EXHIBIT 8 (f)
FUND PARTICIPATION AGREEMENT
THIS AGREEMENT, made as of the 12th day of January, 2007, (the
"Agreement") by and between ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ADVISERS MANAGEMENT TRUST
("TRUST"), ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ MANAGEMENT INC. ("NB MANAGEMENT"), a New York
corporation, and OM FINANCIAL LIFE INSURANCE COMPANY ("LIFE COMPANY"), a life
insurance company organized under the laws of the State of Maryland.
WHEREAS, TRUST is registered with the Securities and Exchange Commission
("SEC") under the Investment Company Act of 1940, as amended ("40 Act") as an
open-end, diversified management investment company; and
WHEREAS, TRUST is organized as a series fund comprised of several
portfolios ("Portfolios"); and
WHEREAS, TRUST was organized to act as the funding vehicle for certain
variable life insurance and/or variable annuity contracts offered by life
insurance companies through separate accounts of such life insurance companies
which have entered into participation agreements substantially similar to this
Agreement ("Participating Insurance Companies") and also offers its shares to
certain qualified pension and retirement plans; and
WHEREAS, TRUST has received an order from the SEC, dated May 5,1995
(File No. 812-9164), granting Participating Insurance Companies and their
separate accounts exemptions from the provisions of Sections 9(a), 13(a), 15(a)
and 1 5 (b) of the '40 Act, and Rules 6e-2(b)(15) and 6e-3(T)(b )(15)
thereunder, to the extent necessary to permit shares of the Portfolios of the
TRUST to be sold to and held by variable annuity and variable life insurance
separate accounts of both affiliated and unaffiliated life insurance companies
and certain qualified pension and retirement plans (the "Order"); and
WHEREAS, LIFE COMPANY has established or will establish one or more
separate accounts ("Separate Accounts") to offer certain variable annuity and/or
variable life insurance contracts set forth on Schedule A (individually, the
"Variable Contract" and, collectively, the "Variable Contracts") and is desirous
of having the Portfolios listed on Schedule B hereto ("Designated Portfolios")
as underlying funding vehicles for such Contracts; and
WHEREAS, NB MANAGEMENT is registered with the SEC as an investment
adviser under the Investment Advisers Act of 1940 and as a broker-dealer under
the Securities Exchange Act of 1934, as amended; and
WHEREAS, NB MANAGEMENT is the investment manager and administrator of
the Designated Portfolios of the Trust and distributor of the shares of each
Designated Portfolio of TRUST; and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, LIFE COMPANY intends to purchase shares of TRUST to fund the
aforementioned Variable Contracts and TRUST is authorized to sell such shares to
LIFE COMPANY at net asset value;
NOW, THEREFORE, in consideration of their mutual promises, LIFE COMPANY,
TRUST, and NBMANAGEMENT agree as follows:
Article I. SALE OF TRUST SHARES
1.1 TRUST agrees to make the shares of the Designated Portfolios
available continuously for purchase at the applicable net asset value per share
by the Separate Accounts and the LIFE COMPANY on those days on which the TRUST
calculates its net asset value pursuant to rules of the SEC and the TRUST shall
calculate such net asset value on each day which the NYSE is open for regular
trading.
1.2 TRUST agrees to sell to LIFE COMPANY those shares of the Designated
Portfolios of TRUST which LIFE COMPANY orders, executing such orders on a daily
basis at the net asset value next computed after receipt by TRUST or its
designee of the order for the shares of TRUST. For purposes of this Section 1.2,
LIFE COMPANY shall be the designee of TRUST for receipt of such orders from LIFE
COMPANY and receipt by such designee prior to the close of regular trading on
the New York Stock Exchange (generally 4:00 p.m. Eastern time) shall constitute
receipt by TRUST; provided that TRUST receives notice of such order by 9:30 a.m.
New York Time on the next following Business Day (or such later time as
permitted by Section 1.5). "Business Day" shall mean any day on which the New
York Stock Exchange is open for trading and on which TRUST calculates its net
asset value pursuant to the rules of the SEC.
1.3 TRUST agrees to redeem for cash, on LIFE COMPANY's request, any full
or fractional shares of TRUST held by LIFE COMPANY, executing such requests on a
daily basis at the net asset value next computed after receipt by TRUST or its
designee of the request for redemption. For purposes of this Section 1.3, LIFE
COMPANY shall be the designee of TRUST for receipt of requests for redemption
from LIFE COMPANY and receipt by such designee shall constitute receipt by
TRUST; provided that TRUST receives notice of such request for redemption by
9:30 a.m. New York time on the next following Business Day (or such later time
as permitted by Section 1.5).
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1.4 TRUST shall furnish, same day notice (via phone, followed promptly
by written notice, or facsimile) to LIFE COMPANY of the declaration of any
income, dividends or capital gain distributions payable on the shares of any
Designated Portfolio of TRUST. LIFE COMPANY hereby elects to receive all such
income, dividends and capital gain distributions as are payable on a Designated
Portfolio's shares in additional shares of the Designated Portfolio. TRUST shall
notify LIFE COMPANY of the number of shares so issued as payment of such
dividends and distributions. LIFE COMPANY reserves the right to revoke this
election by written notice to the TRUST and to receive all such income,
dividends and distributions in cash.
1.5 TRUST shall make the net asset value per share for the selected
Designated Portfolio(s) available to LIFE COMPANY on each Business Day as soon
as reasonably practicable after the net asset value per share is calculated but
shall use its best efforts to make such net asset value available by 6:30 p.m.
New York time. In the event that the TRUST is unable to meet the 6:30 p.m. time
stated immediately above, then TRUST shall provide the LIFE COMPANY with
additional time to notify TRUST of purchase or redemption orders pursuant to
Sections 1.2 and 1.3, hereof, or wire net payments for the purchase of TRUST
shares pursuant to Section 1.7 hereof Such additional time shall be equal to the
additional time that TRUST takes to make the net asset values available to the
LIFE COMPANY. If TRUST provides LIFE COMPANY or its designee with materially
incorrect share net asset value information, TRUST shall make an adjustment to
the number of shares purchased or redeemed to reflect the correct share net
asset value. Any material error (determined in accordance with SEC guidelines)
in the calculation or reporting of net asset value per share, dividend or
capital gain information shall be reported promptly upon discovery to LIFE
COMPANY. NB MANAGEMENT shall bear the cost of correcting such errors and shall
also reimburse LIFE COMPANY for any reasonable administrative or other costs or
losses incurred in correcting Variable Contract Owner accounts.
1.6 At the end of each Business Day, LIFE COMPANY shall use the
information described in Section 1.5 to calculate Separate Account unit values
for the day. Using these unit values, LIFE COMPANY shall process each such
Business Day's Separate Account transactions based on requests and premiums
received by it in accordance with Section 1.2, above, to determine the net
dollar amount of Designated Portfolio shares which shall be purchased or
redeemed at that day's closing net asset value per share. The net share purchase
or redemption orders so determined shall be transmitted to TRUST by LIFE COMPANY
by 9:30 a.m. New York Time on the Business Day next following LIFE Company's
receipt of such requests and premiums in accordance with the terms of Sections
1.2 and 1.3 hereof.
