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EXHIBIT (8)(e)
PARTICIPATION AGREEMENT
AMONG
VARIABLE INSURANCE PRODUCTS FUND,
FIDELITY DISTRIBUTORS CORPORATION
and
AMERITAS LIFE INSURANCE CORP.
THIS AGREEMENT, made and entered into as of this 15th day of July, 1989 by and
among AMERITAS LIFE INSURANCE CORP., (hereinafter the "Company"), a Nebraska
corporation, on its own behalf and on behalf of each segregated asset account of
the Company set forth on Schedule C hereto as may be amended from time to time
(each such account hereinafter referred to as the "Account"), and the VARIABLE
INSURANCE PRODUCTS FUND, an unincorporated business trust organized under the
laws of the Commonwealth of Massachusetts (hereinafter the "Fund"), and FIDELITY
DISTRIBUTORS CORPORATION (hereinafter the "Underwriter"), a Massachusetts
corporation.
WHEREAS, the Fund engages in business as an open-end management investment
company an is available to act as the investment vehicle for separate accounts
established for variable life insurance policies and variable annuity contracts
(collectively, the "Variable Insurance Products") to be offered by insurance
companies which have entered into participation agreements substantially
identical to this Agreement (hereinafter "Participating Insurance Companies");
and
WHEREAS, the beneficial interest in the Fund is divided into several series of
shares, each designated a "Portfolio" and representing the interest in a
particular managed portfolio of securities and other assets; and
WHEREAS, the Fund has obtained an order from the Securities and Exchange
Commission, dated October 15, 1985 (File No. 812-6102), granting Participating
Insurance Companies and variable annuity and variable life insurance separate
account exemptions from the provisions of sections 9(a), 13(a), 15(a), and 15(b)
of the Investment Company Act of 1940, as amended, (hereinafter the "1940 Act")
and Rules 6e-2(b) (15) and 6e-3(T) (b) (15)thereunder, to the extent necessary
to permit shares of the Fund to be sold to and held by variable annuity and
variable life insurance separate accounts of both affiliated and unaffiliated
life insurance companies (hereinafter the "Shared Funding Exemptive Order"); and
WHEREAS, the Fund is registered as an open-end management investment company
under the 1940 Act and its shares are registered under the Securities Act of
1933, as amended (hereinafter the "1933 Act"); and
WHEREAS, Fidelity management & Research Company (the "Advisor") is duly
registered as an investment adviser under the federal Investment Advisers Act of
1940 and any applicable state securities law; and
WHEREAS, the Company has registered or will register certain variable life and
variable annuity contracts under the 1933 Act; and
WHEREAS, each Account is a duly organized, validly existing segregated asset
account, established by resolution of the Board of Directors of the Company on
the date shown for such Account on Schedule C hereto, to set aside and invest
assets attributable to the aforesaid variable life and annuity contracts; and
WHEREAS, the Company has registered or will register each Account as a unit
investment trust under the 1940 Act; and
WHEREAS, the Underwriter is registered as a broker dealer with the Securities
and Exchange Commission under the Securities Exchange Act of 1934, as amended,
(hereinafter the "1934 Act"), and is a member in good standing of the National
Association of Securities Dealers, Inc. (hereinafter "NASD"); and
WHEREAS, to the extent permitted by applicable insurance law and regulations,
the Company intends to purchase shares in the Portfolios on behalf of each
Account to fund certain of the aforesaid variable life and variable annuity
contracts and the Underwriter is authorized to sell such shares to unit
investment
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trusts such as each Account at net asset value;
NOW, THEREFORE, in consideration of their mutual promises, the Company, the Fund
and the Underwriter agree as follows:
ARTICLE I. Sale of Fund Shares
1.1 The Underwriter agrees to sell to the Company those shares of the Fund
which each Account orders, executing such orders on a daily basis at
the net asset value next computed after receipt by the Fund or its
designee of the order for the shares of the Fund. For purposes of the
Section 1.1, the Company shall be the designee of the Fund for receipt
of such orders from each Account and receipt by such designee shall
constitute receipt by the Fund; provided that the Fund receives notice
of such order by 9:30 a.m. Boston time on the next following Business
Day. "Business Day" shall mean any day on which the New York Stock
Exchange is open for trading and on which the Fund calculates its net
asset value pursuant to the rules of the Securities and Exchange
Commission.
1.2 The Fund agrees to make its shares available indefinitely for purchase
at the applicable net asset value per share by the Company and its
Accounts on those days on which the Fund calculates its net asset value
pursuant to rules of the Securities and Exchange Commission and the
Fund shall use reasonable efforts to calculate such net asset value on
each day which the New York Stock Exchange is open for trading.
Notwithstanding the foregoing, the Board of Trustees of the Fund
(hereinafter the "Trustees") may refuse to sell shares of any Portfolio
to any person, or suspend or terminate the offering of shares of any
Portfolio if such action is required by law or by regulatory
authorities having jurisdiction or is, in the sole discretion of the
Trustees acting in good faith and in light of their fiduciary duties
under federal and any applicable state laws, necessary in the best
interests of the shareholders of such Portfolio.
1.3 The Fund and the Underwriter agree that shares of the Fund will be sold
only to Participating Insurance Companies and their separate accounts.
No shares of any Portfolio will be sold to the general public.
1.4 The Fund and the Underwriter will not sell Fund shares to any insurance
company or separate account unless an agreement containing provisions
substantially the same as Articles I, III, V, VII and Section 2.5 and
2.12 of Article II of this Agreement is in effect to govern such sales.
1.5 The Fund agrees to redeem for cash, on the Company's request, any full
or fractional shares of the Fund held by the Company, executing such
requests on a daily basis at the net asset value next computed after
receipt by the Fund or its designee of the request for redemption. For
purposes of the Section 1.5, the Company shall be the designee of the
Fund for receipt of requests for redemption from each Account and
receipt by such designee shall constitute receipt by the Fund; provided
that the Fund receives notice of such request for redemption on the
next following Business Day.
