriter, or other
resources available to the Underwriter. Currently, no such payments are
contemplated.
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 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,
and all taxes on the issuance or transfer of the Fund's shares.
5.3. The Fund shall bear the pro rata expenses of distributing a
combined prospectus containing the Fund's prospectus to owners of Contracts
issued by the Company and of distributing the Fund's proxy materials and reports
to such Contract owners.
ARTICLE VI. DIVERSIFICATION AND QUALIFICATION
6.1. The Fund will invest its assets in such a manner as to ensure
that the Contracts will be treated as annuity or life insurance contracts,
whichever is appropriate, under the Code and the regulations issued thereunder
(or any successor provisions). Without limiting the scope of the foregoing, each
Designated Portfolio has complied and will continue to comply with Section
817(h) of the Code and Treasury Regulation Section 1.817-5, and any Treasury
interpretations thereof, relating to the diversification requirements for
variable annuity, endowment, or life insurance contracts, and any amendments or
other modifications or successor provisions to such Section or Regulations. In
the event of a breach of this Article VI by the Fund, it will take all
reasonable steps (a) to notify the Company of such breach and (b) to adequately
diversify the Fund so as to achieve compliance within the grace period afforded
by Regulation 1.817-5.
6.2. The Fund represents that it is or will be qualified as a
Regulated Investment Company under Subchapter M of the Code, and that it will
make every effort to maintain such qualification (under Subchapter M or any
successor or similar provisions) and that it will notify the Company immediately
upon having a reasonable basis for believing that it has ceased to so qualify or
that it might not so qualify in the future.
6.3. The Company represents that the Contracts are currently, and
at the time of issuance shall be, treated as life insurance or annuity insurance
contracts, under applicable provisions of
9
the Code, and that it will make every effort to maintain such treatment, and
that it will notify the Fund and the Underwriter immediately upon having a
reasonable basis for believing the Contracts have ceased to be so treated or
that they might not be so treated in the future. The Company agrees that any
prospectus offering a contract that is a "modified endowment contract" as that
term is defined in Section 7702A of the Code (or any successor or similar
provision), shall identify such contract as a modified endowment contract.
ARTICLE VII. POTENTIAL CONFLICTS
The following provisions shall apply only upon issuance of the Mixed and Shared
Funding Order and the sale of shares of the Fund to variable life insurance
separate accounts, and then only to the extent required under the ▇▇▇▇ ▇▇▇.
7.1. The Board will monitor the Fund for the existence of any
material irreconcilable conflict between the interests of the Contract owners of
all separate accounts investing in the Fund. An irreconcilable material conflict
may arise for a variety of reasons, including: (a) an action by any state
insurance regulatory authority; (b) a change in applicable federal or state
insurance, tax, or securities laws or regulations, or a public ruling, private
letter ruling, no-action or interpretative letter, or any similar action by
insurance, tax, or securities regulatory authorities; (c) an administrative or
judicial decision in any relevant proceeding; (d) the manner in which the
investments of any Portfolio are being managed; (e) a difference in voting
instructions given by variable annuity contract and variable life insurance
contract owners; or (f) a decision by an insurer to disregard the voting
instructions of contract owners. The Board shall promptly inform the Company if
it determines that an irreconcilable material conflict exists and the
implications thereof.
7.2. The Company will report any potential or existing conflicts of
which it is aware to the Board. The Company will assist the Board in carrying
out its responsibilities under the Mixed and Shared Funding Exemptive Order, by
providing the Board with all information reasonably necessary for the Board to
consider any issues raised. This includes, but is not limited to, an obligation
by the Company to inform the Board whenever Contract owner voting instructions
are disregarded.
7.3. If it is determined by a majority of the Board, or a majority
of its disinterested members, that a material irreconcilable conflict exists,
the Company and other Participating Insurance Companies shall, at their expense
and to the extent reasonably practicable (as determined by a majority of the
disinterested Board members), take whatever steps are necessary to remedy or
eliminate the irreconcilable material conflict, up to and including: (1)
withdrawing the assets allocable to some or all of the separate accounts from
the Fund or any Portfolio, and reinvesting such assets in a different investment
medium, including (but not limited to) another Portfolio of the Fund, or
submitting the question whether such segregation should be implemented to a vote
of all affected contract owners and, as appropriate, segregating the assets of
any appropriate group (I.E. annuity contract owners, life insurance contract
owners, or variable contract owners of one or more Participating Insurance
Companies) that votes in favor of such segregation, or offering to the affected
contract owners the option of making such a change; and (2) establishing a new
registered management investment company or managed separate account.
