FORM OF SALES AGREEMENT
AGREEMENT, dated as of , 1986 by and among Integrity Life Insurance
Company ("Integrity"), ("Insurer") and Separate Account of
(the "Separate Account").
W I T N E S S E T H:
WHEREAS, Integrity is a principal underwriter of Harmony Investment Trust
(the "Trust"), a series mutual fund whose shareholders are separate accounts
of insurance companies pursuant to a Distribution Agreement dated as of
, 1986 ("Distribution Agreement");
WHEREAS, such insurance companies issue, among other products, variable
life insurance and annuity products ("Variable Products") under which
contributions are allocated to such separate accounts for investment in the
Trust, and shares of the Trust are not sold except in connection with such
Variable Products;
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WHEREAS, the Trust is registered as an open-end investment company under
the Investment Company Act of 1940 (the "1940 Act");
WHEREAS, the Trust may designate in its sole discretion that certain
portfolios are limited to certain types of Variable Products or to a single
insurer and its affiliates;
WHEREAS, Insurer issues [type of variable products] ("Certificates"),
under which contributions are allocated to the investment divisions of the
Separate Account, which constitute Variable Products as contemplated by this
Agreement, and which are eligible for investment in the Trust's portfolios
("Funds") generally available for [type of variable product] or dedicated to
Insurer and its affiliates;
WHEREAS, Insurer and Integrity are each registered as a broker-dealer
under the Securities Exchange Act of 1934 ("1934 Act") and each is a member
of the National Association of Securities Dealers, Inc. ("NASD");
WHEREAS, Insurer may in the future issue other Variable Products under
which contributions or premiums are allocated to the Separate Account or
other separate accounts;
WHEREAS, Insurer may in the future issue other Variable Products under
which contributions or premiums are allocated to the Separate Account or
other separate accounts;
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NOW THEREFORE, Integrity, Insurer and the Separate Account hereby agree as
follows:
1. Integrity will make available to the Separate Account shares of all
Funds available for [type of variable product] for investment of
contributions under the Certificates. The Funds currently generally available
for [type of variable products] or dedicated to Insurer and its affiliates
are set forth in Schedule A hereto. Integrity will promptly notify Insurer of
new Funds made generally available into which contributions under the Funds
may be invested.
2. Purchases and redemptions of shares will be at net asset value for the
appropriate Fund, next computed as set forth in the most recent Trust
prospectus and Statement of Additional Information (respectively, "Trust
Prospectus" and "SAI") and any supplements thereto, and shall be submitted to
the Trust's transfer agent pursuant to procedures forwarded from time to time
by Integrity.
3. Orders for shares must be accompanied by payment therefor in
immediately available funds unless other procedures for payment are specified
by Integrity upon 90 days' notice and agreed to by Insurer. Orders for
redemption will be settled by payment in immediately available funds unless
other procedures for payment are specified by Insurer upon 90 days' notice
and agreed to by Integrity.
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4. (a) In good faith and as soon as practicable, Integrity will provide at
Trust expense camera ready copy of the current Trust Prospectus and SAI and
any supplements thereto for printing and distribution by Insurer with the
prospectus for the Certificates. Integrity will also provide camera ready
copy of Trust proxy materials and semi-annual reports, and any supplements
thereto. Integrity will use its best efforts to coordinate with Insurer and
to provide notice of anticipated filings or supplements. Insurer is not
authorized (i) to give any information or make any representations concerning
the Trust, its shares or operations except those contained in the most recent
Trust Prospectus and SAI and any supplements thereto, or (ii) to use any
sales literature or advertising mentioning the Trust (including brochures,
letters, illustrations and other similar materials, whether transmitted
directly to potential applicants or published in print or audio-visual
media), except in either case as Integrity, on behalf of the Trust, may
authorize in writing in advance, which authorization will not be unreasonably
withheld.
Integrity will furnish Insurer from time to time such information with
respect to the Trust and its shares as Insurer may reasonably request. At
reasonable times and upon reasonable notice to the Trust, the Insurer shall
have the
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right, except as stated below, to inspect, at its own expense, the trust's
books, records and accounts presented and maintained in accordance with
federal securities laws and such additional information regarding the Trust's
financial condition and operations (including, with the consent of such
auditors, the workpapers of the Trust's independent auditors), as Insurer may
reasonably request. In addition, Integrity shall furnish Insurer upon request
copies of the Trust's registration statement and all amendments and exhibits
thereto and periodic reports filed with the Securities and Exchange
Commission under the 1940 Act. Insurer acknowledges that certain books,
records, accounts and documents which Insurer may otherwise inspect pursuant
to this paragraph may contain confidential information with respect to the
Trust or its advisers, underwriters or shareholders, and Insurer agrees that
the Board of Trustees of the Trust may withhold any book, record, account,
document or other information or part thereof containing information
determined to be confidential in the sole discretion of the Trust's Board of
Trustees.