1.6 The Company agrees to purchase and redeem the shares of each Portfolio
offered by the then current prospectus of the Fund and in accordance
with the provisions of such prospectus. The Company agrees that all net
amounts available under the variable life and variable annuity
contracts with the form number(s) which are listed on Schedule A
attached hereto and incorporated herein by this reference, as such
Schedule A may be amended from time to time hereafter by mutual written
agreement of all the parties hereto, (the "Contracts") shall be
invested in the Fund, in such other Funds advised by the Adviser as may
be mutually agreed to in writing by the parties hereto, or in the
Company's general account, provided that such amounts may also be
invested in an investment company other
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than the Fund if (a) such other investment company, or series thereof,
has investment objectives and policies of all the Portfolios of the
Fund; or (b) the Company gives the Fund and the Underwriter 45 days
written notice of its intention to make such other investment company
available as a funding vehicle for the Contracts; or (c) such other
investment company was available as a funding vehicle for the Contracts
prior to the date of this Agreement and the Company so informs the Fund
and Underwriter prior to their signing this Agreement; or (d) the Fund
or Underwriter consents to the use of such other investment company.
1.7 The Company shall pay for Fund shares on the next Business Day after an
order to purchase Fund shares is made in accordance with the provisions
of Section 1.1 hereof. Payment shall be in federal funds transmitted by
wire. For purpose of Section 2.10 and 2.11, upon receipt by the Fund of
the federal funds so wired, such funds shall cease to be the
responsibility of the Company and shall become the responsibility of
the Fund.
1.8 Issuance and transfer of the Fund's Shares will be by book entry only.
Stock certificates will not be issued to the Company or any Account.
Shares ordered from the Fund will be recorded in an appropriate title
for each Account or the appropriate subaccount of each Account.
1.9 The Fund shall furnish same day notice (by wire or telephone, followed
by written confirmation) to the Company of any income, dividends or
capital gain distributions payable on the Funds' shares. The Company
hereby elects to receive all such income dividends and capital gain
distributions as are payable on the Portfolio shares in additional
shares of the Portfolio. The Company reserves the right to revoke this
election and to receive all such income dividends and capital gain
distributions in cash. The Fund shall notify the Company of the number
of shares so issued as payment of such dividends and distributions.
1.10 The Fund shall make the net asset value per share for each Portfolio
available to the Company on a daily basis as soon as reasonably
practical after the net asset value per share is calculated and shall
use its best efforts to make such net asset value per share available
by 7 p.m. Boston time.
ARTICLE II. Representations and Warranties
2.1 The Company represents and warrants that the Contracts are or will be
registered under the 1933 Act; that the Contracts will be issued and
sold in compliance in all material respects with all applicable Federal
and State laws and that the sale of the Contracts shall comply in all
material respects with state insurance suitability requirements. The
Company further represents and warrants that it is an insurance company
duly organized and in good standing under applicable law and that it
has legally and validly established each Account prior to any issuance
or sale thereof as a segregated asset account under Section44-402.01 of
the Nebraska Insurance Code and has registered or, prior to any
issuance or sale of the Contracts, will register each Account as a unit
investment trust in accordance with the provisions of the 1940 Act to
serve as a segregated investment account for the Contracts.
2.2 The Fund represents and warrants that Fund shares sold pursuant to this
Agreement shall be registered under the 1933 Act, duly authorized for
issuance and sold in compliance with the laws of the State of Nebraska
and all applicable federal and state securities laws and that the Fund
is and shall remain registered under the 0000 Xxx. The Fund shall amend
the Registration Statement for its shares under the 1933 Act and the
1940 Act from time to time as required in order to effect the
continuous offering of its shares. The fund shall register and qualify
the shares for sale in accordance with the laws of the various states
only if and to the extent deemed advisable by the Fund or the
Underwriter.
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2.3 The Fund represents that it is currently qualified as a Regulated
Investment Company under Subchapter M of the Internal Revenue Code of
1986, as amended, (the "Code") and that it will make every effort to
maintain such qualification (under Subchapter M or any successor or
similar provision) and that it will notify the Company immediately upon
having a reasonable basis for believing that it has ceased to so
qualify or that it might not so qualify in the future.
2.4 The Company represent that the Contracts are currently treated as
endowment, annuity or life insurance contracts, under applicable
provisions of the Code and that it will make every effort to maintain
such treatment and that it will notify the Fund and the Underwriter
immediately upon having a reasonable basis for believing that the
Contracts have ceased to be so treated or that they might no be so
treated in the future.
2.5 The Fund currently does not intend to make any payments to finance
distribution expenses pursuant to Rule 12b-1 under the 1940 Act or
otherwise, although it may make such payments in the future. The Fund
has adopted a "no fee" or "defensive" Rule 12b-1 Plan under which it
makes no payment for distribution expenses. To the extent that it
decides to finance distribution expenses pursuant to Rule 12b-1 to
finance distribution expenses.
2.6 The Fund makes no representation as the whether any aspect of its
operation (including, but not limited to, fees and expenses and
investment policies) complies with the insurance laws or regulation of
the various states except that the Fund represents that the Fund's
investment policies, fees and expenses are and shall at all times
remain in compliance with the law of the State of Nebraska and the Fund
and the Underwriter represent that their respective operations are and
shall at all times remain in material compliance with the law of the
Sate of Nebraska to the extent required to perform this Agreement.
2.7 The Underwriter represents and warrants that it is a member in good
standing of the NASD and is registered as a broker-dealer with the SEC.
The Underwriter further represents that it will sell and distribute the
Fund shares in accordance with the laws of the State of Nebraska and
all applicable state and federal securities laws, including without
limitation the 1933 Act, the 1934 Act, and the 0000 Xxx.
