AMENDED AND RESTATED
FUND PARTICIPATION AGREEMENT
Phoenix Life Insurance Company
▇▇▇▇▇▇ Advisors Trust
Columbia ▇▇▇▇▇▇ Asset Management, LLP
and
Columbia Management Distributors, Inc.
May 6, 2008
TABLE OF CONTENTS
Article I. Sale of Fund Shares............................................ 3
Article II. Representations and Warranties................................ 5
Article III. Prospectuses and Proxy Statements; Voting.................... 8
Article IV. Sales Material and Information................................ 9
Article V. Fees and Expenses.............................................. 10
Article VI. Diversification and Qualification............................. 11
Article VII. Potential Conflicts and Compliance With Mixed and Shared
Funding Exemptive Order................................................... 12
Article VIII. Indemnification............................................. 14
Article IX. Applicable Law................................................ 19
Article X. Termination.................................................... 19
Article XI. Notices....................................................... 21
Article XII. Miscellaneous................................................ 22
SCHEDULE A................................................................ 25
SCHEDULE B................................................................ 26
SCHEDULE C................................................................ 27
AMENDED AND RESTATED PARTICIPATION AGREEMENT
Among
PHOENIX LIFE INSURANCE COMPANY
▇▇▇▇▇▇ ADVISORS TRUST
COLUMBIA ▇▇▇▇▇▇ ASSET MANAGEMENT, LLP
and
COLUMBIA MANAGEMENT DISTRIBUTORS, INC.
THIS AGREEMENT, made and entered into as of this 6th day of May , 2008, by
and among PHOENIX LIFE INSURANCE COMPANY (the "Company"), a New York life
insurance company formerly known as Phoenix Home Life Mutual Insurance Company,
on its own behalf and on behalf of its separate accounts (the "Accounts");
▇▇▇▇▇▇ ADVISORS TRUST, an open-end management investment company organized
under the laws of Delaware (the "Fund"); COLUMBIA ▇▇▇▇▇▇ ASSET MANAGEMENT, LLP
(the "Adviser"), a Delaware limited liability partnership; and COLUMBIA
MANAGEMENT DISTRIBUTORS, INC. (the "Distributor"), a Massachusetts corporation.
WHEREAS, the Fund engages in business as an open-end management investment
company and is available to act as the investment vehicle for separate accounts
established for variable life insurance policies and/or variable annuity
contracts (collectively, the "Variable Insurance Products") to be offered by
insurance companies, many of which have entered into participation agreements
similar to this Agreement (hereinafter "Participating Insurance Companies"); and
WHEREAS, the beneficial interest in the Fund is divided into several series
of shares, each designated a "portfolio" and representing the interest in a
particular managed portfolio of securities and other assets; and
WHEREAS, the Fund is able to rely on an order from the Securities and
Exchange Commission (hereinafter the "SEC") granting Participating Insurance
Companies and variable annuity and variable life insurance separate accounts
exemptions from the provisions of sections 9(a), 13(a), 15(a), and 15(b) of the
Investment Company Act of 1940, as amended, (hereinafter the "1940 Act") and
Rules 6e-2(b)(15) and 6e-3(T)(b)(15) thereunder, to the extent necessary to
permit shares of the Fund to be sold to and held by variable annuity and
variable life insurance separate accounts of life insurance companies that may
or may not be affiliated with one another and qualified pension and retirement
plans ("Qualified Plans") (hereinafter the "Mixed and Shared Funding Exemptive
Order"); and
WHEREAS, the Fund is registered as an open-end management investment company
under the 1940 Act and shares of the portfolios are registered under the
Securities Act of 1933, as amended (hereinafter the "1933 Act"); and
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WHEREAS, the Adviser is duly registered as an investment adviser under the
Investment Advisers Act of 1940, as amended; and
WHEREAS, the Distributor is duly registered as a broker-dealer under the
Securities Exchange Act of 1934, as amended, (the "1934 Act") and is a member
in good standing of the Financial Industry Regulatory Authority. (the "FINRA");
and
WHEREAS, the Company has issued and plans to continue to issue certain
variable life insurance policies and/or variable annuity contracts supported
wholly or partially by the Accounts (the "Contracts"), listed on Schedule A
attached hereto and incorporated herein by reference, as such schedule may be
amended from time to time by mutual written agreement of the parties; and
WHEREAS, each Account is a duly organized, validly existing segregated asset
account, established by resolution of the Board of Directors of the Company
under the insurance laws of the State of New York , to set aside and invest
assets attributable to the Contracts; and
WHEREAS, the Company has registered each Account as a unit investment trust
under the 1940 Act, unless such Account is exempt from registration thereunder;
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares in the Portfolios listed on
Schedule B attached hereto and incorporated herein by reference, as such
schedule may be amended from time to time by mutual written agreement of the
parties (the "Portfolios"), on behalf of the Accounts to fund the Contracts,
and the Distributor is authorized to sell such shares to unit investment trusts
such as the Accounts at net asset value; and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company also intends to continue to purchase shares in other
open-end investment companies or series thereof not affiliated with the Fund
(the "Unaffiliated Funds") on behalf of the Accounts to fund the Contracts; and
WHEREAS, the Fund and the Company previously entered into that certain
Participation Agreement dated as of April 18, 1995, as amended by that certain
Amendment No. 1 to the Participation Agreement dated as of December 16, 1996 by
and between the Company and the Fund (the Participation Agreement, as amended
and in effect, the "Current Participation Agreement"); and
WHEREAS., it is the intent of all parties to simultaneously amend and
restate the Current Participation Agreement, effective upon execution of this
Agreement.
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NOW, THEREFORE, in consideration of their mutual promises, the Company, the
Fund, the Distributor and the Adviser agree as follows:
ARTICLE I. Sale of Fund Shares
1.1. The Distributor agrees to sell to the Company those shares of the
Portfolios which the Account orders, executing such orders on each Business Day
at the net asset value next computed after receipt by the Fund or its designee
of the order for the shares of the Portfolios, subject to the terms and
conditions set forth in the Fund's then-current prospectus. For purposes of
this Section 1.1, the Company shall be the designee of the Fund for receipt of
such orders and receipt by such designee shall constitute receipt by the Fund,
provided that the Fund receives notice of any such order sufficiently in
advance of 10:00 a.m. Eastern time on the next following Business Day to effect
any purchase by 10:00 a.m. Eastern time on that Business Day. The parties agree
that receipt by the Fund of notice of such order prior to 9:00 a.m. Eastern
time will be deemed to be sufficiently in advance for purposes of the preceding
sentence; receipt of such notice between 9:00 a.m. and 10:00 a.m. Eastern time
will be deemed to be sufficiently in advance solely in the discretion of the
Fund or its designee. "Business Day" shall mean any day on which the New York
Stock Exchange is open for trading and on which a Portfolio calculates its net
asset value pursuant to the rules of the SEC.
1.2. The Fund agrees to make shares of the Portfolios available for purchase
at the applicable net asset value per share by the Company and the Accounts on
those days on which the Fund calculates its Portfolios' net asset value
pursuant to rules of the SEC, and the Fund shall calculate such net asset value
on each day on which the New York Stock Exchange is open for trading.
