PARTICIPATION AGREEMENT
Ameritas Life Insurance Corp.
The Union Central Life Insurance Company
This Participation Agreement ("Agreement"), dated as of the 3rd day of November,
2008, is made by and between AMERITAS LIFE INSURANCE CORP. ("Ameritas"), THE
UNION CENTRAL LIFE INSURANCE COMPANY ("Union Central") (Ameritas and Union
Central, separately and together, shall be referred to as "Company"), each on
behalf of itself and each of the respective separate accounts identified on
Exhibit A, which is attached hereto, as the parties hereto may amend from time
to time ("Variable Accounts"), XXXXXXX & XXXX, INC. ("W&R"), distributor for Ivy
Funds Variable Insurance Portfolios, Inc., and IVY FUNDS VARIABLE INSURANCE
PORTFOLIOS, INC. ("Ivy Funds VIP").
WHEREAS, Ivy Funds VIP is registered with the Securities and Exchange Commission
("SEC") as an open-end management investment company under the Investment
Company Act of 1940, as amended ("1940 Act"), and currently consists of the
separately managed series identified on Exhibit B, which is attached hereto and
may be unilaterally amended from time to time by W&R and/or Ivy Funds VIP in
their sole and exclusive discretion upon written notice to Company (each a
"Portfolio"); and
WHEREAS, the Portfolios are currently sold to one or more separate accounts of
life insurance companies to fund benefits under variable life insurance policies
and/or variable annuity contacts ("Participating Insurance Companies"); and
WHEREAS, Company, W&R and Ivy Funds VIP mutually desire the inclusion of the
Portfolios as underlying investment media for each of the variable life
insurance policies and/or variable annuity contracts issued by Company
identified on Exhibit A, which is attached hereto, as the parties hereto may
amend from time to time (collectively, the "Contracts"); and
WHEREAS, the Contracts allow for the allocation of net amounts received by
Company to separate sub-accounts of the Variable Accounts for investment in
shares of the Portfolios and other similar funds; and
WHEREAS, selection of a particular sub-account (corresponding to a particular
Portfolio) is made by the owner of a Contract ("Contract Owner") and such
Contract Owner may reallocate their investment options among the sub-accounts of
the Variable Accounts in accordance with the terms of the Contracts.
NOW THEREFORE, Company, W&R and Ivy Funds VIP, in consideration of the promises
and undertakings described herein, agree as follows:
1. SCOPE OF AGREEMENT. The scope of this Agreement is limited to the purchase
of Portfolio shares by the Variable Accounts on behalf of purchasers of the
Contracts.
2. REPRESENTATIONS OF COMPANY.
(a) Company represents and warrants that the Variable Accounts have been
established and are in good standing under the laws of their states of
organization; and the Variable Accounts have been registered as unit
investment trusts under the 1940 Act and will remain so registered, or
are exempt from registration pursuant to Section 3(c)(11) of the 1940
Act;
(b) Company represents and warrants that it is an insurance company duly
organized and in good standing under the laws of its state of
incorporation and that it has legally and validly established each
Variable Account as a segregated asset account under applicable state
insurance laws and the regulations thereunder.
(c) Company represents and warrants that (i) prior to and at the time of
any issuance or sale of Portfolio shares, the Contracts will be
registered under the Securities Act of 1933, as amended ("1933 Act"),
unless exempt from such registration, (ii) prior to and at the time of
any issuance or sale of Portfolio shares, the Contracts will be duly
authorized for issuance and sold in compliance with all applicable
federal and state laws, including, without limitation, the 1933 Act,
the Securities Exchange Act of 1934 ("1934 Act"), the 1940 Act and the
law(s) of Company's state(s) of organization and domicile, (iii) each
Variable Account does and will comply in all material respects with
the requirements of the 1940 Act and the rules thereunder, unless
exempt from such requirements, (iv) each Variable Account's 1933 Act
registration statement relating to the Contracts, together with any
amendments thereto, will at all times comply in all material respects
with the requirements of the 1933 Act and the rules thereunder, (v)
Company will amend the registration statement for its Contracts under
the 1933 Act and for its Variable Accounts under the 1940 Act from
time to time as required in order to effect the continuous offering of
its Contracts or as may otherwise be required by applicable law, and
(vi) each Variable Account prospectus, Statement of Additional
Information ("SAT"), and thencurrent stickers, will at all times
comply in all material respects with the applicable requirements of
the 1933 Act and the rules thereunder.
