FUND PARTICIPATION AGREEMENT
This AGREEMENT is made this ___ day of ______________________, 2001,
by and between _______ American Family Life Insurance Company (the
"Insurer"), a life insurance company domiciled in Wisconsin, on its behalf
and on behalf of the segregated asset accounts of the Insurer listed on
Exhibit A to this Agreement (the "Separate Accounts"); Insurance Series (the
"Fund"), a Massachusetts business trust; and Federated Securities Corp. (the
"Distributor"), a Pennsylvania corporation.
W I T N E S S E T H
WHEREAS, the Fund is registered with the Securities and Exchange
Commission ("SEC") as an open-end management investment company under the
Investment Company Act of 1940, as amended ("1940 Act") and the Fund is
authorized to issue separate classes of shares of beneficial interest
("shares"), each representing an interest in a separate portfolio of assets
known as a "portfolio" and each portfolio has its own investment objective,
policies, and limitations; and
WHEREAS, the Fund is available to offer shares of one or more of its
portfolios to separate accounts of insurance companies that fund variable
annuity contracts ("Variable Contracts") and to serve as an investment medium
for Variable Contracts offered by insurance companies that have entered into
participation agreements substantially similar to this agreement
("Participating Insurance Companies"), and the Fund will be made available in
the future to offer shares of one or more of its portfolios to separate
accounts of insurance companies that fund variable life insurance policies
(at which time such policies would also be "Variable Contracts" hereunder),
and
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WHEREAS, the Fund is currently comprised of thirteen separate
portfolios, and other portfolios may be established in the future; and
WHEREAS, the Fund has obtained an order from the SEC dated December
29, 1993 (File No. 812-8620), 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 1940 Act
and Rules 6e-2(b)(15) and 6e-3(T)(b)(15) thereunder, to the extent necessary
to permit shares of the Fund to be sold to and held by variable annuity and
variable life insurance separate accounts of life insurance companies that
may or may not be affiliated with one another (hereinafter the "Mixed and
Shared Funding Exemptive Order"); and
WHEREAS, the Distributor is registered as a broker-dealer with the
SEC under the Securities Exchange Act of 1934, as amended ("1934 Act"), and
is a member in good standing of the National Association of Securities
Dealers, Inc. ("NASD"); and
WHEREAS, Federated Investment Management Company (the "Adviser") is
the investment adviser to the Fund and is a business trust duly organized,
validly existing, and in good standing under the laws of the State of
Delaware, and is registered with the SEC as an investment adviser under the
Investment Advisers Act of 1940 and is registered or licensed as an
investment adviser under the laws of all jurisdictions in which its
activities require it to be so registered or licensed, except where the
failure to be so licensed would not have a material adverse effect on its
business; and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Insurer wishes to purchase shares of one or more of the
Fund's portfolios on behalf of its Separate Accounts to serve as an
investment medium for
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Variable Contracts funded by the Separate Accounts, and the Distributor is
authorized to sell shares of the Fund's portfolios;
NOW, THEREFORE, in consideration of the foregoing and the mutual
promises and covenants hereinafter set forth, the parties hereby agree as
follows:
ARTICLE I. SALE OF FUND SHARES
1.1 The Distributor agrees to sell to the Insurer those shares of
the portfolios offered and made available by the Fund and identified on
Exhibit B ("Portfolios") that the Insurer orders on behalf of its Separate
Accounts, and agrees to execute such orders on each day on which the Fund
calculates its net asset value pursuant to rules of the SEC ("business day")
at the net asset value next computed after receipt and acceptance by the Fund
or its agent of the order for the shares of the Fund.
1.2 The Fund agrees to make available on each business day shares of
the Portfolios for purchase at the applicable net asset value per share by
the Insurer on behalf of its Separate Accounts; provided, however, that the
Board of Trustees of the Fund may refuse to sell shares of any Portfolio to
any person, or suspend or terminate the offering of shares of any Portfolio,
if such action is required by law or by regulatory authorities having
jurisdiction or is, in the sole discretion of the Trustees, acting in good
faith and in light of the Trustees' fiduciary duties under applicable law,
necessary in the best interests of the shareholders of any Portfolio (it
being understood that for this purpose shareholders means Variable contract
owners). Notice of election to suspend or terminate shall be furnished by the
Fund, said termination to be effective 10 business days after receipt of such
notice by the Insurer in order to give the Insurer sufficient time to take
appropriate steps in response to such suspension or termination.
3
1.3 The Fund and the Distributor agree that shares of the Portfolios
of the Fund will be sold only to Participating Insurance Companies, their
separate accounts, and other persons consistent with each Portfolio being
adequately diversified pursuant to Section 817(h) of the Internal Revenue
Code of 1986, as amended ("Code"), and the regulations thereunder. No shares
of any Portfolio will be sold directly to the general public to the extent
not permitted by applicable tax law.
1.4 The Fund and the Distributor will not sell shares of the
Portfolios to any insurance company or separate account unless an agreement
containing provisions substantially the same as the provisions in Articles I,
II and IV of this Agreement is in effect to govern such sales.
1.5 Upon receipt of a request for redemption in proper form from the
Insurer, the Fund agrees to redeem any full or fractional shares of the
Portfolios held by the Insurer, executing such requests on each business day
at the net asset value next computed after receipt and acceptance by the Fund
or its agent of the request for redemption, except that the Fund reserves the
right to suspend the right of redemption, consistent with Section 22(e) of
the 1940 Act and any rules thereunder. Such redemption shall be paid
consistent with applicable rules of the SEC and procedures and policies of
the Fund as described in the current prospectus and in this Agreement. The
Fund agrees to notify the Insurer at least 10 business days prior to any
changes in the procedures governing purchases and redemptions of portfolio
shares which would affect the Insurer's obligations under this Agreement.
