EXHIBIT 9.5
PARTICIPATION AGREEMENT
Among
▇▇▇▇▇▇ INSTITUTIONAL PRODUCTS TRUST,
▇▇▇▇▇▇ ASSOCIATES, INC.
and
AMERITAS LIFE INSURANCE CORP.
THIS AGREEMENT, made and entered into this 10th day of
December, 1996 by and among AMERITAS LIFE INSURANCE CORP.,
(hereinafter the "Insurance Company"), a Nebraska corporation, on its
own behalf and on behalf of each segregated asset account of the
Insurance Company set forth on Schedule A hereto as may be amended
from time to time (each such account hereinafter referred to as the
"Account"), ▇▇▇▇▇▇ INSTITUTIONAL PRODUCTS TRUST, a Delaware business
trust (the "Trust") and ▇▇▇▇▇▇ ASSOCIATES, INC., a Delaware
corporation ("▇▇▇▇▇▇ Associates").
WHEREAS, the Trust engages in business as an open-end
management investment company and is available to act as the
investment vehicle for variable annuity and variable life insurance
contracts to be offered by separate accounts of insurance companies
which have entered into participation agreements substantially
identical to this Agreement ("Participating Insurance Companies") and
for qualified retirement and pension plans ("Qualified Plans"); and
WHEREAS, the beneficial interest in the Trust is divided
into several series of shares, each designated a "Fund" and
representing the interest in a particular managed portfolio of
securities and other assets; and
WHEREAS, the Trust has obtained an order from the Securities
and Exchange Commission (the "Commission"), dated April 24, 1996 (File
No. 812-9852), granting Participating Insurance Companies and their
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, to the extent necessary to permit shares of the Trust to
be sold to and held by Qualified Plans and by variable annuity and
variable life insurance separate accounts of life insurance companies
that may or may not be affiliated with one another (the "Mixed and
Shared Funding Exemptive Order"); and
WHEREAS, the Trust is registered as an open-end management
investment company under the 1940 Act and the offering of its shares
is registered under the Securities Act of 1933, as amended
(hereinafter the "1933 Act"); and
WHEREAS, ▇▇▇▇▇▇ Associates is duly registered as an
investment adviser under the Investment Advisers Act of 1940 and any
applicable state securities law; and
WHEREAS, the Insurance Company has registered under the 1933
Act, or will register under the 1933 Act, certain variable annuity or
variable life insurance contracts identified by the form number(s)
listed on Schedule B to this Agreement, as amended from time to time
hereafter by mutual written agreement of all the parties hereto (the
"Contracts"); and
-1-
WHEREAS, each Account is a duly organized, validly existing
segregated asset account, established by resolution of the board of
directors of the Insurance Company on the date shown for that Account
on Schedule A hereto, to set aside and invest assets attributable to
the Contracts; and
WHEREAS, the Insurance 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 Insurance Company intends to purchase shares
in the Funds at net asset value on behalf of each Account to fund the
Contracts;
NOW, THEREFORE, in consideration of their mutual promises,
the Insurance Company, the Trust and ▇▇▇▇▇▇ Associates agree as
follows:
ARTICLE I. Sale of Trust Shares
1.1. The Trust agrees to sell to the Insurance Company
those shares of the Trust which each Account orders, executing such
orders on a daily basis at the net asset value next computed after
receipt by the Trust or its designee of the order for the shares of
the Trust. For purposes of this Section 1.1, the Insurance Company
shall be the designee of the Trust for receipt of such orders from the
Accounts and receipt by such designee shall constitute receipt by the
Trust; provided that the Trust receives notice of such order by 7:00
a.m., Mountain Time, on the next following Business Day, except as
otherwise provided by Section 1.10. In this Agreement, "Business Day"
shall mean any day on which the New York Stock Exchange is open for
trading and on which the Trust calculates its net asset value pursuant
to the rules of the Commission.
1.2. The Trust agrees to make its shares available for
purchase at the applicable net asset value per share by the Insurance
Company and its Accounts on those days on which the Trust calculates
its Funds' net asset values pursuant to rules of the Commission and
the Trust shall use reasonable efforts to calculate its Funds' net
asset values on each day on which the New York Stock Exchange is open
for trading. Notwithstanding the foregoing, the trustees of the Trust
may refuse to sell shares of any Fund to any person, or suspend or
terminate the offering of shares of any Fund if such action is
required by law or by regulatory authorities having jurisdiction or
is, in the sole discretion of the trustees of the Trust acting in good
faith and in light of their fiduciary duties under federal and any
applicable state laws, necessary in the best interests of the
shareholders of that Fund.
1.3. The Trust agrees that shares of the Trust will be sold
only to Accounts of Participating Insurance Companies and to Qualified
Plans. No shares of any Fund will be sold to the general public.
1.4. The Trust will not sell its shares to any insurance
company or separate account unless an agreement containing provisions
substantially the same as Sections 2.4, 3.4, 3.5, and Sections 7.1 -
7.7 of this Agreement is in effect to govern such sales.
1.5. The Trust agrees to redeem, on the Insurance Company's
request, any full or fractional shares of the Trust held by the
Account, executing such requests on a daily basis at the net asset
value next computed after receipt by the Trust or its designee of the
request for redemption. However, if one or more Funds has determined
to settle redemption transactions for all of its shareholders on a
delayed basis (more than one business day, but in no event more than
three Business Days, after the date on which the redemption order is
received, unless otherwise permitted by an order of the Commission
under Section 22(e) of the 1940 Act), the Trust shall be permitted to
delay sending redemption proceeds to the Insurance Company by the same
-2-
number of days that the Trust is delaying sending redemption proceeds
to the other shareholders of the Fund. For purposes of this Section
1.5, the Insurance Company shall be the designee of the Trust for
receipt of requests for redemption from each Account and receipt by
that designee shall constitute receipt by the Trust; provided that the
Trust receives notice of the request for redemption by 7:00 a.m.,
Mountain Time, on the next following Business Day, except as otherwise
provided by Section 1.10.
1.6. The Insurance Company agrees to purchase and redeem
the shares of each Fund offered by the then-current prospectus of the
Trust in accordance with the provisions of that prospectus.
1.7. The Insurance Company shall pay for Trust shares by
1:00 p.m., Mountain Time, on the next Business Day after an order to
purchase Trust shares is made in accordance with the provisions of
Section 1.1 hereof. Payment shall be in federal funds transmitted by
wire. For the purpose of Sections 2.9 and 2.10, upon receipt by the
Trust of the federal funds so wired, such funds shall cease to be the
responsibility of the Insurance Company and shall become the
responsibility of the Trust. Payment of net redemption proceeds
(aggregate redemptions of a Fund's shares by an Account minus
aggregate purchases of that Fund's shares by that Account) for a given
Business Day will normally be made by wiring federal funds to the
Insurance Company on the next Business Day after receipt of the
redemption request, but in no event later than 3 days following the
receipt of the redemption request. However, payment may be postponed
under unusual circumstances, such as when normal trading is not taking
place on the New York Stock Exchange, an emergency as defined by the
Securities and Exchange Commission exists, or as permitted by the
Securities and Exchange Commission.