(b) Integrity will indemnify and hold harmless Insurer and the Separate
Account against any losses, claims, damages or liabilities, to which Insurer
or the Separate Account may become subject, 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 Trust
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Prospectus and/or SAI or any supplements thereto, or arise out of or are
based upon 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; and will reimburse Insurer or the Separate Account for any legal
or other expenses reasonably incurred by it in connection with investigating
or defending against such loss, claim, damage, liability or action; provided,
however, that Integrity shall 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 alleged untrue statement or omission or alleged
omission made in the Trust Prospectus and/or SAI or any such supplement in
good faith reliance upon and in conformity with written information furnished
by Insurer specifically for use in the preparation thereof.
Integrity shall not indemnity Insurer or the Separate Account for any
action where an applicant for the Certificates was not furnished or sent or
given, at or prior to written confirmation of the sale of the Certificate, a
copy of the prospectus relating to the Certificates together with the Trust
Prospectus, any supplements to the Trust Prospectus Integrity may furnish to
Insurer and, if requested by the applicant from the Insurer, the Trust SAI
and any supplements thereto.
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5. (a) Insurer shall report to Integrity for communication to the Board of
the Trust any conflict or potential for conflict known to Insurer or which
reasonably should be known to Insurer between the interests of the
policyowners in the Separate Account and the interests of policyowners in the
separate accounts of other insurance companies investing in the Trust and
shall assist the Board of the Fund in carrying out its responsibilities with
respect to such conflicts.
An irreconcilable material conflict may arise, inter alia, from:
(i) an action by a state insurance regulatory authority;
(ii) a chance in applicable insurance laws or regulations;
(iii) a tax ruling or provision of the Internal Revenue Code or the
regulations thereunder;
(iv) any other development relating to the tax treatment of insurance
companies, certificate or contract owners or beneficiaries of Variable
Products;
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(v) the manner in which a Fund is being invested;
(vi) differences in voting instructions given by owners of different
types of Variable Products; or
(vii) a decision by an insurance company to override instructions of its
certificate or contract owners with respect to Fund shares.
(b) Insurer shall at its expense take any steps determined to be necessary
by the Board of the Trust to eliminate any material irreconcilable conflict
determined to exist by the Board of the Trust, including, but not limited to,
(i) withdrawing the assets (in cash and/or securities, as determined by the
Trustees) allocable to the Separate Account from the Trust or any of the
Funds and reinvesting such assets in a different medium, including another
Fund of the Trust, or submitting the question whether such segregation should
be implemented to a vote of all affected certificate or contract owners and,
as appropriate, segregating the assets of the certificate or contract owners
of different types of Variable Products or all the certificate or contract
owners of the Separate Account or of the Insurer that vote in favor of such
segregation, or offering to the affected certificate or contract owners the
option of making such a change, and
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(ii) establishing a new registered management investment company or managed
Separate Account. The determination of the Trust's Board will be conclusive
and in no event will the Trust or Integrity be required to establish a new
funding medium for Variable Products issued by Insurer. Nevertheless, Insurer
shall not be required to establish a new funding medium for Variable Products
in accordance with this section if an offer to do so has been declined by a
majority of the affected certificate or contract owners. Moreover, Insurer
will be assisted by Integrity in taken any actions required pursuant to this
paragraph to minimize disruption of the certificate or contract owners or
depression of the value of the assets of the Variable Products affected. Any
procedures with respect to the resolution of conflicts adopted by the Trust's
Board of Trustees shall be incorporated herein by reference.
(c) Integrity shall promptly inform the Insurer of (i) any determination
by the Trust's Board of the existence of an irreconcilable material conflict
involving any other insurance company and the implications of such conflict
and (ii) any other circumstances which come to its attention which might
result in termination of the offering of shares of the Trust or any of the
Funds to the Separate Account.