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1.6 For purposes of Sections 1.1, 1.2 and 1.5, the Insurer shall be
the agent of the Fund for the limited purpose of receiving and accepting
purchase and redemption orders from each Separate Account and receipt of such
orders by 4:00 p.m. Eastern time by the Insurer shall be deemed to be receipt
by the Fund for purposes of Rule 22c-1 of the 1940 Act; provided that the
Insurer will use its best efforts to provide notice of such orders to the
Fund on the next following business day prior to 10:00 a.m. Eastern time on
such day.
1.7 The Insurer agrees to purchase and redeem the shares of each
Portfolio in accordance with the provisions of the current prospectus for the
Fund. The Fund agrees to notify the Insurer at least 10 business days prior
to any changes in the procedures governing purchases and redemptions of
portfolio shares, which would affect the Insurer's obligations under this
Agreement.
1.8 The Insurer shall pay for shares of the Portfolio on the next
business day after it places an order to purchase shares of the Portfolio.
Payment shall be in federal funds transmitted by wire. For purposes of
Section 2.11, upon receipt by the Fund of the federal funds so wired, such
funds shall cease to be the responsibility of the Insurer and shall become
the responsibility of the Fund.
1.9 Issuance and transfer of shares of the Portfolios will be by
book entry only unless otherwise agreed by the Fund. Stock certificates will
not be issued to the Insurer or the Separate Accounts unless otherwise agreed
by the Fund. Shares ordered from the Fund will be recorded in an appropriate
title for the Separate Accounts or the appropriate subaccounts of the
Separate Accounts.
1.10 The Fund shall furnish same day notice (by wire or telephone,
followed by written confirmation) to the Insurer of any income dividends or
capital gain
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distributions payable on the shares of the Portfolios. The Insurer hereby
elects to reinvest in the Portfolio all such dividends and distributions as
are payable on a Portfolio's shares and to receive such dividends and
distributions in additional shares of that Portfolio. The Insurer reserves
the right to revoke this election in writing and to receive all such
dividends and distributions in cash. The Fund shall notify the Insurer of the
number of shares so issued as payment of such dividends and distributions.
1.11 The Fund shall instruct its recordkeeping agent to advise the
Insurer on each business day of the net asset value per share for each
Portfolio as soon as reasonably practical after the net asset value per share
is calculated and shall use its best efforts to make such net asset value per
share available by 7:00 p.m. Eastern time. If the Fund is unable to meet the
7:00 p.m. time stated herein, it shall provide additional time for the
Insurer to place orders for the purchase and redemption of shares and make
any applicable purchase payments.
ARTICLE II. REPRESENTATIONS AND WARRANTIES
2.1 The Insurer represents and warrants that it is an insurance
company duly organized and in good standing under applicable law and that it
is taxed as an insurance company under Subchapter L of the Code.
2.2 The Insurer represents and warrants that it has legally and
validly established each of the Separate Accounts as a segregated asset
account under the Wisconsin Insurance Code, and that each of the Separate
Accounts is a validly existing segregated asset account under applicable
federal and state law.
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2.3 The Insurer represents and warrants that the Variable Contracts
issued by the Insurer or interests in the Separate Accounts under such
Variable Contracts (1) are or, prior to issuance, will be registered as
securities under the Securities Act of 1933 ("1933 Act") or, alternatively,
(2) 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 ▇▇▇▇ ▇▇▇.
2.4 The Insurer represents and warrants that each of the Separate
Accounts (1) has been registered as a unit investment trust in accordance
with the provisions of the 1940 Act or, alternatively, (2) has not been
registered in proper reliance upon an exclusion from registration under the
▇▇▇▇ ▇▇▇.
2.5 Subject to the Fund's compliance with applicable diversification
requirements, the Insurer represents that it believes, in good faith, that
the Variable Contracts issued by the Insurer are currently treated as annuity
contracts or life insurance policies (which may include modified life
endowment contracts), whichever is appropriate, under applicable provisions
of the Code.
2.6 The Fund represents and warrants that it is duly organized as a
business trust under the laws of the Commonwealth of Massachusetts, and is in
good standing under applicable law.
2.7 The Fund represents and warrants that Fund shares sold pursuant
to this Agreement are registered under the 1933 Act, duly authorized for
issuance and sold in compliance with all applicable federal and state laws
and that the Fund is and shall remain registered as an open-end management
investment company under the 1940 Act.
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2.8 The Fund represents that it believes, in good faith, that the
Portfolios currently comply with the diversification provisions of Section
817(h) of the Code and the regulations issued thereunder relating to the
diversification requirements for variable life insurance policies and
variable annuity contracts.
2.9 The Fund represents that it is currently qualified as a
Regulated Investment Company under Subchapter M of the Code.
2.10 The Distributor 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 Distributor represents and warrants that is duly organized and in good
standing under the laws of the State of Pennsylvania.
2.11 The Fund and the Distributor represent and warrant that all of
their directors, officers, employees, investment advisers, and other
individuals/entities dealing with 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
minimal 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.
ARTICLE III. GENERAL DUTIES
3.1 The Fund shall take all such actions as are necessary to permit
the sale of the shares of each Portfolio to the Separate Accounts, including
maintaining its registration as an investment company under the 1940 Act, and
registering the shares of
8
the Portfolios sold to the Separate Accounts under the 1933 Act for so long
as required by applicable law. The Fund shall amend its Registration
Statement filed with the SEC under the 1933 Act and the 1940 Act from time to
time as required in order to effect the continuous offering of the shares of
the Portfolios. The Fund shall register and qualify the shares for sale in
accordance with the laws of the various states to the extent deemed necessary
by the Fund or the Distributor.