1.7 If LIFE COMPANY's order requests the net purchase of TRUST shares,
LIFE COMPANY shall pay for such purchase by wiring federal funds to TRUST or its
designated custodial account on the day the order is actually transmitted by
LIFE COMPANY by 3:00 p.m.
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New York Time (or such later time as permitted by Section 1.5). If LIFE
COMPANY's order requests a net redemption resulting in a payment of redemption
proceeds to LIFE COMPANY, TRUST shall wire the redemption proceeds to LIFE
COMPANY or its designated custodial account on the day the order is actually
received by TRUST by 3:00 p.m. New York Time unless doing so would require TRUST
to dispose of portfolio securities or otherwise incur material additional costs,
but in such event, TRUST shall use best efforts to wire proceeds to LIFE COMPANY
within five (5) days (provided that in no event may any delay by TRUST in paying
redemption proceeds cause LIFE Camp ANY or any Separate Account to fail to meet
its obligations under Section 22(e) of the ▇▇▇▇ ▇▇▇) and TRUST shall notify the
person designated in writing by LIFE COMPANY as the recipient for such notice of
such delay by 3 :00 p.m. New York Time the same business day that LIFE COMPANY
transmits the redemption order to TRUST. If LIFE COMPANY's order requests the
application of redemption proceeds from the redemption of shares to the purchase
of shares of another fund administered or distributed by NB MANAGEMENT, TRUST
shall so apply such proceeds on the same Business Day that LIFE COMPANY
transmits such order to TRUST.
1.8 Notwithstanding Section 1.7, TRUST reserves the right to suspend the
right of redemption or postpone the date of payment or satisfaction upon
redemption consistent with Section 22( e) of the 40 Act and any rules
thereunder; provided that TRUST shall notify in writing the person designated by
the LIFE COMPANY as the recipient for such notice of such delay promptly; and
provided that in no event may any delay by TRUST in paying redemption proceeds
cause LIFE COMPANY or any Separate Account to fail to meet its obligations under
Section 22( e) of the ▇▇▇▇ ▇▇▇.
1.9 TRUST agrees that all shares of the Designated Portfolios of TRUST
will be sold only to Participating Insurance Companies which have agreed to
participate in TRUST to fund their Separate Accounts and/or to certain qualified
pension and other retirement plans, all in accordance with the requirements of
Section 817(h) of the Internal Revenue Code of 1986, as amended ("CODE") and
Treasury Regulation 1.817-5. Shares of the Designated Portfolios of TRUST will
not be sold directly to the general public.
1.10 TRUST may refuse to sell shares of any Designated Portfolio to any
person, or suspend or terminate the offering of the shares of any Designated
Portfolio if such action is required by law or by regulatory authorities having
jurisdiction or is, in the sole discretion of the Board of Trustees of TRUST,
acting in good faith and in light of its fiduciary duties under federal and any
applicable state laws, deemed necessary and in the best interests of the
shareholders of such Designated Portfolios.
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1.11 TRUST will not sell TRUST shares to any Participating Insurance
Company or separate account unless an agreement containing provisions
substantially the same as Articles I, III, V, VI and VII of this Agreement, and
Sections 2.1 and 2.4 of Article II are in effect to govern such sales.
Article II. REPRESENTATIONS AND WARRANTIES
2.1 LIFE COMPANY represents and warrants that it is an insurance company
duly organized and in good standing under the laws of Maryland and that it has
legally and validly established each Separate Account as a segregated asset
account under such laws, and that Old Mutual Financial Network Securities, Inc.,
the principal underwriter for the Variable Contracts, is registered as a
broker-dealer under the Securities Exchange Act of 1934.
2.2 LIFE COMPANY represents and warrants that it has registered or,
prior to any issuance or sale of the Variable Contracts, will register each
Separate Account as a unit investment trust ("UIT") in accordance with the
provisions of the '40 Act and cause each Separate Account to remain so
registered to serve as a segregated asset account for the Variable Contracts,
unless an exemption from registration is available.
2.3 LIFE COMPANY represents and warrants that the Variable Contracts
will be registered under the Securities Act of 1933 (the "'33 Act") unless an
exemption from registration is available prior to any issuance or sale of the
Variable Contracts and that the Variable Contracts will be issued and sold in
compliance in all material respects with all applicable federal and state laws
and further that the sale of the Variable Contracts shall comply in all material
respects with state insurance law suitability requirements.
2.4 LIFE COMPANY represents and warrants that the Variable Contracts are
currently and at the time of issuance will be treated as life insurance,
endowment or annuity contracts under applicable provisions of the Code, that it
will make every effort to maintain such treatment and that it will notify TRUST
immediately upon having a reasonable basis for believing that the Variable
Contracts have ceased to be so treated or that they might not be so treated in
the future.
2.5 LIFE COMPANY represents and warrants that it shall deliver such
prospectuses, statements of additional information, proxy statements and
periodic reports of the Trust as required to be delivered under applicable
federal or state law and interpretations of federal and state securities
regulators thereunder in connection with the offer, sale or acquisition of the
Variable Contracts.
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2.6 TRUST and NB MANAGEMENT represent and warrant that the Designated
Portfolio shares offered and sold pursuant to this Agreement will be registered
under the '33 Act and duly authorized for issuance in accordance with all
applicable federal and state laws, and TRUST is and shall remain registered as
an open-end management investment company under the '40 Act for so long as such
shares of the Designated Portfolios are sold. TRUST shall amend its registration
statement under the '33 Act and the '40 Act from time to time as required in
order to effect the continuous offering of its shares. TRUST shall register and
qualify its shares for sale in accordance with the laws of the various states to
the extent necessary to perform its obligations under this Agreement
2.7 TRUST and NB MANAGEMENT represent and warrant that for each quarter
each Designated Portfolio currently complies, and will continue to comply with
the diversification requirements set forth in Section 817(h) of the Code and any
regulations thereunder applicable to variable contracts as defined in Section
817(d) of the Code, and any amendments or other modifications or successor
provisions to such Sections or regulations (and any revenue rulings, revenue
procedures, notices and other published announcements of the Internal Revenue
Service interpreting those Sections or regulations), as if those requirements
applied directly to each Designated Portfolio. TRUST will notify LIFE COMPANY
immediately upon having a reasonable basis for believing any Designated
Portfolio has ceased to comply or might not so comply and will immediately take
all reasonable steps to adequately diversify the Designated Portfolio to achieve
compliance within the grace period afforded by Regulation 1.817-5.