(d) Company represents that each Variable Account is a "segregated asset
account" and that interests in each Variable Account are offered
exclusively through the purchase of a "variable contract", within the
meaning of such terms under Section 817 of the Internal Revenue Code
of 1986, as amended ("Code"), and Section 1.817-50)(2) of the Federal
Tax Regulations, that it shall make every effort to continue to meet
such definitional requirements, and that it shall notify W&R and Ivy
Funds VIP immediately upon having a reasonable basis for believing
that such requirements have ceased to be met or that they may not be
met in the future.
(e) Company represents that the Contracts are currently, and at the time
of issuance will be, treated as annuity contracts or life insurance
policies, whichever is appropriate under applicable provisions of the
Code, and that it shall make every effort to maintain such treatment.
Company will promptly notify W&R and Ivy Funds VIP upon having a
reasonable basis for believing that the Contracts have ceased to be
treated as annuity
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contracts or life insurance polices, or that the Contracts may not be
so treated in the future.
(f) Company represents that it has established such rules and procedures
as are necessary to ensure compliance with applicable federal, state
and self-regulatory requirements relating to the offering of the
Contracts. W&R and Ivy Funds VIP explicitly disclaim any and all
responsibility for the offer, sale, distribution and/or servicing of
the Contracts, except as otherwise specified in this Agreement.
(g) Company shall during the term of this Agreement comply with all laws,
rules and regulations applicable to it in connection with the
performance of each of its obligations under this Agreement or
applicable to the performance of its business, including, but not
limited to, the requirements of the USA Patriot Act of 2001 (the "AML
Act") and related laws, rules and regulations.
(h) To the extent one or more third parties are engaged by Company to
offer the Contracts and/or perform services that Company is
responsible for under this Agreement (such parties include, but are
not limited to, affiliates of Company) ("Agents"), Company shall
determine that each such Agent is capable of performing such services,
shall take measures as may be necessary to ensure that Agents perform
such services in accordance with the requirements of this Agreement
and applicable law and shall bear full responsibility for, and assume
all liability for (including any obligation for indemnification as
provided in Paragraph 13 hereof), the actions and inactions of such
Agents as if such services had been provided by Company.
(i) From time to time, W&R and/or Ivy Funds VIP may implement policies,
procedures or requirements in an effort to comply with applicable
legal requirements and/or avoid potential adverse effects on the
Portfolios. Company agrees to cooperate in good faith with W&R and/or
Ivy Funds VIP in the implementation of any such policies, procedures
and/or requirements and agrees to comply with any and all
requirements, restrictions and limitations described in the
Portfolios' Prospectus, including any restrictions or prohibitions
relating to frequent purchases and redemptions of Portfolio shares.
(j) Company represents that, during the term of this Agreement, it will
have in force adequate insurance coverage insuring the Company against
potential liabilities associated with the underwriting and
distribution of the Contracts.
3. AUTHORITY OF COMPANY. Subject to the terms and conditions of this
Agreement, Company shall be authorized to, and agrees, to act as a limited
agent of W&R for purposes of Rule 22c-1 under the 1940 Act and to the
extent permitted by applicable law, for the sole purpose of receiving
instructions for the purchase and redemption of Portfolio shares (from or
on behalf of Contract Owners or participants making investment allocation
decisions under the Contracts) prior to the close of business of the New
York Stock Exchange ("NYSE"), normally 3:00 p.m. Central Time ("Pricing
Time") each Business Day. "Business Day" shall mean any day on which the
NYSE is open for trading and on which the Portfolios calculate their net
asset value as set forth in the Portfolios' most recent Prospectuses and
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SAIs. Except as particularly stated in this paragraph, Company shall have
no authority to act on behalf of W&R or Ivy Funds VIP or to incur any cost
or liability on its behalf.