7.4. If a material irreconcilable conflict arises because of a
decision by the Company to disregard Contract owner voting instructions and that
decision represents a minority position or would preclude a majority vote, the
Company may be required, at the Fund's election, to withdraw the Account's
investment in the Fund and terminate this Agreement with respect to each
Account; provided,
10
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 members of the Board. Any such withdrawal and
termination must take place within six (6) months after the Fund gives written
notice that this provision is being implemented, and until the end of that six
month period the Fund shall continue to accept and implement orders by the
Company for the purchase (and redemption) of shares of the Fund.
7.5. If a material irreconcilable conflict arises because a
particular state insurance regulator's decision applicable to the Company
conflicts with the majority of other state regulators, then the Company will
withdraw the affected Account's investment in the Fund and terminate this
Agreement with respect to such Account within six months after the Board informs
the Company in writing that it has determined that such decision has created an
irreconcilable material conflict; provided, however, that such withdrawal and
termination shall be limited to the extent required by the foregoing material
irreconcilable conflict as determined by a majority of the disinterested members
of the Board. Until the end of the foregoing six month period, the Fund shall
continue to accept and implement orders by the Company for the purchase (and
redemption) of shares of the Fund.
7.6. For purposes of Section 7.3 through 7.6 of this Agreement, a
majority of the disinterested members of the Board shall determine whether any
proposed action adequately remedies any irreconcilable material conflict, but in
no event will the Fund be required to establish a new funding medium for the
Contracts. The Company shall not be required by Section 7.3 to establish a new
funding medium for the Contract if an offer to do so has been declined by vote
of a majority of Contract owners materially adversely affected by the
irreconcilable material conflict. In the event that the Board determines that
any proposed action does not adequately remedy any irreconcilable material
conflict, then the Company will withdraw the Account's investment in the Fund
and terminate this Agreement within six (6) months after the Board informs the
Company in writing of the foregoing determination; provided, however, that such
withdrawal and termination shall be limited to the extent required by any such
material irreconcilable conflict as determined by a majority of the
disinterested members of the Board.
7.7. If and to the extent the Mixed and Shared Funding Exemption
Order or any amendment thereto contains terms and conditions different from
Sections 3.4, 3.5, 3.6, 7.1, 7.2, 7.3, 7.4, and 7.5 of this Agreement, then the
Fund and/or the Participating Insurance Companies, as appropriate, shall take
such steps as may be necessary to comply with the Mixed and Shared Funding
Exemptive Order, and Sections 3.4, 3.5, 3.6, 7.1, 7.2, 7.3, 7.4 and 7.5 of this
Agreement shall continue in effect only to the extent that terms and conditions
substantially identical to such Sections are contained in the Mixed and Shared
Funding Exemptive Order or any amendment thereto. If and to the extent that Rule
6e-2 and Rule 6e-3(T) are amended, or Rule 6e-3 is adopted, to provide exemptive
relief from any provision of the 1940 Act or the rules promulgated thereunder
with respect to mixed or shared funding (as defined in the Mixed and Shared
Funding Exemptive Order) on terms and conditions materially different from those
contained in the Mixed and Shared Funding Exemptive Order, then (a) the Fund
and/or the Participating Insurance Companies, as appropriate, shall take such
steps as may be necessary to comply with Rules 6e-2 and 6e-3(T), as amended, and
Rule 6e-3, as adopted, to the extent such rules are applicable; and (b) Sections
3.5, 3.6, 7.1., 7.2, 7.3, 7.4, and 7.5 of this Agreement shall continue in
effect only to the extent that terms and conditions substantially identical to
such Sections are contained in such Rule(s) as so amended or adopted.