Notwithstanding the foregoing, 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 Fund acting in good faith,
necessary or appropriate in the best interests of the shareholders of such
Portfolio. All orders received by the Company shall be subject to the terms of
the then current prospectus of the Fund, including the Fund's excessive trading
policies. The Company shall use its best efforts, and shall reasonably
cooperate with, the Fund to enforce stated prospectus policies regarding
transactions in Portfolio shares. The Company represents and warrants to the
Fund, the Adviser and the Distributor that the Company's personnel have
sufficient expertise and experience to implement this Agreement in accordance
with its terms. The Company acknowledges that orders received by it in
violation of the Fund's stated policies may be subsequently revoked or
cancelled by the Fund and that the Fund shall not be responsible for any losses
incurred by the Company or the Contract owner as a result of such cancellation.
In addition, the Company acknowledges that the Fund has the right to refuse any
purchase order for any reason, particularly if the Fund determines that a
Portfolio would be unable to invest the money effectively in accordance with
its investment policies or would otherwise be adversely affected due to the
size of the transaction, frequency of trading, or other factors.
1.3. The Fund will not sell shares of the Portfolios to any other
Participating Insurance Company separate account unless an agreement containing
provisions the substance of which are the same as Sections 2.1, 2.2 (except
with respect to designation of applicable law), 3.5, 3.6, 3.7, and Article VII
of this Agreement is in effect to govern such sales.
1.4. The Fund agrees to redeem for cash, on the Company's request, any full
or fractional shares of the Portfolios held by the Company, executing such
requests on each
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Business Day at the net asset value next computed after receipt by the Fund or
its designee of the request for redemption. For purposes of this Section 1.4,
the Company shall be the designee of the Fund for receipt of requests for
redemption and receipt by such designee shall constitute receipt by the Fund,
provided that the Fund receives notice of any such request for redemption
sufficiently in advance of 10:00 a.m. Eastern time on the next following
Business Day to effect any redemption by 10:00 a.m. Eastern time on that
Business Day. The parties agree that receipt by the Fund of notice of such
order prior to 9:00 a.m. Eastern time will be deemed to be sufficiently in
advance for purposes of the preceding sentence; receipt of such notice between
9:00 a.m. and 10:00 a.m. Eastern time will be deemed to sufficiently in advance
solely in the discretion of the Fund or its designee.
1.5. The parties hereto acknowledge that the arrangement contemplated by
this Agreement is not exclusive; the Fund's shares may be sold to other
Participating Insurance Companies (subject to Section 1.3) and the cash value
of the Contracts may be invested in other investment companies.
1.6. In the event of net purchases, the Company shall pay for Fund shares by
3:00 p.m. Eastern time on the next Business Day after an order to purchase Fund
shares is received in accordance with the provisions of Section 1.1 hereof.
Payment shall be in federal funds transmitted by wire and/or by a credit for
any shares redeemed the same day as the purchase.
1.7. The Fund shall pay and transmit the proceeds of redemptions of Fund
shares by 2:00 p.m. Eastern Time on the next Business Day after a redemption
order is received in accordance with Section 1.4 hereof; provided, however,
that the Fund may delay payment in extraordinary circumstances to the extent
permitted under Section 22(e) of the 1940 Act. Payment shall be in federal
funds transmitted by wire and/or a credit for any shares purchased the same day
as the redemption.
Each party has the right to rely on information or confirmations provided by
the other party (or by an affiliate of the other party), and shall not be
liable in the event that an error is a result of any misinformation supplied by
the other party.
1.8. Issuance and transfer of the Fund's shares will be by book entry only.
Stock certificates will not be issued to the Company or the Accounts. Shares
purchased from the Fund will be recorded in an appropriate title for the
relevant Account or the relevant sub-account of an Account.
1.9. The Fund shall furnish same day notice (by electronic communication or
telephone, followed by electronic confirmation) to the Company of any income,
dividends or capital gain distributions payable on a Portfolio's shares. The
Company hereby elects to receive all such income dividends and capital gain
distributions as are payable on a Portfolio's shares in additional shares of
that Portfolio. The Company reserves the right to revoke this election and to
receive all such income dividends and capital gain distributions in cash. The
Fund shall notify the Company by the end of the next following Business Day of
the number of shares so issued as payment of such dividends and distributions.
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1.10. The Fund shall make the net asset value per share for each Portfolio
available to the Company on each Business Day as soon as reasonably practicable
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. In the event of an error in the computation of a Portfolio's net asset
value per share ("NAV") or any dividend or capital gain distribution (each, a
"pricing error"), the Adviser or the Fund shall notify the Company as soon as
possible after discovery of the error. Such notification may be oral, but shall
be confirmed promptly in writing. A pricing error shall be corrected in
accordance with the Fund's policies and procedures, which comply in all
material respects with applicable law. Upon notification by the Adviser of any
overpayment due to a material error, the Company shall promptly remit to the
Adviser any overpayment that has not been paid to Contract owners. In no event
shall the Company be liable to Contract owners for any such adjustments or
underpayment amounts. Only the following pricing errors shall be deemed to be
"materially incorrect" or constitute a "material error" for purposes of this
Agreement: pricing errors that result in a difference between the erroneous NAV
and the correct NAV equal to or greater than $0.01 per share.
1.11. The parties agree to mutually cooperate with respect to any state
insurance law restriction or requirement applicable to the Fund's investments;
provided, however, that the Fund reserves the right not to implement
restrictions or take other actions required by state insurance law if the Fund
or the Adviser determines that the implementation of the restriction or other
action is not in the best interest of Fund shareholders.
ARTICLE II. Representations and Warranties
2.1. The Company represents and warrants that: (a) Contracts or interests in
the Accounts are or will be registered under the 1933 Act, or are not so
registered in proper reliance upon an exemption from such registration
requirements (in the event the Company of the Account relies upon an exemption
from such registration requirements, the Company undertakes to promptly so
notify the Fund); (b) the Contracts will be issued and sold in compliance in
all material respects with all applicable federal and state laws; and (c) the
sale of the Contracts shall comply in all material respects with state
insurance suitability requirements.
2.2. The Company represents and warrants that: (a) it is an insurance
company duly organized and in good standing under applicable law; (b) it has
legally and validly established each Account prior to any issuance or sale of
units thereof as a segregated asset account under New York law; and (c) it has
registered each Account as a unit investment trust in accordance with the
provisions of the 1940 Act to serve as a segregated investment account for the
Contracts and will maintain such registration for so long as any Contracts are
outstanding as required by applicable law or, alternatively, the Company has
not registered one or more Accounts in proper reliance upon an exclusion from
such registration requirements.
2.3. The Fund represents and warrants that: (a) the Fund shares sold
pursuant to this Agreement shall be registered under the 1933 Act; (b) the Fund
shares sold pursuant to this Agreement shall be duly authorized for issuance
and sold in compliance with all applicable state and federal securities laws
including without limitation the 1933 Act, the 1934 Act, and the 1940 Act;
(c) the Fund is and shall remain registered under the 1940 Act; and (d) the
Fund shall amend
5
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.