4. AVAILABLE PORTFOLIOS.
(a) AVAILABILITY. Ivy Funds VIP will make shares of the Portfolios
available to Company and its Variable Accounts for purchase and
redemption at the applicable net asset value and with no sales charges
on those days on which the Portfolios calculate their net asset value
pursuant to the rules of the SEC, subject to the terms and conditions
of this Agreement. Notwithstanding the foregoing, the Board of
Directors of Ivy Funds VIP ("Board") may refuse to sell shares of any
Portfolio to any person or suspend or terminate the offering of shares
of any Portfolio (a) if such action is required by law or by
regulatory authorities having jurisdiction, (b) if, in the sole
discretion of the Board, acting in good faith and in light of their
fiduciary duties under federal and any applicable state laws, the
Board deems such action to be in the best interests of the
shareholders of such Portfolio, or (c) if such action is required by
any policies that the Board has adopted and that apply to all
Participating Insurance Companies. Further, it is acknowledged and
agreed that the availability of Portfolio shares shall be subject to
Ivy Funds VIP's current Prospectus and SAI and to federal and state
laws, rules and regulations.
(b) ADDITION, DELETION OR MODIFICATION OF PORTFOLIOS. W&R and/or Ivy Funds
VIP may, from time to time, add other Portfolios to provide additional
funding media for the Contracts, or to delete, combine or modify
existing Portfolios, by amending Exhibit B hereto. W&R and/or Ivy
Funds VIP reserve the right to amend Exhibit B in their sole and
exclusive discretion upon written notice to Company. W&R and/or Ivy
Funds VIP will use reasonable efforts to provide written notice to
Company at least thirty (30) days prior to ------ the date of deletion
of any Portfolio offered through the Contracts. Upon such amendment to
Exhibit B, any applicable reference to a Portfolio, Ivy Funds VIP or
its shares herein shall include a reference to any such additional
Portfolio.
(c) NO SALES TO THE GENERAL PUBLIC. Ivy Funds VIP represents and warrants
that shares of the Portfolios will be sold only to insurance companies
and/or their separate accounts funding variable life insurance
policies and/or variable annuity contracts or to other persons or
entities permitted under Section 817 of the Code, or regulations
promulgated thereunder. Ivy Funds VIP represents and warrants that no
shares of any Portfolio have been or will be sold to the general
public.
5. PROCESSING OF PORTFOLIO PURCHASE AND REDEMPTION REQUESTS.
(a) PRICING INFORMATION. Ivy Funds VIP or its agents will use reasonable
best efforts to provide closing net asset value, change in net asset
value, dividend or daily accrual rate information and capital gain
information by 6:00 p.m. Central Time each Business Day to Company.
Company shall use this data to calculate unit values for its Variable
Accounts. Unit values shall be used to process that same Business
Day's Variable Account transactions. In the event adjustments to
transactions previously effected on behalf of a Variable Account are
required to correct any material error in the computation of the net
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asset value of a Portfolio's shares, Ivy Funds VIP or its agent shall
notify Company promptly upon discovering the need for those
adjustments which result in a reimbursement to a Variable Account in
accordance with Ivy Funds VIP's then current policies on
reimbursement, which Ivy Funds VIP represents are consistent with
applicable SEC standards. Such notification may be oral, but shall be
confirmed promptly in writing. If an adjustment is to be made in
accordance with such policies to correct an error which has caused a
Variable Account to receive an amount different than that to which it
is entitled, Ivy Funds VIP or its agent shall make all necessary
adjustments to the number of shares owned by the Variable Account and
distribute to the Variable Account the amount of such underpayment for
credit by the Company to affected Contract Owners. W&R and Ivy Funds
VIP shall not be responsible for payment of any costs of reprocessing
transactions in units issued by a Variable Account (or a sub-account
of a Variable Account) under the Contracts arising out of an error in
the calculation of a Portfolio's net asset value, dividends or capital
gains distributions if such error is discovered and corrected within
five (5) Business Days; however, in the event that the error causes
the Company to incur any direct costs for reprocessing Contract
accounts, such as preparing and mailing revised statements, W&R and/or
Ivy Funds VIP shall reimburse the Company for all such reasonable
costs. The Company agrees to use its best efforts to minimize any
costs incurred under this paragraph and shall provide W&R with
acceptable documentation of any such costs incurred.
