Exhibit 99.(h)(8)
FUND PARTICIPATION AGREEMENT
BETWEEN
PORTFOLIO PARTNERS, INC.,
GOLDEN AMERICAN LIFE INSURANCE COMPANY
AND
AETNA LIFE INSURANCE AND ANNUITY COMPANY
Golden American Life Insurance Company (the "Company"), Portfolio Partners,
Inc. (the "Fund") and Aetna Life Insurance and Annuity Company (the "Adviser")
hereby agree to an arrangement whereby the Fund shall be made available to serve
as underlying investment media for Variable Annuity or Variable Life Contracts
("Contracts") to be issued by the Company.
1. ESTABLISHMENT OF ACCOUNTS; AVAILABILITY OF FUND.
(a) The Company represents that it has established Separate Account B and
may establish such other accounts as may be set forth in Schedule A
attached hereto and as may be amended from time to time with the
mutual consent of the parties hereto (the "Accounts"), each of which
is a separate account under Delaware Insurance law, and has registered
or will register each of the Accounts (except for such Accounts for
which no such registration is required) as a unit investment trust
under the Investment Company Act of 1940 (the "1940 Act"), to serve as
an investment vehicle for the Contracts. Each Contract provides for
the allocation of net amounts received by the Company to an Account
for investment in the shares of one of more specified open-end
management investment companies available through that Account as
underlying investment media. Selection of a particular investment
management company and changes therein from time to time are made by
the participant or Contract owner, as applicable under a particular
Contract.
(b) The Fund and the Adviser represent and warrant that the investments of
the series of the Fund (each designated a "Portfolio") specified in
Schedule B attached hereto (as may be amended from time to time with
the mutual consent of the parties hereto) will at all times be
adequately diversified within the meaning of Section 817(h) of the
Internal Revenue Service Code of 1986, as amended (the "Code"), and
the Regulations thereunder, and that at all times while this agreement
is in effect, all beneficial interests will be owned by one or more
insurance companies
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or by any other party permitted under Section 1.817-5(f)(3) of the
Regulations promulgated under the Code or by the successor thereto, or
by any other party permitted under a Revenue Ruling or private letter
ruling granted by the Internal Revenue Service.
2. PRICING INFORMATION; ORDERS; SETTLEMENT.
(a) The Fund will make Fund shares available to be purchased by the
Company, and will accept redemption orders from the Company, on behalf
of each Account at the net asset value applicable to each order on
those days on which the Fund calculates its net asset value (a
"Business Day"). Fund shares shall be purchased and redeemed in such
quantity and at such time determined by the Company to be necessary to
meet the requirements of those Contracts for which the Fund serve as
underlying investment media, provided, however, that the Board of
Trustees of the Fund (hereinafter the "Trustees") may upon reasonable
notice to the Company, refuse to sell shares of any Portfolio to any
person, or suspend or terminate the offering of shares of any
Portfolio if such action is required by law or by regulatory
authorities having jurisdiction or is, in the sole discretion of the
Trustees, acting in good faith and in the best interests of the
shareholders of any Portfolio and is acting in compliance with their
fiduciary obligations under federal and/or any applicable state laws.
(b) The Fund will provide to the Company closing net asset value, dividend
and capital gain information at the close of trading each day that the
New York Stock Exchange (the "Exchange" is open (each such day a
"Business Day"), and in no event later than 7:00 p.m. Eastern Standard
time on such Business Day. The Company will send via facsimile or
electronic transmission to the Fund or its specified agent orders to
purchase and/or redeem Fund shares by 10:00 a.m. Eastern Standard Time
the following business day. Payment for net purchases will be wired by
the Company to an account designated by the Fund to coincide with the
order for shares of the Fund.