(d) Insurer shall, in connection with its obligations and those of the
Separate Account hereunder, comply with applicable law including state
insurance law. Insurer
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represents that it has taken all actions required to authorize investment by
the Separate Account in the Trust and that no objection raised by the
appropriate state insurance regulatory authorities to the terms of such
investment remains unresolved on the date hereof.
(e) Integrity shall inform Insurer in advance of all regular meetings of
the Trust's Board of Trustees. Insurer may, upon reasonable notice, request
permission to be present at a regular meeting or make a presentation to the
Board of Trustees of the Trust. Permission to so appear shall not be
unreasonably withheld.
6. The Insurer will provide certificate and contractowners with voting
privileges with respect to Trust shares attributable to the Certificate
consistent with all other separate accounts investing in the Trust.
Pass-through voting privileges will be calculated with reference to the number
of shares of the Trust attributable to a particular certificate or contract.
Insurer will vote its own shares of each Fund and shares for which no
instructions have been received in the same proportion as instructions
received for that Fund.
7. This Agreement shall terminate automatically if it shall be assigned.
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8. This Agreement may be terminated at any time on two years' written
notice to the other party hereto, without the payment of any penalty, by
Insurer or Integrity.
9. This Agreement shall terminate automatically if the Distribution
Agreement shall terminate.
10. This Agreement shall be subject to the provisions of the 1940 Act and
the 1934 Act and the rules, regulations, and rulings thereunder and of the
NASD, from time to time in effect, including such exemptions from the 1940
Act as the Securities and Exchange Commission ("SEC") may grant, and the
terms hereof shall be interpreted and construed in accordance therewith.
Without limiting the generality of the foregoing, the term "assigned" shall
not include any transaction exempt from section 15(b)(2) of the 1940 Act by
order or rule of the SEC or any transactions as to which the staff of the SEC
has taken a no-action position.
Insurer shall, in connection with its obligations hereunder, comply with
all laws and regulations, whether Federal or state, and whether relating to
insurance, securities or other general areas, including but not limited to
the recordkeeping and sales supervision requirements of such laws and
regulations.
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Integrity shall immediately notify Insurer of the issuance by any
regulatory body of any stop order with respect to the Trust Prospectus or SAI
or the initiation of any proceeding for that purpose or for any other purpose
relating to the registration or an offering of shares of the Trust and of any
other action or circumstances that may prevent the lawful offer or sale of
shares of the Trust in any state or jurisdiction.
11. Insurer shall submit to all regulatory and administrative bodies
having jurisdiction over the operations of Integrity or the Trust, present or
future, any information, reports or other material which any such body by
reason of this Agreement may request or require pursuant to applicable laws
or regulations.
12. Insurer retains the ultimate right of control over, and responsibility
for, marketing the Certificate.
13. Integrity represents that neither Integrity nor any person employed in
any material connection with respect to the services provided pursuant to
this Agreement:
(a) Within the last 10 years has been convicted of any felony or
misdemeanor arising out of conduct involving embezzlement, fraudulent
conversion, or misappropriation of funds or securities, or involving
violations of Section 1341, 1342, or 1343 of Xxxxx 00, Xxxxxx Xxxxxx
Code; or
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(b) Within the last 10 years has been found by any state regulatory
authority to have violated or has acknowledged violation of any provisions of
any state insurance law involving fraud, deceit or knowing misrepresentation;
or
(c) Within the last 10 years has been found by any federal or state
regulatory authorities to have violated or have acknowledged violation of any
provision of federal or state securities laws involving fraud, deceit or
knowing misrepresentation.
14. Integrity and Insurer each represent that no commission or other fee
shall be charged or paid to any person or entity in connection with the sale
or purchase of the Trust's shares to or from the Separate Account, other than
regular salary or wages.
Integrity represents that it has entered into no more favorable agreement
for purchase and sale of Trust shares with any other insurer. In the event
that Integrity enters into any such agreement, Integrity agrees to offer the
same terms to Insurer.
Integrity also agrees that, if Insurer issues Certificate under which
contributions are allocated to separate accounts other than the Separate
Account and which constitute Variable Products as contemplated by this
Agreement,
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Integrity will at Insurer's request enter into an agreement with Insurer and
the other separate account having terms substantially identical to those of
this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
Date: , 1986
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INTEGRITY LIFE INSURANCE
COMPANY
Attest:
By:
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Secretary Vice President
[INSURER]
Attest:
By:
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Secretary
SEPARATE ACCOUNT OF
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[INSURER]
Attest:
By:
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Secretary