(b) PLACING OF ORDERS BY COMPANY. All orders shall be communicated by the
Company through the National Securities Clearing Corporation's
("NSCC") Fund/SERV system. The following information shall be supplied
by the Company at the time each order is placed: (i) total purchases
for each Portfolio (including all purchase, exchange and transfer
orders received net by the Company resulting in purchases of Portfolio
shares); (ii) total redemptions for each Portfolio (including all
redemption, exchange and transfer orders received by the Company
resulting in redemptions of Portfolio shares); and (iii) such other
information required by NSCC or reasonably requested by W&R. Orders
for purchases or redemptions shall be placed by Company with W&R or
its specified agent in a manner and format determined by W&R no later
than 8:30 a.m. Central Time on the following Business Day using the
NSCC format unless an exception procedure is necessary. The Company
may place purchase and/or redemption orders on the following Business
Day for shares of the Portfolios that it receives prior to the Pricing
Time each Business Day. The Company will not aggregate pre-Pricing
Time trades with post-Pricing Time trades.
(c) PROCESSING OF ORDERS. To the extent permitted by applicable law,
orders for shares of Portfolios received by Company prior to the
Pricing Time on a Business Day and received by W&R by 8:30 a.m.
Central time on the following Business Day shall be executed at the
time they are received by W&R and at the net asset value price
determined as of the close of trading on the previous Business Day,
provided that Company represents it has received such orders prior to
the close of the NYSE on the previous Business Day. In connection with
this Section 5(c), Company represents and warrants that it will not
submit any order for shares of a Portfolio or engage in any practice,
nor will it allow any person acting on its behalf to submit any order
for shares of
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a Portfolio or engage in any practice, that would violate or cause a
violation of Section 22 of the 1940 Act or Rule 22c-1 thereunder. W&R
will not accept any order made on a conditional basis or subject to
any delay or contingency. Company shall only place purchase orders for
shares of Portfolios on behalf of its customers whose addresses
recorded on Company's books are in a state or other jurisdiction in
which the Portfolios are registered or qualified for sale, or are
exempt from registration or qualification as confirmed in writing by
W&R.
(d) PAYMENT FOR SHARES. Payment for net purchases shall be settled through
the NSCC. For exception settlements, the Company will wire payment for
net purchases to a custodian account designated by Ivy Funds VIP by
5:00 p.m. Central Time on the same day as the order for Portfolio
shares is placed, to the extent practicable. Ivy Funds VIP will wire
payment for net redemptions to an account designated by Company by
5:00 p.m. Central Time on the same day as the order is placed, to the
extent practicable, but in any event within five (5) calendar days
after the date the order is placed in order to enable Company to pay
redemption proceeds within the time specified in Section 22(e) of the
1940 Act or such period of time as may be required by law. Net
purchase orders are subject to cancellation at the option of W&R
and/or Ivy Funds VIP in the event that payment is not received within
two (2) Business Days following receipt of the order by Ivy Funds VIP.
Company shall indemnify W&R and Ivy Funds VIP for any losses incurred
in connection with a cancelled order.
(e) DIVIDEND AND CAPITAL GAIN DISTRIBUTIONS. Dividends and capital gain
distributions shall be reinvested in additional Portfolio shares at
net asset value. Notwithstanding the above, W&R shall not be held
responsible for providing Company with ex-date net asset value, change
in net asset value, dividend or capital gain information when the NYSE
is closed, when an emergency exists making the valuation of net assets
not reasonably practicable, or during any period when the SEC has by
order permitted the suspension of pricing shares for the protection of
shareholders. Ivy Funds VIP shall furnish, on or before the
ex-dividend date, but no later than receipt of the exdividend date net
asset value, notice to Company of any income dividends or capital gain
distributions payable on the shares of the Portfolios. Company hereby
elects to receive all such income dividends and capital gain
distributions as are payable on a Portfolio's shares in additional
shares of the Portfolio. Ivy Funds VIP shall notify Company of the
number of shares so issued as payment of such dividends and
distributions.
(f) ISSUANCE OF SHARES. Issuance and transfer of Portfolio shares will be
by book entry only. Share certificates will not be issued to Company
for any Variable Account. Portfolio shares will be recorded in the
appropriate title for each Variable Account.
(g) COMPANY REPORTING AND FUND TRADING RESTRICTIONS.