2.8 The Fund represents that it is lawfully organized and validly existing
under the laws of the Commonwealth of Massachusetts and that it does
and will comply in all material respects with the 1940 Act.
2.9 The Underwriter represents and warrants that the Adviser is and shall
remain duly registered in all material respects under all applicable
federal and state securities laws and that the Adviser shall
perform its obligations for the Fund in compliance in all material
respects with the laws of the State of Nebraska and any applicable
state and federal securities laws.
2.10 The Fund and Underwriter represent and warrant that all of their
directors, officer, employees, investment advisers, and other
individuals/entities dealing with the money and/or securities of the
Fund are and shall continue to be at all times covered by a blanket
fidelity bond or similar coverage for the benefit of the Fund in an
amount no less than the minimal coverage as required currently by
Section 17g-(1) of the 1940 Act or related provisions as may be
promulgated from time to time. The aforesaid Bond shall include
coverage for larceny and embezzlement and shall be issued by a
reputable bonding company.
2.11 The Company represents and warrants that all of its directors, officers
employees, investment advisers, and other individuals/entities dealing
with the money and/or securities of the Fund are and shall continue to
be at all times covered by a blanket fidelity bond or similar coverage
for the benefit of the Fund, in an amount not less than the minimal
coverage as required currently by Section 270.17g-1 of the 1940 Act or
related provisions
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as may be promulgated from time to time. The aforesaid Bond shall
include coverage for larceny and embezzlement and shall be issued by a
reputable bonding company.
2.12 The Company represents and warrants that it will not purchase Fund
shares with Account assets derived from the sale of Contracts to
deferred compensation plans with respect to service for state and local
governments which qualify under Section 457 of the federal Internal
Revenue Code, as may be amended. The Company may purchase Fund shares
with Account assets derived from any sale of a Contract to any other
type of tax-advantaged employee benefit plan; provided however that
such plan has no more that 500 employees who are eligible to
participate at the time of the first such purchase hereunder by the
Company of Fund shares derived from the sale of such Contract.
ARTICLE III. Prospectuses and Proxy Statements; Voting
3.1 The Underwriter shall provide the Company (at the Company's expense)
with as many copies of the Fund's current prospectus as the Company may
reasonably request. If requested by the Company in lieu thereof, the
Fund shall provide such documentation (including a final copy of the
new prospectus as set in type at the Fund's expense) and other
assistance as is reasonably necessary in order for the Company once
each year (or more frequently if the prospectus for the Fund is
amended) to have the prospectus for the Contracts and the Fund's
prospectus printed together in one document (such printing to be at the
Company's expense).
3.2 The Fund's prospectus shall state that the Statement of Additional
Information for the Fund is available from the Underwriter (or in the
Fund's discretion, the Prospectus shall state that such Statement is
available from the Fund), and the Underwriter (or the Fund), at its
expense, shall print and provide such Statement free of charge to the
Company and to any owner of a Contract or prospective owner who
requests such Statement.
3.3 The Fund, at its expense, shall provide the Company with copies of its
proxy material, reports to stockholders and other communication to
stockholders in such quantity as the Company shall reasonably require
for distributing to Contract Owners.
3.4 If and to the extent required by law the Company shall:
1. solicit voting instruction from Contract Owners;
2. vote the Fund shares in accordance with instructions
received from Contract Owners; and
3. vote Fund shares for which no instructions have been
received in the same proportion as Fund shares of such
portfolio for which instructions have been received: so
long as and to the extent that the Securities and Exchange
Commission continues to interpret the Investment Company
Act to require pass-through voting privileges for variable
contract owners. The Company reserves the right to vote
Fund 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 participating in the Fund
calculates voting privileges in a manner consistent with
the standards set forth on Schedule B attached hereto and
incorporated herein by this reference, which standards will
also be provided to the other Participating Insurance
Companies.
3.5 The Fund will comply with all provisions of the 1940 Act requiring
voting by shareholders, and in particular the Fund will either provide
for annual meetings or comply with Section 16(c) of the 1940 Act
(although the Fund is not one of the trusts described in Section 16(c)
of that Act) as well as with Sections 16(a) and, if and when
applicable, 16(b). Further, the Fund will act in accordance with the
Securities and Exchange
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Commission's interpretation of the requirements of Section 16(a) with
respect to periodic elections of trustees and with whatever rules the
Commission may promulgate with respect thereto.
ARTICLE IV. Sales Material and Information
4.1 The Company shall furnish, or shall cause to be furnished, to the Fund
or its designee, each piece os sales literature or other promotional
material in which the Fund or its investment adviser or the Underwriter
is named, at least fifteen Business Days prior to its use. No such
material shall be used if the Fund or its designee object to such use
within fifteen Business Days after receipt of such material
4.2 The Company shall not give any information or make any representations
or statements on behalf of the Fund or concerning the Fund in
connection with the sale of the Contracts other than the information or
representations contained in the registration statement or prospectus
for the Fund shares, as such registration statement and prospectus may
be amended or supplemented from time to time, or in reports or proxy
statements for the Fund, or in sales literature or other promotional
material approved by the Fund or its designee or by the Underwriter,
except with the permission of the Fund or the Underwriter or the
designee of either.
4.3 The Fund, Underwriter, or its designee shall furnish, or shall cause to
be furnished, to the Company or its designee, each piece of sales
literature or other promotional material in which the Company and/or
its separate account(s), is named at least fifteen Business Days prior
to its use. No such material shall be used if the Company or its
designee object to such use within fifteen Business Days after receipt
of such material.
4.4 The Fund and the Underwriter shall not give any information or make any
representations on behalf of the Company or concerning the Company,
each Account, or the Contracts other than the information or
representation contained in a registration statement or prospectus for
the Contracts, as such registration statement and prospectus may be
amended or supplemented from time to time, or in published reports for
each Account which are in the public domain or approved by the Company
for distribution to Contract owner, or in sales literature or other
promotional material approved by the Company or its designee, except
with the permission of the Company.