2.4. The Fund currently does not intend to make any payments to finance
distribution expenses pursuant to Rule 12b-1 under the 1940 Act, although it
may make such payments in the future subject to applicable law and after
providing notice to the Company.
2.5. The Fund represents and warrants that it shall register and qualify the
shares for sale in accordance with the laws of the various states if and to the
extent required by applicable law.
2.6. The Fund represents and warrants that it is lawfully organized and
validly existing under the laws of the State of Delaware and that it does and
will comply in all material respects with the 1940 Act.
2.7. The Fund makes no representation as to whether any aspect of its
operations (including, but not limited to, fees and expenses and investment
policies) complies with the insurance laws or regulations of the various states.
2.8. The Adviser represents and warrants that it is and shall remain duly
registered under all applicable federal and state securities laws and that it
shall perform its obligations for the Fund in compliance in all material
respects with any applicable state and federal securities laws.
2.9. The Distributor represents and warrants that it is and shall remain
duly registered as a broker-dealer under all applicable federal and state
securities laws and is a member in good standing with the FINRA, and that it
shall perform its obligations for the Fund in compliance in all material
respects with the laws of any applicable state and federal securities laws.
2.10. The Fund and the Adviser represent and warrant that all of their
respective officers, employees, investment advisers, and other individuals or
entities dealing with the money and/or securities of the Fund are, and shall
continue to be at all times, covered by one or more blanket fidelity bonds or
similar coverage for the benefit of the Fund in an amount not less than the
minimal coverage required by Rule 17g-1 under the 1940 Act or related
provisions as may be promulgated from time to time. The aforesaid bonds shall
include coverage for larceny and embezzlement and shall be issued by a
reputable bonding company.
2.11. The Fund and the Adviser represent and warrant that they will provide
the Company with as much advance notice as is reasonably practicable of any
material change affecting the Portfolios (including, but not limited to, any
material change in the registration statement or prospectus affecting the
Portfolios) and any proxy solicitation affecting the Portfolios and consult
with the Company in order to implement any such change in an orderly manner,
recognizing the expenses of changes and attempting to minimize such expense by
implementing them in conjunction with regular annual updates of the prospectus
for the Contracts where reasonably practicable.
6
2.12. The Company represents and warrants, for purposes other than
diversification under Section 817 of the Internal Revenue Code of 1986 as
amended (the "Code"), that the Contracts are currently and at the time of
issuance will be treated as annuity contracts or life insurance policies under
applicable provisions of the Code, and that it will make every effort to
maintain such treatment and that it will notify the Fund, the Distributor and
the Adviser 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. In addition, the Company represents and warrants that each Account
is a "segregated asset account" and that interests in each Account are offered
exclusively through the purchase of or transfer into a "variable contract"
within the meaning of such terms under Section 817 of the Code and the
regulations thereunder. The Company will use every effort to continue to meet
such definitional requirements, and it will notify the Fund, the Distributor
and the Adviser immediately upon having a reasonable basis for believing that
such requirements have ceased to be met or that they might not be met in the
future. The Company represents and warrants that it will not purchase Fund
shares with assets derived from tax-qualified retirement plans except,
indirectly, through Contracts purchased in connection with such plans.
2.13. The Company represents and warrants that it is currently in
compliance, and will remain in compliance, with all applicable anti-money
laundering laws, regulations, and requirements. In addition, the Company
represents and warrants that it has adopted and implemented policies and
procedures reasonably designed to achieve compliance with the applicable
requirements administered by the Office of Foreign Assets Control ("OFAC") of
the U.S. Department of the Treasury.
2.14. The Company represents and warrants that it is currently in
compliance, and will remain in compliance, with all applicable laws, rules and
regulations relating to consumer privacy, including, but not limited to,
Regulation S-P.
2.15. The Company represents and warrants that it has adopted, and will at
all times during the term of this Agreement maintain, reasonable and
appropriate procedures ("Late Trading Procedures") reasonably designed to
ensure that any and all orders relating to the purchase, sale or exchange of
Fund shares communicated to the Fund to be treated in accordance with Article I
of this Agreement as having been received on a Business Day, have been received
by the Valuation Time on such Business Day and were not modified after the
Valuation Time, and that all orders received from Contract owners but not
rescinded by the Valuation Time were communicated to the Fund or its agent as
received for that Business Day. The Company represents and warrants that it has
adopted and implemented controls reasonably designed to ensure that all orders
received by the Company after the close of the New York Stock Exchange on a
particular Business Day will not be aggregated with orders received by the
Company before the close of the New York Stock Exchange on such Business Day.
"Valuation Time" shall mean the time as of which the Fund calculates net asset
value for the shares of the Portfolios on the relevant Business Day.
2.16. Each transmission of orders by the Company shall constitute a
representation by the Company that such orders are accurate and complete and
relate to orders received by the Company by the Valuation Time on the Business
Day for which the order is to be priced and that
7
such transmission includes all orders relating to Fund shares received from
Contract owners but not rescinded by the Valuation Time. The Company agrees to
provide the Fund or its designee with a copy of the Late Trading Procedures and
such certifications and representations regarding the Late Trading Procedures
as the Fund or its designee may reasonably request. The Company will promptly
notify the Fund in writing of any material change to the Late Trading
Procedures.
2.17 The Company, PHL Variable Insurance Company, Phoenix Life and Annuity
Company and Columbia Management Services, Inc. have entered in to a separate
Rule 22c-2 Agreement effective as of April 16, 2007, as amended from time to
time (the "Rule 22c-2 Agreement"). The terms and conditions of the Rule 22c-2
Agreement are incorporated by reference herein as though the Company entered
into such agreement with the Fund, the Adviser and the Distributor.
2.18 The Company agrees to cooperate fully with any and all efforts by the
Fund to assure the Fund that the Company has implemented effective compliance
policies and procedures administered by qualified personnel as required by and
in accordance with any and all applicable laws, rules and regulations.
2.19 Each party represents that the execution and delivery of this Agreement
and the consummation of the transactions contemplated herein have been duly
authorized by all necessary corporate or board action, as applicable, by such
party and when so executed and delivered this Agreement will be the valid and
binding obligation of such party enforceable in accordance with its terms.
ARTICLE III. Prospectuses and Proxy Statements; Voting
3.1. At least annually, the Adviser or Distributor shall provide the Company
with as many copies of the Fund's current prospectus as the Company may
reasonably request, with expenses to be borne in accordance with Schedule A
hereof. If requested by the Company in lieu thereof, the Adviser, Distributor
or Fund shall provide such documentation (including an electronic version of
the current prospectus) and other assistance as is reasonably necessary in
order for the Company once each year (or more frequently if the prospectus for
the Fund is amended) to have the prospectus for the Contracts and the
prospectus for the Fund printed together in one document.
3.2. If applicable state or federal laws or regulations require that the
Statement of Additional Information ("SAI") for the Fund be distributed to all
Contract owners, then the Fund, Distributor and/or the Adviser shall provide
the Company with copies of the Fund's SAI in such quantities, with expenses to
be borne in accordance with Schedule A hereof, as the Company may reasonably
require to permit timely distribution thereof to Contract owners. The Adviser,
Distributor and/or the Fund shall also provide an SAI to any Contract owner or
prospective owner who requests such SAI from the Fund.