3.2 The Fund shall make every effort to maintain qualification of
each Portfolio as a Regulated Investment Company under Subchapter M of the
Code (or any successor or similar provision) and shall notify the Insurer
immediately upon having a reasonable basis for believing that a Portfolio has
ceased to so qualify or that it might not so qualify in the future.
3.3 The Fund shall make every effort to enable each Portfolio to
comply with the diversification provisions of Section 817(h) of the Code and
the regulations issued thereunder relating to the diversification
requirements for variable life insurance policies and variable annuity
contracts and any prospective amendments or other modifications to Section
817 or regulations thereunder, and shall notify the Insurer immediately upon
having a reasonable basis for believing that any Portfolio has ceased to
comply.
3.4 The Insurer shall take all such actions as are necessary under
applicable federal and state law to permit the sale of the Variable Contracts
issued by the Insurer, including registering each Separate Account as an
investment company to the extent required under the 1940 Act, and registering
the Variable Contracts or interests in the Separate Accounts under the
Variable Contracts to the extent required under the 1933
9
Act, and obtaining all necessary approvals to offer the Variable Contracts
from state insurance commissioners.
3.5 The Insurer shall make every effort to maintain the treatment of
the Variable Contracts issued by the Insurer as annuity contracts or life
insurance policies, whichever is appropriate, under applicable provisions of
the Code, and shall notify the Fund and the Distributor immediately upon
having a reasonable basis for believing that such Variable Contracts have
ceased to be so treated or that they might not be so treated in the future.
3.6 The Insurer shall offer and sell the Variable Contracts issued
by the Insurer in accordance with applicable provisions of the 1933 Act, the
1934 Act, the 1940 Act, the NASD Rules of Fair Practice, and state law
respecting the offering of variable life insurance policies and variable
annuity contracts.
3.7 The Distributor shall sell and distribute the shares of the
Portfolios of the Fund in accordance with the applicable provisions of the
1933 Act, the 1934 Act, the 1940 Act, the NASD Rules of Fair Practice, and
state law.
3.8 A majority of the Board of Trustees of the Fund shall consist of
persons who are not "interested persons" of the Fund ("disinterested
Trustees"), as defined by Section 2(a)(19) of the 1940 Act and the rules
thereunder, and as modified by any applicable orders of the SEC, except that
if this provision of this Section 3.8 is not met by reason of the death,
disqualification, or bona fide resignation of any Trustee or Trustees, then
the operation of this provision shall be suspended (a) for a period of 45
days if the vacancy or vacancies may be filled by the Fund's Board; (b) for a
period of
10
60 days if a vote of shareholders is required to fill the vacancy or
vacancies; or (c) for such longer period as the SEC may prescribe by order
upon application.
3.9 The Insurer will not in any way recommend any proposal or oppose
or interfere with any reasonable proposal submitted by the Fund at a meeting
of owners of Variable Contracts or shareholders of the Fund, unless such
proposal is not in the best interests of Contract Owners, and will in no way
recommend, oppose, or interfere with the solicitation of proxies for Fund
shares held by Contract Owners, without the prior written consent of the
Fund, which consent may be withheld in the Fund's sole discretion.
3.10 Each party hereto shall cooperate with each other party and all
appropriate governmental authorities having jurisdiction (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.
ARTICLE IV. POTENTIAL CONFLICTS
4.1 During such time as the Fund engages in Mixed Funding or Shared
Funding, the parties hereto shall comply with the conditions in this Article
IV.
4.2 The Fund's Board of Trustees shall monitor the Fund for the
existence of any material irreconcilable conflict (1) between the interests
of owners of variable annuity contracts and variable life insurance policies,
and (2) between the interests of owners of Variable Contracts ("Variable
Contract Owners") issued by different Participating Life Insurance Companies
that invest in the Fund. A material irreconcilable 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
11
insurance, tax, or securities laws or regulations, or a public ruling,
private letter ruling, no-action or interpretive letter, or any similar
action by insurance, tax, or securities regulatory authorities; (c) an
administrative or judicial decision in any relevant proceeding; (d) the
manner in which the investments of any Portfolio of the Fund are being
managed; (e) a difference in voting instructions given by variable annuity
and variable life insurance contract owners; or (f) a decision by a
Participating Insurance Company to disregard the voting instructions of
Variable Contract Owners.
4.3 The Insurer agrees that it shall report any potential or
existing conflicts of which it is aware to the Fund's Board of Trustees. The
Insurer will be responsible for assisting the Board of Trustees of the Fund
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 Insurer to inform the Board whenever
Variable Contract Owner voting instructions are disregarded. The Insurer
shall carry out its responsibility under this Section 4.3 with a view only to
the interests of the Variable Contract Owners.
4.4 The Insurer agrees that in the event that it is determined by a
majority of the Board of Trustees of the Fund or a majority of the Fund's
disinterested Trustees that a material irreconcilable conflict exists, the
Insurer shall, at its expense and to the extent reasonably practicable (as
determined by a majority of the disinterested Trustees of the Board of the
Fund), 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 another portfolio of the Fund, or submitting the question as to
whether such segregation should be
12
implemented to a vote of all affected Variable Contract Owners and, as
appropriate, segregating the assets of any appropriate group (I.E., annuity
contract owners or life insurance contract owners of contracts issued by one
or more Participating Insurance Companies), that votes in favor of such
segregation, or offering to the affected Variable Contract Owners the option
of making such a change; and (2) establishing a new registered management
investment company or managed separate account. If a material irreconcilable
conflict arises because of the Insurer's decision to disregard Variable
Contract Owners' voting instructions and that decision represents a minority
position or would preclude a majority vote, the Insurer shall be required, at
the Fund's election, to withdraw the Separate Accounts' investment in the
Fund, 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 Trustees, and no
charge or penalty will be imposed as a result of such withdrawal. These
responsibilities shall be carried out with a view only to the interests of
the Variable Contract Owners. A majority of the disinterested Trustees of the
Fund shall determine whether or not any proposed action adequately remedies
any material irreconcilable conflict, but in no event will the Fund or its
investment adviser or the Distributor be required to establish a new funding
medium for any Variable Contract. The Insurer shall not be required by this
Section 4.4 to establish a new funding medium for any Variable Contract if
any offer to do so has been declined by vote of a majority of Variable
Contract Owners materially adversely affected by the material irreconcilable
conflict.