11
ARTICLE VIII. INDEMNIFICATION
8.1. INDEMNIFICATION BY THE COMPANY
8.1(a). The Company agrees to indemnify and hold harmless the
Fund and the Underwriter and each of its trustees/directors and officers, and
each person, if any, who controls the Fund or Underwriter within the meaning of
Section 15 of the 1933 Act or who is under common control with the Underwriter
(collectively, the "Indemnified Parties" for purposes of this Section 8.1)
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 or regulation, at common law or otherwise, insofar as such
losses, claims, damages, liabilities or expenses (or actions in respect thereof)
or settlements:
(i) arise out of or are based upon any untrue statement or
alleged untrue statements of any material fact contained in
the registration statement, prospectus (which shall include a
written description of a Contract that is not registered under
the 1933 Act), or SAI for the Contracts or contained in the
Contracts or sales literature for the Contracts (or any
amendment or supplement to any of the foregoing), or arise out
of or are based upon the omission or the alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading,
provided that this 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,
prospectus or SAI for the Contracts or in the Contracts or
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 (other than statements or representations
contained in the registration statement, prospectus, SAI, or
sales literature of the Fund not supplied by the Company or
persons under its control) or wrongful conduct of the Company
or its agents or persons under the Company's authorization or
control, with respect to the sale or distribution of the
Contracts or Fund Shares; or
(iii) arise out of any untrue statement or alleged untrue
statement of a material fact contained in a registration
statement, prospectus, SAI, or sales literature of the Fund or
any amendment thereof or supplement thereto or the omission or
alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein
not misleading if such a statement or omission was made in
reliance upon information furnished to the Fund by or on
behalf of the Company; or
(iv) arise as a result of any material failure by the Company
to provide the services and furnish the materials under the
terms of this Agreement (including a failure, whether
unintentional or in good faith or otherwise, to comply with
the qualification requirements specified in Article VI of this
Agreement); or
12
(v) arise out of or result from any material breach of any
representation and/or warranty made by the Company in this
Agreement or arise out of or result from any other material
breach of this Agreement by the Company; or
(vi) as limited by and in accordance with the provisions of
Sections 8.1(b) and 8.1(c) hereof.
8.1(b). The Company shall not be liable under this
indemnification provision with respect to any losses, claims, damages,
liabilities or litigation to which an Indemnified Party would otherwise be
subject by reason of such Indemnified Party's willful misfeasance, bad faith, or
gross negligence in the performance of such Indemnified Party's duties or by
reason of such Indemnified Party's reckless disregard of its obligations or
duties under this Agreement.
8.1(c). The Company shall not be liable under this
indemnification provision with respect to any claim made against an Indemnified
Party unless such Indemnified Party shall have notified the Company in writing
within a reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Company of any
such claim shall not relieve the Company from any liability which it may have to
the Indemnified Party against whom such action is brought otherwise than on
account of this indemnification provision. In case any such action is brought
against an Indemnified Party, the Company shall be entitled to participate, at
its own expense, in the defense of such action. The Company also shall be
entitled to assume the defense thereof, with counsel satisfactory to the party
named in the action. After notice from the Company to such party of the
Company's election to assume the defense thereof, the Indemnified Party shall
bear the fees and expenses of any additional counsel retained by it, and the
Company will not be liable to such party under this Agreement for any legal or
other expenses subsequently incurred by such party independently in connection
with the defense thereof other than reasonable costs of investigation.
8.1(d). The Indemnified Parties will promptly notify the
Company of the commencement of any litigation or proceedings against them in
connection with the issuance or sale of the Fund shares or the Contracts or the
operation of the Fund.