8
3.3. The Fund, Distributor and/or Adviser shall provide the Company with
copies of the Fund's proxy materials, reports to shareholders and other
communications to shareholders in such quantity, with expenses to be borne in
accordance with Schedule A hereof, as the Company may reasonably require to
permit timely distribution thereof to Contract owners.
3.4. It is understood and agreed that, except with respect to information
regarding the Company provided in writing by that party, the Company shall not
be responsible for the content of the prospectus or SAI for the Fund. It is
also understood and agreed that, except with respect to information regarding
the Fund, the Distributor, the Adviser or the Portfolios provided in writing by
the Fund, the Distributor or the Adviser, neither the Fund, the Distributor nor
Adviser are responsible for the content of the prospectus or SAI for the
Contracts.
3.5. If and to the extent required by law the Company shall:
(a) solicit voting instructions from Contract owners;
(b) vote the Portfolio shares held in the Accounts in accordance with
instructions received from Contract owners;
(c) vote Portfolio shares held in the Accounts for which no instructions
have been received in the same proportion as Portfolio shares for which
instructions have been received from Contract owners, so long as and to the
extent that the SEC continues to interpret the 1940 Act to require
pass-through voting privileges for variable contract owners; and
(d) vote Portfolio shares held in its general account or otherwise in the
same proportion as Portfolio shares for which instructions have been
received from Contract owners, so long as and to the extent that the SEC
continues to interpret the 1940 Act to require such voting by the insurance
company. The Company reserves the right to vote Fund shares in its own
right, to the extent permitted by law.
3.6. The Company shall be responsible for assuring that each of its separate
accounts holding shares of a Portfolio calculates voting privileges as directed
by the Fund and agreed to by the Company and the Fund. The Fund agrees to
promptly notify the Company of any changes of interpretations or amendments of
the Mixed and Shared Funding Exemptive Order.
3.7. The Fund will comply with all provisions of the 1940 Act requiring
voting by shareholders. Further, the Fund will act in accordance with the SEC's
interpretation of the requirements of Section 16(a) with respect to periodic
elections of directors or trustees and with whatever rules the SEC may
promulgate with respect thereto.
ARTICLE IV. Sales Material and Information
4.1. The Company shall furnish, or shall cause to be furnished, to the Fund
or its designee, a copy of each piece of sales literature or other promotional
material that the Company develops or proposes to use and in which the Fund (or
Portfolio thereof), the Adviser or the Distributor is named in connection with
the Contracts, at least ten (10) business days prior to its use. No such
material shall be used if the Fund objects to such use within five (5) business
days after receipt of such material.
9
4.2. The Company shall not give any information or make any representations
or statements on behalf of the Fund in connection with the sale of the
Contracts other than the information or representations contained in the
registration statement, including the prospectus or SAI for the Fund shares, as
the same may be amended or supplemented from time to time, or in sales
literature or other promotional material approved by the Fund, Distributor or
Adviser, except with the permission of the Fund, Distributor or Adviser.
4.3. The Fund, the Adviser or the Distributor shall furnish, or shall cause
to be furnished, to the Company, a copy of each piece of sales literature or
other promotional material in which the Company and/or its Accounts are named
at least ten (10) business days prior to its use. No such material shall be
used if the Company objects to such use within five (5) business days after
receipt of such material.
4.4. The Fund, the Distributor and the Adviser shall not give any
information or make any representations on behalf of the Company or concerning
the Company, the Accounts, or the Contracts other than the information or
representations contained in a registration statement, including the prospectus
or SAI for the Contracts, as the same may be amended or supplemented from time
to time, or in sales literature or other promotional material approved by the
Company or its designee, except with the permission of the Company.
4.5. For purposes of Articles IV and VIII, the phrase "sales literature and
other promotional material" includes, but is not limited to, advertisements
(such as material published, or designed for use in, a newspaper, magazine, or
other periodical, radio, television, telephone or tape recording, videotape
display, signs or billboards, motion pictures, or other public media; e.g.,
on-line networks such as the Internet or other electronic 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, 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 shareholder reports, and
proxy materials (including solicitations for voting instructions) and any other
material constituting sales literature or advertising under the FINRA rules,
the 1933 Act or the ▇▇▇▇ ▇▇▇.
4.6. At the request of any party to this Agreement, each other party will
make available to the other party's independent auditors and/or representatives
of the appropriate regulatory agencies, all records, data and access to
operating procedures that may be reasonably requested in connection with
compliance and regulatory requirements related to this Agreement or any party's
obligations under this Agreement.
ARTICLE V. Fees and Expenses
5.1. The Fund, the Distributor and the Adviser shall pay no fee or other
compensation to the Company under this Agreement, and the Company shall pay no
fee or other compensation
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to the Fund, the Distributor or Adviser under this Agreement; provided,
however, (a) the parties will bear their own expenses as reflected in Schedule
C and other provisions of this Agreement, and (b) the parties may enter into
other agreements relating to the Company's investment in the Fund, including
services agreements.
Each Party agrees to cooperate with the others, as applicable, in arranging
to print, mail and/or deliver, in a timely manner, combined or coordinated
prospectuses or other materials of the Portfolio and the Accounts.
ARTICLE VI. Diversification and Qualification
6.1. The Fund, Distributor and Adviser represent and warrant that the Fund
and each Portfolio thereof will at all times comply with Section 817(h) of the
Code and Treasury Regulation (S)1.817-5, as amended from time to time, and any
Treasury interpretations thereof, relating to the diversification requirements
for variable annuity, endowment, or life insurance contracts and any amendments
or other modifications or successor provisions to such Section or Regulations.
The Fund, the Distributor or the Adviser shall, upon request, provide to the
Company a quarterly written diversification report, which shall show the
results of the quarterly Section 817(h) diversification test and include a
certification as to whether each Portfolio complies with the Section 817(h)
diversification requirement.
6.2. The Fund, the Distributor and the Adviser agree that shares of the
Portfolios will be sold only to Participating Insurance Companies and their
separate accounts and to Qualified Plans. No shares of any Portfolio of the
Fund will be sold to the general public. However, it is understood by the
Company that the Fund may sell shares of any Portfolio to any person eligible
to invest in that Portfolio in accordance with applicable provisions of
Section 817(h) under the Code and the regulations thereunder, and that if such
provisions are not applicable, then the Fund may sell shares of any Portfolio
to any person, including members of the general public.
6.3. The Fund, the Distributor and the Adviser represent and warrant that
the Fund and each Portfolio is currently qualified as a Regulated Investment
Company under Subchapter M of the Code, and that each Portfolio will maintain
such qualification (under Subchapter M or any successor or similar provisions)
as long as this Agreement is in effect.