4.5 The Insurer, at least annually, shall submit to the Fund's Board
of Trustees such reports, materials, or data as the Board reasonably may
request so that the Trustees of the Fund may fully carry out the obligations
imposed upon the Board by the conditions contained in the application for the
Mixed and Shared Funding
13
Exemptive Order and said reports, materials, and data shall be submitted more
frequently if deemed appropriate by the Board.
4.6 All reports of potential or existing conflicts received by the
Fund's Board of Trustees, and all Board action with regard to determining the
existence of a conflict, notifying Participating Insurance Companies of a
conflict, and determining whether any proposed action adequately remedies a
conflict, shall be properly recorded in the minutes of the Board of Trustees
of the Fund or other appropriate records, and such minutes or other records
shall be made available to the SEC upon request.
4.7 The Board of Trustees of the Fund shall promptly notify the
Insurer in writing of its determination of the existence of an irreconcilable
material conflict and its implications.
ARTICLE V. PROSPECTUSES AND PROXY STATEMENTS; VOTING
5.1 The Insurer shall distribute such prospectuses, proxy statements
and periodic reports of the Fund to the owners of Variable Contracts issued
by the Insurer as required to be distributed to such Variable Contract Owners
under applicable federal or state law.
5.2 The Distributor shall provide the Insurer with as many copies of
the current prospectus of the Fund as the Insurer may reasonably request. If
requested by the Insurer in lieu thereof, the Fund shall provide such
documentation (including a final copy of the Fund's prospectus as set in type
or in camera-ready copy) and other assistance as is reasonably necessary in
order for the Insurer to either print a stand-alone document or print
together in one document the current prospectus for the
14
Variable Contracts issued by the Insurer and the current prospectus for the
Fund, or a document combining the Fund prospectus with prospectuses of other
funds in which the Variable Contracts may be invested. The Fund shall bear
the expense of printing copies of its current prospectus that will be
distributed to existing Variable Contract Owners, and the Insurer shall bear
the expense of printing copies of the Fund's prospectus that are used in
connection with offering the Variable Contracts issued by the Insurer.
5.3 The Fund and the Distributor shall provide, at the Fund's
expense, such copies of the Fund's current Statement of Additional
Information ("SAI") as may reasonably be requested, to the Insurer and to any
owner of a Variable Contract issued by the Insurer who requests such SAI.
5.4 The Fund, at its expense, shall provide the Insurer with copies
of its proxy statements, periodic reports to shareholders, and other
communications to shareholders in such quantity as the Insurer shall
reasonably require for purposes of distributing to owners of Variable
Contracts issued by the Insurer. The Fund, at the Insurer's expense, shall
provide the Insurer with copies of its periodic reports to shareholders and
other communications to shareholders in such quantity as the Insurer shall
reasonably request for use in connection with offering the Variable Contracts
issued by the Insurer. If requested by the Insurer in lieu thereof, the Fund
shall provide such documentation (including a final copy of the Fund's proxy
statements, periodic reports to shareholders, and other communications to
shareholders, as set in type or in camera-ready copy) and other assistance as
reasonably necessary in order for the Insurer to print such shareholder
communications for distribution to owners or prospective purchasers of
Variable Contracts issued by the Insurer.
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5.5 The Fund will provide the Insurer with as much advance 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 Separate Account. The Fund will work with the Insurer
to the extent that it is reasonable, so as to enable the Insurer to solicit
proxies from Variable Contract owners, or to make changes to its registration
statement or prospectus, in an orderly manner. The Fund will make reasonable
efforts to attempt to have changes affecting the Variable Contract
prospectuses become effective simultaneously with the annual updates for such
prospectuses.
5.6 For so long as the SEC interprets the 1940 Act to require
pass-through voting by Participating Insurance Companies whose Separate
Accounts are registered as investment companies under the 1940 Act, the
Insurer shall vote shares of each Portfolio of the Fund held in a Separate
Account or a subaccount thereof, whether or not registered under the 1940
Act, at regular and special meetings of the Fund in accordance with
instructions timely received by the Insurer (or its designated agent) from
owners of Variable Contracts funded by such Separate Account or subaccount
thereof having a voting interest in the Portfolio. The Insurer shall vote
shares of a Portfolio of the Fund held in a Separate Account or a subaccount
thereof that are attributable to the Variable Contracts as to which no timely
instructions are received, as well as shares held in such Separate Account or
subaccount thereof that are not attributable to the Variable Contracts and
owned beneficially by the Insurer (resulting from charges against the
Variable Contracts or otherwise), in the same proportion as the votes cast by
owners of the Variable Contracts funded by that Separate Account or
subaccount thereof having a voting interest in the Portfolio from whom
instructions have been timely received. The Insurer shall vote shares of each
Portfolio of the Fund
16
held in its general account, if any, in the same proportion as the votes cast
with respect to shares of the Portfolio held in all Separate Accounts of the
Insurer or subaccounts thereof, in the aggregate.