2.8 TRUST and NB MANAGEMENT represent and warrant that each Designated
Portfolio invested in by the Separate Account is currently qualified as a
"regulated investment company" under Subchapter M of the Code, that they will
maintain such qualification under Subchapter M (or any successor or similar
provisions) and that no other Participating Insurance Company will purchase
shares in any Designated Portfolio for any purpose or under any circumstances
that would preclude LIFE COMPANY from "looking through" to the investments of
each Designated Portfolio in which it invests, pursuant to the "look through"
rules found in Treasury Regulation 1.817-5. TRUST and NB MANAGEMENT will notify
LIFE COMPANY immediately upon having a reasonable basis for believing any
Designated Portfolio has ceased to so qualify or might not so qualify in the
future.
2.9 LIFE COMPANY hereby consents to the use by TRUST of the name and
telephone number of LIFE COMPANY and to the reference by TRUST to the
relationship between LIFE COMPANY and TRUST as part of an informational page on
TRUST'S site on the World Wide Web portion of the Internet. The LIFE COMPANY
hereby further consents to TRUST'S establishing a link between TRUST'S site and
LIFE COMPANY's site from the same place that LIFE COMPANY is listed on TRUST'S
site as described in the preceding sentence.
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2.10 The Trust represents and warrants that to the extent that it
decides to finance distribution expenses pursuant to Ru1e 12b-l under the 1940
Act, it will have a board of trustees, a majority of whom are not interested
persons of the Trust, to formu1ate and approve any plan under Ru1e 12b-l to
finance distribution expenses.
2.11 The Trust and NB MANAGEMENT represent and warrant that the Trust's
investment policies, fees and expenses are and shall at all times remain in
compliance with the laws of the State of Delaware and the Trust represents that
its respective operations are and shall at all times remain in material
compliance with the laws of the State of Delaware to the extent required to
perform this Agreement.
2.12 The Trust 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 and any applicable
regu1ations thereunder. TRUST and NB MANAGEMENT represent and warrant that
TRUST's operations, and that of each Designated Portfolio, does and will comply
with applicable federal and state law.
2.13 NB Management represents and warrants that it is lawfully organized
and validly existing under the laws of its state of organization; a member in
good standing of the NASD and is registered as a broker-dealer with the SEC
under the Securities Exchange Act of 1934, as amended (the" 1934 Act") and will
remain du1y registered under all applicable federal and state securities laws.
NB Management further represents that it serves as principal
underwriter/distributor of TRUST and will perform its obligations for the TRUST
in accordance with the laws of the State of Delaware and any applicable state
and federal securities law.
2.14 The Trust and NB MANAGEMENT represent and warrant that TRUST's
directors, officers, employees 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 as required by Ru1e 17 g-(l) under the 1940 Act or related
provisions as may be promu1gated from time to time. The aforesaid blanket
fidelity bond shall include coverage for larceny and embezzlement and shall be
issued by a reputable bonding company.
2.15 NB Management represents and warrants that it is lawfully organized
and validly existing under the laws of its state of organization; it is du1y
registered as an investment adviser under the Investment Advisers Act of 1940,
as amended and shall remain du1y registered under all applicable federal and
state securities laws and that it shall perform its obligations for the Trust in
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compliance in all material respects with the laws of the State of Delaware and
any applicable state and federal securities laws.
2.16 Each party represents and warrants that the execution and delivery
of this Agreement and the consummation of the transactions contemplated herein
have been duly authorized by all necessary corporate, partnership or trust
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.
2.17 LIFE COMPANY represents and warrants that all orders for the
purchase and sale of TRUST shares submitted to the TRUST (or counted by LIFE
COMPANY in submitting a net order under Section 1.6 of the Agreement) for
execution at a price based on the net asset value per share ("NA V") of the
Trust's Designated Portfolios next computed after receipt by LIFE COMPANY on a
particular Business day, will have been received in good order by LIFE COMPANY
prior to the close of trading of the NYSE, in accordance with Rule 22c-l under
the 1940 Act (subject only to exceptions as permitted under Rule 22c-l(c) under
the 1940 Act, respecting initial purchase payments on variable annuity contacts,
and to the established administrative procedures of LIFE COMPANY as described
under Rule 6e-3(T), paragraph (b )(12)(iii) under the 1940 Act respecting
premium processing for variable life insurance contracts).
2.18 TRUST and NB MANAGEMENT represent and warrant that TRUST is and
shall maintain compliance with Rule 38a-l under the 1940 Act and NB MANAGEMENT
represents and warrants that NB MANAGEMENT is and shall maintain compliance with
Rule 206(4)-7 under the Advisers Act.
Article III. PROSPECTIJS AND PROXY STATEMENTS
3.1 TRUST shall prepare and be responsible for filing with the SEC and
any state regulators requiring such filing all shareholder reports, notices,
proxy materials (or similar materials such as voting instruction solicitation
materials), prospectuses and statements of additional information of TRUST.
TRUST shall bear the costs of registration and qualification of shares of the
Designated Portfolios, preparation and filing of the documents listed in this
Section 3.1 and all taxes to which an issuer is subject on the issuance and
transfer of its shares.
3.2 At least annually (or in the case of a prospectus supplement, when
that supplement is issued), TRUST or its designee shall provide LIFE COMPANY,
free of charge, with as many copies of the current prospectus and statement of
additional information (describing only the Designated Portfolios) for the
shares, or any supplement thereto, as LIFE
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COMPANY may reasonably request for distribution to existing Variable Contract
owners whose Variable Contract are funded by such shares. TRUST or its designee
shall provide LIFE COMPANY, at LIFE COMPANY's expense, with as many copies of
the current prospectus and statement of additional information for the shares,
and any supplement thereto, as LIFE COMPANY may reasonably request for
distribution to prospective purchasers of Variable Contracts. TRUST or its
designee shall provide LIFE COMPANY free of charge copies, if and to the extent
applicable to the shares, of the TRUST's proxy materials, reports to
shareholders and other communications to shareholders in such quantity as LIFE
COMPANY shall reasonably require for distribution to Variable Contract owners.
TRUST will bear the printing costs (or duplicating costs with respect to the
statement of additional information) and mailing costs associated with the
delivery of the following TRUST (or individual Designated Portfolio) documents,
and any supplements thereto, to existing Variable Contract owners of LIFE
COMPANY (regardless of whether such document<; are printed together with, or
separate from, the documents for other trusts in the Variable Contracts):
(i) prospectuses and statements of additional information;
(ii) annual and semi-annual reports; and
(iii) proxy materials (including, but not limited to, the proxy cards,
notice and statement, as well as the costs associated with
tabulating votes).