8.2. INDEMNIFICATION BY THE UNDERWRITER
8.2(a). The Underwriter 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 8.2)
against any and all losses, claims, damages, liabilities (including amounts paid
in settlement with the written consent of the Underwriter) or litigation
(including legal and other expenses) to which the Indemnified Parties may become
subject under any statute or regulation, at common law or otherwise, insofar as
such losses, claims, damages, liabilities or expenses (or actions in respect
thereof) or settlements:
(i) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the
registration statement or prospectus or SAI or sales
literature 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
13
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 Underwriter or Fund by or on behalf of the Company for use
in the registration statement, prospectus or SAI for the Fund
or in sales literature (or 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 (other than statements or representations
contained in the registration statement, prospectus, SAI or
sales literature for the Contracts not supplied by the
Underwriter or persons under its control) or wrongful conduct
of the Fund or Underwriter or persons under their control,
with respect to the sale or distribution of the Contracts or
Fund shares; or
(iii) arise out of any untrue statement or alleged untrue
statement of a material fact contained in a registration
statement, prospectus, SAI or sales literature covering the
Contracts, or any amendment thereof or supplement thereto, or
the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the
statement or statements therein not misleading, if such
statement or omission was made in reliance upon information
furnished to the Company by or on behalf of the Fund or the
Underwriter; or
(iv) arise as a result of any failure by the Fund or the
Underwriter to provide the services and furnish the materials
under the terms of this Agreement (including a failure of the
Fund, whether unintentional or in good faith or otherwise, to
comply with the diversification and other qualification
requirements specified in Article VI of this Agreement); or
(v) arise out of or result from any material breach of any
representation and/or warranty made by the Underwriter in this
Agreement or arise out of or result from any other material
breach of this Agreement by the Underwriter;
as limited by and in accordance with the provisions of Sections 8.2(b) and
8.2(c) hereof.
8.2(b). The Underwriter 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 or 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 Account, whichever is applicable.
8.2(c). The Underwriter 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 Underwriter 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
14
failure to notify the Underwriter of any such claim shall not relieve the
Underwriter 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 Party, the Underwriter will be entitled to participate, at its own
expense, in the defense thereof. The Underwriter also shall be entitled to
assume the defense thereof, with counsel satisfactory to the party named in the
action. After notice from the Underwriter to such party of the Underwriter'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 Underwriter
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.
The Company agrees promptly to notify the Underwriter 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 Contracts or the
operation of the Account.
8.3. INDEMNIFICATION BY THE FUND
8.3(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 8.3)
against any and all losses, claims, expenses, 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 be
required to pay or may become subject under any statute or regulation, at common
law or otherwise, insofar as such losses, claims, expenses, damages, liabilities
or expenses (or actions in respect thereof) or settlements, 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, whether unintentional or in
good faith or otherwise, to comply with the diversification
and other qualification requirements specified in Article VI
of this Agreement); or
(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 8.3(b) and
8.3(c) hereof.
8.3(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 Underwriter or the
Account, whichever is applicable.
8.3(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
15
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 of 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 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.
8.3(d). The Company and the Underwriter agree promptly to
notify the Fund of the commencement of any litigation or proceeding against it
or any of its respective officers or directors in connection with the Agreement,
the issuance or sale of the Contracts as they pertain to the Fund, the operation
of the Account as it pertains to the Fund, or the sale or acquisition of shares
of the Fund.
ARTICLE IX. APPLICABLE LAW
9.1. This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the State of
California.
9.2. This Agreement shall be subject to the provisions of the 1933,
1934 and 1940 Acts, and the rules and regulations and rulings thereunder,
including such exemptions from those statutes, rules and regulations as the SEC
may grant (including, but not limited to, any Mixed and Shared Funding Exemptive
Order) and the terms hereof shall be interpreted and construed in accordance
therewith. If, in the future, the Mixed and Shared Funding Exemptive Order
should no longer be necessary under applicable law, then Article VII shall no
longer apply.