6.4. The Company agrees that if the Internal Revenue Service ("IRS") asserts
in writing in connection with any governmental audit or review of the Company
(or, to the Company's knowledge, of any Contract owner) that any Portfolio has
failed to comply with the diversification requirements of Section 817(h) of the
Code or the Company otherwise becomes aware of any facts that could give rise
to any claim against the Fund, Distributor or Adviser as a result of such a
failure or alleged failure:
(a) The Company shall promptly notify the Fund, the Distributor and the
Adviser of such assertion or potential claim;
(b) The Company shall consult with the Fund, the Distributor and the
Adviser as to how to minimize any liability that may arise as a result of
such failure or alleged failure;
11
(c) The Company shall use its best efforts to minimize any liability of
the Fund, the Distributor and the Adviser resulting from such failure,
including, without limitation, demonstrating, pursuant to Treasury
Regulations, Section 1.817-5(a)(2), to the commissioner of the IRS that such
failure was inadvertent;
(d) Any written materials to be submitted by the Company to the IRS, any
Contract owner or any other claimant in connection with any of the foregoing
proceedings or contests (including, without limitation, any such materials
to be submitted to the IRS pursuant to Treasury Regulations,
Section 1.817-5(a)(2)) shall be provided by the Company to the Fund, the
Distributor and the Adviser (together with any supporting information or
analysis) within at least two (2) business days prior to submission;
(e) The Company shall provide the Fund, the Distributor and the Adviser
with such cooperation as the Fund, the Distributor and the Adviser shall
reasonably request (including, without limitation, by permitting the Fund,
the Distributor and the Adviser to review the relevant books and records of
the Company) in order to facilitate review by the Fund, the Distributor and
the Adviser of any written submissions provided to it or its assessment of
the validity or amount of any claim against it arising from such failure or
alleged failure;
(f) The Company shall not with respect to any claim of the IRS or any
Contract owner that would give rise to a claim against the Fund, the
Distributor and the Adviser (i) compromise or settle any claim, (ii) accept
any adjustment on audit, or (iii) forego any allowable administrative or
judicial appeals, without the express written consent of the Fund, the
Distributor and the Adviser, which shall not be unreasonably withheld;
provided that, the Company shall not be required to appeal any adverse
judicial decision unless the Fund and the Adviser shall have provided an
opinion of independent counsel to the effect that a reasonable basis exists
for taking such appeal; and further provided that the Fund, the Distributor
and the Adviser shall bear the costs and expenses, including reasonable
attorney's fees, incurred by the Company in complying with this clause (f).
ARTICLE VII. Potential Conflicts and Compliance With Mixed and Shared Funding
Exemptive Order
7.1. The Board of Trustees of the Fund (the "Board") will monitor the Fund
for the existence of any material irreconcilable conflict among the interests
of the Contract owners of all separate accounts investing in the Fund and the
interests of participants under all Qualified Plans investing in the Fund, and
the Board will determine what action, if any, should be taken in response to
such conflict. An irreconcilable material conflict may arise for a variety of
reasons, including: (a) an action by any state insurance regulatory authority;
(b) a change in applicable federal or state insurance, tax, or securities laws
or regulations, or a public ruling, private letter ruling, no-action or
interpretative letter, or any similar action by insurance, tax, or securities
regulatory authorities; (c) an administrative or judicial decision in any
relevant proceeding; (d) the manner in which the investments of any Portfolio
is being managed; (e) a difference in voting instructions given by variable
annuity contract and variable life insurance contract owners or by contract
owners of different Participating Insurance Companies; (f) a decision by a
Participating Insurance Company to disregard the voting instructions of
Contract owners; or (g) as applicable,
12
a decision by a Qualified Plan to disregard the voting instructions of
Qualified Plan participants. The Board shall promptly inform the Company if it
determines that an irreconcilable material conflict exists and the implications
thereof.
7.2. The Company will report any potential or existing conflicts of which it
is aware to the Board. The Company will assist the Board in carrying out its
responsibilities under the Mixed and Shared Funding Exemptive Order, by
providing the Board with all information reasonably necessary for the Board to
consider any issues raised. This includes, but is not limited to, an obligation
by the Company to inform the Board whenever Contract owner voting instructions
are to be disregarded. Such responsibilities shall be carried out by the
Company with a view only to the interests of its Contract owners.
7.3. If it is determined by a majority of the Board, or a majority of its
directors who are not interested persons of the Fund, the Distributor, the
Adviser or any subadviser to any of the Portfolios (the "Independent
Directors"), that a material irreconcilable conflict exists, the Company and
other Participating Insurance Companies and Qualified Plans shall, at their
expense and to the extent reasonably practicable (as determined by a majority
of the Independent Directors), take whatever steps are necessary to remedy or
eliminate the irreconcilable material conflict, up to and including:
(1) withdrawing the assets allocable to some or all of the separate accounts
from the Fund or any Portfolio and reinvesting such assets in a different
investment medium, including (but not limited to) another Portfolio, or
submitting the question whether such segregation should be implemented to a
vote of all affected Contract owners and, as appropriate, segregating the
assets of any appropriate group (i.e., annuity contract owners, life insurance
contract owners, or variable contract owners of one or more Participating
Insurance Companies) that votes in favor of such segregation, or offering to
the affected contract owners the option of making such a change; and
(2) establishing a new registered management investment company or managed
separate account. The Company's responsibility to take remedial action shall be
carried out by the Company with a view only to the interests of Contract owners.
7.4. If a material irreconcilable conflict arises because of a decision by
the Company to disregard Contract owner voting instructions and that decision
represents a minority position or would preclude a majority vote, the Company
may be required, at the Fund's election, to withdraw the Account's investment
in the Fund and terminate this Agreement; 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 Directors. Any such withdrawal and termination must take place
within six (6) months after the Fund gives written notice that this provision
is being implemented, and until the end of that six-month period the Adviser,
the Distributor and the Fund shall continue to accept and implement orders by
the Company for the purchase (and redemption) of shares of the Fund, subject to
the terms of the Fund's then-current prospectus.
7.5. If a material irreconcilable conflict arises because a particular state
insurance regulator's decision applicable to the Company conflicts with the
majority of other state regulators, then the Company will withdraw the
Account's investment in the Fund and terminate this Agreement within six months
after the Board informs the Company in writing that it has determined that such
decision has created an irreconcilable material conflict; provided, however,
13
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 Directors. Until the end of the foregoing six-month period, the
Fund shall continue to accept and implement orders by the Company for the
purchase (and redemption) of shares of the Fund, subject to the terms of the
Fund's then-current prospectus.
7.6. For purposes of Sections 7.3 through 7.5 of this Agreement, a majority
of the Independent Directors shall determine whether any proposed action
adequately remedies any irreconcilable material conflict, but in no event will
the Fund be required to establish a new funding medium for the Contracts. The
Company shall not be required by Section 7.3 to establish a new funding medium
for the Contracts if an offer to do so has been declined by vote of a majority
of Contract owners materially affected by the irreconcilable material conflict.
In the event that the Board determines that any proposed action does not
adequately remedy any irreconcilable material conflict, then the Company will
withdraw the Account's investment in the Fund and terminate this Agreement
within six (6) months after the Board informs the Company in writing of the
foregoing determination; provided, however, that such withdrawal and
termination shall be limited to the extent required by any such material
irreconcilable conflict as determined by a majority of the Independent
Directors.
7.7. The Fund hereby notifies the Company that Account prospectus disclosure
regarding potential risks of mixed and shared funding may be appropriate.