1.8. Issuance and transfer of the Trust's shares will be by
book entry only. Stock certificates will not be issued to the
Insurance Company or any Account. Shares ordered from the Trust will
be recorded in an appropriate title for each Account or the
appropriate subaccount of each Account.
1.9. The Trust shall furnish same day notice (by wire or
telephone, followed by written confirmation) to the Insurance Company
of any income, dividends or capital gain distributions payable on the
Funds' shares. The Insurance Company hereby elects to receive all
income dividends and capital gain distributions payable on a Fund's
shares in additional shares of that Fund. The Insurance Company
reserves the right to revoke this election and to receive all such
income dividends and capital gain distributions in cash. The Trust
shall notify the Insurance Company of the number of shares issued as
payment of dividends and distributions.
1.10. The Trust shall make the net asset value per share
for each Fund available to the Insurance Company on a daily basis as
soon as reasonably practical after the net asset value per share is
calculated and shall use its best efforts to make those per-share net
asset values available by 5:00 p.m., Mountain Time. On any day that
the Trust is unable to provide the Insurance Company with the per
share net asset value for a Fund by such time, the Trust shall, for
each such Fund, provide the Insurance Company additional time to place
purchase and redemption orders for shares pursuant to Sections 1.1.
and 1.5. Such additional time shall be equal to the additional time
which the Trust takes to make the per share net asset value available
to the Insurance Company. In the event that the Trust is unable to
provide said net asset value to the Insurance Company prior to 9:00
p.m., Mountain Time, on any day, Trust and the Insurance Company shall
cooperate so that the Trust receives said purchase and redemption
orders for shares as soon as practicable and by such time as the Trust
and the Insurance Company shall mutually agree on the following
Business Day. All purchase and redemption orders for shares of the
Trust communicated to the Trust by the foregoing deadlines shall be
-3-
treated by the Trust as if they were received by the Trust prior to
7:00 a.m., Mountain Time, as provided in Section 1.1 above. The Trust
shall indemnify and hold harmless the Insurance Company against any
and all liability, loss, damage, cost or expenses which the Insurance
Company may incur, suffer, or be required to pay due to the Trust's
(i) materially incorrect calculation of the daily net asset value,
dividend rate or capital gain distribution rate; and (ii) incorrect
reporting of the daily net asset value, dividend rate or capital gain
distribution rate; provided that the Trust shall have no obligation to
indemnify and hold harmless the Insurance Company if the incorrect
calculation or incorrect reporting was the result of incorrect
information furnished by the Insurance Company or information
furnished untimely by the Insurance Company.
ARTICLE II. Representations, Warranties and Agreements
2.1. The Insurance Company represents, warrants and agrees
that the offerings of 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 applicable state insurance suitability requirements.
The Insurance Company further represents that it is an insurance
company duly organized and in good standing under applicable law and
that it has legally and validly established the Account prior to any
issuance or sale thereof as a segregated asset account under the
Nebraska Insurance Code and has registered, or warrants and agrees
that prior to any issuance or sale of the Contracts it 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.
2.2. The Trust warrants and agrees that Trust shares sold
pursuant to this Agreement shall be registered under the 1933 Act,
duly authorized for issuance and sale in compliance with the laws of
the State of Delaware and all applicable federal securities laws and
that the Trust is and shall remain registered under the 1940 Act. The
Trust warrants and agrees that it 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 Trust 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 Trust or ▇▇▇▇▇▇ Associates.
2.3. The Trust represents that it is currently qualified as
a Regulated Investment Company under Subchapter M of the Internal
Revenue Code of 1986, as amended, (the "Code") and warrants and agrees
that it will make all reasonable efforts to maintain its qualification
(under Subchapter M or any successor or similar provision) and that it
will notify the Insurance 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.
2.4. The Insurance Company represents that the Contracts
are currently treated as annuity or life insurance contracts under
applicable provisions of the Code and warrants and agrees that it will
make every effort to maintain such treatment and that it will notify
the Trust and ▇▇▇▇▇▇ Associates 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 Trust may elect to make payments to finance
distribution expenses pursuant to Rule 12b-1 under the 1940 Act. To
the extent that it decides to finance distribution expenses pursuant
to Rule 12b-1, the Trust undertakes to have a board of trustees, a
majority of whom are not interested persons of the Trust, formulate
and approve any plan under Rule 12b-1 to finance distribution
expenses.
-4-
2.6. The Trust makes no representation warranties as to
whether any aspect of its operations (including, but not limited to,
fees and expenses and investment policies) complies or will comply
with the insurance laws or regulations of the various states.
2.7. The Trust represents that it is lawfully organized and
validly existing under the laws of the State of Delaware and
represents, warrants and agrees that it does and will comply in all
material respects with the 1940 Act.
2.8. ▇▇▇▇▇▇ Associates represents that it is and warrants
that it shall remain duly registered as an investment adviser under
all applicable federal and state securities laws and agrees that it
shall perform its obligations for the Trust in compliance in all
material respects with the laws of the State of Colorado and any
applicable state and federal securities laws.
2.9. The Trust and ▇▇▇▇▇▇ Associates represent and warrant
that all of their officers, employees, investment advisers, investment
sub-advisers, and other individuals or entities described in Rule
17g-1 under the 1940 Act dealing with the money and/or securities of
the Trust are, and shall continue to be at all times, covered by a
blanket fidelity bond or similar coverage for the benefit of the Trust
in an amount not less than the minimum coverage required currently by
Rule 17g-1 under the 1940 Act or related provisions as may be
promulgated from time to time. That fidelity bond shall include
coverage for larceny and embezzlement and shall be issued by a
reputable bonding company.
ARTICLE III. Disclosure Documents and Voting
3.1. ▇▇▇▇▇▇ Associates shall provide the Insurance Company
(at the Insurance Company's expense) with as many copies of the
Trust's current prospectus as the Insurance Company may reasonably
request. If requested by the Insurance Company in lieu thereof, the
Trust shall provide such documentation (including a final copy of the
new prospectus as set in type at the Trust's expense) and other
assistance as is reasonably necessary in order for the Insurance
Company once each year (or more frequently if the prospectus for the
Trust is amended) to have the prospectus for the Contracts and the
Trust's prospectus printed together in one document (at the Insurance
Company's expense).