5.6 During such time as the Fund engages in Mixed Funding or Shared
Funding, the Fund shall disclose in its prospectus that (1) the Fund is
intended to be a funding vehicle for variable annuity and variable life
insurance contracts offered by various insurance companies, (2) material
irreconcilable conflicts possibly may arise, and (3) the Board of Trustees of
the Fund will monitor events in order to identify the existence of any
material irreconcilable conflicts and to determine what action, if any,
should be taken in response to any such conflict. The Fund hereby notifies
the Insurer that prospectus disclosure may be appropriate regarding potential
risks of offering shares of the Fund to separate accounts funding both
variable annuity contracts and variable life insurance policies and to
separate accounts funding Variable Contracts of unaffiliated life insurance
companies.
ARTICLE VI. SALES MATERIAL AND INFORMATION
6.1 The Insurer 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 (or any Portfolio thereof) or its investment
adviser or the Distributor is named at least 15 days prior to the anticipated
use of such material, and no such sales literature or other promotional
material shall be used unless the Fund and the Distributor or the designee of
either approve the material or do not respond with comments on the material
within 10 days from receipt of the material. The Fund, the Distributor, or
its designee reserves the right to reasonably object to the continued use of
any such literature or other promotional material in which the Fund or the
Adviser or the
17
Distributor is named, and no such material shall be used in the Fund, the
Distributor, or its designee so object.
6.2 The Insurer agrees that neither it nor any of its affiliates or
agents shall give any information or make any representations or statements
on behalf of the Fund or concerning the Fund 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 and by the Distributor or its designee, except with the
permission of the Fund or its designee and the Distributor or its designee.
6.3 The Fund or the Distributor or the designee of either shall
furnish to the Insurer or its designee, each piece of sales literature or
other promotional material in which the Insurer or its Separate Accounts are
named at least 15 days prior to the anticipated use of such material, and no
such material shall be used unless the Insurer or its designee approves the
material or does not respond with comments on the material within 10 days
from receipt of the material. The Insurer reserves the right to reasonably
object at any time thereafter to the continued use of any such sales
literature or other promotional material in which the Insurer or the Separate
Accounts or the Variable Contracts are named, and no such material shall be
used thereafter if the Insurer so objects.
6.4 The Fund and the Distributor agree that each and the affiliates
and agents of each shall not give any information or make any representations
on behalf of the Insurer or concerning the Insurer, the Separate Accounts, or
the Variable Contracts issued by the Insurer, other than the information or
representations contained in a
18
registration statement or prospectus for such Variable Contracts, as such
registration statement and prospectus may be amended or supplemented from
time to time, or in reports for the Separate Accounts or prepared for
distribution to owners of such Variable Contracts, or in sales literature or
other promotional material approved by the Insurer or its designee, except
with the permission of the Insurer.
6.5 The Fund will provide to the Insurer at least one complete copy
of the Mixed and Shared Funding Exemptive Application and any amendments
thereto, all prospectuses, Statements of Additional Information, reports,
proxy statements and other voting solicitation materials, applications for
exemptions, request for no-action letters, and notices, orders or responses
relating thereto and all amendments and supplements to any of the above, that
relate to the Fund or its shares, promptly after the filing of such document
with the SEC or the NASD.
6.6 The Insurer will provide to the Fund all prospectuses (which
shall include an offering memorandum if the Variable Contracts issued by the
Insurer or interests therein are not registered under the 1933 Act),
Statements of Additional Information, reports, solicitations for voting
instructions relating to the Fund, applications for exemptions, request for
no-action letters, and notices, orders or responses relating thereto and all
amendments or supplements to any of the above that relate to the Variable
Contracts issued by the Insurer or the Separate Accounts which utilize the
Fund as an underlying investment medium, promptly after the filing of such
document with the SEC or the NASD.
6.7 For purposes of this Article VI, 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,
19
television, telephone or tape recording, videotape display, signs or
billboards, motion pictures, telephone directories (other than routine
listings), electronic media, computerized media, or other public media),
sales literature (I.E., any written or electronic communication distributed
or made generally available to customers or the public, including, but not
limited to, 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.
ARTICLE VII. INDEMNIFICATION
7.1 INDEMNIFICATION BY THE INSURER
7.1(a) The Insurer agrees to indemnify and hold harmless
the Fund, each of its Trustees and officers, the Adviser, and the Distributor
(collectively, the "Indemnified Parties" for purposes of this Section 7.1)
against any and all losses, claims, damages, liabilities (including amounts
paid in settlement with the written consent of the Insurer) or litigation
expenses (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 litigation
expenses are related to the sale or acquisition of the Fund's shares or the
Variable Contracts issued by the Insurer 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 (which
shall include an offering memorandum) for the Variable
Contracts issued by the Insurer or advertisement or sales
literature for such Variable 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
20
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 Insurer by or on behalf of the Fund for use in the
registration statement or prospectus for the Variable
Contracts issued by the Insurer or advertisement or sales
literature (or any amendment or supplement) or otherwise for
use in connection with the sale of such Variable Contracts or
Fund shares; or
(ii) arise out of or as a result of any statement or
representation (other than statements or representations
contained in the registration statement, prospectus or
advertisement or sales literature of the Fund not supplied by
the Insurer or persons under its control) or wrongful conduct
of the Insurer or any of its affiliates, employees or agents
with respect to the sale or distribution of the Variable
Contracts issued by the Insurer or the Fund shares; or
(iii) arise out of any untrue statement or alleged
untrue statement of a material fact contained in a
registration statement, prospectus, or advertisement 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 Insurer; or
(iv) arise out of or result from any material breach
of any representation and/or warranty made by the Insurer in
this Agreement or arise out of or result from any other
material breach of this Agreement by the Insurer;
except to the extent provided in Sections 7.1(b) and 7.1(c)
hereof.