(1) The Company agrees to provide W&R and/or Ivy Funds VIP, upon
written request, the taxpayer identification number ("TIN"), if
known, of any or all Contract Owner(s) of the account and the
amount, date, name or other identifier of any investment
professional(s) associated with the Contract Owner(s) or account
(if
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known), and transaction type (purchase, redemption, transfer, or
exchange) of every purchase, redemption, transfer, or exchange of
Shares held through an account maintained by the Company during
the period covered by the request.
(2) W&R and/or Ivy Funds VIP requests for information pursuant to
this section shall set forth a specific period for which
transaction information is sought. W&R and/or Ivy Funds VIP may
request transaction information it deems necessary, including
transaction information for each trading day, to investigate
compliance with policies established by W&R and/or Ivy Funds VIP
for the purpose of eliminating or reducing any dilution of the
value of the outstanding shares issued by Ivy Funds VIP or
otherwise to comply with applicable regulatory requirements
("Market Timing Policies").
(3) The Company agrees to transmit the requested information that
is on its books and records to W&R and/or Ivy Funds VIP or its
designee promptly, but in any event not later than five (5)
Business Days, after receipt of a request. If the requested
information is not on the Company's books and records, the
Company agrees to: (i) provide or arrange to provide to W&R
and/or Ivy Funds VIP the requested information from Contract
Owners who hold an account with an indirect intermediary; or (ii)
if directed by W&R and/or Ivy Funds VIP, block further purchases
of Fund Shares from such indirect intermediary. In such instance,
the Company agrees to inform W&R and/or Ivy Funds VIP whether it
plans to perform (i) or (ii). Responses required by this
paragraph must be communicated in writing and in a format
mutually agreed upon by the parties. To the extent practicable,
the format for any. transaction information provided to W&R
and/or Ivy Funds VIP should be consistent with the NSCC
Standardized Data Reporting Format. For purposes of this
provision, an "indirect intermediary" has the same meaning as in
SEC Rule 22c-2 under the 0000 Xxx.
(4) W&R and/or Ivy Funds VIP agrees not to use the information
received for marketing or any other similar purpose without the
prior written consent of the Company.
(5) The Company agrees to execute written instructions from W&R
and/or Ivy Funds VIP to restrict or prohibit further purchases or
exchanges of Shares by a Contract Owner that has been identified
by W&R and/or Ivy Funds VIP as having engaged in transactions of
the Fund's Shares (directly or indirectly through the Company's
account) that violate Market Timing Policies established by W&R
and/or Ivy Funds VIP.
(6) Instructions from W&R and/or Ivy Funds VIP will include the
TIN, if known, and the specific restriction(s) to be executed. If
the TIN is not known, the instructions will include an equivalent
identifying number of the Contract Owner(s) or account(s) or
other agreed upon information to which the instruction relates.
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(7) The Company agrees to execute instructions as soon as
reasonably practicable, but not later than five (5) Business Days
after receipt of the instructions by the Company.
(8) The Company must provide written confirmation to W&R and/or
Ivy Funds VIP that instructions have been executed. The Company
agrees to provide confirmation as soon as reasonably practicable,
but not later than five (5) Business Days after the instructions
have been executed.
(9) For purposes of this Section 5 (g):
(i) The term "Shares" means the interests of Shareholders
corresponding to the redeemable securities of record issued
by W&R and/or Ivy Funds VIP under the 1940 Act that are held
by the Company.
(ii) The term "Contract Owner" means the holder of interests
in a variable annuity or variable life insurance contract
issued by the Company.
(iii)The term "written" includes electronic writings and
facsimile transmissions.
6. SERVICES AND EXPENSES. W&R shall pay or cause to be paid compensation to
Company as set forth on Exhibit C for administrative services identified on
Schedule A of Exhibit C. All expenses incident to the performance by
Company, W&R and/or Ivy Funds VIP of their respective obligations under
this Agreement shall be paid by the party subject to the obligation, as set
forth on Schedule B of Exhibit C.