4.5 The Fund will provide to the Company at least one complete copy of all
registration statements, prospectuses, Statements of Additional
Information, reports, proxy statements, sales literature and other
promotional materials, applications for exemptions, requests for
no-action letters, and all amendments to any of the above, that relate
to the Fund or its shares, contemporaneously with the filing of such
document with the Securities and Exchange Commission or other
regulatory authorities.
4.6 The Company will provide to the fund at least one complete copy of all
registration statements, prospectuses, Statements of Additional
Information, reports, solicitations for voting instructions, sales
literature and other promotional materials, applications for
exemptions, requests for no action letters, and all amendments to any
of the above, that relate to the Contracts or each Account,
contemporaneously with the filing of such document with the Securities
and Exchange Commission.
4.7 For purposes of this Article IV, the phrase "sales literature or other
promotional material" includes, but is no limited to, advertisements
(such as material published, or designed for use in, a newspaper,
magazine, or other periodical, radio television, telephone or tape
recording, videotape display, signs or billboards, motion pictures, or
other public media), sales literature (i.e., any written communication
distributed or made generally available to customers or the public,
including brochures, circulars, research reports, market letters,
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form letters, seminar texts, reprints or excerpts of any other
advertisement, sales literature, or published article), educational or
training materials or other communications distributed or made
generally available to some or all agents or employees, and
registration statements, prospectuses, Statement of Additional
Information, shareholder reports, and proxy materials.
ARTICLE V. Fees and Expenses
5.1 The Fund and Underwriter shall pay no fee or other compensation to the
Company under this agreement, except that if the Fund or any Portfolio
adopts and implements a plan pursuant to Rule12b-1 to finance
distribution expenses, then the Underwriter may make payment to the
Company or to the underwriter for the Contracts if and in amounts
agreed to by the Underwriter in writing and such payments will be made
out of existing fees otherwise payable to the Underwriter. No such
payments shall be made directly by the Fund. Currently no payments are
contemplated.
5.2 All expenses incident to performance by the Fund under this Agreement
shall be paid by the Fund. The Fund shall see to it that all its shares
are registered and authorized for issuance in accordance with
applicable federal law and, if and to the extent deemed advisable by
the Fund, in accordance with applicable state laws prior to their sale.
The Fund shall bear the expenses for the cost of registration and
qualification of the Fund's shares, preparation and filing of the
Fund's prospectus and registration statement, proxy materials and
reports, setting the prospectus in type, setting in type and printing
the proxy material and reports to shareholders (including the costs of
printing a prospectus that constitutes an annual report), the
preparation of all statements and notices required by any federal or
state law, all taxes on the issuance or transfer of the Fund's shares.
5.3 The Company shall bear the expenses of printing and distributing the
Fund's prospectus to owners of Contracts issued by the Company and
distributing the Fund's proxy materials and reports to such Contract
owners.
ARTICLE VI. Diversification
6.1 The Fund will at all times invest money from the Contracts in such a
manner as to ensure that the Contracts will be treated as variable
contracts under the Code and the regulations issued thereunder. Without
limiting the scope of the foregoing, the Fund will at all times comply
with Section 817(h) of the Code and Treasury Regulation ss.1.817-5,
relating to the diversification requirements for variable annuity,
endowment, or life insurance contracts and any amendments or other
modifications to such Section or Regulations.
ARTICLE VII. Potential Conflicts
7.1 The Board of Trustees of the Fund (the "Board") will monitor the Fund
for the existence of any material irreconcilable conflict between the
interests of the contract owners of all separate account investing in
the Fund. An irreconcilable material conflict may arise for a variety
of reasons, including: (a) an action by any state insurance regulatory
authority; (b) a change in applicable federal or state insurance, tax
or securities laws or regulations, or a public ruling, private letter
ruling, no-action or interpretative letter, or any similar action by
insurance, tax, or securities regulatory authorities; (c) an
administrative or judicial decision in any relevant proceeding; (d) the
manner in which the investments of any Portfolio are being managed; (e)
a difference in voting instructions given by variable annuity contract
and variable life insurance contract owners; or (f) a decision by an
insurer to disregard the voting instructions of contract owners. The
Board shall promptly inform the Company if it determines that an
irreconcilable material conflict exists and the
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implications thereof.
7.2 The Company will report any potential or existing conflicts of which it
is aware to the Board. The Company will assist the Board in carrying
out its responsibilities under the Shared Funding Exemptive Order, by
providing the Board with all information reasonably necessary for the
Board to consider any issues raised. This includes, but is not limited
to, an obligation by the Company to inform the Board whenever contract
owner voting instructions are disregarded.
7.3 If it is determined by a majority of the Board, or a majority of its
disinterested trustees, that a material irreconcilable conflict exists,
the Company and other Participating Insurance Companies shall, at their
expense and to the extent reasonably practicable (as determined by a
majority of the disinterested trustees), take whatever steps are
necessary to remedy or eliminate the irreconcilable material conflict,
up to and including: (1), withdrawing the assets allocable to some or
all of the separate accounts from the Fund or any Portfolio and
reinvesting such assets in a different investment medium, including
(but not limited to) another Portfolio of the Fund, or submitting the
question whether such segregation should be implemented to a vote of
all affected Contract owners and, as appropriate, segregating the
assets of any appropriate group (i.e., annuity contract owners, life
insurance contract owners, or variable contract owners of one or more
Participating Insurance Companies) that votes in favor of such
segregation, or offering to the affected contract owners the option of
making such a change; and (2) establishing a new registered management
investment company or manage separate account.