7.1(b) The Insurer shall not be liable under this
indemnification provision with respect to any losses, claims, damages,
liabilities or litigation expenses to which an Indemnified Party would
otherwise be subject by reason of willful misfeasance, bad faith, or gross
negligence in the performance of the Indemnified Party's duties or by reason
of the Indemnified Party's reckless disregard of obligations or duties under
this Agreement or to the Fund.
21
7.1(c) The Insurer shall not be liable under this
indemnification provision with respect to any claim made against an
Indemnified Party unless such Party shall have notified the Insurer 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 Party shall have received notice
of such service on any designated agent), but failure to notify the Insurer
of any such claim shall not relieve the Insurer 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 Insurer shall be
entitled to participate, at its own expense, in the defense of such action.
The Insurer also shall be entitled to assume the defense thereof, with
counsel satisfactory to the party named in the action. After notice from the
Insurer to such party of the Insurer'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 Insurer 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.
7.1(d) The Indemnified Parties shall promptly notify the
Insurer of the commencement of any litigation or proceedings against them in
connection with the issuance or sale of the Fund shares or the Variable
Contracts issued by the Insurer or the operation of the Fund.
7.2 INDEMNIFICATION BY THE DISTRIBUTOR
7.2(a) The Distributor agrees to indemnify and hold harmless
the Insurer, its affiliated principal underwriter of the Variable Contracts,
and each of
22
their directors and officers and any affiliated person of the Insurer within
the meaning of Section 2(a)(3) of the 1940 Act (collectively, the
"Indemnified Parties" for purposes of this Section 7.2) against any and all
losses, claims, damages, liabilities (including amounts paid in settlement
with the written consent of the Distributor) or litigation expenses
(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 litigation expenses
are related to the sale or acquisition of the Fund's shares or the Variable
Contracts issued by the Insurer 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 Distributor or
the Fund or the designee of either by or on behalf of the
Insurer for use in the registration statement or prospectus
for the Fund or in advertisements or sales literature (or any
amendment or supplement) or otherwise 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 Variable Contracts
issued by the Insurer or Fund shares; or
(ii) arise out of or as a result of any statement or
representations (other than statements or representations
contained in the registration statement, prospectus or
advertisement or sales literature for the Variable Contracts
not supplied by the Distributor or any employees or agents
thereof) or wrongful conduct of the Fund or Distributor, or
the affiliates, employees, or agents of the Fund or the
Distributor with respect to the sale or distribution of the
Variable Contracts issued by the Insurer or Fund shares; or
(iii) arise out of any untrue statement or alleged
untrue statement of a material fact contained in a
registration statement, prospectus, or advertisement or sales
literature covering the Variable Contracts issued
23
by the Insurer, 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 Insurer by or on behalf of the Distributor or
the Fund; or
(iv) arise out of or result from any material breach
of any representation and/or warranty made by the Distributor
or the Fund in this Agreement or arise out of or result from
any other material breach of this Agreement by the Distributor
(including a failure, whether unintentional or in good faith
or otherwise, to comply with the diversification requirements
specified in Section 2.8 and Section 3.3 of this Agreement, or
to qualify as a regulated investment company under Subchapter
M of the Code;
except to the extent provided in Sections 7.2(b) and 7.2(c) hereof. In
addition to the foregoing, if any pricing error results in a material impact
to Contract owners, then the Distributor will use best efforts to work with
the Insurer to put such Contract owners in the same position they would have
been in if no such pricing error had occurred.
7.2(b) The Distributor shall not be liable under this
indemnification provision with respect to any losses, claims, damages,
liabilities or litigation expenses to which an Indemnified Party would
otherwise be subject by reason of willful misfeasance, bad faith, or gross
negligence in the performance of the Indemnified Party's duties or by reason
of the Indemnified Party's reckless disregard of obligations or duties under
this Agreement or to the Insurer or the Separate Accounts.
7.2(c) The Distributor shall not be liable under this
indemnification provision with respect to any claim made against an
Indemnified Party unless such Party shall have notified the Distributor in
writing within a reasonable time after the summons or other first legal
process giving information of the nature of the claim shall have been served
upon such Indemnified Party (or after such Party shall have received notice
of such service on any designated agent), but failure to notify the
Distributor of
24
any such claim shall not relieve the Distributor from any liability which it
may have to the Indemnified Party against whom such action is brought
otherwise than on account of this indemnification provision. In case any such
action is brought against the Indemnified Parties, the Distributor will be
entitled to participate, at is own expense, in the defense thereof. The
Distributor also shall be entitled to assume the defense thereof, with
counsel satisfactory to the party named in the action. After notice from the
Distributor to such party of the Distributor's election to assume the defense
thereof, the Indemnified Party shall bear the fees and expenses of any
additional counsel retained by it, and the Distributor will not be liable to
such party under this Agreement for any legal or other expense subsequently
incurred by such party independently in connection with the defense thereof
other than reasonable costs of investigation.
7.2(d) The Insurer shall promptly notify the Distributor of
the commencement of any litigation or proceedings against it or any of its
officers or directors in connection with the issuance or sale of the Variable
Contracts issued by the Insurer or the operation of the Separate Accounts.