7. PROSPECTUSES, SAIs, PROXIES AND REPORTS.
(a) DELIVERY TO COMPANY. W&R shall promptly provide Company (or its
designee), or cause Company (or its designee) to be provided with:
(1) a camera-ready copy of the Portfolios' Prospectus and any
supplements, for use by Company in producing a combined
prospectus for each Contract incorporating both the Contract
Prospectus and the Portfolios' Prospectus;
(2) a .pdf version of the Portfolios' SAI and any supplements;
(3) periodic reports required under the 1940 Act ("Periodic Reports")
in such quantity as Company shall reasonably require for
distribution to Contract Owners; and
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(4) copies of any Portfolio proxy materials in such quantity as
Company shall reasonably require for distribution to Contract
Owners.
(b) DELIVERY TO CONTRACT OWNERS. W&R shall bear the reasonable costs of
printing Portfolio proxy materials (or similar materials such as
voting solicitation instructions), Periodic Reports, Prospectuses and
SAIs intended for delivery to Contract Owners and for the costs of
delivering such materials to Contract Owners. W&R and/or Ivy Funds VIP
shall reimburse Company for reasonable costs they incur within thirty
(30) days after receipt of an invoice itemizing such costs. Company
assumes sole responsibility for ensuring that such materials are
delivered to Contract Owners in accordance with applicable federal and
state securities laws. With respect to proxy materials, Company shall
provide any Contract Owner and other information to a designated third
party proxy service vendor, as reasonably requested by W&R and/or Ivy
Funds VIP.
(c) USE OF PORTFOLIO MATERIALS BY COMPANY. If Company elects to include
any materials provided by W&R or Ivy Funds VIP, specifically
Prospectuses, SAIs, Periodic Reports and proxy materials, on its web
site or in any other computer or electronic format, Company assumes
sole responsibility for maintaining such materials in the form
provided by W&R or Ivy Funds VIP and for promptly replacing such
materials with all updates provided by W&R or Ivy Funds VIP. W&R or
Ivy Funds VIP agree to provide all such materials requested by Company
in a Portable Document Format (PDF) in a timely fashion at no
additional cost, together with such other formats at Company's cost as
may be mutually agreed upon.
(d) PROXY VOTING. If and to the extent required by law, Company shall: (i)
solicit voting instructions from Contract Owners; (ii) vote the
Portfolio(s) shares in accordance with the instructions received from
Contract Owners; and (iii) vote Portfolio(s) shares for which no
instructions have been received in the same proportion as the vote of
all other holders of such shares, provided however, that the Company
reserves the right to vote Portfolio shares held in any segregated
asset account in its own right, to the extent permitted by law.
Company and its agents will in no way recommend action in connection
with or oppose or interfere with the solicitation of proxies for the
Portfolio shares held for the benefit of such Contract Owners.
8. COMPANY'S USE OF PORTFOLIO INFORMATION. Company and its agents shall make
no representations concerning the Portfolios or Portfolio shares except
those contained in the Portfolios' then current Prospectuses, SAIs or other
documents produced by W&R (or an entity on its behalf) which contain
information about the Portfolios. Company agrees to submit to W&R for prior
review and approval any communication with the public containing any
Portfolio information. Company agrees to allow at least ten (10) Business
Days for W&R to review any advertising and sales literature drafted by
Company (or agents on its behalf) with respect to the Portfolios prior to
using such material or submitting such material to any regulator.
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9. REPRESENTATIONS OF W&R AND/OR IVY FUNDS VIP.
(a) W&R represents that the Portfolios are currently qualified as
regulated investment companies under Subchapter M of the Code and that
Ivy Funds VIP shall make every effort to maintain such qualification.
W&R shall promptly notify Company upon having a reasonable basis for
believing that any of the Portfolios has ceased to so qualify, or that
they may not qualify as such in the future.
(b) W&R represents that each of the Portfolios currently complies with the
diversification requirements pursuant to Section 817(h) of the Code
and Section 1.817-5(b) of the Federal Tax Regulations and that Ivy
Funds VIP will make every effort to maintain the Portfolios'
compliance with such diversification requirements, unless the
Portfolios are otherwise exempt from Section 817(h) and/or except as
otherwise disclosed in the Portfolios' Prospectus. W&R will notify
Company promptly upon having a reasonable basis for believing that a
Portfolio has ceased to so qualify, or that a Portfolio might not so
qualify in the future.