7.4 If a material irreconcilable conflict arises because of a decision by
the Company to disregard contract owner voting instructions and that
decision represents a minority position or would preclude a majority
vote, the Company may be required, at the Fund's election, to withdraw
the Account's investment in the Fund and terminate this Agreement;
provided, however that such withdrawal and termination shall be limited
to the extent required by the foregoing material irreconcilable
conflict as determined by a majority of the disinterested members of
the Board. Any such withdrawal and termination must take place within
six (6) months after the Fund gives written notice that this provision
is being implemented, and until the end of that six month period the
Underwriter and Fund shall continue to accept and implement orders by
the Company for the purchase (and redemption) of shares of the Fund.
7.5 If a material irreconcilable conflict arises because a particular state
insurance regulator's decision applicable to the Company conflicts with
the majority of other state regulators, then the Company will withdraw
the affected Account's investment in the Fund and terminate this
Agreement within six months after the Board informs the Company in
writing that it has determined that such decision has created an
irreconcilable material conflict; provided, however, 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. Until the end of
the foregoing six month period, the Underwriter and Fund shall continue
to accept and implement orders by the Company for the purchase (and
redemption) of shares of the Fund.
7.6 For purposes of Sections 7.3 through 7.6 of this Agreement, a majority
of the disinterested members of the Board shall determine whether any
proposed action adequately remedies any irreconcilable material
conflict, but in no event will the Fund be required to establish a new
funding medium for the Contracts. The Company shall not be required by
Section 7.3 to establish a new funding medium for the Contracts if an
offer to do so has been declined by vote of majority of Contract owners
materially adversely affected by the irreconcilable material conflict.
In the event that the Board determines that
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any proposed action does not adequately remedy any irreconcilable
material conflict, then the Company will withdraw the Account's
investment in the Fund and terminate this Agreement within six (6)
months after the Board informs the Company in writing of the foregoing
determination, provided, however, that such withdrawal and termination
shall be limited to the extent required by any such material
irreconcilable conflict as determined by a majority of the
disinterested members of the Board.
7.7 If and to the extent that Rule 6e-2 and Rule 6e-3(T) are amended, or
Rule 6e-3 is adopted, to provide exemptive relief from any provision of
the Act or the rules promulgated thereunder with respect to mixed or
shared funding (as defined in the Shared Funding Exemptive Order) on
terms and conditions materially different from those contained in the
Shared Funding Exemptive Order, then (a) the Fund and/or the
Participating Insurance Companies, as appropriate, shall take such
steps as may be necessary to comply with Rules 6e-2 and 6e-3(T), as
amended, and Rule 6e-3m as adopted, to the extent such rules are
applicable; and (b) Sections 3.4, 3.5, 7.1, 7.2, 7.3, 7.4, and 7.5 of
this Agreement shall continue in effect only to the extent that terms
and conditions substantially identical to such Sections are contained
in such Rule(s) as so amended or adopted.
ARTICLE VIII. Indemnification
8.1 Indemnification By The Company
8.1(a) The Company agrees to indemnify and hold harmless the Fund and
each of its Trustees and officers and each person, if any, who
controls the Fund within the meaning of Section 15 of the 1933
Act (collectively, the "Indemnified Parties" for purposes of
this Section 8.1) against any and all losses, claims, damages,
liabilities (including amounts paid in settlement with the
written consent of the Company) or litigation ( including
legal and other expenses), to which the Indemnified Parties
may become subject under any statute, regulation, at common
law or otherwise, insofar as such losses, claims, damage,
liabilities or expenses (or actions in respect thereof) or
settlements are related to the sale or acquisition of the
Fund's shares or the Contracts and:
4. Arise out of or are based upon any untrue statements or
alleged untrue statements of any material fact contained
in the Registration Statement or prospectus for the
Contracts or contained in the Contracts or sales
literature for the Contracts or contained in the
Contracts or sales literature for the Contracts (or any
amendment or supplement to any of the foregoing), or
arise out of or are based upon the omission or the
alleged omission to state therein a material fact
required to be stated therein or necessary to make the
statements therein not misleading, provided that this
agreement to indemnify shall not apply as to any
Indemnified Party if such statement or omission or such
alleged statement or omission was made in reliance upon
and in conformity with information furnished to the
Company by or on behalf of the Fund for use in the
Registration Statement or prospectus for the Contracts
or in the Contracts or sales literature (or any
amendment or supplement) or otherwise for use in
connection with the sale of the Contracts or Fund
shares; or
5. arise out of or as a result of statements or
representations (other than statements or
representations contained in the Registration Statement,
prospectus or sales literature of the Fund not supplied
by the Company, or persons under its control) or
wrongful conduct of the Company or persons
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under its control, with respect to the sale or
distribution of the Contracts or Fund Shares; or
6. arise out of any untrue statement or alleged untrue
statement of a material fact contained in a Registration
Statement, prospectus, or sales literature of the Fund
or any amendment thereof or supplement thereto or the
omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make
the statements therein not misleading if such a
statement or omission was made in reliance upon
information furnished to the Fund by or on behalf of the
Company: or
7. arise as a result of any failure by the Company to
provide the services and furnish the materials under the
terms of this Agreement; or
8. arise out of or result from any material breach of any
representation and/or warranty made by the Company in
this Agreement or arise out of or result from any other
material breach of this Agreement by the Company, as
limited by and in accordance with the provisions of
Sections 8.1(b) and 8.1(c) hereof.
8.1(b) The Company 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 or
duties under this Agreement or to the Fund, whichever is
applicable.
8.1(c) The Company shall not be liable under this indemnification
provision with respect to any claim made against an
Indemnified Party unless such Indemnified Party shall have
notified the Company in writing within a reasonable time after
the summons or other first legal process giving information of
the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have
received notice of such service on any designated agent), but
failure to notify the Company of any such claim shall not
relieve the Company from any liability which it may have to
the Indemnified Party against whom such action is brought
otherwise than on account of this indemnification provision.