LIFE COMPANY will submit any bills for printing, duplicating and/or
mailing costs, relating to the TRUST documents described above, to TRUST for
reimbursement by TRUST and TRUST shall reimburse LIFE COMPANY within thirty (30)
days of receipt of such bills. LIFE COMPANY shall monitor such costs and shall
use its best efforts to control these costs. If requested by LIFE COMPANY, the
TRUST shall provide such documentation (including a final copy of the TRUST's
prospectus as set in type or in camera-ready copy) and other assistance as is
reasonably necessary in order for LIFE COMPANY to print together in one document
the current prospectus for the Variable Contracts issued by LIFE COMPANY and the
current prospectus for the TRUST. Should LIFE COMPANY wish to print any of these
documents in a format different from that provided by TRUST, LIFE COMPANY shall
provide Trust with sixty (60) days' prior written notice and LIFE COMPANY shall
bear the cost associated with any format change.
3.3 TRUST will provide, at its expense, LIFE COMPANY with the following
TRUST (or individual Designated Portfolio) documents, and any supplements
thereto, with respect to prospective Variable Contract owners of LIFE COMPANY:
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(i) camera-ready copy of the current prospectus for printing by the
LIFE COMPANY;
(ii) a copy of the statement of additional information suitable for
duplication;
(iii) camera-ready copy of proxy material suitable for printing; and
(iv) camera-ready copy of the annual and semi-annual reports for
printing by the LIFE COMPANY.
3.4 TRUST will provide LIFE COMPANY with at least one complete copy of
all prospectuses, statements of additional information. annual and semi-annual
reports, proxy statements, sales literature and other promotional materials,
exemptive applications, requests for no-action letters and all amendments or
supplements to any of the above that relate to the Designated Portfolios
promptly after the filing of each such document with the SEC or other regulatory
authority. LIFE COMPANY will provide TRUST with at least one complete copy of
all prospectuses, statements of additional information, annual and semi-annual
reports, proxy statements, sales literature and other promotional materials,
exemptive applications, requests for no-action letters and all amendments or
supplements to any of the above that relate to a Separate Account promptly after
the filing of each such document with the SEC or other regulatory authority.
Article IV. SALES MATERIALS: PRIVACY
4.1 LIFE COMPANY will furnish, or will cause to be furnished, to TRUST
and NB MANAGEMENT, each piece of sales literature or other promotional material
in which TRUST or NB MANAGEMENT is named, at least ten (10) Business Days prior
to its intended use. No such material will be used if TRUST or NB MANAGEMENT
objects to its use in writing within five (5) Business Days after receipt of
such material.
4.2 TRUST and NB MANAGEMENT will furnish, or will cause to be furnished,
to LIFE COMPANY or its designee, each piece of sales literature or other
promotional material in which LIFE COMPANY or its Separate Accounts is named, at
least ten (10) Business Days prior to its intended use. No such material will be
used if LIFE COMPANY objects to its use in writing within five (5) Business Days
after receipt of such material.
4.3 TRUST and its affiliates and agents shall not give any information
or make any representations or statements on behalf of LIFE COMPANY or
concerning LIFE COMPANY, the
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Separate Accounts, or the Variable Contracts issued by LIFE COMPANY, other than
the information or representations contained in a registration statement or
prospectus for such Variable Contracts, as such registration statement and
prospectus may be amended or supplemented from time to time, or in published
reports of the Separate Accounts which are in the public domain or approved by
the LIFE Camp ANY for distribution to owners of such Variable Contracts, or in
sales literature or other promotional material provided by LIFE COMPANY or its
designee, except with the written permission of LIFE COMPANY.
4.4 LIFE COMPANY and its affiliates and agents shall not give any
information or make any representations on behalf of TRUST or concerning TRUST
in connection with the sale of the Variable Contracts other than the information
or representations contained in a registration statement or prospectus for
TRUST, as such registration statement and prospectus may be amended or
supplemented from time to time, or in published reports of THE TRUST that are IN
the public domain or approved by the TRUST or NB MANAGEMENT for distribution to
owners of such Variable Contracts, or in sales literature or other promotional
material provided by TRUST or its designee, except with the written permission
of TRUST.
4.5 For purposes of this Agreement, the phrase "sales literature or
other promotional material" or words of similar import include, without
limitation, advertisements (such as material published, or designed for use, in
a newspaper, magazine or other periodical, radio, television, telephone or tape
recording, videotape display, signs or billboards, motion pictures or other
public media), sales literature (such as any written communication distributed
or made generally available to customers or the public, including brochures,
circulars, research reports, market letters, form letters, seminar texts, or
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, registration
statements, prospectuses, statements of additional information, shareholder
reports and proxy materials, and any other material constituting sales
literature or advertising under National Association of Securities Dealers, Inc.
rules, the '40 Act or the '33 Act.
4.6 TRUST and NB MANAGEMENT will provide LIFE COMPANY with as much
notice as is reasonably practicable of any proxy solicitation for any Designated
Portfolio, and of any material change in TRUST's registration statement,
particularly any change resulting in a change to the registration statement or
prospectus or statement of additional information for any Separate Account.
TRUST and NB MANAGEMENT will cooperate with LIFE COMPANY so as to enable LIFE
COMPANY to solicit proxies :from Variable Contract owners or to make changes to
its prospectus, statement of additional information or registration statement,
in an orderly manner. TRUST and NB MANAGEMENT will make reasonable efforts to
attempt to have changes
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affecting Variable Contract prospectuses become effective simultaneously with
the annual updates for such prospectuses
4.7 Subject to law and regulatory authority, each party hereto shall
treat as confidential all information pertaining to the owners of the Variable
Contracts and all information reasonably identified as confidential in writing
by any other party hereto and, except as permitted by this Agreement, shall not
disclose, disseminate or utilize such names and addresses and other confidential
information until such time as it may come into the public domain without the
express written consent of the affected party. Each party hereto shall be solely
responsible for the compliance of their officers, directors, employees, agents,
independent contractors, and any affiliated and non-affiliated third parties
with all applicable privacy-related laws and regulations including but not
limited to the ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act and Regulation S-P. The provisions of this
Section 4.7 shall survive the termination of this Agreement.
Article V. POTENTIAL CONFLICTS
5.1 TRUST agrees that the Board of Trustees of TRUST (the "Board") will
monitor each Designated Portfolio for the existence of any material
irreconcilable conflict between the interests of the variable annuity and
variable life insurance contract owners of Participating Insurance Company
Separate Accounts investing in the TRUST. The Board shall have the sole
authority to determine if a material irreconcilable conflict exists, and such
determination shall be binding on LIFE COMPANY only if approved in the form of a
resolution by a majority of the Board, or a majority of the disinterested
trustees of the Board. A material irreconcilable conflict may arise for a
variety of reasons, including: (a) state insurance regulatory authority action;
(b) a change in applicable federal or state insurance, tax, or securities laws
or regulations, or a public ruling, private letter ruling, 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 the TRUST are being managed; (e) a difference in voting
instructions given by variable annuity and variable life insurance contract
owners or by contract owners of different Participating Insurance Companies; or
(f) a decision by a Participating Insurance Company to disregard voting
instructions of variable annuity and variable life insurance contract owners.