(c) W&R represents and warrants that Ivy Funds VIP is duly organized and
validly existing under the laws of Maryland and that each Portfolio
does and will comply in all material respects with the 1940 Act and
the rules and regulations thereunder.
(d) W&R represents and warrants that the Portfolio shares offered and sold
pursuant to this Agreement will be registered under the 1933 Act and
each Portfolio shall be registered under the 1940 Act prior to and at
the time of any issuance or sale of such shares. W&R shall amend the
Portfolios' registration statement under the 1933 Act and the 1940 Act
from time to time as required in order to effect the continuous
offering of Portfolio shares. Ivy Funds VIP shall register and qualify
its shares for sale in accordance with the laws of the various states
only if and to the extent deemed advisable by Ivy Funds VIP or W&R.
(e) Ivy Funds VIP represents and warrants that it, its directors,
officers, employees and others dealing with the money or securities,
or both, of a Portfolio shall at all times be covered by a blanket
fidelity bond or similar coverage for the benefit of the Portfolio in
an amount not less than the minimum coverage required by Rule 17g-1 or
other regulations under the 1940 Act. Such bond shall include coverage
for larceny and embezzlement and be issued by a reputable bonding
company.
(f) W&R represents and warrants that it is currently and will continue to
be a registeredbroker dealer and member in good standing with the
Financial Industry Regulatory Authority ("FINRA").
10. CONFIRMATIONS. Ivy Funds VIP or its agent shall provide Company access to
electronic account information, which shall confirm all transactions in
Portfolio shares made during that particular quarter by a Variable Account.
This is in addition to position information received daily by the Company
via NSCC.
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11. MIXED AND SHARED FUNDING.
(a) GENERAL. The parties understand that the SEC has wanted an order to
Ivy Funds VIP exempting it from certain provisions of the 1940 Act and
rules thereunder so that Ivy Funds VIP may be available for investment
by certain other entities, including, without limitation, separate
accounts funding variable annuity contracts or variable life insurance
contracts, separate accounts of insurance companies unaffiliated with
Company, and trustees of qualified pension and retirement plans
(collectively, "Mixed and Shared Funding"). The parties recognize that
the SEC has imposed terms and conditions for such orders. Ivy Funds
VIP hereby notifies Company that it may be appropriate to include in
the prospectus pursuant to which a Contract is offered disclosure
regarding the potential risks of Mixed and Shared Funding.
(b) INFORMATION REQUESTED BY BOARD. Company and Ivy Funds VIP (or its
agent) will at least annually submit to the Board such reports,
materials or data as the Board may reasonably request so that the
Board may fully carry out the obligations imposed upon it by the
provisions hereof or any exemptive order wanted by the SEC to permit
Mixed and Shared Funding, and said reports, materials and data will be
submitted at any reasonable time deemed appropriate by the Board.
12. TERMINATION.
(a) EVENTS OF TERMINATION. This Agreement shall terminate as to the sale
and issuance of Portfolio(s) shares:
(1) at the option of Company, W&R or Ivy Funds VIP upon at least
sixty (60) days advance written notice to the other;
(2) at any time with respect only to an applicable Portfolio(s), upon
W&R's election, if Ivy Funds VIP determines that liquidation of
the Portfolio(s) is in the best interest of the Portfolio(s) and
its (their) beneficial owners. Reasonable advance notice of
election to liquidate shall be furnished by W&R to permit the
substitution of Portfolio shares with the shares of another
investment company;
(3) if the Contracts are not treated as annuity contracts or life
insurance policies by the applicable regulators or under
applicable rules or regulations;
(4) if the Variable Accounts are not deemed "segregated asset
accounts" by the applicable regulators or under applicable rules
or regulations;
(5) with respect only to the applicable Portfolio(s), upon a decision
by Company based on reasonable cause, in accordance with
applicable law, to substitute such Portfolio shares with the
shares of another investment company for Contracts for which the
Portfolio shares have been selected to serve as the underlying
investment medium. Company shall give at least sixty (60) days
written notice to Ivy Funds VIP and W&R of any decision to
substitute Portfolio shares; such reasonable cause shall
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include but not be limited to changes in the Portfolio's
investment strategy, management or performance;
(6) upon sixty (60) days notice upon assignment of this Agreement
unless such assignment is made with the written consent of each
other party;
(7) in the event Portfolio shares are not registered, issued or sold
pursuant to Federal law, or such law precludes the use of
Portfolio shares as an underlying investment medium of Contracts
issued or to be issued by Company. Prompt written notice shall be
given by either party to the other in the event the conditions of
this provision occur; and
(8) at the option of any party to this Agreement, upon another
party's material breach of any provision of this Agreement.