In case any such action is brought against the Indemnified
Parties, the Company shall be entitled to participate, at its
own expense, in the defense of such action. The Company also
shall be entitled to assume the defense thereof, with counsel
satisfactory to the party named in the action. After notice
from the Company to such party of the Company's election to
assume the defense thereof, the Indemnified Party shall bear
the fees and expenses of any additional counsel retained by
it, and the Company will not be liable to such party under
this Agreement for any legal or other expenses subsequently
incurred by such party independently in connection with the
defense thereof other than reasonable costs of investigation.
8.1(d) Th Indemnified Parties will promptly notify the Company of the
commencement of any litigation or proceedings against them in
connection with the issuance or sale of the Fund Shares or the
Contracts or the operation of the Fund.
8.2 Indemnification by the Underwriter
8.2(a) The Underwriter agrees to indemnify and hold harmless the
Company and each of its directors and officers and each
person, if any, who controls the Company within the meaning of
Section 15 of the 1933 Act (collectively, the "Indemnified
Parties" for purposes of this Section 8.2) against any and all
losses, claims, damages, liabilities (including amounts paid
in settlement with the written consent of the Underwriter) or
litigation (including legal and other expenses) to which the
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Indemnified Parties may become subject under any statue, at
common law or otherwise, insofar as such losses, claims,
damages, liabilities or expenses ( or actions in respect
thereof) or settlements are related to the sale or acquisition
of the Fund's shares or the Contracts and:
9. arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained
in the Registration Statement or prospectus or sales
literature of the Fund (or any amendment or supplement
to any of the foregoing), or arise out of or are based
upon the omission or the alleged omission to state
therein a material fact required to be stated therein or
necessary to make the statements therein not misleading,
provided that this agreement to indemnify shall not
apply as to any Indemnified Party is such statement or
omission or such alleged statement or omission was made
in reliance upon and in conformity with information
furnished to the Underwriter or Fund by or on behalf of
the company for use in the Registration Statement or
prospectus for the Fund or in sales literature (or any
amendment or supplement) or otherwise for use in
connection with the sale of the Contracts or fund
shares: or
10. arise out of or as a result of statements or
representations (other than statements or
representations contained in the Registration Statement,
prospectus or sales literature for the Contracts not
supplied by the Underwriter or persons under its
control) or wrongful conduct of the Fund, Adviser or
Underwriter or persons under their control, with respect
to the sale or distribution of the Contracts or Fund
shares; or
11. arise out of any untrue statement or alleged untrue
statement of a material fact contained in a Registration
Statement, prospectus, or sales literature covering the
Contracts, or any amendment thereof or supplement
thereto, or the omission or alleged omission to state
therein a material fact required to be stated therein or
necessary to make the statement or statements therein
not misleading, if such statement or omission was made
in reliance upon information furnished to the Company by
or on behalf of the Fund; or
12. arise as a result of any failure by the Fund to provide
the services and furnish the materials under the terms
of this Agreement (including a failure, whether
unintentional or in good faith or otherwise, to comply
with the diversification requirements specified in
Article VI of this Agreement); or
13. arise out of or result from any material breach of any
representation and/or warranty made by the Underwriter
in this Agreement or arise out of or result from any
other material breach of this Agreement by the
Underwriter; as limited by and in accordance with the
provisions of Sections 8.02(b) and 8.2(c) hereof.
8.2(b) The Underwriter 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 each Company or the Account,
whichever is applicable.
8.2(c) The Underwriter shall not be liable under this indemnification
provision with respect to any claim made against an
Indemnified Party unless such Indemnified Party shall have
notified the Underwriter in writing within a reasonable time
after
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the summons or other first legal process giving information of
the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have
received notice of such service on any designated agent), but
failure to notify the Underwriter of any such claim shall not
relieve the Underwriter from any liability which it may have
to the Indemnified Party against whom such action is brought
otherwise than on account of this indemnification provision.
In case any such action is brought against the Indemnified
Parties, the Underwriter will be entitled to participate, at
its own expense, in the defense thereof. The Underwriter also
shall be entitled to assume the defense thereof, with counsel
satisfactory to the party named in the action. After notice
from the Underwriter to such party of the Underwriter's
election to assume the defense thereof, the Indemnified Party
shall bear the fees and expenses of any additional counsel
retained by it, and the Underwriter 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.
8.2(d) The Company agrees promptly to notify the Underwriter of the
commencement of any litigation or proceedings against it or
any of its officers or directors in connection with the
issuance or sale of the Contracts or the operation of each
Account.
8.3 Indemnification By the Fund
8.3(a) The fund agrees to indemnify and hold harmless the Company,
and each of its directors and officers and each person, if
any, who controls the Company within the meaning of Section 15
of the 1933 Act (collectively, the "Indemnified Parties" for
purposes of this Section 8.3) against any and all losses,
claims, damages, liabilities (including amounts paid in
settlement with the written consent of the Fund) or litigation
(including legal and other expenses) to which the Indemnified
Parties may become subject under any statute, at common law or
otherwise, insofar as such losses, claims, damages,
liabilities or expenses (or actions in respect thereof) or
settlements result from the gross negligence, bad faith or
willful misconduct of the Trustees or any member thereof, are
related to the operation of the fund and:
14. arise as a result of any failure by the Fund to provide
the services and furnish the materials under the terms
of this Agreement (including a failure to comply with
the diversification requirements specified in Article VI
of this Agreement); or
15. arise out of or result from any material breach of any
representation and/or warranty made by the Fund in this
Agreement or arise out of or result from any other
material breach of this Agreement by the Fund;
as limited by and in accordance with the provisions of Sections 8.3(b)
and 8.3(c) hereof.
8.3(b) The Fund 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 the Company, the Fund, the
Underwriter or each Account, whichever is applicable.