7.8 At least annually, the Company will submit to the Board such reports,
materials or data as the Board may reasonably request so that the Board may
carry out fully the obligations imposed on it by the conditions contained in
the application for the Mixed and Shared Funding Exemptive Order.
7.9 If and to the extent that Rule 6e-2 and Rule 6e-3(T) are amended, or
Rule 6e-3 is adopted, to provide exemptive relief from any provision of the
1940 Act or the rules promulgated thereunder with respect to mixed or shared
funding (as defined in the Mixed and Shared Funding Exemptive Order) on terms
and conditions materially different from those contained in the Mixed and
Shared Funding Exemptive Order, then (a) the Fund and/or the Participating
Insurance Companies, as appropriate, shall take such steps as may be necessary
to comply with Rules 6e-2 and 6e-3(T), as amended, and Rule 6e-3, as adopted,
to the extent such rules are applicable: and (b) Sections 3.5, 3.6, 3.7 and
Sections 7.1-7.8 of this Agreement shall continue in effect only to the extent
that terms and conditions substantially identical to such Sections are
contained in such Rule(s) as so amended or adopted.
ARTICLE VIII. Indemnification
8.1. Indemnification by the Company
(a) The Company agrees to indemnify and hold harmless the Fund, the
Distributor and the Adviser and each of their respective officers and
directors or trustees and each person, if any, who controls the Fund,
Distributor or Adviser within the meaning of Section 15 of the 1933 Act
(collectively, the "Indemnified Parties" for purposes of this Section 8.1)
14
against any and all losses, claims, expenses, damages and liabilities
(including amounts paid in settlement with the written consent of the
Company) or litigation (including reasonable 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,
expenses, damages or liabilities (or actions in respect thereof) or
settlements are related to the sale or acquisition of the Fund'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 or SAI covering the Contracts or contained in
the Contracts or sales literature or other promotional material 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 Company by or on behalf of the Fund for use in the
registration statement or prospectus for the Contracts or in the
Contracts or sales literature or other promotional material (or any
amendment or supplement to any of the foregoing) or otherwise for use in
connection with the sale of the Contracts or Fund shares; or
(ii) arise out of or as a result of statements or representations
(other than statements or representations contained in the registration
statement, prospectus or sales literature or other promotional material
of the Fund not supplied by the Company or persons under its control) or
wrongful conduct of the Company or persons under its control, with
respect to the sale or distribution of the Contracts or Fund Shares; or
(iii) arise out of any untrue statement or alleged untrue statement
of a material fact contained in a registration statement, prospectus,
SAI, or sales literature or other promotional material 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 in
writing to the Fund by or on behalf of the Company; or
(iv) arise as a result of any failure by the Company to provide the
services and furnish the materials under the terms of this Agreement; or
(v) arise out of or result from any material breach of any
representation and/or warranty made by the Company in this Agreement or
arise out of or result from any other material breach of this Agreement
by the Company, including without limitation Section 2.12 and
Section 6.4 hereof,
15
as limited by and in accordance with the provisions of Sections 8.1(b)
and 8.1(c) hereof.
(b) The Company shall not be liable under this indemnification provision
with respect to any losses, claims, expenses, damages, liabilities or
litigation to which an Indemnified Party would otherwise be subject by
reason of such Indemnified Party's willful misfeasance, bad faith, or gross
negligence in the performance of such Indemnified Party's duties or by
reason of such Indemnified Party's reckless disregard of obligations or
duties under this Agreement.
(c) The Company shall not be liable under this indemnification provision
with respect to any claim made against an Indemnified Party unless such
Indemnified Party shall have notified the Company in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received
notice of such service on any designated agent), but failure to notify the
Company of any such claim shall not relieve the Company from any liability
which it may have to the Indemnified Party against whom such action is
brought otherwise than on account of this indemnification provision, except
to the extent that the Company has been prejudiced by such failure to give
notice. In case any such action is brought against the Indemnified Parties,
the Company shall be entitled to participate, at its own expense, in the
defense of such action. The Company also shall be entitled to assume the
defense thereof, with counsel satisfactory to the party named in the action.
After notice from the Company to such party of the Company's election to
assume the defense thereof, the Indemnified Party shall bear the fees and
expenses of any additional counsel retained by it, and the Company will not
be liable to such party under this Agreement for any legal or other expenses
subsequently incurred by such party independently in connection with the
defense thereof other than reasonable costs of investigation.
(d) The Indemnified Parties will promptly notify the Company of (i) the
issuance by any court or regulatory body of any stop order, cease and desist
order, or other similar order with respect to the Fund's registration
statement under the 1933 Act or prospectus, (ii) any request by the SEC for
any amendment to such registration statement or prospectus that may affect
the offering of shares of the Fund, (iii) the initiation of any litigation
or proceedings for that purpose or for any other purpose relating to the
registration or offering of the Fund's shares, or (iv) any other action or
circumstances that may prevent the lawful offer or sale of shares of any
Fund in any state or jurisdiction, including, without limitation, any
circumstances in which (a) such shares are not registered and, in all
material respects, issued and sold in accordance with applicable state and
federal law, or (b) such law precludes the use of such shares as an
underlying investment medium of the Contracts issued or to be issued by the
Company. The Fund and Adviser will make every reasonable effort to prevent
the issuance, with respect to any Fund, of any such stop order, cease and
desist order or similar order and, if any such order is issued, to obtain
the lifting thereof at the earliest possible time.
8.2. Indemnification by the Adviser
(a) The Adviser agrees to indemnify and hold harmless the Company and its
directors and officers and each person, if any, who controls the Company
within the meaning of Section 15 of the 1933 Act (collectively, the
"Indemnified Parties" for purposes of this Section
16
8.2) against any and all losses, claims, expenses, damages, liabilities
(including amounts paid in settlement with the written consent of the
Adviser) or litigation (including reasonable legal and other expenses) to
which the Indemnified Parties may become subject under any statute or
regulation, at common law or otherwise, insofar as such losses, claims,
damages, liabilities or expenses (or actions in respect thereof) or
settlements are related to the sale or acquisition of the Portfolios 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 SAI or sales literature or other promotional
material of the Fund prepared by the Fund, the Distributor or the
Adviser (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 Adviser, the Distributor or the Fund by or on behalf of
the Company for use in the registration statement, prospectus or SAI for
the Fund or in sales literature or other promotional material (or any
amendment or supplement to any of the foregoing) or otherwise for use in
connection with the sale of the Contracts or the Portfolios; or
(ii) arise out of or as a result of statements or representations
(other than statements or representations contained in the registration
statement, prospectus, SAI or sales literature or other promotional
material for the Contracts not supplied by the Adviser or persons under
its control) or wrongful conduct of the Fund, the Distributor or the
Adviser or persons under their control, with respect to the sale or
distribution of the Contracts or Portfolios; or
(iii) arise out of any untrue statement or alleged untrue statement
of a material fact contained in a registration statement, prospectus,
SAI, or sales literature or other promotional material 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 Company by or on
behalf of the Adviser, the Distributor or the Fund; or
(iv) arise as a result of any failure by the Fund, the Distributor or
the Adviser to provide the services and furnish the materials under the
terms of this Agreement (including a failure, whether unintentional or
in good faith or otherwise, to comply with the diversification and other
qualification requirements specified in Article VI of this Agreement); or
17
(v) arise out of or result from any material breach of any
representation and/or warranty made by the Fund, the Distributor or the
Adviser in this Agreement or arise out of or result from any other
material breach of this Agreement by the Adviser, the Distributor or the
Fund; or
(vi) arise out of or result from the incorrect or untimely
calculation or reporting by the Fund, the Distributor or the Adviser of
the daily net asset value per share (subject to Section 1.10 of this
Agreement) or dividend or capital gain distribution rate;
as limited by and in accordance with the provisions of Sections 8.2(b) and
8.2(c) hereof. This indemnification is in addition to and apart from the
responsibilities and obligations of the Adviser specified in Article VI hereof.