3.2. The Trust's prospectus shall state that the Statement
of Additional Information for the Trust (the "SAI") is available from
the Trust, and ▇▇▇▇▇▇ Associates (or the Trust), at its expense, shall
print and provide the SAI free of charge to the Insurance Company and
to any owner of a Contract or prospective owner who requests the SAI.
3.3. The Trust, at its expense, shall provide the Insurance
Company with copies of its proxy material, reports to shareholders and
other communications to shareholders in such quantity as the Insurance
Company shall reasonably require for distributing to Contract owners.
3.4. If and to the extent required by law, the Insurance
Company shall:
(i) solicit voting instructions from Contract owners;
(ii) vote the Trust shares in accordance with instructions
received from Contract owners; and
(iii) vote Trust shares for which no instructions have been
received in the same proportion as Trust shares of that Fund for which
instructions have been received;
so long as and to the extent that the Commission continues to
interpret the 1940 Act to require pass-through voting privileges for
variable contract owners. The Insurance Company reserves the right to
vote Trust shares held in any segregated asset account in its own
right, to the extent permitted by law.
-5-
Participating Insurance Companies shall be responsible for assuring
that each of their separate accounts participating in the Trust
calculates voting privileges in a manner consistent with the standards
set forth on Schedule C attached hereto and incorporated herein by
this reference, which standards will also be provided to the other
Participating Insurance Companies. The Insurance Company shall
fulfill its obligation under, and abide by the terms and conditions
of, the Mixed and Shared Funding Exemptive Order.
3.5. The Trust will comply with all provisions of the 1940 Act
requiring voting by shareholders, and in particular the Trust will
either provide for annual meetings (except insofar as the Commission
may interpret Section 16 of the 1940 Act not to require such meetings)
or, as the Trust currently intends, comply with Section 16(c) of the
1940 Act (although the Trust is not one of the trusts described in
Section 16(c) of that Act) as well as with Sections 16(a) and, if and
when applicable, 16(b). Further, the Trust will act in accordance
with the Commission's interpretation of the requirements of Section
16(a) with respect to periodic elections of trustees and with whatever
rules the Commission may promulgate with respect thereto.
ARTICLE IV. Sales Material and Information
4.1. The Insurance Company shall furnish, or shall cause to be
furnished, to the Trust or its designee, each piece of sales
literature or other promotional material in which the Trust, a
sub-adviser of one of the Funds, or ▇▇▇▇▇▇ Associates is named, at
least ten calendar days prior to its use. No such material shall be
used if the Trust or its designee objects to such use within five
calendar days after receipt of such material.
4.2. The Insurance Company shall not give any information or
make any representations or statements on behalf of the Trust or
concerning the Trust in connection with the sale of the Contracts
other than the information or representations contained in the Trust's
registration statement, prospectus or SAI, as that registration
statement, prospectus or SAI may be amended or supplemented from time
to time, or in reports or proxy statements for the Trust, or in sales
literature or other promotional material approved by the Trust or its
designee or by ▇▇▇▇▇▇ Associates, except with the permission of the
Trust or ▇▇▇▇▇▇ Associates.
4.3. The Trust, ▇▇▇▇▇▇ Associates, or its designee shall
furnish, or shall cause to be furnished, to the Insurance Company or
its designee, each piece of sales literature or other promotional
material in which the Insurance Company or the Account is named at
least fifteen calendar days prior to its use. No such material shall
be used if the Insurance Company or its designee objects to such use
within ten calendar days after receipt of that material.
4.4. The Trust and ▇▇▇▇▇▇ Associates shall not give any
information or make any representations on behalf of the Insurance
Company or concerning the Insurance Company, any Account, or the
Contracts other than the information or representations contained in a
registration statement, prospectus or statement of additional
information for the Contracts, as that registration statement,
prospectus or statement of additional information may be amended or
supplemented from time to time, or in published reports for any
Account which are in the public domain or approved by the Insurance
Company for distribution to Contract owners, or in sales literature or
other promotional material approved by the Insurance Company or its
designee, except with the permission of the Insurance Company.
4.5. The Trust will provide to the Insurance Company at least
one complete copy of each registration statement, prospectus,
statement of additional information, report, proxy statement, piece of
sales literature or other promotional material, application for
exemption, request for no-action letter, and any amendment to any of
the above, that relate to the Trust or its shares, contemporaneously
with the filing of the document with the Commission, the National
Association of Securities Dealers, Inc. ("NASD"), or other regulatory
authorities.
-6-
4.6. The Insurance Company will provide to the Trust at least
one complete copy of each registration statement, prospectus,
statement of additional information, report, solicitation for voting
instructions, piece of sales literature and other promotional
material, application for exemption, request for no-action letter, and
any amendment to any of the above, that relates to the Contracts or
the Account, contemporaneously with the filing of the document with
the Commission, the NASD, 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, 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,
research reports, market letters, form letters, shareholder
newsletters, seminar texts, reprints or excerpts of any other
advertisement, sales literature, or published article), educational or
training materials or other communications distributed or made
generally available to some or all agents or employees, and
registration statements, prospectuses, statements of additional
information, shareholder reports, and proxy materials.
4.8. At the request of any party to this Agreement, each other
party will make available to the other party's independent auditors
and/or representative of the appropriate regulatory agencies, all
records, data and operating procedures of the Accounts or the Trust,
or otherwise relevant to the provisions of the Agreement that may be
reasonably requested.
ARTICLE V. Fees and Expenses
5.1. The Trust and ▇▇▇▇▇▇ Associates shall pay no fee or other
compensation to the Insurance Company under this agreement, except as
set forth in Section 5.4 and except that if the Trust or any Fund
adopts and implements a plan pursuant to Rule 12b-1 to finance
distribution expenses, ▇▇▇▇▇▇ Associates or the Trust may make
payments to the Insurance Company in amounts consistent with that
12b-1 plan, subject to review by the trustees of the Trust, at a rate
at least equal to the highest rate paid to any other Participating
Insurance Company with segregated account values in each applicable
Fund that are equal to or less than those of the Insurance Company.
5.2. All expenses incident to performance by the Trust under
this Agreement shall be paid by the Trust. The Trust shall see to it
that any offering of its shares is registered and that all of its
shares are authorized for issuance in accordance with applicable
federal law and, if and to the extent deemed advisable by the Trust or
▇▇▇▇▇▇ Associates, in accordance with applicable state laws prior to
their sale. The Trust shall bear the cost of registration and
qualification of the Trust's shares, preparation and filing of the
Trust'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, the preparation of
all statements and notices required by any federal or state law, and
all taxes on the issuance or transfer of the Trust's shares.