ARTICLE X. TERMINATION
10.1.This Agreement shall continue in full force and effect until
the first to occur of:
(a) termination by any party, for any reason with respect to some
or all Designated Portfolios, by 180 days advance written
notice delivered to the other parties; or
(b) termination by the Company by written notice to the Fund and
the Underwriter based upon the Company's determination that
shares of the Fund are not reasonably available to meet the
requirements of the Contracts; or
(c) termination by the Company by written notice to the Fund and
the Underwriter in the event any of the Designated Portfolio's
shares are not registered, issued or sold in accordance with
applicable state and/or federal law or such law precludes the
use of such shares as the underlying investment media of the
Contracts issued or to be issued by the Company; or
(d) termination by the Fund or Underwriter in the event that
formal administrative proceedings are instituted against the
Company by the NASD, the SEC, the Insurance Commissioner or
like official of any state or any other regulatory body
regarding the Company's duties under this Agreement or related
to the sale of the Contracts, the operation of any Account, or
the purchase of the Fund's
16
shares; provided, however, that the Fund or Underwriter
determines in its sole judgment exercised in good faith, that
any such administrative proceedings will have a material
adverse effect upon the ability of the Company to perform its
obligations under this Agreement; or
(e) termination by the Company in the event that formal
administrative proceedings are instituted against the Fund or
Underwriter by the NASD, the SEC, or any state securities or
insurance department or any other regulatory body; provided,
however, that the Company determines in its sole judgment
exercised in good faith, that any such administrative
proceedings will have a material adverse effect upon the
ability of the Fund or Underwriter to perform its obligations
under this Agreement; or
(f) termination by the Company by written notice to the Fund and
the Underwriter with respect to any Designated Portfolio in
the event that such Portfolio ceases to qualify as a Regulated
Investment Company under Subchapter M or fails to comply with
the Section 817(h) diversification requirements specified in
Article VI hereof, or if the Company reasonably believes that
such Portfolio may fail to so qualify or comply; or
(g) termination by the Fund or Underwriter by written notice to
the Company in the event that the Contracts fail to meet the
qualifications specified in Article VI hereof; or
(h) termination by either the Fund or the Underwriter by written
notice to the Company, if either one or both of the Fund or
the Underwriter respectively, shall determine, in their sole
judgment exercised in good faith, that the Company has
suffered a material adverse change in its business,
operations, financial condition, or prospects since the date
of this Agreement or is the subject of material adverse
publicity; or
(i) termination by the Company by written notice to the Fund and
the Underwriter, if the Company shall determine, in its sole
judgment exercised in good faith, that the Fund, Adviser, or
the Underwriter 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
(j) termination by the Company upon any substitution of the shares
of another investment company or series thereof for shares of
a Designated Portfolio of the Fund in accordance with the
terms of the Contracts, provided that the Company has given at
least 45 days prior written notice to the Fund and Underwriter
of the date of substitution; or
(k) termination by any party in the event that the Fund's Board of
Trustees determines that a material irreconcilable conflict
exists as provided in Article VII.
10.2. Notwithstanding any termination of this Agreement, the Fund
and the Underwriter shall, at the option of the Company, continue to make
available additional shares of the
17
Fund pursuant to the terms and conditions of this Agreement, for all Contracts
in effect on the effective date of termination of this Agreement (hereinafter
referred to as "Existing Contracts"), unless the Underwriter requests that the
Company seek an order pursuant to Section 26(b) of the 1940 Act to permit the
substitution of other securities for the shares of the Designated Portfolios.
The Underwriter agrees to split the cost of seeking such an order, and the
Company agrees that it shall reasonably cooperate with the Underwriter and seek
such an order upon request. Specifically, the owners of the Existing Contracts
may 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 (subject to any such election by the
Underwriter). The parties agree that this Section 10.2 shall not apply to any
terminations under Article VII and the effect of such Article VII terminations
shall be governed by Article VII of this Agreement. The parties further agree
that this Section 10.2 shall not apply to any terminations under Section 10.1(g)
of this Agreement.
10.3. The Company shall not redeem Fund shares attributable to the
Contracts (as opposed to Fund shares attributable to the Company's assets held
in the Account) except (i) as necessary to implement Contract owner initiated or
approved transactions, (ii) 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"), (iii) upon 45 days
prior written notice to the Fund and Underwriter, as permitted by an order of
the SEC pursuant to Section 26(b) of the 1940 Act, but only if a substitution of
other securities for the shares of the Designated Portfolios is consistent with
the terms of the Contracts, or (iv) as permitted under the terms of the
Contract. Upon request, the Company will promptly furnish to the Fund and the
Underwriter reasonable assurance that any redemption pursuant to clause (ii)
above is a Legally Required Redemption. Furthermore, except in cases where
permitted under the terms of the Contacts, the Company shall not prevent
Contract owners from allocating payments to a Portfolio that was otherwise
available under the Contracts without first giving the Fund or the Underwriter
45 days notice of its intention to do so.