(c) The Fund hereby appoints the Company as its agent for the limited
purpose of accepting purchase and redemption orders for Fund shares
relating to the Contracts from Contract owners or participants. Orders
from Contract owners or participants received from any distributor of
the Contracts (including affiliates of the Company) by the Company,
acting as agent for the Fund, prior to the close of the Exchange on
any given
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business day will be executed by the Fund at the net asset value
determined as of the close of the Exchange on such Business Day,
provided that the Fund receives written (or facsimile) notice of such
order by 10 a.m. Eastern Standard Time on the next following Business
Day. Any orders received by the Company acting as agent on such day
but after the close of the Exchange will be executed by the Fund at
the net asset value determined as of the close of the Exchange on the
next business day following the day of receipt of such order, provided
that the Fund receives written (or facsimile) notice of such order by
10 a.m. Eastern Standard Time within two days following the day of
receipt of such order.
(d) Payments for net redemptions of shares of the Fund will be wired by
the Fund to an account designated by the Company. Payments for net
purchases of the Fund will be wired by the Company to an account
designated by the Fund on the same Business Day the Company places an
order to purchase Fund shares. Payments shall be in federal funds
transmitted by wire.
(e) In lieu of applicable provisions set forth in paragraphs 2(a) through
2(d) above, the parties may agree to provide pricing information,
execute orders and wire payments for purchases and redemptions through
National Securities Clearing Corporation's Fund/SERV system in which
case such activities will be governed by the provisions set forth in
an Exhibit to this Agreement.
(f) Each party has the right to rely on information or confirmations
provided by the other party (or by any 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.
(g) The Company agrees to purchase and redeem the shares of the Portfolios
named in Schedule B offered by the then current prospectus and
statement of additional information of the Fund in accordance with the
provisions of such prospectus and statement of additional information.
The Company shall not permit any person other than a Contract owner or
Participant to give instructions to the Company which would require
the Company to redeem or exchange shares of the Fund. This provision
shall not be construed to prohibit the Company from substituting
shares of another fund, as permitted by law.
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3. EXPENSES.
(a) Except as otherwise provided in this Agreement, all expenses incident
to the performance by the Fund under this Agreement shall be paid by
the Fund, including the cost of registration of Fund shares with the
Securities and Exchange Commission (the "SEC") and in states where
required. The Fund and Adviser shall pay no fee or other compensation
to the Company under this Agreement, and the Company shall pay no fee
or other compensation to the Fund or Adviser, except as provided
herein and in Schedule C attached hereto and made a part of this
Agreement as may be amended from time to time with the mutual consent
of the parties hereto. All expenses incident to performance by each
party of its respective duties under this Agreement shall be paid by
that party, unless otherwise specified in this Agreement.
(b) The Fund or the Adviser shall provide to the Company Post Script files
of periodic fund reports to shareholders and other materials that are
required by law to be sent to Contract owners. In addition, the Fund
or the Adviser shall provide the Company with a sufficient quantity of
its prospectuses, statements of additional information and any
supplements to any of these materials, to be used in connection with
the offerings and transactions contemplated by this Agreement. In
addition, the Fund shall provide the Company with a sufficient
quantity of its proxy material that is required to be sent to Contract
owners. The Adviser shall be permitted to review and approve the
typeset form of such material prior to such printing provided such
material has been provided by the Adviser to the Company within a
reasonable period of time prior to typesetting.
(c) In lieu of the Fund's or Adviser's providing printed copies of
prospectuses, statements of additional information and any supplements
to any of these materials, and periodic fund reports to shareholders,
the Company shall have the right to request that the Fund transmit a
copy of such materials in an electronic format (Post Script files),
which the Company may use to have such materials printed together with
similar materials of other Account funding media that the Company or
any distributor will distribute to existing or prospective Contract
owners or participants.
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4. REPRESENTATIONS.
(a) The Company agrees that it and its agents shall not, without the
written consent of the Fund or the Adviser, make representations
concerning the Fund, or its shares except those contained in the then
current prospectuses and in current printed sales literature approved
by or deemed approved by the Fund or the Adviser.
(b) The Fund and Adviser represent and warrant that (i) they have examined
and tested their systems and made reasonable inquiry of their business
partners and other entities with whom they conduct business with
respect to Year 2000 problems and (ii) their ability to perform their
obligations under this Agreement will not be interrupted or disrupted
as a result of any business interruptions or other business problems
relating to specific dates or days before, during and after the Year
2000.