7.3 INDEMNIFICATION BY THE FUND
7.3(a) The Fund agrees to indemnify and hold harmless the
Insurer, its affiliated principal underwriter of the Variable Contracts, and
each of their directors and officers and any affiliated person of the Insurer
within the meaning of Section 2(a)(3) of the 1940 Act (collectively, the
"Indemnified Parties" for purposes of this Section 7.3) against any and all
losses, claims, damages, liabilities (including amounts paid in settlement
with the written consent of the Fund) or litigation expenses (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
25
losses, claims, damages, liabilities or litigation expenses are related to
the sale or acquisition of the Fund's shares or the Variable Contracts issued
by the Insurer 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
advertisement 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 Distributor or
the Fund or the designee of either by or on behalf of the
Insurer for use in the registration statement or prospectus
for the Fund or in advertisements or sales literature (or any
amendment or supplement) or otherwise for use in connection
with the sale of the Variable Contracts issued by the Insurer
or Fund shares; or
(ii) arise out of or as a result of any statement or
representation (other than statements or representations
contained in the registration statement, prospectus or sales
literature for the Variable Contracts not supplied by the
Distributor or any employees or agents thereof) or wrongful
conduct of the Fund, or the affiliates, employees, or agents
of the Fund, with respect to the sale or distribution of the
Variable Contracts issued by the Insurer or Fund shares; or
(iii) arise out of any untrue statement or alleged
untrue statement of a material fact contained in a
registration statement, prospectus or advertisement or sales
literature covering the Variable Contracts issued by the
Insurer, 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 Insurer by or on behalf of the Fund; or
(iv) 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; (including a failure,
whether unintentional or in good faith or otherwise, to comply
with the diversification requirements specified in Section 2.8
and Section 3.3 of this Agreement, or to qualify as a
regulated investment company under Subchapter M of the Code).
26
except to the extent provided in Sections 7.3(b) and 7.3(c) hereof. In
addition to the foregoing, if any pricing error results in a material impact
to Contract owners, then the Fund will use best efforts to work with the
Insurer to put such Contract owners in the same position they would have been
in if no such pricing error had occurred.
7.3(b) The Fund shall not be liable under this
indemnification provision with respect to any losses, claims, damages,
liabilities or litigation expenses to which an Indemnified Party would
otherwise be subject by reason of willful misfeasance, bad faith, or gross
negligence in the performance of the Indemnified Party's duties or by reason
of the Indemnified Party's reckless disregard of obligations or duties under
this Agreement or to the Insurer or the Separate Accounts.
7.3(c) The Fund shall not be liable under this
indemnification provision with respect to any claim made against an
Indemnified Party unless such 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 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
27
by such party independently in connection with the defense thereof other than
reasonable costs of investigation.
7.3(d) The Insurer shall promptly notify the Fund of the
com-mencement of any litigation or proceedings against it or any of its
officers or directors in connection with the issuance or sale of the Variable
Contracts issued by the Insurer or the sale of the Fund's shares.
ARTICLE VIII. APPLICABLE LAW
8.1 This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the State of Wisconsin.
8.2 This Agreement shall be subject to the provisions of the 1933,
1934, and 1940 Acts, and the rules and regulations and rulings thereunder,
including such exemptions from those statutes, rules and regulations as the
SEC may grant (including, but not limited to, the Mixed and Shared Funding
Exemptive Order), and the terms hereof shall be interpreted and construed in
accordance therewith.
ARTICLE IX. TERMINATION
9.1 This Agreement shall terminate:
(a) at the option of any party upon 180 days advance
written notice to the other parties; or
(b) at the option of the Insurer if shares of the
Portfolios are not reasonably available to meet the requirements of the
Variable Contracts issued by the
28
Insurer, as determined by the Insurer, and upon prompt notice by the Insurer
to the other parties; or
(c) at the option of the Fund or the Distributor upon
institution of formal proceedings against the Insurer or its agent by the
NASD, the SEC, or any state securities or insurance department or any other
regulatory body regarding the Insurer's duties under this Agreement or
related to the sale of the Variable Contracts issued by the Insurer, the
operation of the Separate Accounts, or the purchase of the Fund shares; or
(d) at the option of the Insurer upon institution of formal
proceedings against the Fund or the Distributor or their agents by the NASD,
the SEC, or any state securities or insurance department or any other
regulatory body; or
(e) upon requisite vote of the Variable Contract Owners
having an interest in the Separate Accounts (or any subaccounts thereof) to
substitute the shares of another investment company for the corresponding
shares of the Fund or a Portfolio in accordance with the terms of the
Variable Contracts for which those shares had been selected or serve as the
underlying investment media; or
(f) in the event any of the shares of a Portfolio are not
registered, issued or sold in accordance with applicable state and/or federal
law, or such law precludes the use of such shares as the underlying
investment media of the Variable Contracts issued or to be issued by the
Insurer; or
29
(g) by any party to the Agreement upon a determination by a
majority of the Trustees of the Fund, or a majority of its disinterested
Trustees, that an irreconcilable conflict, as described in Article IV hereof,
exists; or
(h) 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
(i) by the Insurer by written notice upon the sale,
acquisition or change of control of the Adviser; or
(j) by the Insurer, the Fund or the Distributor by written
notice to the other parties upon a material breach of the Agreement by the
other party;
(k) by either the Fund or the Distributor by written notice
to the Insurer, if either one or both of the Fund or the Distributor
respectively, shall determine, in their sole judgment exercised in good
faith, that the Insurer has suffered a material adverse change in its
business, operations, financial condition or prospects since the date of this
Agreement or is the subject to material adverse publicity; or
(l) by the Insurer by written notice to the Fund and the
Underwriter, if the Insurer shall determine, in its sole judgment exercised
in good faith, that either the Fund or the Distributor has suffered a
material adverse change in its business, operations, financial condition or
prospects since the date of this Agreement or is the subject to material
adverse publicity; or
30
(m) at the option of the Insurer if the Fund or a Portfolio
fails to meet the requirements under Subchapter M of the Code for
qualification as a Regulated Investment Company specified in Section 3.2
hereof or the diversification requirements specified in Section 3.3 hereof.