5.2 LIFE COMPANY will be responsible for assisting the Board in carrying
out its responsibilities under the Conditions set forth in the notice issued by
the SEC for the TRUST on April 12, 1995 (the "Notice") (Investment Company Act
Release No. 21003), by providing the Board with all information reasonably
necessary for it to consider any issues raised. This responsibility includes,
but is not limited to, an obligation by LIFE COMPANY to inform the Board
whenever Variable Contract owner voting instructions are disregarded by LIFE
COMPANY.
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5.3 If a majority of the Board or a majority of its disinterested
trustees determines that a material irreconcilable conflict exists, LIFE COMPANY
and other Participating Insurance Companies, at their expense and to the extent
reasonably practicable (as determined by a majority of disinterested trustees),
will take any steps necessary to remedy or eliminate the irreconcilable material
conflict, up to and including: (a) withdrawing the assets allocable to some or
all of the separate accounts from the TRUST or any Portfolio thereof and
reinvesting those assets in a different investment medium, which may include
another Portfolio of TRUST or another investment company, or submitting the
question as to 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 (Le., 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 (b) establishing a new registered management investment company or
managed separate account.
If a material irreconcilable conflict arises because of LIFE COMPANY's
decision to disregard Variable Contract owner voting instructions, and that
decision represents a minority position or would preclude a majority vote, LIFE
COMPANY may be required, at the election of the TRUST, to withdraw its Separate
Account's investment in the TRUST; provided, however, that such withdrawal and
termination will be limited to the extent required by the foregoing
irreconcilable material conflict as determined by a majority of the
disinterested directors of the Board. No charge or penalty will be imposed as a
result of such withdrawal. Any such withdrawal and termination must take place
within six (6) months after TRUST gives written notice to LIFE COMPANY that this
provision is being implemented, or such period as may be required to obtain any
necessary exemptive relief from the Commission with regard to the substitution
of underlying funds. Until the end of such period TRUST AND NB MANAGEMENT will,
to the extent permitted by law and any exemptive relief previously granted to
TRUST, continue to accept and implement orders by LIFE COMPANY for the purchase
(and redemption) of shares of TRUST. The responsibility to take such remedial
action shall be carried out with a view only to the interests of the Variable
Contract owners.
For the purposes of this Section 5.3, a majority of the disinterested
members of the Board shall determine whether or not any proposed action
adequately remedies any material irreconcilable conflict, but in no event will
the TRUST or NB MANAGEMENT (or any other investment adviser of the TRUST) be
required to establish a new funding medium for any Variable Contract. Further,
LIFE COMPANY shall not be required by this Section 5.3 to establish a new
funding medium for any Variable Contract if any offer to do so has been declined
by a vote of a majority of Variable Contract owners affected by the
irreconcilable material conflict.
13
5.4 The Board's determination of the existence of a material
irreconcilable conflict and its implications shall be made known promptly and in
writing to LIFE COMPANY.
5.5 No less than annually, LIFE COMPANY shall submit to the Board such
reports, materials or data as the Board may reasonably request so that the Board
may fully carry out the obligations imposed upon it by these Conditions. Such
reports, materials, and data shall be submitted more frequently if deemed
appropriate by the Board.
Article VI. VOTING
6.1 LIFE COMPANY will provide pass-through voting privileges to all
Variable Contract owners so long as the SEC continues to interpret the '40 Act
as requiring pass-through voting privileges for Variable Contract owners.
Accordingly, LIFE COMPANY, where applicable, will vote shares of TRUST held by
its Separate Accounts in a manner consistent with voting instructions timely
received from its Variable Contract owners. LIFE COMPANY shall vote shares for
which it has not received timely voting instructions in the same proportion as
it votes those shares for which it has received voting instructions, 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. LIFE COMPANY
reserves the right to vote shares held in any segregated asset account in its
own right, to the extent permitted by law. Participating Insurance Companies
shall be responsible for assuring that each of their separate accounts holding
TRUST shares calculates voting privileges on matters related to TRUST in the
manner required by the Order; provided, however, that TRUST or NB MANAGEMENT
shall provide LIFE COMPANY and each other Participating Insurance Company with a
written copy of the voting privilege requirements under the Order and such other
assistance as may be necessary to facilitate coordination between LIFE COMPANY
and each other Participating Insurance Company in complying with such standards,
and provided further that LIFE COMPANY shall be free to vote Designated
Portfolio shares attributable to any Separate Account in any manner permitted by
applicable law, to the extent the Order is superseded by SEC regulation or
administrative practice (including no-action relief). TRUST and NB MANAGEMENT
will notify LIFE COMPANY of any changes of interpretations or amendments to the
Order.
6.2 TRUST will comply with all provisions of the 1940 Act requiring
voting by shareholders, and in particular, TRUST either will provide for annual
meetings (except insofar as the SEC may interpret Section 16 of the 1940 Act not
to require such meetings) or, as TRUST currently intends, to comply with Section
16(c) of the 1940 Act (although TRUST is not one of the trusts described in
Section 16(c) of the ▇▇▇▇ ▇▇▇) as well as with Sections 16(a) and, if and when
applicable, 16(b). Further, TRUST will act in accordance with the SEC's
interpretation of
14
the requirements of Section 16(a) with respect to periodic elections of
directors and with whatever rules the SEC may promulgate with respect thereto.
6.3 If and to the extent 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 '40 Act
or the rules thereunder with respect to mixed and shared funding on terms and
conditions materially different from any exemptions granted in the Order, then
TRUST and/or LIFE COMPANY, as appropriate, shall take such steps as may be
necessary to comply with Rule 6e-2 and Rule 6e-3(T), as amended, and Rule 6e-3,
as adopted, to the extent such Rules are applicable.
Article VII. INDEMNIFICATION
7.1 INDEMNIFICATION BY LIFE COMPANY. LIFE COMPA.NY agrees to indemnify
and hold harmless TRUST and NB MANAGEMENT and each of their Trustees, directors,
officers, employees and agents and each person, if any, who controls TRUST or NB
MANAGEMENT within the meaning of Section 15 of the '33 Act (collectively, the
"Indemnified Parties" for purposes of this Article VII) against any and all
losses, claims, damages, liabilities (including amounts paid in settlement with
the written consent of LIFE COMPANY, which consent shall not be unreasonably
withheld) 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 holding of TRUST shares or the Variable Contracts and:
(a) arise out of or are based upon any untrue statements or
alleged untrue statements of any material fact contained
in the registration statement, prospectus, or sales
literature for the Variable Contracts or contained in
the Variable Contracts (or any amendment or supplement
to any of the foregoing), or arise out of or are based
upon the omission or the alleged omission to state
therein a material fact required to be stated therein or
necessary to make the statements therein not misleading,
provided that this agreement to indemnify shall not
apply as to any Indemnified Party if such statement or
omission or such alleged statement or omission was made
in reliance upon and in conformity with information
furnished to LIFE COMPANY by or on behalf of TRUST for
use in the registration statement, prospectus or sales
literature for the Variable Contracts or in the Variable
Contracts (or any amendment or supplement) or otherwise
for use in connection with the sale of the Variable
Contracts or TRUST shares; or
15
(b) 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 TRUST not supplied by
LIFE COMPANY, or persons under its control) or wrongful
conduct of LIFE COMPANY or persons under its control,
with respect to the sale or distribution of the Variable
Contracts or TRUST shares; or
(c) arise out of any untrue statement or alleged untrue
statement of a material fact contained in a registration
statement, prospectus, or sales literature of 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 statement
or omission or such alleged statement or omission was
made in reliance upon and in conformity with information
furnished to TRUST for inclusion therein by or on behalf
of LIFE COMPANY; or
(d) arise as a result of any failure by LIFE COMPANY to
substantially provide the services and furnish the
materials under the terms of this Agreement; or
(e) arise out of or result from any material breach of any
representation and/or warranty made by LIFE COMPANY in
this Agreement or arise out of or result from any other
material breach of this Agreement by LIFE COMPANY.