5.3. The Trust, at its expense, will provide the Insurance
Company with as many copies of the current prospectus for the Trust as
the Insurance Company may reasonably request for distribution, at the
Insurance Company's expense, to existing Contract owners. If
requested by the Insurance Company in lieu thereof, the Trust shall
provide such documentation (including camera-ready copy and computer
diskette of the current prospectus for the Trust) and other assistance
as is reasonably necessary in order for the Insurance Company once
each year (or more frequently if the prospectus for the Trust is
amended) to have the Contract prospectus and the Trust prospectus
printed together in one document. In the event that the Trust
-7-
prospectus is printed on a combined basis with the Contract
prospectus, the printing expenses shall be allocated among the Trust,
the Insurance Company and such other funds which participate in the
Contract prospectus according to the number of pages (and approximate
fractions thereof) relating to such party relative to the total number
of pages of the complete combined prospectus. Pages allocated to the
Trust shall be limited to those pages which specifically describe the
Trust. All other pages and covers shall be allocated to the Insurance
Company. However, when any change in a combined Contract and Trust
prospectus is initiated by a particular party, then such party shall
pay for the printing and distribution of the revised prospectus.
5.4. The Insurance Company bears the responsibility and
correlative expense for administrative and support services for
Contract owners. ▇▇▇▇▇▇ Associates recognizes the Insurance Company
as the sole shareholder of shares of the Trust issued under this
Agreement. From time to time, ▇▇▇▇▇▇ Associates may pay amounts from
its past profits to the Insurance Company for providing certain
administrative services for the Trust or for providing other services
that relate to the Trust. In consideration of the savings resulting
from such arrangement, and to compensate the Insurance Company for its
costs, ▇▇▇▇▇▇ Associates agrees to pay to the Insurance Company an
amount equal to 25 basis points (0.25%) per annum of the average
aggregate amount invested by the Insurance Company in the Trust under
this Agreement. The parties agree that such payments are for
administrative services and investor support services, and do not
constitute payment for investment advisory, distribution or other
services. Payment of such amounts by ▇▇▇▇▇▇ Associates shall not
increase the fees paid by the Trust or its shareholders.
ARTICLE VI. Diversification
6.1. The Trust will comply with Section 817(h) of the Code and
Treasury Regulation 1.817-5 relating to the diversification
requirements for variable annuity, endowment, modified endowment or
life insurance contracts and any amendments or other modifications to
that Section or Regulation at all times necessary to satisfy those
requirements.
ARTICLE VII. Potential Conflicts
7.1. The trustees of the Trust will monitor the Trust for the
existence of any material irreconcilable conflict between the
interests of the variable Contract owners of all separate accounts
investing in the Trust and the participants of all Qualified Plans
investing in the Trust. An irreconcilable material conflict may arise
for a variety of reasons, including: (a) an action by any state
insurance regulatory authority; (b) a change in applicable federal or
state insurance, tax, or securities laws or regulations, or a public
ruling, private letter ruling, no-action or interpretive letter, or
any similar action by insurance, tax, or securities regulatory
authorities; (c) an administrative or judicial decision in any
relevant proceeding; (d) the manner in which the investments of any
Fund 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 a Participating Insurance Company to
disregard the voting instructions of variable contract owners. The
trustees of the Trust shall promptly inform the Insurance Company if
they determine that an irreconcilable material conflict exists and the
implications thereof. The trustees of the Trust shall have sole
authority to determine whether an irreconcilable material conflict
exists and their determination shall be binding upon the Insurance
Company.
7.2. The Insurance Company and ▇▇▇▇▇▇ Associates each will
report promptly any potential or existing conflicts of which it is
aware to the trustees of the Trust. The Insurance Company and ▇▇▇▇▇▇
Associates each will assist the trustees of the Trust in carrying out
-8-
their responsibilities under the Mixed and Shared Funding Exemptive
Order, by providing the trustees of the Trust with all information
reasonably necessary for them to consider any issues raised. This
includes, but is not limited to, an obligation by the Insurance
Company to inform the trustees of the Trust whenever Contract owner
voting instructions are to be disregarded. These responsibilities
shall be carried out by the Insurance Company with a view only to the
interests of the Contract owners and by ▇▇▇▇▇▇ Associates with a view
only to the interests of Contract holders and Qualified Plan
participants.
7.3. If it is determined by a majority of the trustees of the
Trust, or a majority of the trustees who are not interested persons of
the Trust, any of its Funds, or ▇▇▇▇▇▇ Associates (the "Independent
Trustees"), that a material irreconcilable conflict exists, the
Insurance Company and/or other Participating Insurance Companies or
Qualified Plans that have executed participation agreements shall, at
their expense and to the extent reasonably practicable (as determined
by a majority of the Independent Trustees), 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 Trust or any Fund and
reinvesting those assets in a different investment medium, including
(but not limited to) another Fund of the Trust, or submitting the
question whether such segregation should be implemented to a vote of
all affected variable contract owners and, as appropriate, segregating
the assets of any appropriate group (e.g., 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 variable contract owners the
option of making such a change; and (2) establishing a new registered
management investment company or managed separate account and
obtaining any necessary approvals or orders of the Commission in
connection therewith.
7.4. If a material irreconcilable conflict arises because of a
decision by the Insurance Company to disregard Contract owner voting
instructions and that decision represents a minority position or would
preclude a majority vote, the Insurance Company may be required, at
the Trust's election, to withdraw the affected Account's investment in
the Trust and terminate this Agreement with respect to that 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 Independent
Trustees. Any such withdrawal and termination must take place within
six (6) months after the Trust gives written notice that this
provision is being implemented, and, until the end of that six month
period, the Trust shall continue to accept and implement orders by the
Insurance Company for the purchase (and redemption) of shares of the
Trust.
7.5. If a material irreconcilable conflict arises because a
particular state insurance regulator's decision applicable to the
Insurance Company conflicts with the majority of other state
regulators, then the Insurance Company will withdraw the affected
Account's investment in the Trust and terminate this Agreement with
respect to that Account within six months after the trustees of the
Trust inform the Insurance Company in writing that they have
determined that the state insurance regulator's decision has created
an irreconcilable material conflict; provided, however, that such
withdrawal and termination shall be limited to the extent required by
the foregoing material irreconcilable conflict as determined by a
majority of the Independent Trustees. Until the end of the foregoing
six month period, the Trust shall continue to accept and implement
orders by the Insurance Company for the purchase (and redemption) of
shares of the Trust.