8.3(c) The Fund shall no be liable under this indemnified provision
with respect to any claim made against and Indemnified Party
unless such Indemnified Party shall have
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notified the Fund in writing within a reasonable time after
the summons or other first legal process giving information of
the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have
received notice of such service on any designated agent), but
failure to notify the Fund of any such claim shall not relieve
the Fund from any liability which it may have to the
Indemnified Party against whom such action is brought
otherwise than on account of this indemnification provision.
In case any such action is brought against the Indemnified
Parties, the Fund will be entitled to participate, at its own
expense, in the defense thereof. The Fund also shall be
entitled to assume the defense thereof, with counsel
satisfactory to the party named in the action. After notice
from the Fund to such party of the Fund's election to assume
the defense thereof, the Indemnified Party shall bear the fees
and expense of any additional counsel retained by it, and the
Fund will not be liable to such party under this Agreement for
any legal or other expenses subsequently incurred by such
party independently in connection with the defense thereof
other than reasonable costs of investigation.
8.3(d) The Company and the Underwriter agree promptly to notify the
Fund of the commencement of any litigation or proceedings
against it or any of its respective officers or directors in
connection with this Agreement, the issuance or sale of the
Contracts, with respect to the operation of either Account, or
the sale or acquisition of shares of the Fund.
ARTICLE IX. Applicable Law
9.1 This Agreement shall be construed and the provisions hereof interpreted
under and in accordance with the laws of the Commonwealth of
Massachusetts.
9.2 This Agreement shall be subject to the provision of the 1933, 1934, and
1940 acts, and the rules and regulations and rulings thereunder,
including such exemptions from those statutes, rules and regulations as
the Securities and Exchange Commission may grant (including, but not
limited to, the Shared Funding Exemptive Order) and the terms hereof
shall be interpreted and construed in accordance therewith.
ARTICLE X. Termination
10.1 This agreement shall terminate:
(1) at the option of any party upon one year advance written
notice to the other parties; provided, however such notice
shall not be given earlier than one year following the date of
this Agreement; or
(2) at the option of the Company to the extent that shares of
Portfolios are not reasonably available to meet the
requirements of the Contracts as determined by the Company,
provided however, that such termination shall apply only to
the Portfolio(s) not reasonably available. Prompt notice of
the election to terminate for such cause shall be furnished by
the Company; or
(3) at the option of the Fund in the event that formal
administrative proceedings are instituted against the Company
by the National Association of Securities Dealer, Inc.
("NASD"), the Securities and Exchange Commission, the
Insurance Commissioner or any other regulatory body regarding
the Company's duties under this Agreement or related to the
sale of the Contracts, with respect to the operation of any
Account, or the purchase of the Fund shares, provided,
however, that the Fund determines in its sole judgment
exercised in good faith, that any such
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administrative proceedings will have a material adverse effect
upon the ability of the Company to perform its obligations
under this Agreement; or
(4) at the option of the Company in the event that formal
administrative proceedings are instituted against the Fund or
Underwriter by the NASD, the Securities and Exchange
Commission, or any state securities or insurance department or
any other regulatory body, provided, however, that the Company
determines in its sole judgment exercised in good faith, that
any such administrative proceedings will have a material
adverse effect upon the ability of the Fund or Underwriter to
perform its obligations under this Agreement; or
(5) with respect to any Account, upon requisite vote of the
Contract owners having an interest in such Account (or any
subaccount) to substitute the shares of another investment
company for the corresponding Portfolio shares of the Fund in
accordance with the terms of the Contracts for which those
Portfolio shares had been selected to serve as the underlying
investment media. The Company will give 30 days' prior written
notice to the Fund of the date of any proposed vote to replace
the Fund's shares; or
(6) at the option of the Company, in the event any of the Fund's
shares are not registered, issued or sold in accordance with
applicable state and/or federal law or such law precludes the
use of such shares as the underlying investment media of the
Contracts issued or to be issued by the Company; or
(7) at the option of the Company, if the Fund ceases to qualify as
a Regulated Investment Company under Subchapter M of the Code
or under any successor or similar provision, or if the Company
reasonably believes that the Fund may fail to so qualify; or
(8) at the option of the Company, if the Fund fails to meet the
diversification requirements specified in Article VI hereof;
or
(9) at the option of either the Fund or the Underwriter, if (1)
the Fund or the Underwriter, respectively, shall determine, in
their sole judgment reasonably exercised in good faith, that
the Company has suffered a material adverse change in its
business or financial condition or is the subject of material
adverse publicity and such material adverse change or material
adverse publicity will have a material adverse impact upon the
business and operations of either the Fund or the Underwriter,
(2) the Fund or the Underwriter shall notify the Company in
writing of such determination and its intent to terminate this
Agreement, and (3) after considering the action taken by the
Company and any other changes in circumstances since the
giving of such notice, such determination of the Fund or the
Underwriter shall continue to apply on the sixtieth (60th) day
following the giving of such notice, which sixtieth day shall
be the effective date of termination; or
(10) at the option of the Company, if (1) the Company shall
determine, in its sole judgment reasonably exercised in good
faith, that either the Fund or the Underwriter has suffered a
material adverse change in its business or financial condition
or is the subject of material adverse publicity and such
material adverse change or material adverse publicity will
have a material adverse impact upon the business and
operations of the Company, (2) the Company shall notify the
Fund and the Underwriter in writing of such determination and
its intent to terminate the Agreement, and (3) after
considering the action taken by the Fund and/or the
Underwriter and any other changes in circumstances since the
giving of such notice, such determination shall continue to
apply on the sixtieth (60th) day
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following the giving of such notice, which sixtieth day shall
be effective date of termination; or
(11) at the option of either the Fund or the Underwriter, if the
Company gives the Fund and the Underwriter the written notice
specified in Section 1.6(b) hereof and at the time such notice
was given there was no notice of termination outstanding under
any other provision of this Agreement; provided, however any
termination under this Section 10.1(k) shall be effective
forty five (45) days after the notice specified in Section
1.6(b) was given.