7.2 LIFE 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 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 or to TRUST,
whichever is applicable.
7.3 LIFE 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 LIFE 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 LIFE COMPANY of any
such claim shall not relieve LIFE 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 failure
16
to notify results in the failure of actual notice to the Indemnifying Party and
such Indemnifying Party is damaged solely as a result of failure to give such
notice. In case any such action is brought against an Indemnified Party, LIFE
COMPANY shall be entitled to participate at its own expense in the defense of
such action. LIFE COMPANY also shall be entitled to assume the defense thereof,
with counsel reasonably satisfactory to the party named in the action. After
notice from LIFE COMPANY to such party of LIFE 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 LIFE 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, unless: .
(a) the LIFE COMPANY and the Indemnified Party will have
mutually agreed to the retention of such counsel; or
(b) the named parties to any such proceeding (including any
impleaded parties) include both the LIFE COMPANY and the
Indemnified Party and representation of both parties by
the same counsel would be inappropriate due to actual or
potential differing interests between them. The LIFE
COMPANY will not be liable for any settlement of any
proceeding effected without its written consent but if
settled with such consent or if there is a final
judgment for the plaintiff, the LIFE COMPANY agrees to
indemnify the Indemnified Party from and against any
loss or liability by reason of such settlement or
judgment. A successor by law of the parties to this
Agreement will be entitled to the benefits of the
indemnification contained in this Article VII. The
indemnification provisions contained in this Article VII
will survive any termination of this Agreement.
7.4.A INDEMNIFICATION BY TRUST AND NB MANAGEMENT. TRUST and NB
MANAGEMENT, jointly and severally, agree to indemnify and hold harmless LIFE
COMPANY and each of its directors, officers, employees, and agents and each
person, if any, who controls LIFE COMPANY within the meaning of Section 15 of
the '33 Act (collectively, the "Indemnified Parties" for the purposes of this
Article VII) against any and all losses, claims, damages, liabilities (including
amounts paid in settlement with the written consent of NB MANAGEMENT which
consent shall not be unreasonably withheld) or litigation (including legal and
other expenses) to which the Indemnified Parties may become subject under any
statute, or regulation, at common law or otherwise, insofar as such losses,
claims, damages, liabilities or expenses (or actions in respect thereof) or
settlements are related to the sale, acquisition, or holding of TRUST shares or
the Variable Contracts and:
(a) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained
in the registration statement,
17
prospectus or sales literature for 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 such statement or omission or such
alleged statement or omission was made in reliance upon
and in conformity with information furnished to NB
MANAGEMENT or TRUST by or on behalf of LIFE COMPANY for
use in the registration statement or prospectus for
TRUST or in sales literature (or any amendment or
supplement) or otherwise for use in connection with the
sale of the Variable Contracts or TRUST shares; or
(b) arise out of or as a result of statement oo or
representations (other than statements or
representations contained in the registration statement,
prospectus or sales literature for the Variable
Contracts not supplied by NB MANAGEMENT or persons under
its control) or wrongful conduct of TRUST or NB
MANAGEMENT or persons under their control, with respect
to the sale or distribution of the Variable Contracts or
TRUST shares; or
(c) arise out of any untrue statement or alleged untrue
statement of a material fact contained in a registration
statement, prospectus, or sales literature covering the
Variable 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 statements therein not
misleading, if such statement or omission or such
alleged statement or omission was made in reliance upon
and in conformity with information furnished to LIFE
COMPANY for inclusion therein by or on behalf of TRUST;
or
(d) arise as a result of (i) a failure by TRUST to
substantially provide the services and furnish the
materials under the terms of this Agreement; or (ii) a
failure by a Designated Portfolio(s) invested in by the
Separate Account to comply with the diversification
requirements of Section 817(h) of the Code; or (iii) a
failure by a Designated Portfolio(s) invested in by the
Separate Account to qualify as a "regulated investment
company" under Subchapter M of the Code; or
18
(e) arise out of or result from any material breach of any
representation and/or warranty made by NB MANAGEMENT or
TRUST in this Agreement or arise out of or result from
any other material breach of this Agreement by NB
MANAGEMENT or TRUST; or
(f) arise out of or result from the incorrect or untimely
calculation or reporting of daily net asset value per
share or dividend or capital gain distribution rate.
7.4.B INDEMNIFICATION FOR FAILURE TO COMPLY WITH DIVERSIFICATION
REQUIREMENTS
The TRUST and NB MANAGEMENT acknowledge that any failure (whether intentional or
in good faith or otherwise) to comply with the diversification requirements
specified in Section 2.7 of this Agreement may result in the Variable Contracts
not being treated as variable contracts for federal income tax purposes, which
would have adverse tax consequences for Variable Contract owners and could also
adversely affect LIFE COMPANY's corporate tax liability. Accordingly, without in
any way limiting the effect of Section 7.4.A hereof and without in any way
limiting or restricting any other remedies available to LIFE COMPANY, the TRUST
and NB MANAGEMENT will pay on a joint and several basis all costs associated
with or arising out of any failure, or any anticipated or reasonably foreseeable
failure, of the TRUST or any Designated Portfolio to comply with Section 2.7 of
this Agreement, including all costs associated with correcting or responding to
any such failure; such costs may include, but are not limited to, the costs
involved in creating, organizing, and registering a new investment company as a
funding medium for the Variable Contracts and/or the costs of obtaining whatever
regulatory authorizations are required to substitute shares of another
investment company for those of the failed TRUST or Designated Portfolio
(including but not limited to an order pursuant to Section 26( c) of the 1940
Act); fees and expenses of legal counsel and other advisors to LIFE COMPANY and
any federal income taxes, interest or tax penalties (or "toll charges" or
exactments or amounts paid in settlement) incurred by LIFE COMPANY in connection
with any such failure or anticipated or reasonably foreseeable failure. Such
indemnification and reimbursement obligation shall be in addition to any other
indemnification and reimbursement obligations of the TRUST and/or NB MANAGEMENT
under this Agreement.