-9-
7.6. For purposes of Sections 7.3 through 7.6 of this Agreement,
a majority of the Independent Trustees shall determine whether any
proposed action adequately remedies any irreconcilable material
conflict, but in no event will the Trust be required to establish a
new funding medium for the Contracts. The Insurance 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 trustees of the Trust
determine that any proposed action does not adequately remedy any
irreconcilable material conflict, then the Insurance Company will
withdraw the Account's investment in the Trust and terminate this
Agreement within six (6) months after the trustees of the Trust inform
the Insurance Company in writing of the foregoing determination,
provided, however, that the withdrawal and termination shall be
limited to the extent required by the material irreconcilable
conflict, as determined by a majority of the Independent Trustees.
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 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 Trust 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 those 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
those Sections are contained in the Rule(s) as so amended or adopted.
ARTICLE VIII. Indemnification
8.1. Indemnification By The Insurance Company
8.1(a). The Insurance Company agrees to indemnify and hold
harmless the Trust and each trustee, officer, employee or agent of the
Trust, and each person, if any, who controls the Trust within the
meaning of Section 15 of the 1933 Act (collectively, the "Indemnified
Parties" for purposes of this Section 8.1) against any and all losses,
claims, damages, liabilities (including amounts paid in settlement
with the written consent of the Insurance 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, acquisition, or redemption of the Trust'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 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 in writing to the
Insurance Company by or on behalf of the Trust for use in
the registration statement or prospectus 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 shares of the Trust;
-10-
(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 Trust not supplied by the Insurance
Company, or persons under its control) or wrongful conduct
of the Insurance Company or persons under its control, with
respect to the sale or distribution of the Contracts or
Trust Shares;
(iii) arise out of any untrue statement or alleged
untrue statement of a material fact contained in a
registration statement, prospectus, or sales literature of
the Trust or any amendment thereof or supplement thereto or
the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the
statements therein not misleading if such a statement or
omission was made in reliance upon information furnished in
writing to the Trust by or on behalf of the Insurance
Company;
(iv) arise as a result of any failure by the Insurance
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, warranty or agreement made by the
Insurance Company in this Agreement or arise out of or
result from any other material breach of this Agreement by
the Insurance Company,
as limited by and in accordance with the provisions of Sections 8.1(b)
and 8.1(c) hereof.
8.1(b). The Insurance 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 that may arise from that Indemnified Party's willful
misfeasance, bad faith, or gross negligence in the performance of that
Indemnified Party's duties or by reason of that Indemnified Party's
reckless disregard of obligations or duties under this Agreement or to
the Trust, whichever is applicable.
8.1(c). The Insurance Company shall not be liable under this
indemnification provision with respect to any claim made against an
Indemnified Party unless that Indemnified Party shall have notified
the Insurance 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 that Indemnified Party (or
after the Indemnified Party shall have received notice of such service
on any designated agent). Notwithstanding the foregoing, the failure
of any Indemnified Party to give notice as provided herein shall not
relieve the Insurance Company of its obligations hereunder except to
the extent that the Insurance Company has been prejudiced by such
failure to give notice. In addition, any failure by the Indemnified
Party to notify the Insurance Company of any such claim shall not
relieve the Insurance Company from any liability which it may have to
the Indemnified Party against whom the action is brought otherwise
than on account of this indemnification provision. In case any such
action is brought against the Indemnified Parties, the Insurance
Company shall be entitled to participate, at its own expense, in the
defense of the action. The Insurance Company also shall be entitled
to assume the defense thereof, with counsel satisfactory to the party
named in the action; provided, however, that if the Indemnified Party
shall have reasonably concluded that there may be defenses available
to it which are different from or additional to those available to the
Insurance Company, the Insurance Company shall not have the right to
assume said defense, but shall pay the costs and expenses thereof
(except that in no event shall the Insurance Company be liable for the
fees and expenses of more than one counsel for Indemnified Parties in
connection with any one action or separate but similar or related
actions in the same jurisdiction arising out of the same general
-11-
allegations or circumstances). After notice from the Insurance
Company to the Indemnified Party of the Insurance Company's election
to assume the defense thereof, and in the absence of such a reasonable
conclusion that there may be different or additional defenses
available to the Indemnified Party, the Indemnified Party shall bear
the fees and expenses of any additional counsel retained by it, and
the Insurance Company will not be liable to that party under this
Agreement for any legal or other expenses subsequently incurred by the
party independently in connection with the defense thereof other than
reasonable costs of investigation.
8.1(d). The Indemnified Parties will promptly notify the
Insurance Company of the commencement of any litigation or proceedings
against them in connection with the issuance or sale of the Trust's
shares or the Contracts or the operation of the Trust.
8.2. Indemnification by ▇▇▇▇▇▇ Associates
8.2(a). ▇▇▇▇▇▇ Associates agrees to indemnify and hold harmless
the Insurance Company and each of its directors, officers, employees
or agents, and each person, if any, who controls the Insurance 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 ▇▇▇▇▇▇ Associates) 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, acquisition or redemption of the Trust's shares 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
sales literature of the Trust (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 the statement or omission or
alleged statement or omission was made in reliance upon and
in conformity with information furnished in writing to
▇▇▇▇▇▇ Associates or the Trust by or on behalf of the
Insurance Company for use in the registration statement or
prospectus for the Trust or in sales literature (or any
amendment or supplement) or otherwise for use in connection
with the sale of the Contracts or Trust shares;
(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 ▇▇▇▇▇▇
Associates or persons under its control) or wrongful conduct
of the Trust, ▇▇▇▇▇▇ Associates or persons under their
control, with respect to the sale or distribution of the
Contracts or shares of the Trust;
(iii) arise out of any untrue statement or alleged
untrue statement of a material fact contained in a
registration statement, prospectus, or sales literature
covering the Contracts, or any amendment thereof or
supplement thereto, or the omission or alleged omission to
state therein a material fact required to be stated therein
or necessary to make the statement or statements therein not
misleading, if such statement or omission was made in
reliance upon information furnished in writing to the
Insurance Company by or on behalf of the Trust;
-12-
(iv) arise as a result of any failure by the Trust 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 VI of
this Agreement); or
(v) arise out of or result from any material breach of
any representation, warranty or agreement made by ▇▇▇▇▇▇
Associates in this Agreement or arise out of or result from
any other material breach of this Agreement by ▇▇▇▇▇▇
Associates;
as limited by and in accordance with the provisions of Sections 8.2(b)
and 8.2(c) hereof.
8.2(b) ▇▇▇▇▇▇ Associates 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 that may arise from the Indemnified Party's 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 and duties under this Agreement or to the
Insurance Company or the Account, whichever is applicable.