10.2 It is understood and agreed that the right of any party hereto to
terminate this Agreement pursuant to Section 10.1(a) may be exercised
for any reason or for no reason.
10.3 Notice Requirement No termination of this Agreement shall be effective
unless and until the party terminating this Agreement gives prior
written notice to all other parties to this Agreement of its intent to
terminate which notice shall set forth the basis for such termination.
Furthermore,
(12) In the event that any termination is based upon the provisions
of Article VII, or the provision of Section 10.1(a), 10.1(i),
10.1(j) or 10.1(k) of this Agreement, such prior written
notice shall be given in advance of the effective date of
termination as required by such provisions; and
(13) in the event that any termination is based upon the provisions
of Section 10.1(c) or 10.1(d) of this Agreement, such prior
written notice shall be given at least (90) days before the
effective date of termination.
10.4 Effect of Termination Notwithstanding any termination of this
Agreement, the Fund and the Underwriter shall at the option of the
Company, continue to make available additional shares of the Fund
pursuant to the terms and conditions of this Agreement, for all
Contracts in effect on the effective date of termination (hereinafter
referred to as "Existing Contracts"). Specifically, without limitation,
the owners of the Existing Contracts shall be permitted to reallocate
investments in the Fund, redeem investments in the Fund and/or invest
in the Fund upon the making of additional purchase payments under the
Existing Contacts. The parties agree that this Section 10.4 shall not
apply to any termination under Article VII and the effect of such
Article VII terminations shall be governed by Article VII of this
Agreement.
10.5 The Company shall not redeem Fund shares attributable to the Contracts
(as opposed to Fund shares attributable to the Company's assets held in
either Account) except (i) as necessary to implement Contract Owner
initiated transactions, or (ii) as required by state and/or federal law
or regulation or judicial or other legal precedent of general
application (hereinafter referred to as a "Legally Required
Redemption"). Upon request, the Company will promptly furnish to the
Fund and Underwriter the opinion of counsel for the Company (which
counsel shall be reasonably satisfactory to the Fund and the
Underwriter) to the effect that any redemption pursuant to clause (ii)
above is a Legally Required Redemption. Furthermore, except in cases
where permitted under the terms of the Contracts, the Company shall not
prevent Contract Owners from allocating payments to a Portfolio that
was otherwise available under the Contracts without first giving the
Fund or the Underwriter 90 days notice of its intention to do so.
ARTICLE XI Notices
Any notice shall be sufficiently given when sent by registered or certified mail
to the other party at the address of such party set forth below or at such other
address as such party may from time to
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time specify in writing to the other party.
If to the Fund: 00 Xxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Treasurer
If to the Company: 5900 "O" Street, X.X. Xxx 0x000
Xxxxxxx, Xxxxxxxx 00000
Attention: Legal Department
If to the Underwriter: 00 Xxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Treasurer
ARTICLE XII. Miscellaneous
12.1 All persons dealing with the Fund must look solely to the property of
the Fund for the enforcement of any claims against the Fund as neither
the Trustee, officers, agents or shareholders assume any personal
liability for obligations entered into on behalf of the Fund.
12.2 Subject to the requirements of legal process and regulatory authority,
each party hereto shall treat as confidential the names and addresses
of the owners of the Contracts and all information reasonably
identified as confidential in writing by any other party hereto and,
except as permitted by this Agreement, shall not disclose, disseminate
or utilize such names and addresses and other confidential information
until such time as it may come into the public domain without the
express written consent of the affected party.
12.3 The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions
hereof or otherwise affect their construction or effect.
12.4 This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the
same instrument.
12.5 If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the
Agreement shall not be affected thereby.
12.6 Each party hereto shall cooperate with each other party and all
appropriate governmental authorities (including without limitation the
Securities and Exchange Commission, the NASD and state insurance
regulators) and shall permit such authorities reasonable access to its
books and records in connection with any investigation or inquiry
relating to this Agreement or the transaction contemplated hereby.
Notwithstanding the generality of the foregoing, each party hereto
further agrees to furnish the California Insurance Commissioner with
any information or reports in connection with services provided under
this Agreement with such Commissioner may request in order to ascertain
whether the variable life insurance operation of the Company are being
conducted in a manner consistent with the California Variable Life
Insurance Regulations and any other applicable law or regulations.
12.7 The Fund and Underwriter agree that to the extent any advisory or other
fees received by the Fund, the Underwriter or the Adviser are
determined to be unlawful in legal or administrative proceedings under
the 1973 NAIC model variable life insurance regulation in the states of
California, Colorado, Maryland or Michigan, the Underwriter shall
indemnify and reimburse the Company for any out of pocket expenses and
actual damages the Company has incurred as a result of any such
proceeding; provided however that the provisions of Section 8.2(b) of
this and 8.2(c) shall apply to such indemnification and reimbursement
obligation. Such indemnification and reimbursement obligation shall be
in addition to any other indemnification and reimbursement obligations
of the Fund and/or the Underwriter under this Agreement.
12.8 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.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed in its name on its behalf by its duly authorized representative and its
seal to be hereunder affixed hereto as of the date specified below.
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Company:
AMERITAS LIFE INSURANCE CORP.
By its authorized officer,
SEAL By:
--------------------------------------
Title:
--------------------------------------
Date:
--------------------------------------
Fund:
VARIABLE INSURANCE PRODUCTS FUND
By its authorized officer,
SEAL By:
--------------------------------------
Title:
--------------------------------------
Date:
--------------------------------------
Underwriter:
FIDELITY DISTRIBUTORS CORPORATION
By its authorized officer,
SEAL By:
--------------------------------------
Title:
--------------------------------------
Date:
--------------------------------------
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