5. TERMINATION.
This agreement shall terminate as to the sale and issuance of new
Contracts:
(a) at the option of either the Company, the Adviser or the Fund, upon
sixty days advance written notice to the other parties;
(b) at the option of the Company, upon one week advance written notice to
the Adviser and the Fund, if Fund shares are not available for any
reason to meet the requirement of Contracts as determined by the
Company. Reasonable advance notice of election to terminate shall be
furnished by Company;
(c) at the option of either the Company, the Adviser or the Fund,
immediately upon institution of formal proceedings against the broker-
dealer or broker-dealers marketing the Contracts, the Account, the
Company, the Fund or the Adviser by the National Association of
Securities Dealers, Inc. (the "NASD"), the SEC or any other regulatory
body;
(d) upon the determination of the Accounts to substitute for the Fund's
shares the shares of another investment company in accordance with the
terms of the applicable Contracts. The Company will give 60 days
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written notice to the Fund and the Adviser of any decision to replace
the Fund's shares;
(e) upon assignment of this Agreement, unless made with the written
consent of all other parties hereto;
(f) if Fund shares are not registered, issued or sold in conformance with
Federal law or such law precludes the use of Fund shares as an
underlying investment medium for Contracts issued or to be issued by
the Company. Prompt notice shall be given by the appropriate party
should such situation occur.
6. CONTINUATION OF AGREEMENT.
Termination as the result of any cause listed in Section 5 shall not affect
the Fund's obligation to furnish its shares to Contracts then in force for
which its shares serve or may serve as the underlying medium unless such
further sale of Fund shares is prohibited by law or the SEC or other
regulatory body, or is determined by the Fund's Board to be necessary to
remedy or eliminate an irreconcilable conflict pursuant to Section 10
hereof.
7. ADVERTISING MATERIALS; FILED DOCUMENTS.
(a) Advertising and sales literature with respect to the Fund prepared by
the Company or its agents for use in marketing its Contracts will be
submitted to the Fund or its designee for review before such material
is submitted to any regulatory body for review. No such material shall
be used if the Fund or its designee reasonably object to such use in
writing, transmitted by facsimile within two business days after
receipt of such material.
(b) The Fund will provide additional copies of its financials as soon as
available to the Company and at least one complete copy of all
registration statements, prospectuses, statements of additional
information, annual and semi-annual reports, proxy statements and all
amendments or supplements to any of the above that relate to the Fund
promptly after the filing of such document with the SEC or other
regulatory authorities. At the Adviser's request, the Company will
provide to the Adviser at least one complete copy of all registration
statements, prospectuses, statements of additional information, annual
and semi-annual reports, proxy statements, and all amendments or
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supplements to any of the above that relate to the Account promptly
after the filing of such document with the SEC or other regulatory
authority.
(c) The Fund or the Adviser will provide via Excel spreadsheet diskette
format or in electronic transmission to the Company at least quarterly
portfolio information necessary to update Fund profiles with seven
business days following the end of each quarter.
(d) The Fund will reimburse the Company for any incorrect information
provided to the Company under this Section as provided for in Schedule
C.
8. PROXY VOTING.
(a) The Company shall provide pass-through voting privileges on Fund
shares held by registered separate accounts to all Contract owners and
participants to the extent the SEC continues to interpret the 1940 Act
as requiring such privileges. The Company shall provide pass-through
voting privileges on Fund shares held by unregistered separate
accounts to all Contract owners.
(b) The Company will distribute to Contract owners and participants, as
appropriate, all proxy material furnished by the Fund and will vote
Fund shares in accordance with instructions received from such
Contract owners and participants. If and to the extent required by
law, the Company, with respect to each group Contract and in each
Account, shall vote Fund shares for which no instructions have been
received in the same proportion as shares for which such instructions
have been received. The Company and its agents shall not oppose or
interfere with the solicitation of proxies for Fund shares held for
such Contract owners and participants.
9. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless the Fund and the
Adviser, and its directors, officers, employees, agents and each
person, if any, who controls the Fund or its Adviser within the
meaning of the Securities Act of 1933 (the "1933 Act") against any
losses, claims, damages or liabilities to which the Fund or any such
director, officer, employee, agent, or controlling person may become
subject, under the 1933 Act or otherwise, insofar as such losses,
claims, damages, or
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liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material
fact contained in the Registration Statement, prospectus or sales
literature of the Company 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, or arise out of or as a result of conduct,
statements or representations (other than statements or
representations contained in the prospectuses or sales literature of
the Fund) of the Company or its agents, with respect to the sale and
distribution of Contracts for which Fund shares are the underlying
investment. The Company will reimburse any legal or other expenses
reasonably incurred by the Fund or any such director, officer,
employee, agent, investment adviser, or controlling person in
connection with investigating or defending any such loss, claim,
damage, liability or action; PROVIDED, HOWEVER, that the Company will
not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon (i) an
untrue statement or omission or alleged omission made in such
Registration Statement or prospectus in conformity with written
materials furnished to the Company by the Fund specifically for use
therein or (ii) the willful misfeasance, bad faith, or gross
negligence by the Fund or Adviser in the performance of its duties or
the Fund's or Adviser's reckless disregard of obligations or duties
under this Agreement or to the Company, whichever is applicable. This
indemnity agreement will be in addition to any liability which Company
may otherwise have.
(b) The Fund and the Adviser agree to indemnify and hold harmless the
Company and its directors, officers, employees, agents and each
person, if any, who controls the Company within the meaning of the
1933 Act against any losses, claims, damages or liabilities to which
the Company or any such director, officer, employee, agent or
controlling person may become subject, under the 1933 Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained
in the Registration Statement, prospectuses or sales literature of the
Fund 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 material fact required to be stated therein or necessary to
make the statements therein not misleading. The Fund will reimburse
any legal or other expenses reasonably incurred by the Company or any
such director, officer, employee, agent, or controlling
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person in connection with investigating or defending any such loss,
claim, damage, liability or action; PROVIDED, HOWEVER, that the Fund
will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue
statement or omission or alleged omission made in such Registration
Statement or prospectuses which are in conformity with written
materials furnished to the Fund by the Company specifically for use
therein.
(c) Promptly after receipt by an indemnified party hereunder of notice of
the commencement of action, such indemnified party will, if a claim in
respect thereof is to be made against the indemnifying party
hereunder, notify the indemnifying party of the commencement thereof;
but the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party
otherwise than under this Section 10. In case any such action is
brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party
will be entitled to participate therein and, to the extent that it may
wish to, assume the defense thereof, with counsel satisfactory to such
indemnified party, and after notice from the indemnifying party to
such indemnified party of its election to assume the defense thereof,
the indemnifying party will not be liable to such indemnified party
under this Section 9 for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation.
10. POTENTIAL CONFLICTS.
(a) The Company has received a copy of an application for exemptive
relief, as amended, filed by the Fund on and with the SEC and the
order issued by the SEC dated December 21, 1998 (File No. 812-11196)
in response thereto (the "Mixed and Shared Funding Exemptive Order").
The Company has reviewed the conditions to the requested relief set
forth in such application for exemptive relief. As set forth in such
application, the Board of Directors of Fund (the "Board") will monitor
the Fund for the existence of any material irreconcilable conflict
between the interests of the contractholders of all separate accounts
("Participating Companies") investing in the Fund. An irreconcilable
material conflict may arise for a variety of reasons, including: (i)
an action by any state insurance regulatory authority; (ii) a change
in applicable federal or state insurance, tax, or securities laws or
regulations, or a public ruling,
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private letter ruling, no-action or interpretative letter, or any
similar actions by insurance, tax or securities regulatory
authorities; (iii) an administrative or judicial decision in any
relevant proceeding; (iv) the manner in which the investments of any
portfolio are being managed; (v) a difference in voting instructions
given by variable annuity contractholders and variable life insurance
contractholders; or (vi) a decision by an insurer to disregard the
voting instructions of contractholders. The Board shall promptly
inform the Company if it determines that an irreconcilable material
conflict exists and the implications thereof.