8.2(c) ▇▇▇▇▇▇ Associates shall not be liable under this
indemnification provision with respect to any claim made against an
Indemnified Party unless the Indemnified Party shall have notified
▇▇▇▇▇▇ Associates 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 the Indemnified Party (or
after the Indemnified Party shall have received notice of such service
on any designated agent). Notwithstanding the foregoing, the failure
of any Indemnified Party to give notice as provided herein shall not
relieve ▇▇▇▇▇▇ Associates of its obligations hereunder except to the
extent that ▇▇▇▇▇▇ Associates has been prejudiced by such failure to
give notice. In addition, any failure by the Indemnified Party to
notify ▇▇▇▇▇▇ Associates of any such claim shall not relieve ▇▇▇▇▇▇
Associates 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, ▇▇▇▇▇▇ Associates will be entitled to
participate, at its own expense, in the defense thereof. ▇▇▇▇▇▇
Associates also shall be entitled to assume the defense thereof, with
counsel satisfactory to the party named in the action; provided,
however, that if the Indemnified Party shall have reasonably concluded
that there may be defenses available to it which are different from or
additional to those available to ▇▇▇▇▇▇ Associates, ▇▇▇▇▇▇ Associates
shall not have the right to assume said defense, but shall pay the
costs and expenses thereof (except that in no event shall ▇▇▇▇▇▇
Associates be liable for the fees and expenses of more than one
counsel for Indemnified Parties in connection with any one action or
separate but similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances). After
notice from ▇▇▇▇▇▇ Associates to the Indemnified Party of ▇▇▇▇▇▇
Associates's election to assume the defense thereof, and in the
absence of such a reasonable conclusion that there may be different or
additional defenses available to the Indemnified Party, the
Indemnified Party shall bear the fees and expenses of any additional
counsel retained by it, and ▇▇▇▇▇▇ Associates will not be liable to
that party under this Agreement for any legal or other expenses
subsequently incurred by that party independently in connection with
the defense thereof other than reasonable costs of investigation.
8.2(d) The Insurance Company agrees to notify ▇▇▇▇▇▇ Associates
promptly 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.
-13-
8.3 Indemnification By the Trust
8.3(a). The Trust agrees to indemnify and hold harmless the
Insurance Company, and each of its directors, officers, employees and
agents, and each person, if any, who controls the Insurance 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 legal and
other expenses) to which the Indemnified Parties may become subject
under any statute, at common law or otherwise, insofar as those
losses, claims, damages, liabilities or expenses (or actions in
respect thereof) or settlements result from the gross negligence, bad
faith or willful misconduct of any trustee(s) of the Trust, are
related to the operations of the Trust and:
(i) arise as a result of any failure by the Trust to
provide the services and furnish the materials under the terms of
this Agreement (including a failure to comply with the
diversification requirements specified in Article VI of this
Agreement); or
(ii) arise out of or result from any material breach of any
representation, warranty or agreement made by the Trust in this
Agreement or arise out of or result from any other material
breach of this Agreement by the Trust;
as limited by, and in accordance with the provisions of, Sections
8.3(b) and 8.3(c) hereof.
8.3(b). The Trust 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 that may
arise from the Indemnified Party's 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 and duties under this Agreement or to the Insurance
Company, the Trust, ▇▇▇▇▇▇ Associates or the Account, whichever is
applicable.
8.3(c). The Trust shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party
unless the Indemnified Party shall have notified the Trust 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 the Indemnified Party (or after the Indemnified Party
shall have received notice of such service on any designated agent).
Notwithstanding the foregoing, the failure of any Indemnified Party to
give notice as provided herein shall not relieve the Trust of its
obligations hereunder except to the extent that the Trust has been
prejudiced by such failure to give notice. In addition, any failure
by the Indemnified Party to notify the Trust of any such claim shall
not relieve the Trust 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 Trust will be entitled
to participate, at its own expense, in the defense thereof. The Trust
also shall be entitled to assume the defense thereof, with counsel
satisfactory to the party named in the action; provided, however, that
if the Indemnified Party shall have reasonably concluded that there
may be defenses available to it which are different from or additional
to those available to the Trust, the Trust shall not have the right to
assume said defense, but shall pay the costs and expenses thereof
(except that in no event shall the Trust be liable for the fees and
expenses of more than one counsel for Indemnified Parties in
-14-
connection with any one action or separate but similar or related
actions in the same jurisdiction arising out of the same general
allegations or circumstances). After notice from the Trust to the
Indemnified Party of the Trust's election to assume the defense
thereof, and in the absence of such a reasonable conclusion that there
may be different or additional defenses available to the Indemnified
Party, the Indemnified Party shall bear the fees and expenses of any
additional counsel retained by it, and the Trust will not be liable to
that party under this Agreement for any legal or other expenses
subsequently incurred by that party independently in connection with
the defense thereof other than reasonable costs of investigation.
8.3(d). The Insurance Company and ▇▇▇▇▇▇ Associates agree
promptly to notify the Trust 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, the operation of the Account, or the sale or acquisition of
shares of the Trust.
ARTICLE IX. Applicable Law
9.1. This Agreement shall be construed and provisions hereof
interpreted under and in accordance with the laws of the State of
Delaware, except that each party to this Agreement waives its rights
under that law for any claim for punitive damages.
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 any exemptions from those statutes, rules and
regulations the Commission may grant (including, but not limited to,
the Mixed and Shared Funding Exemptive Order) and the terms hereof
shall be interpreted and construed in accordance therewith.