10.4. Notwithstanding any termination of this Agreement, each
party's obligation under Article VIII to indemnify the other parties shall
survive.
ARTICLE XI. NOTICES
Any notice shall be sufficiently given when sent by registered
or certified mail to the other party at the address of such party set forth
below or at such other address as such party may from time to time specify in
writing to the other party.
If to the Fund: PIMCO Variable Insurance Trust
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
If to the Company: Jefferson Pilot Financial Insurance Co.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Law Department
If to Underwriter: PIMCO Funds Distributors LLC
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
18
ARTICLE XII. MISCELLANEOUS
12.1. All persons dealing with the Fund must look solely to the
property of the Fund, and in the case of a series company, the respective
Designated Portfolios listed on Schedule A hereto as though each such Designated
Portfolio had separately contracted with the Company and the Underwriter for the
enforcement of any claims against the Fund. The parties agree that neither the
Board, officers, agents or shareholders of the Fund assume any personal
liability or responsibility for obligations entered into by or on behalf of the
Fund.
12.2. Subject to the requirements of legal process and regulatory
authority, each party hereto shall treat as confidential the names and addresses
of the owners of the Contracts and all information reasonably identified as
confidential in writing by any other party hereto and, except as permitted by
this Agreement, shall not disclose, disseminate or utilize such names and
addresses and other confidential information without the express written consent
of the affected party until such time as such information has come into the
public domain.
12.3. 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.
12.4. This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
12.5. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of the
Agreement shall not be affected thereby.
12.6. Each party hereto shall cooperate with each other party and
all appropriate governmental authorities (including without limitation the SEC,
the NASD, 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.
Notwithstanding the generality of the foregoing, each party hereto further
agrees to furnish the Nebraska and New Jersey Insurance Commissioners with any
information or reports in connection with services provided under this Agreement
which such Commissioner may request in order to ascertain whether the .variable
annuity operations of the Company are being conducted in a manner consistent
with the Nebraska variable annuity laws and regulations and any other applicable
law or regulations.
12.7. The rights, remedies and obligations contained in this
Agreement are cumulative and are in addition to any and all rights, remedies,
and obligations, at law or in equity, which the parties hereto are entitled to
under state and federal laws.
12.8. This Agreement or any of the rights and obligations hereunder
may not be assigned by any party without the prior written consent of all
parties hereto.
12.9. The Company shall furnish, or shall cause to be furnished, to
the Fund or its designee copies of the following reports:
(a) the Company's annual statement (prepared under statutory
accounting principles) and annual report (prepared under
generally accepted accounting principles) filed with any
state or federal regulatory body or otherwise made available
to the
19
public, as soon as practicable and in any event within
90 days after the end of each fiscal year; and
(b) any registration statement (without exhibits) and financial
reports of the Company filed with the Securities and Exchange
Commission or any state insurance regulatory, as soon as
practicable after the filing thereof.
Signatures located on the following page
20
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed in its name and on its behalf by its duly authorized representative
and its seal to be hereunder affixed hereto as of the date specified below.
JEFFERSON PILOT FINANCIAL INSURANCE COMPANY
By its authorized officer
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------
Title: Senior Vice President
---------------------------
Date: May 10, 2001
----------------------------
JEFFERSON PILOT LIFE AMERICA INSURANCE COMPANY
By its authorized officer
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------
Title: Senior Vice President
---------------------------
Date: May 10, 2001
----------------------------
PIMCO VARIABLE INSURANCE TRUST
By its authorized officer
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------
Title: Chairman
---------------------------
Date: June 14, 2001
----------------------------
PIMCO FUNDS DISTRIBUTORS LLC
By its authorized officer
By: /s/ ▇▇▇▇▇▇ ▇.▇▇▇▇▇▇, ▇▇.
------------------------------
Name: ▇▇▇▇▇▇ ▇.▇▇▇▇▇▇, ▇▇.
----------------------------
Title: Exec. VP
---------------------------
Date: 5-29-01
----------------------------
21
Schedule A
PIMCO VARIABLE INSURANCE TRUST PORTFOLIOS:
PIMCO Total Return Bond Portfolio, Administrative Class
SEGREGATED ASSET ACCOUNTS:
Dated May 1, 2001