(b) The Company will report any potential or existing conflicts of which
it is aware to the Board. The Company will assist the Board in
carrying out its responsibilities under the Shared Funding Exemptive
Order by providing the Board with all information reasonably necessary
for the Board to consider any issues raised. This includes, but is not
limited to, an obligation by the Company to inform the Board whenever
contractholder voting instructions are disregarded.
(c) If a majority of the Board, or a majority of its disinterested Board
members, determines that a material irreconcilable conflict exists
with regard to contractholder investments in a Fund, the Board shall
give prompt notice to all Participating Companies. If the Board
determines that the Company is responsible for causing or creating
said conflict, the Company shall at its sole cost and expense, and to
the extent reasonably practicable (as determined by a majority of the
disinterested Board members), take such action as is necessary to
remedy or eliminate the irreconcilable material conflict. Such
necessary action may include but shall not be limited to:
(i) withdrawing the assets allocable to the Account from the Fund and
reinvesting such assets in a different investment medium or
submitting the question of whether such segregation should be
implemented to a vote of all affected contractholders and as
appropriate, segregating the assets of any appropriate group
(i.e., annuity contract owners, life insurance contract owners,
or variable contract owners of one or more Participating
Companies) that votes in favor of such segregation, or offering
to the affected contractholders the option of making such a
change; and/or
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(ii) establishing a new registered management investment company or
managed separate account.
(d) If a material irreconcilable conflict arises as a result of a decision
by the Company to disregard its contractholder voting instructions and
said decision represents a minority position or would preclude a
majority vote by all of its contractholders having an interest in the
Fund, the Company at its sole cost, may be required, at the Board's
election, to withdraw an 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
disinterested members of the Board.
(e) For the purpose of this Section 10, a majority of the disinterested
Board members shall determine whether or not any proposed action
adequately remedies any irreconcilable material conflict, but in no
event will the Fund be required to establish a new funding medium for
any Contract. The Company shall not be required by this Section 11 to
establish a new funding medium for any Contract if an offer to do so
has been declined by vote of a majority of the Contract owners or
participants materially adversely affected by the irreconcilable
material conflict.
11. MISCELLANEOUS.
(a) AMENDMENT AND WAIVER. Neither this Agreement, nor any provision
hereof, may be amended, waived, discharged or terminated orally, but
only by an instrument in writing signed by all parties hereto.
(b) NOTICES. All notices and other communications hereunder shall be given
or made in writing and shall be delivered personally, or sent by
telex, telecopier or registered or certified mail, postage prepaid,
return receipt requested, or recognized overnight courier service to
the party or parties to whom they are directed at the following
addresses, or at such other addresses as may be designated by notice
from such party to all other parties.
To the Company:
Golden American Life Insurance Company
0000 Xxxxxxxx Xxxxx
Xxxx Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx
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To the Fund:
Portfolio Partners, Inc.
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxx, Counsel
Any notice, demand or other communication given in a manner prescribed in
this subsection (b) shall be deemed to have been delivered on receipt.
(c) SUCCESSORS AND ASSIGNS. This agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective permitted
successors and assigns.
(d) COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one
agreement, and any party hereto may execute this Agreement by signing
any such counterpart.
(e) SEVERABILITY. In case any one or more of the provisions contained in
this Agreement should be invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining
provisions contained herein shall not in any way be affected or
impaired thereby.
(f) ENTIRE AGREEMENT. This Agreement constitutes the entire agreement and
understanding between the parties hereto and supersedes all prior
agreement and understandings relating to the subject matter hereof.
(g) GOVERNING LAW. This Agreement shall be governed and interpreted in
accordance with the laws of the State of Connecticut.
(h) It is understood by the parties that this Agreement is not an
exclusive arrangement in any respect.
(i) The terms of this Agreement and the Schedules thereto will be held
confidential by each party except to the extent that either party or
its counsel may deem it necessary to disclose such terms.
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12. LIMITATION ON LIABILITY OF DIRECTORS, ETC.
This agreement has been executed on behalf of the Fund by the undersigned
officer of the Fund in his or her capacity as an officer of the Fund. The
obligations of this agreement shall be binding upon the assets and property of
the Fund only and shall not be binding on any Director, officer or shareholder
of the Fund individually.