ARTICLE X. Termination
10.1. This Agreement shall terminate:
(a) at the option of any party upon one year advance
written notice to the other parties; provided, however, such
notice shall not be given earlier than one year following the
date of this Agreement; or
(b) at the option of the Insurance Company to the
extent that shares of Funds are not reasonably available to meet
the requirements of the Contracts as determined by the Insurance
Company, provided, however, that such a termination shall apply
only to the Fund(s) not reasonably available. Prompt written
notice of the election to terminate for such cause shall be
furnished by the Insurance Company to the Trust and ▇▇▇▇▇▇; or
(c) at the option of the Trust or ▇▇▇▇▇▇ Associates,
in the event that formal administrative proceedings are
instituted against the Insurance Company by the NASD, the
Commission, an insurance commissioner or any other regulatory
body regarding the Insurance Company's duties under this
Agreement or related to the sale of the Contracts, the operation
of any Account, or the purchase of the Trust's shares, provided,
however, that the Trust 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 Insurance
Company to perform its obligations under this Agreement; or
-15-
(d) at the option of the Insurance Company in the
event that formal administrative proceedings are instituted
against the Trust or ▇▇▇▇▇▇ Associates by the NASD, the
Commission, or any state securities or insurance department or
any other regulatory body, provided, however, that the Insurance
Company determines in its sole judgement exercised in good faith,
that any such administrative proceedings will have a material
adverse effect upon the ability of the Trust or ▇▇▇▇▇▇ Associates
to perform its obligations under this Agreement; or
(e) with respect to any Account, upon requisite vote
of the Contract owners having an interest in that Account (or any
subaccount) to substitute the shares of another investment
company for the corresponding Fund shares in accordance with the
terms of the Contracts for which those Fund shares had been
selected to serve as the underlying investment media. The
Insurance Company will give at least 30 days' prior written
notice to the Trust of the date of any proposed vote to replace
the Trust's shares; or
(f) at the option of the Insurance Company, in the
event any of the Trust's shares are not registered, issued or
sold in accordance with applicable state and/or federal law or
exemptions therefrom, or such law precludes the use of those
shares as the underlying investment media of the Contracts issued
or to be issued by the Insurance Company; or
(g) at the option of the Insurance Company, if the
Trust ceases to qualify as a regulated investment company under
Subchapter M of the Code or under any successor or similar
provision, or if the Insurance Company reasonably believes that
the Trust may fail to so qualify; or
(h) at the option of the Insurance Company, if the Trust
fails to meet the diversification requirements specified in
Article VI hereof; or
(i) at the option of either the Trust or ▇▇▇▇▇▇
Associates, if (1) the Trust or ▇▇▇▇▇▇ Associates, respectively,
shall determine, in their sole judgment reasonably exercised in
good faith, that the Insurance Company has suffered a material
adverse change in its business or financial condition or is the
subject of material adverse publicity and that material adverse
change or material adverse publicity will have a material adverse
impact upon the business and operations of either the Trust or
▇▇▇▇▇▇ Associates, (2) the Trust or ▇▇▇▇▇▇ Associates shall
notify the Insurance Company in writing of that determination and
its intent to terminate this Agreement, and (3) after considering
the actions taken by the Insurance Company and any other changes
in circumstances since the giving of such a notice, the
determination of the Trust or ▇▇▇▇▇▇ Associates shall continue to
apply on the sixtieth (60th) day following the giving of that
notice, which sixtieth day shall be the effective date of
termination; or
(j) at the option of the Insurance Company, if (1) the
Insurance Company shall determine, in its sole judgment
reasonably exercised in good faith, that either the Trust or
▇▇▇▇▇▇ Associates has suffered a material adverse change in its
business or financial condition or is the subject of material
adverse publicity and that material adverse change or material
adverse publicity will have a material adverse impact upon the
business and operations of the Insurance Company, (2) the
Insurance Company shall
-16-
notify the Trust and ▇▇▇▇▇▇ Associates in writing of the
determination and its intent to terminate the Agreement, and (3)
after considering the actions taken by the Trust and/or ▇▇▇▇▇▇
Associates and any other changes in circumstances since the
giving of such a notice, the determination shall continue to
apply on the sixtieth (60th) day following the giving of the
notice, which sixtieth day shall be the effective date of
termination.
10.2. It is understood and agreed that the right of any party
hereto to terminate this Agreement pursuant to Section 10.1(a) may be
exercised for any reason or for no reason.
10.3. No termination of this Agreement shall be effective unless
and until the party terminating this Agreement gives prior written
notice to all other parties to this Agreement of its intent to
terminate, which notice shall set forth the basis for the termination.
Furthermore,
(a) In the event that any termination is based upon the
provisions of Article VII, or the provision of Section 10.1(a),
10.1(i), 10.1(j), or 10.1(k) of this Agreement, the prior written
notice shall be given in advance of the effective date of termination
as required by those provisions; and
(b) in the event that any termination is based upon the
provisions of Section 10.1(c) or 10.1(d) of this Agreement, the prior
written notice shall be given at least ninety (90) days before the
effective date of termination.
10.4. Notwithstanding any termination of this Agreement, subject
to Section 1.2 of this Agreement and for so long as the Trust
continues to exist, the Trust and ▇▇▇▇▇▇ Associates shall at the
option of the Insurance Company, continue to make available additional
shares of the Trust pursuant to the terms and conditions of this
Agreement, for all Contracts in effect on the effective date of
termination of this Agreement ("Existing Contracts"). Specifically,
without limitation, the owners of the Existing Contracts shall be
permitted to reallocate investments in the Trust, redeem investments
in the Trust and/or invest in the Trust upon the making of additional
purchase payments under the Existing Contracts. The parties agree
that this Section 10.4 shall not apply to any terminations under
Article VII and the effect of Article VII terminations shall be
governed by Article VII of this Agreement.
10.5. The Insurance Company shall not redeem Trust shares
attributable to the Contracts (as opposed to Trust shares attributable
to the Insurance Company's assets held in the Account) except (i) as
necessary to implement Contract-owner-initiated transactions, or (ii)
as required by state and/or federal laws or regulations or judicial or
other legal precedent of general application (a "Legally Required
Redemption"). Upon request, the Insurance Company will promptly
furnish to the Trust and ▇▇▇▇▇▇ Associates the opinion of counsel for
the Insurance Company (which counsel shall be reasonably satisfactory
to the Trust and ▇▇▇▇▇▇ Associates) to the effect that any redemption
pursuant to clause (ii) above is a Legally Required Redemption.
Furthermore, the Insurance Company shall not prevent new Contract
owners from allocating payments to a Fund that formerly was available
under the Contracts without first giving the Trust or ▇▇▇▇▇▇
Associates 90 days notice of its intention to do so.
ARTICLE XI. Notices
Any notice shall be sufficiently given when sent by registered or
certified mail to the other party at the address of that other party
set forth below or at such other address as the other party may from
time to time specify in writing.
-17-
If to the Trust:
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇, Vice President
If to the Insurance Company:
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Executive Vice President,
Secretary and Corporate General Counsel
If to ▇▇▇▇▇▇ Associates:
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇, Vice President
ARTICLE XII. Miscellaneous
12.1. Subject to the requirements of legal process and
regulatory authority, each party hereto shall treat as confidential
the names and addresses of the owners of the Contracts and all
information reasonably identified as confidential in writing by any
other party hereto and, except as permitted by this Agreement, shall
not disclose, disseminate or utilize such names and addresses and
other confidential information without the express written consent of
the affected party unless and until that information may come into the
public domain.
12.2. The captions in this Agreement are included for
convenience of reference only and in no way define or delineate any of
the provisions hereof or otherwise affect their construction or
effect.
12.3. This Agreement may be executed simultaneously in two or
more counterparts, each of which taken together shall constitute one
and the same instrument.
12.4. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder
of the Agreement shall not be affected thereby.
12.5. Each party hereto shall cooperate with each other party
and all appropriate governmental authorities (including without
limitation the Commission, the NASD and state insurance regulators)
and shall permit those authorities reasonable access to its books and
records in connection with any lawful investigation or inquiry
relating to this Agreement or the transactions contemplated hereby.