7.5 NB MANAGEMENT shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
to which an Indemnified Party would otherwise be subject by reason of such
Indemnified Party's willful misfeasance, bad faith, or gross negligence in the
performance of such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations and duties under this Agreement or to
LIFE COMPANY.
19
7.6 TRUST and NB MANAGEMENT (the "Indemnifying Parties" for purposes of
this Section 7.6) 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 NB MANAGEMENT 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 NB MANAGEMENT of any such claim shall not relieve
NB MANAGEMENT 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 failure to notify
results in the failure of actual notice to the Indemnifying Party and such
Indemnifying Party is damaged solely as a result of failure to give such notice
In case any such action is brought against the Indemnified Parties, NB
MA.NAGEMENT shALL be entitled to participate at its own expense in the defense
thereof. NB MANAGEMENT also shall be entitled to assume the defense thereof,
with counsel reasonably satisfactory to the party named in the action. After
notice from NB MANAGEMENT to such party of NB MANAGEMENT's election to assume
the defense thereof, the Indemnified Party shall bear the fees and expenses of
any additional counsel retained by it, and NB MANAGEMENT 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, unless:
(a) the Indemnifying Parties and the Indemnified Party will
have mutually agreed to the retention of such counsel;
or
(b) the named parties to any such proceeding (including any
impleaded parties) include both the Indemnifying Parties
and the Indemnified Party and representation of both
parties by the same counsel would be inappropriate due
to actual or potential differing interests between them.
The Indemnifying Parties will not be liable for any
settlement of any proceeding effected without its
written consent but if settled with such consent or if
there is a final judgment for the plaintiff, the
Indemnifying Parties agrees to indemnify the Indemnified
Party from and against any loss or liability by reason
of such settlement or judgment. A successor by law of
the parties to this Agreement will be entitled to the
benefits of the indemnification contained in this
Article VII.
7.7 The provision of this Article VII shall survive the termination of
this Agreement.
Article VIII. TERM; TERMINATION
20
8.1 This Agreement shall be effective as of the date hereof and shall
continue in force until terminated in accordance with the provisions herein.
8.2 This Agreement shall terminate in accordance with the following
provisions:
(a) At the option of LIFE COMPANY or TRUST at any time from
the date hereof upon 180 days' notice, unless a shorter
time is agreed to by the parties;
(b) At the option of LIFE COMPANY, if TRUST shares are not
reasonably available to meet the requirements of the
Variable Contracts as determined by LIFE COMPANY. Prompt
notice of election to terminate shall be furnished by
LIFE COMPANY, said termination to be effective ten days
after receipt of notice unless TRUST makes available a
sufficient number of shares to reasonably meet the
requirements of the Variable Contracts within said
ten-day period;
(c) At the option of LIFE COMPANY, upon the institution of
formal proceedings against TRUST or NB MANAGEMENT by the
SEC, the National Association of Securities Dealers,
Inc., or any other regulatory body, the expected or
anticipated ruling, judgment or outcome of which would,
in LIFE COMPANY's reasonable judgment, materially impair
TRUST's or NB MANAGEMENT's ability to meet and perform
their respective obligations and duties hereunder.
Prompt notice of election to terminate shall be
furnished by LIFE COMPANY with said termination to be
effective upon receipt of notice;
(d) At the option of TRUST, upon the institution of formal
proceedings against LIFE COMPANY by the SEC, the
National Association of Securities Dealers, Inc., or any
other regulatory body, the expected or anticipated
ruling, judgment or outcome of which would, in TRUST's
reasonable judgment, materially impair LIFE COMPANY's
ability to meet and perform its obligations and duties
hereunder. Prompt notice of election to terminate shall
be furnished by TRUST with said termination to be
effective upon receipt of notice;
(e) At the option of LIFE COMPANY, in the event TRUSTs
shares are not registered, issued or sold in accordance
with applicable state or federa1law, or such law
precludes the use of such shares as the underlying
investment medium of Variable Contracts issued or to be
issued by LIFE COMPANY. Termination shall be effective
immediately upon notice to TRUST;
21
(f) At the option of TRUST if the Variable Contracts cease
to qualify as annuity contracts or life insurance
contracts, as applicable, under the Code, or if TRUST
reasonably believes that the Variable Contracts may fail
to so qualify. Termination shall be effective upon
receipt of notice by LIFE COMPANY;
(g) At the option of LIFE COMPANY, upon TRUST's breach of
any material provision of this Agreement, which breach
has not been cured to the satisfaction of LIFE COMPANY
within sixty(60) days after written notice of such
breach is delivered to TRUST;
(h) At the option of TRUST, upon LIFE COMPANY's breach of
any material provision of this Agreement, which breach
has not been cured to the satisfaction of TRUST within
sixty(60) days after written notice of such breach is
delivered to LIFE COMPANY;
(i) At the option of TRUST, if the Variable Contracts are
not registered, issued or sold in accordance with
applicable federal and/or state law. Termination shall
be effective upon sixty (60) days' advance written
notice to LIFE COMPANY;
(j) At the option of LIFE COMPANY in the event that any
Designated Portfolio ceases to qualify as a Regulated
Investment Company under Subchapter M of the Code or
under any successor or similar provision, or if LIFE
COMPANY reasonably believes that any Designated
Portfolio may fail to so qualify. Termination shall be
effective immediately upon notice to the TRUST;
(k) At the option of LIFE COMPANY in the event that any
Designated Portfolio fails to meet the diversification
requirements specified in Article II hereof or if LIFE
COMPANY reasonably believes that any Designated
Portfolio may fail to meet such diversification
requirements. Termination shall be effective immediately
upon notice to the TRUST;
(1) termination by the LIFE COMPANY, upon any substitution
of the shares of another investment company or series
thereof for shares of the TRUST
22
in accordance with the terms of the Variable Contracts,
provided that LIFE COMPANY has given at least forty-five
(45) days prior written notice to TRUST of the date of
substitution;
(m) at the option of the LIFE COMPANY, if the LIFE COMPANY
determines in its sole judgment exercised in good faith
that either the TRUST or NB MANAGEMENT has suffered a
material adverse change in its business, operations or
financial condition since the date of this Agreement or
is the subject of material adverse publicity which is
likely to have a material adverse impact upon the
business and operations of the TRUST or NB MANAGEMENT.
Termination shall be effective immediately upon notice
to the TRUST.
(n) In the event this Agreement is assigned without the
prior written consent of LIFE COMPANY, TRUST, and NB
MANAGEMENT, termination shall be effective immediately
upon such occurrence without notice.