IN WITNESS WHEREOF, the undersigned have executed this Agreement by their
duly authorized officers effective as of the 13th day of July, 2001.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
By: /s/ Xxxxx X. Xxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Executive Vice President
PORTFOLIO PARTNERS, INC.
By: /s/ Xxxxxx X. Xxxxxxxxxxx
-----------------------------
Name: Xxxxxx X. Xxxxxxxxxxx
Title: President
AETNA LIFE INSURANCE AND ANNUITY COMPANY
By: /s/ Xxxxxx X. Xxxxxxxxxxx
-----------------------------
Name: Xxxxxx X. Xxxxxxxxxxx
Title: Vice President
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SCHEDULE A
(For any future separate accounts - See Section l(a)
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SCHEDULE B
(List of portfolios available--See Section l(b))
PPI MFS Capital Opportunities Portfolio - Service Class
Effective 12/31/01:
PPI Xxxxx Aggressive Growth - Service Class
PPI Xxxxx Growth Portfolio - Service Class
PPI Xxxxxxx Tactical Asset Allocation Portfolio - Service Class
PPI Xxxxxxx Xxxxx(R) Capital Growth Portfolio - Service Class
PPI MFS Research Growth Portfolio - Service Class
PPI OpCap Balanced Value Portoflio - Service Class
PPI Salomon Brothers Capital Portfolio - Service Class
PPI Salomon Brothers Investors Value Portfolio - Service Class
PPI Xxxxxxx International Growth Portfolio - Service Class
PPI X.Xxxx Price Growth Equity Portfolio - Service Class
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SCHEDULE C
The following costs, expenses and reimbursements will be paid by the party
indicated:
1. For purposes of Sections 2 and 7, the Fund or the Adviser shall be liable
to the Company for any amount the Company is required to pay to Contract
owners or participants due to (i) an incorrect calculation of a Fund's
daily net asset value, dividend rate, or capital gain distribution rate or
(ii) incorrect or late reporting of the daily net asset value, capital gain
distribution rate of a Fund, upon written notification by the Company, with
supporting data, to the Adviser. In addition, the Fund or the Adviser shall
be liable to the Company for systems and out of pocket costs incurred by
the Company in making a Contract owner's or a participant's account whole,
if such costs or expenses are a result of the Fund's failure to provide
timely or correct net asset values, dividend and capital gains or financial
information and if such information is not corrected by 4pm EST of the next
business day after releasing such incorrect information provided the
incorrect NAV as well as the correct NAV for each day that the error
occurred is provided. If a mistake is caused in supplying such information
or confirmations, which results in a reconciliation with incorrect
information, the amount required to make a Contract owner's or a
Participant's account whole shall be borne by the party providing the
incorrect information, regardless of when the error is corrected.
2. For purposes of Section 3, the Fund or the Adviser shall pay for the cost
of typesetting and printing periodic fund reports to existing shareholders,
prospectuses, prospectus supplements, statements of additional information
and other materials that are required by law to be sent to existing
Contract owners or participants, as well as the cost of distributing such
materials. The Company shall pay for the cost of prospectuses and
statements of additional information and the distribution thereof for
prospective Contract owners or participants. Each party shall be provided
with such supporting data as may reasonably be requested for determining
expenses under Section 3.
3. The Fund shall pay all expenses in connection with the provision to the
Company of a sufficient quantity of its proxy material under Section 3. The
cost associated with proxy preparation, group authorization letters,
programming for tabulation and necessary materials (including postage) will
be paid by the Fund.