12.6. 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.
12.7. This Agreement shall be binding upon and inure to the
benefit of the parties and their respective successors and assigns;
provided, that no party may assign this Agreement without the prior
written consent of the others.
-18-
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.
Insurance Company:
AMERITAS LIFE INSURANCE CORP.
By its authorized officer,
By:_______________________________
Title:
___________________________
Date:
____________________________
Trust:
▇▇▇▇▇▇ INSTITUTIONAL PRODUCTS TRUST
By its authorized officer,
By:
_____________________________
Title:
__________________________
Date:
___________________________
▇▇▇▇▇▇ Associates:
▇▇▇▇▇▇ ASSOCIATES, INC.
By its authorized officer,
By:
_____________________________
Title:
__________________________
Date:
___________________________
Schedule A
Accounts
Name of Account Date of Resolution of
Insurance Company's Board
which Established the Account
Ameritas Life Insurance Corp. October 26, 1995
Separate Account LLVA
Ameritas Life Insurance Corp. August 24, 1994
Separate Account LLVL
Schedule B
Contracts
1. Contract Form 4080
Contract Form 4055
Schedule C
Proxy Voting Procedure
The following is a list of procedures and corresponding
responsibilities for the handling of proxies relating to the Trust by
▇▇▇▇▇▇ Associates, the Trust and the Insurance Company. The defined
terms herein shall have the meanings assigned in the Participation
Agreement except that the term "Insurance Company" shall also include
the department or third party assigned by the Insurance Company to
perform the steps delineated below.
1. The number of proxy proposals is given to the Insurance
Company by ▇▇▇▇▇▇ Associates as early as possible before the date
set by the Trust for the shareholder meeting to facilitate the
establishment of tabulation procedures. At this time ▇▇▇▇▇▇
Associates will inform the Insurance Company of the Record,
Mailing and Meeting dates. This will be done verbally
approximately two months before meeting.
2. Promptly after the Record Date, the Insurance Company will
perform a "tape run", or other activity, which will generate the
names, addresses and number of units which are attributed to each
contractowner/policyholder (the "Customer") as of the Record
Date. Allowance should be made for account adjustments made
after this date that could affect the status of the Customers'
accounts of the Record Date.
Note: The number of proxy statements is determined by the
activities described in Step #2. The Insurance Company will use its
best efforts to call in the number of Customers to ▇▇▇▇▇▇ Associates,
as soon as possible, but no later than one week after the Record Date.
3. The text and format for the Voting Instruction Cards
("Cards" or "Card") is provided to the Insurance Company by the
Trust. The Insurance Company, at its expense, shall produce and
personalize the Voting Instruction cards. ▇▇▇▇▇▇ Associates must
approve the Card before it is printed. Allow approximately 2-4
business days for printing information on the Cards. Information
commonly found on the Cards includes:
a. name (legal name as found on account registration)
b. address
c. Fund or account number
d. coding to state number of units
e. individual Card number for use in tracking and
verification of votes (already on Cards as printed
by the Trust).
(This and related steps may occur later in the chronological
process due to possible uncertainties relating to the proposals.)
4. During this time, ▇▇▇▇▇▇ Associates will develop, produce,
and the Trust will pay for the Notice of Proxy and the Proxy
Statement (one document). Printed and folded notices and
statements will be sent to Insurance Company for insertion into
envelopes (envelopes and return envelopes are provided and paid
for by the Insurance Company). Contents of envelope sent to
customers by Insurance Company will include:
a. Voting Instruction Card(s)
b. One proxy notice and statement (one document)
c. Return envelope (postage pre-paid by Insurance Company)
addressed to the Insurance Company or its tabulation agent
d. "Urge buckslip" - optional, but recommended. (This is
a small, single sheet of paper that requests Customers to
vote as quickly as possible and that their vote is
important. One copy will be supplied by the Trust.)
e. Cover letter - optional, supplied by Insurance Company
and reviewed and approved in advance by ▇▇▇▇▇▇ Associates.
5. The above contents should be received by the Insurance
Company approximately 3-5 business days before mail date.
Individual in charge at Insurance Company reviews and approves
the contents of the mailing package to ensure correctness and
completeness. Copy of this approval sent to ▇▇▇▇▇▇ Associates.
6. Package mailed by the Insurance Company.
* The Trust MUST allow at least a 15-day solicitation
time to the Insurance Company as the shareowner. (A 5-week
period is recommended.) Solicitation time is calculated as
calendar days from (but NOT including) the meeting, counting
backwards.
7. Collection and tabulation of Cards begins. Tabulation
usually takes place in another department or another vendor
depending on process used. An often used procedure is to sort
cards on arrival by proposal into vote categories of all yes, no,
or mixed replies, and to begin data entry.
Note: Postmarks are not generally needed. A need for
postmark information would be due to an insurance company's internal
procedure.
8. If Cards are mutilated, or for any reason are illegible or
are not signed properly, they are sent back to the Customer with
an explanatory letter, a new Card and return envelope. The
mutilated or illegible Card is disregarded and considered to be
NOT RECEIVED for purposes of vote tabulation. Such mutilated or
illegible Cards are "hand verified," i.e., examined as to why
they did not complete the system. Any questions on those Cards
are usually remedied individually.
9. There are various control procedures used to ensure proper
tabulation of votes and accuracy of that tabulation. The most
prevalent is to sort the Cards as they first arrive into
categories depending upon their vote; an estimate of how the vote
is progressing may then be calculated. If the initial estimates
and the actual vote do not coincide, then an internal audit of
that vote should occur. This may entail a recount.
10. The actual tabulation of votes is done in units which is
then converted to shares. (It is very important that the Trust
receives the tabulations stated in terms of a percentage and the
number of SHARES.) ▇▇▇▇▇▇ Associates must review and approve
tabulation format.
11. Final tabulation in shares is verbally given by the
Insurance Company to ▇▇▇▇▇▇ Associates on the morning of the
meeting not later than 10:00 a.m. Denver time. ▇▇▇▇▇▇ Associates
may request an earlier deadline if required to calculate the vote
in time for the meeting.
12. A Certificate of Mailing and Authorization to Vote Shares
will be required from the Insurance Company as well as an
original copy of the final vote. ▇▇▇▇▇▇ Associates will provide
a standard form for each Certification.
13. The Insurance Company will be required to box and archive
the Cards received from the Customers. In the event that any
vote is challenged or if otherwise necessary for legal,
regulatory, or accounting purposes, ▇▇▇▇▇▇ Associates will be
permitted reasonable access to such Cards.
14. All approvals and "signing-off" may be done orally, but must
always be followed up in writing.