(b) The Adviser shall not be liable under this indemnification provision
with respect to any losses, claims, expenses, damages, liabilities or
litigation to which an Indemnified Party would otherwise be subject by
reason of such Indemnified Party's willful misfeasance, bad faith, or gross
negligence in the performance of such Indemnified Party's duties or by
reason of such Indemnified Party's reckless disregard of obligations or
duties under this Agreement.
(c) The Adviser shall not be liable under this indemnification provision
with respect to any claim made against an Indemnified Party unless such
Indemnified Party shall have notified the Adviser in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received
notice of such service on any designated agent), but failure to notify the
Adviser of any such claim shall not relieve the Adviser 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, except
to the extent that the Adviser has been prejudiced by such failure to give
notice. In case any such action is brought against the Indemnified Parties,
the Adviser will be entitled to participate, at its own expense, in the
defense thereof. The Adviser also shall be entitled to assume the defense
thereof, with counsel satisfactory to the party named in the action. After
notice from the Adviser to such party of the Adviser'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 Adviser will not be liable
to such party under this Agreement for any legal or other expenses
subsequently incurred by such party independently in connection with the
defense thereof other than reasonable costs of investigation.
(d) The Company and its broker-dealer subsidiary agree promptly to notify
the Fund, the Distributor or the Adviser (i) the issuance by any court or
regulatory body of any stop order, cease and desist order, or other similar
order with respect to each Account relating to the Contracts, (ii) any
request by the SEC for any amendment to the registration statement or
Account prospectus that may affect the offering of shares of the Fund,
(iii) the initiation 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 for that purpose or for any other
purpose relating to the registration or offering of each Account's interests
pursuant to the Contracts, or (iv) any other action or circumstances that
may prevent the lawful offer or sale of
18
said interests in any state or jurisdiction, including, without limitation,
any circumstances in which said interests are not registered and, in all
material respects, issued and sold in accordance with applicable state and
federal law. The Company will make every reasonable effort to prevent the
issuance of any such stop order, cease and desist order or similar order
and, if any such order is issued, to obtain the lifting thereof at the
earliest possible time.
ARTICLE IX. Applicable Law
9.1. This Agreement shall be construed and the provisions hereof interpreted
under and in accordance with the laws of the Commonwealth of Massachusetts,
without regard to conflict of laws provisions.
9.2. This Agreement shall be subject to the provisions of the 1933, 1934 and
1940 Acts, and the rules and regulations and rulings thereunder, including such
exemptions from those statutes, rules and regulations as the SEC may grant
(including, but not limited to, 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, with or without cause, with respect to
some or all Portfolios, upon sixty (60) days advance written notice
delivered to the other parties; or
(b) at the option of the Company by written notice to the other parties
with respect to any Portfolio based upon the Company's determination that
shares of such Portfolio are not reasonably available to meet the
requirements of the Contracts; or
(c) at the option of the Company by written notice to the other parties
with respect to any Portfolio in the event any of the Portfolio's shares are
not registered, issued or sold in accordance with applicable state and/or
federal law or such law precludes the use of such shares as the underlying
investment media of the Contracts issued or to be issued by the Company; or
(d) at the option of the Fund, Distributor or Adviser in the event that
formal administrative proceedings are instituted against the Company by the
FINRA, the SEC, the Insurance Commissioner or like official of any state or
any other regulatory body regarding the Company's duties under this
Agreement or related to the sale of the Contracts, the operation of any
Account, or the purchase of the Fund shares, if, in each case, the Fund,
Distributor or Adviser, as the case may be, reasonably determines in its
sole judgment exercised in good faith, that any such administrative
proceedings will have a material adverse effect upon the ability of the
Company to perform its obligations under this Agreement; or
(e) at the option of the Company in the event that formal administrative
proceedings are instituted against the Fund, the Distributor or the Adviser
by the FINRA, the
19
SEC, or any state securities or insurance department or any other regulatory
body, if the Company reasonably determines in its sole judgment exercised in
good faith, that any such administrative proceedings will have a material
adverse effect upon the ability of the Fund, the Distributor or the Adviser
to perform their obligations under this Agreement; or
(f) At the option of the Company by written notice to the Fund, the
Adviser and the Distributor, in the event that any Portfolio (i) ceases to
qualify, or the Company reasonably believes such Portfolio may fail to so
qualify, as a Regulated Investment Company under Subchapter M or (ii) fails
to comply with the Section 817(h) diversification requirements specified in
Article VI hereof; or
(g) at the option of any non-defaulting party hereto in the event of a
material breach of this Agreement by any party hereto (the "defaulting
party") other than as described in Section 10.1(a)-(h); provided, that the
non-defaulting party gives written notice thereof to the defaulting party,
with copies of such notice to all other non-defaulting parties, and if such
breach shall not have been remedied within thirty (30) days after such
written notice is given, then the non-defaulting party giving such written
notice may terminate this Agreement by giving thirty (30) days written
notice of termination to the defaulting party; or
(h) at any time upon written agreement of all parties to this Agreement.
10.2. Notice Requirement
No termination of this Agreement shall be effective unless and until the
party terminating this Agreement gives prior written notice to all other
parties of its intent to terminate, which notice shall set forth the basis for
the termination. Furthermore,
(a) in the event any termination is based upon the provisions of Article
VII, or the provisions of Section 10.1(a) of this Agreement, the prior
written notice shall be given in advance of the effective date of
termination as required by those provisions unless such notice period is
shortened by mutual written agreement of the parties;
(b) in the event any termination is based upon the provisions of
Section 10.1(d), 10.1(e) or 10.1(g) of this Agreement, the prior written
notice shall be given at least sixty (60) days before the effective date of
termination; and
(c) in the event any termination is based upon the provisions of
Section 10.1(b), 10.1(c) or 10.1(f), the prior written notice shall be given
in advance of the effective date of termination, which date shall be
determined by the party sending the notice.
10.3. Effect of Termination
Notwithstanding any termination of this Agreement, other than as a result of
a failure by either the Fund or the Company to meet Section 817(h) of the Code
diversification requirements, the Fund, the Distributor and the Adviser shall,
at the option of the Company, continue to make available additional shares of
the Fund pursuant to the terms and conditions of this Agreement,
20
for all Contracts in effect on the effective date of termination of this
Agreement (hereinafter referred to as "Existing Contracts"). Specifically,
without limitation, the owners of the Existing Contracts shall be permitted to
reallocate investments in the Fund, redeem investments in the Fund and/or
invest in the Fund upon the making of additional purchase payments under the
Existing Contracts. The parties agree that this Section 10.3 shall not apply to
any terminations under Article VII and the effect of such Article VII
terminations shall be governed by Article VII of this Agreement.