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NSCC EXHIBIT
PROCEDURES FOR PRICING AND ORDER/SETTLEMENT THROUGH NATIONAL SECURITIES CLEARING
CORPORATION'S MUTUAL FUND PROFILE SYSTEM AND MUTUAL FUND SETTLEMENT, ENTRY AND
REGISTRATION VERIFICATION SYSTEM
As provided in Section 2(e) of the Participation Agreement, the parties hereby
agree to provide pricing information, execute orders and wire payments for
purchases and redemptions of Fund shares through National Securities Clearing
Corporation ("NSCC") and its subsidiary systems as follows:
Distributor or the Funds will furnish to the Company or its affiliate through
NSCC's Mutual Fund Profile System ("MFPS") (1) the most current net asset value
information for each Fund, (2) a schedule of anticipated dividend and
distribution payment dates for each Fund, which is subject to change without
prior notice, ordinary income and capital gain dividend rates on the Fund's
ex-date, and (4) in the case of fixed income funds that declare daily dividends,
the daily accrual or the interest rate factor. All such information shall be
furnished to the Company or its affiliate by 6:30 p.m. Eastern Time on each
business day that the Fund is open for business (each a "Business Day") or at
such other time as that information becomes available. Changes in pricing
information will be communicated to both NSCC and the Company or its affiliate.
Upon receipt of Fund purchase, exchange and redemption instructions for
acceptance as of the time at which a Fund's net asset value is calculated as
specified in such Fund's prospectus ("Close of Trading") on each Business Day
("Instructions"), and upon its determination that there are good funds with
respect to Instructions involving the purchase of Shares, the Company or its
affiliate will calculate the net purchase or redemption order for each Fund.
Orders for net purchases or net redemptions derived from Instructions received
by the Company or its affiliate prior to the Close of Trading on any given
Business Day will be sent to the Defined Contribution Interface of NSCC's Mutual
Fund Settlement, Entry and Registration Verification System ("Fund/SERV") by
5:00 a.m. Eastern Time on the next Business Day. Subject to the Company's or its
affiliate's compliance with the foregoing, the Company or its affiliate will be
considered the agent of the Distributor and the Funds, and the Business Day on
which Instructions are received by the Company or its affiliate in proper form
prior to the Close of Trading will be the date as of which shares of the Funds
are deemed purchased, exchanged or redeemed pursuant to such Instructions.
Instructions received in proper form by the Company or its affiliate after the
Close of Trading on any given Business Day will be treated as if received on the
next following Business Day. Dividends and capital
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gains distributions will be automatically reinvested at net asset value in
accordance with the Fund's then current prospectuses.
The Company or its affiliate will wire payment for net purchase orders by the
Fund's NSCC Firm Number, in immediately available funds, to an NSCC settling
bank account designated by the Company or its affiliate no later than 5:00 p.m.
Eastern time on the same Business Day such purchase orders are communicated to
NSCC. For purchases of shares of daily dividend accrual funds, those shares will
not begin to accrue dividends until the day the payment for those shares is
received.
NSCC will wire payment for net redemption orders by Fund, in immediately
available funds, to an NSCC settling bank account designated by the Company or
its affiliate, by 5:00 p.m. Eastern Time on the Business Day such redemption
orders are communicated to NSCC, except as provided in a Fund's prospectus and
statement of additional information.
With respect to (c) or (d) above, if Distributor does not send a confirmation of
the Company's or its affiliate's purchase or redemption order to NSCC by the
applicable deadline to be included in that Business Day's payment cycle, payment
for such purchases or redemptions will be made the following Business Day. If on
any day the Company or its affiliate or Distributor is unable to meet the NSCC
deadline for the transmission of purchase or redemption orders, it may at its
option transmit such orders and make such payments for purchases and redemptions
directly to Distributor or to the Company or its affiliate, as applicable, as is
otherwise provided in the Agreement.
These procedures are subject to any additional terms in each Fund's prospectus
and the requirements of applicable law. The Funds reserve the right, at their
discretion and without notice, to suspend the sale of shares or withdraw the
sale of shares of any Fund.
2. The Company or its affiliate, Distributor and clearing agents (if applicable)
are each required to have entered into membership agreements with NSCC and met
all requirements to participate in the MFPS and Fund/SERV systems before these
procedures may be utilized. Each party will be bound by the terms of their
membership agreement with NSCC and will perform any and all duties, functions,
procedures and responsibilities assigned to it and as otherwise established by
NSCC applicable to the MFPS and Fund/SERV system and the Networking Matrix Level
utilized.
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3. Except as modified hereby, all other terms and conditions of the Agreement
shall remain in full force and effect. Unless otherwise indicated herein, the
terms defined in the Agreement shall have the same meaning as in this Exhibit.
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