9.2 Each party to this Agreement shall promptly notify the other
parties to the Agreement of the institution against such party of any such
formal proceedings as described in Sections 9.1(c) and (d) hereof. The
Insurer shall give 60 days prior written notice to the Fund of the date of
any proposed vote of Variable Contract Owners to replace the Fund's shares as
described in Section 9.1(e) hereof.
9.3 The Insurer shall not redeem Fund shares attributable to the
Variable Contracts (as contrasted with Fund shares attributable to the
Insurer's assets held in the Separate Account) except (i) as necessary to
implement Variable Contract owner initiated or approved transactions or other
Variable Contract transactions, or to resolve a conflict as contemplated by
Article IV to this agreement, or (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") or
(iii) as permitted by an order of the SEC pursuant to Section 26(b) of the
1940 Act. Upon request, the Insurer will promptly furnish to the Fund and the
Distributor the opinion of counsel for the Insurer (which counsel shall be
reasonably satisfactory to the fund and the Distributor) to the effect that
any redemption pursuant to clause (ii) above is a Legally Required
Redemption. Furthermore, except in cases where permitted under the terms of
the Variable Contracts, the Insurer shall not prevent Variable Contract
owners from allocating payments to a Portfolio that was otherwise available
under the Contracts without first giving the Fund or the Distributor 60 days
notice of its intention to do so.
31
9.4 Notwithstanding any termination of this Agreement, the Fund and
the Distributor shall at the option of the Insurer continue to make available
additional shares of the Fund pursuant to the terms and conditions of this
Agreement, for all Variable Contracts in effect on the effective date of
termination of this Agreement (hereinafter referred to as "Existing
Contracts"). Specifically, without limitation, based upon instructions from
the owners of the Existing Contracts, the Separate Accounts shall be
permitted to reallocate investments in the Portfolios of the Fund and redeem
investments in the Portfolios, and shall be permitted to invest in the
Portfolios in the event that owners of the Existing Contracts make additional
purchase payments under the Existing Contracts. If this Agreement terminates,
the parties agree that Sections 3.10, 7.1, 7.2, 7.3, 8.1, and 8.2, and, to
the extent that all or a portion of the assets of the Separate Accounts
continue to be invested in the Fund or any Portfolio of the Fund, Articles I,
II, and IV and Sections 5.5 and 5.6 will remain in effect after termination.
ARTICLE X. NOTICES
Any notice shall be sufficiently given when sent by registered or
certified mail or by overnight mail through a nationally-recognized delivery
service 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:
Insurance Series
Federated Investors Tower
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn.: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
32
If to the Distributor:
Federated Securities Corp.
Federated Investors Tower
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn.: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
If to the Insurer:
PLEASE INSERT ADDRESS AND CONTACT
ARTICLE XI: MISCELLANEOUS
11.1 The Fund and the Insurer agree that if and to the extent Rule
6e-2 or Rule 6e-3(T) under the 1940 Act is amended or if Rule 6e-3 is adopted
in final form, to the extent applicable, the Fund and the Insurer shall each
take such steps as may be necessary to comply with the Rule as amended or
adopted in final form.
11.2 A copy of the Fund's Agreement and Declaration of Trust is on
file with the Secretary of the Commonwealth of Massachusetts and notice is
hereby given that any agreements that are executed on behalf of the Fund by
any Trustee or officer of the Fund are executed in his or her capacity as
Trustee or officer and not individually. The obligations of this Agreement
shall only be binding upon the assets and property of the Fund and shall not
be binding upon any Trustee, officer or shareholder of the Fund individually.
11.3 Nothing in this Agreement shall impede the Fund's Trustees or
shareholders of the shares of the Fund's Portfolios from exercising any of
the rights provided to such Trustees or shareholders in the Fund's Agreement
and Declaration of Trust, as amended, a copy of which will be provided to the
Insurer upon request.
33
11.4 Administrative services to Variable Contract Owners shall be
the responsibility of Insurer. Insurer, on behalf of its separate accounts
will be the sole shareholder of record of Fund shares.
11.5 It is understood that the name "Federated" or any derivative
thereof or logo associated with that name is the valuable property of the
Distributor and its affiliates, and that the Insurer has the right to use
such name (or derivative or logo) only so long as this Agreement is in
effect. Upon termination of this Agreement the Insurer shall forthwith cease
to use such name (or derivative or logo).
11.6 The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions hereof
or otherwise affect their construction or effect.
11.7 This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
11.8 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.
11.9 This Agreement may not be assigned by any party to the
Agreement except with the written consent of the other parties to the
Agreement.
11.10 Subject to the requirements of legal process and regulatory
authority, each party hereto shall treat as confidential the names and
addresses of the Variable
34
Contract owners 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.
11.11 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.
35
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the day and year first above written.
INSURANCE SERIES
ATTEST: BY:
--------------------------- ------------------------------
Name: Name:
------------------------------ -----------------------------
Title: Title:
------------------------------ ----------------------------
FEDERATED SECURITIES CORP.
ATTEST: BY:
--------------------------- ------------------------------
Name: Name:
------------------------------ -----------------------------
Title: Title:
------------------------------ ----------------------------
AMERICAN FAMILY LIFE
INSURANCE COMPANY
ATTEST: BY:
--------------------------- ------------------------------
Name: Name:
------------------------------ -----------------------------
Title: Title:
------------------------------ ----------------------------
36
EXHIBIT A
American Family Variable Account I
American Family Variable Account II
37
EXHIBIT B
International Equity Fund II
Quality Bond Fund II
38