10.4. Surviving Provisions
Notwithstanding any termination of this Agreement, each party's obligations
under Article VIII to indemnify other parties shall survive and not be affected
by any termination of this Agreement. In addition, with respect to Existing
Contracts, all provisions of this Agreement shall also survive and not be
affected by any termination of this Agreement.
ARTICLE XI. Notices
Any notice shall be sufficiently given when sent by registered or certified
mail to the other party at the address of such party set forth below or at such
other address as such party may from time to time specify in writing to the
other parties.
If to the Company:
Phoenix Life Insurance Company
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇, Vice President
Copy to:
Phoenix Life Insurance Company
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
If to the Fund:
▇▇▇▇▇▇ Advisors Trust
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Secretary
If to the Adviser:
Columbia ▇▇▇▇▇▇ Asset Management, LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Secretary
21
If to the Distributor:
Columbia Management Distributors, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Secretary
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 until such time as such information may come into
the public domain. Without limiting the foregoing, no party hereto shall
disclose any information that another party has designated as proprietary.
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 SEC, the
FINRA and state insurance regulators) and shall permit such authorities
reasonable access to its books and records in connection with any investigation
or inquiry relating to this Agreement or the transactions contemplated hereby.
12.6. Any controversy or claim arising out of or relating to this Agreement,
or breach thereof, shall be settled by arbitration in a forum jointly selected
by the relevant parties (but if applicable law requires some other forum, then
such other forum) in accordance with the Commercial Arbitration Rules of the
American Arbitration Association, and judgment upon the award rendered by the
arbitrators may be entered in any court having jurisdiction thereof.
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12.7. The rights, remedies and obligations contained in this Agreement are
cumulative and are in addition to any and all rights, remedies and obligations,
at law or in equity, which the parties hereto are entitled to under state and
federal laws.
12.8. This Agreement or any of the rights and obligations hereunder may not
be assigned by any party without the prior written consent of all parties
hereto.
12.9. The Company agrees that the obligations assumed by the Fund,
Distributor and the Adviser pursuant to this Agreement shall be limited in any
case to the Fund, Distributor and Adviser and their respective assets and the
Company shall not seek satisfaction of any such obligation from the
shareholders of the Fund, Distributor or the Adviser, the Directors, officers,
employees or agents of the Fund, Distributor or Adviser, or any of them.
12.10. The Fund, the Distributor and the Adviser agree that the obligations
assumed by the Company pursuant to this Agreement shall be limited in any case
to the Company and its assets and neither the Fund, Distributor nor Adviser
shall seek satisfaction of any such obligation from the shareholders of the
Company, the directors, officers, employees or agents of the Company, or any of
them.
12.11. No provision of this Agreement may be deemed or construed to modify
or supersede any contractual rights, duties, or indemnifications, as between
the Adviser and the Fund, and the Distributor and the Fund.
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12.12. This Agreement amends and restates the Current Participation
Agreement as of the date hereof.
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.
PHOENIX LIFE INSURANCE COMPANY
By its authorized officer,
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇'▇▇▇▇▇▇▇
----------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇ ▇'▇▇▇▇▇▇▇
Title: Senior Vice President
▇▇▇▇▇▇ ADVISORS TRUST
By its authorized officer,
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
Title: Treasurer
COLUMBIA ▇▇▇▇▇▇ ASSET MANAGEMENT, LLP
By its authorized officer,
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
Title: COO
COLUMBIA MANAGEMENT DISTRIBUTORS INC.
By its authorized officer,
By: /s/ ▇▇▇▇ ▇▇▇▇▇
----------------------------------
Title: Managing Director
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SCHEDULE A
Accounts: Date Established:
----------------------------------------------------------- -----------------
Phoenix Life Variable Accumulation Account (previously
known as Phoenix Home Life Variable Accumulation Account) June 21, 1982
Phoenix Life Variable Universal Life Account (previously
known as Phoenix Home Life Variable Universal Life
Account) July 21, 1988
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SCHEDULE B
DESIGNATED PORTFOLIO(S)
. ▇▇▇▇▇▇ International Small Cap*
. ▇▇▇▇▇▇ U.S. Smaller Companies*
. ▇▇▇▇▇▇ Select
. ▇▇▇▇▇▇ International Select
* Effective June 1, 2008, ▇▇▇▇▇▇ International Small Cap will change its name
to ▇▇▇▇▇▇ International and ▇▇▇▇▇▇ U.S. Smaller Companies will change its
name to ▇▇▇▇▇▇ USA. In connection with these name changes, the Portfolios'
policy on investment in companies with market capitalizations under $5
billion will also change, as described in the Important Notice Regarding
Change in Investment Policy dated March 20, 2008.
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SCHEDULE C
EXPENSES
The Fund and/or the Distributor and/or Adviser, and the Company will
coordinate the functions and pay the costs of the completing these functions
based upon an allocation of costs in the tables below. Costs shall be allocated
to reflect the Fund's share of the total costs determined according to the
number of pages of the Fund's respective portions of the documents.
Party Party
Responsible for Responsible for
Item Function Coordination Expense
------------------- ----------------------------- ------------------- -------------------
Mutual Fund Electronic copy of combined Company Existing Contract
Prospectus prospectuses made available Holders - Fund
The Fund shall provide the Prospective -
Company, with as many copies Company
of the current prospectus for
the Funds as the Company may
reasonably request.
Distribution (including Company Fund
postage) to Existing Contract
Holders.
Distribution (including Company Company
postage) to Prospective
Clients
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Product Prospectus Printing and Distribution for Company Company
Current and Prospective
Clients
Mutual Fund Electronic copy, if Required Fund, Distributor Fund, Distributor
Prospectus Update & by Fund, Distributor or or Adviser or Adviser
Distribution Adviser
If Required by Company Company (Fund, Company
Distributor or
Adviser to provide
Company with
document in PDF
format)
Product Prospectus If Required by Fund, Company Fund, Distributor
Update & Distributor or Adviser or Adviser
Distribution
If Required by Company Company Company
Mutual Fund SAI Printing Fund, Distributor Fund, Distributor
or Adviser or Adviser
Distribution (including Party who receives Party who receives
postage) the request the request
Product SAI Printing Company Company
Distribution Company Company
Proxy Material for Electronic copy of proxy if Fund, Distributor Fund, Distributor
Mutual Fund required by Law or Adviser or Adviser
Distribution (including Company Fund, Distributor
labor) if proxy required by or Adviser
Law
Printing & distribution if Company Company
required by Company
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Mutual Fund Annual Electronic copy made available Fund, Distributor Fund, Distributor
& Semi-Annual Report or Adviser or Adviser
Distribution Company Fund, Distributor
or Adviser
Operations of the Federal registration of units Company Company
Accounts of separate account (24f-2
fees)
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