8.3 Notwithstanding any termination of this Agreement pursuant to
Section 8.2 hereof, TRUST shall, at the option of the LIFE COMPANY, continue to
make available additional TRUST shares, as provided below, for so long as LIFE
COMPANY desires pursuant to the terms and conditions of this Agreement, for all
Variable Contracts in effect on the effective date of termination of this
Agreement (hereinafter referred to as "Existing Contracts"). Specifically,
without limitation, if LIFE COMPANY so elects to make additional TRUST shares
available, the owners of the Existing Contracts or LIFE COMPANY, whichever shall
have legal authority to do so, shall be permitted to reallocate investments in
TRUST, redeem investments in TRUST and/or invest in TRUST upon the payment of
additional premiums under the Existing Contracts. In the event of a termination
of this Agreement pursuant to Section 8.2 hereof, LIFE COMPANY, as promptly as
is practicable under the circumstances, shall notify TRUST and NB MANAGEMENT
whether LIFE COMPANY elects to continue to make TRUST shares available after
such termination. If TRUST shares continue to be made available after such
termination, the provisions of this Agreement shall remain in effect.
Article IX. NOTICES
Any notice hereunder shall be given by registered or certified mail
return receipt requested to the other party at the address of such party set
forth below or at such other address as such party may from time to time specify
in writing to the other party.
If to TRUST or NB MANAGEMENT:
23
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Management Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
If to LIFE COMPANY:
OM Financial Life Insurance Company
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Securities Counsel: ▇▇▇ ▇▇▇▇▇
Notice shall be deemed given on the date of receipt by the addressee as
evidenced by the return receipt.
Article X. MISCELLANEOUS
10.1 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.
10.2 This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
10.3 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.
lO.4 This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the State of New York,
without reference to conflict of law provisions. It shall also be subject to the
provisions of the federal securities laws and the rules and regulations
thereunder and to any orders of the SEC granting exemptive relief therefrom and
the conditions of such orders.
10.5 The parties agree that the assets and liabilities of each
Designated Portfolio are separate and distinct from the assets and liabilities
of each other Designated Portfolio. No Designated Portfolio shall be liable or
shall be charged for any debt, obligation or liability of any other Designated
Portfolio so long as the Designated Portfolio has sufficient assets to cover any
24
debt, obligation, or liability of the TRUST. No Trustee, officer or agent shall
be personally liable for such debt, obligation or liability of any Designated
Portfolio.
10.6 Each party shall cooperate with each other party and all
appropriate governmental authorities (including without limitation the SEC, the
National Association of Securities Dealers, Inc. 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.
10.7 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.
10.8 No provision of this Agreement may be amended or modified in any
manner except by a written agreement properly authorized and executed by TRUST,
NB MANAGEMENT and the LIFE COMPANY. NB MANAGEMENT may from time to time update
Schedule B to the Agreement, with a copy to the LIFE COMPANY in due course to
add a new Designated Portfolio, delate an inactive or terminated Designated
Portfolio, or reflect the change of name of a Designated Portfolio. The
establishment by the LIFE COMPANY of an account in any Designated Portfolio,
whether or not as yet reflected on an updated Schedule B, shall constitute the
agreement by the LIFE COMPANY, TRUST and NB MANAGEMENT to be bound by the
provisions of this Agreement with respect to that Designated Portfolio.
10.9 The Fund will pay no fee or other compensation to LIFE COMPANY
under this Agreement, except as provided below: (a) if TRUST or any Designated
Portfolio adopts and implements a plan pursuant to Rule 12b-l under the 1940 Act
to finance distribution and shareholder servicing expenses, then, subject to
obtaining any required exemptive orders or other regulatory approvals, TRUST may
make payments to LIFE COMPANY or to the underwriter for the Contracts if and in
such amounts agreed to by TRUST in writing; (b) TRUST may pay fees to LIFE
COMPANY for administrative services provided to Contract owners that are not
primarily intended to result in the sale of shares of the Designated Portfolio
or of underlying Contracts as separately agreed to in writing.
10.10 The schedules to this Agreement (each, a "Schedule," collectively,
the "Schedules") form an integral part hereof and are incorporated herein by
reference. The parties to this Agreement may agree in writing to amend the
Schedules to this Agreement from time to time to reflect changes in or relating
to the Contracts, the Accounts or the Designated Portfolios of the Fund or other
applicable terms of this Agreement. References herein to any Schedule are to the
Schedule then in effect, taking into account any amendments thereto.
25
10.11 Each Designated Portfolio agrees to consult in advance with LIFE
COMPANY concerning any decision to elect or not to pass through the benefit of
any foreign tax credits to the Designated Portfolio's shareholders pursuant to
Section 853 of the Code.
10.12 The parties have entered into or shall enter in to any Shareholder
Information Agreement as required by Rule 22c-2 under 40 Act in connection with
the Variable Contracts. This Agreement shall control with regard to the terms of
the business relationship described in this Agreement. To the extent that the
terms of the Shareholder Information Agreement conflict. with the terms of this
Agreement, the terms of the Shareholder Information Agreement shall control to
the extent required by Rule 22c-2.
10.13 LIFE COMPANY agrees that it will cooperate with NB MA..NAGEMRNT
and the TRUST by providing to NB MANAGEMENT and the TRUST, within thirty (30)
days prior to any deadline imposed by applicable laws, rules or regulations,
information regarding shares sold and redeemed and whether the Separate Accounts
are registered or unregistered under the '40 Act and any other information
pertinent to enabling NB MANAGEMENT and the TRUST to pay registration or other
fees with respect to the TRUST shares sold during the fiscal year in accordance
with Rule 24f-2 or to register and qualify TRUST shares under any applicable
laws, rules or regulations in a timely manner.
26
IN WITNESS WHEREOF, the parties have caused their du1y authorized
officers to execute this Fund Participation Agreement as of the date and year
first above written.
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
ADVISERS MANAGEMENT TRUST
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------
Title: Chairman and CEO
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
NAME:
Title:
OM FINANCIAL LIFE INSURANCE COMPANY
BY:
Name:
Title:
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SCHEDULE A
Name of Separate Accounts:
OLD Mutual Financial Network Separate Account VA
Name of Variable Contracts:
Beacon Navigator variable annuity
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SCHEDULE B
The currently available Portfolios of the TRUST are:
AMT ▇▇▇▇▇▇▇▇ Portfolio - S Class Shares
AMT Focus Portfolio - S Class Shares
AMT Growth Portfolio
AMT Guardian Portfolio - I Class Shares
AMT Guardian Portfolio - S Class Shares
AMT International Portfolio - S Class Shares
AMT Mid-Cap Growth Portfolio - I Class Shares
AMT Mid-Cap Growth Portfolio - S Class Shares
AMT Partners Portfolio
AMT Regency Portfolio - I Class Shares
AMT Regency Portfolio - S Class Shares
AMT Socially Responsive Portfolio
AMT Balanced Portfolio
AMT Limited Maturity Bond Portfolio
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