(b) NOTICE REQUIREMENT. In the event of any termination of this Agreement
at the option of one of the parties, prompt written notice of the
election to terminate this Agreement shall be furnished by the party
terminating the Agreement to the nonterminating parties.
(c) PORTFOLIOS TO REMAIN AVAILABLE: EFFECT OF TERMINATION. Notwithstanding
any termination of this Agreement by Company, Ivy Funds VIP will, at
the option of Company, continue to make available additional shares of
any Portfolio offered under a Contract pursuant to the terms and
conditions of this Agreement, for any Contract that is in effect on
the effective date of termination of this Agreement and that offers
the particular Portfolio(s) as an investment option under the Contract
as of that date (hereinafter referred to as "Existing Contracts"),
unless W&R or the Board determines that doing so would not serve the
best interests of the shareholders of the affected Portfolio(s) or
would be inconsistent with applicable law or regulation. Specifically,
without limitation, the owners of the Existing Contracts will be
permitted to reallocate investments in the Portfolio(s) (as in effect
on such date), redeem investments in the Portfolio(s) and/or invest in
the Portfolio(s) upon the making of additional purchase payments under
the Existing Contracts. The parties agree that this Section 12 will
not apply to any (i) terminations under Section 11 and the effect of
such terminations will be governed by Section 11 of this Agreement or
(ii) any rejected purchase and/or redemption order as described in
Section 2(i) hereof. If Company elects to continue to make available
Portfolio shares to Contract Owners after the effective date of
termination of this Agreement in accordance with this Section 12(c),
all provisions of this Agreement will survive any termination of this
Agreement solely with respect to transactions in such Portfolio shares
under the Existing Contracts.
13. NOTICES.
(a) DELIVERY. All notices sent under this Agreement shall be given in
writing, and shall be delivered personally, or sent by fax, or by a
nationally-recognized overnight courier, postage prepaid. All such
notices shall be deemed to have been duly given when so delivered
personally or sent by fax, with receipt confirmed, or one (1) business
day after
-12-
the date of deposit with such nationally-recognized overnight courier.
All such notices to Company, W&R or Ivy Funds VIP shall be delivered
to:
Ameritas Life Insurance Corp.
0000 "0" Xxxxxx
Xxxxxxx, Xxxxxxxx 00000 Attention:
General Counsel
The Union Central Life Insurance Company
0000 Xxxxxxxx Xxxx
Xxxxxxxxxx, Xxxx 00000
Attention: General Counsel
Xxxxxxx & Xxxx, Inc.
0000 Xxxxx Xxxxxx
Xxxxxxxx Xxxx, Xxxxxx 00000
Attention: Legal Department
Ivy Funds Variable Insurance Portfolios, Inc.
0000 Xxxxx Xxxxxx
Xxxxxxxx Xxxx, Xxxxxx 00000
Attention: Secretary
All such notices to Company, W&R and Ivy Funds VIP shall be delivered to
their respective addresses as listed above, or such other address as
Company, W&R and/or Ivy Funds VIP may have furnished in writing to the
other parties in accordance herewith.
(b) NOTICE OF CERTAIN PROCEEDINGS AND OTHER CIRCUMSTANCES.
(1) Ivy Funds VIP or W&R will immediately notify Company of (i) the
issuance by any court or regulatory body of any stop order, cease
and desist order, or other similar order with respect to Ivy Funds
VIP's registration statement under the 1933 Act or Ivy Funds VIP's
Prospectus, (ii) any request by the SEC for any amendment to such
registration statement or Ivy Funds VIP Prospectus that may affect
the offering of shares of Ivy Funds VIP, (iii) the initiation of
any proceedings for that purpose or for any other purpose relating
to the registration or offering of Ivy Funds VIP Shares, or (iv)
any other action or circumstances that may prevent the lawful
offer or sale of shares of any Portfolio in any state or
jurisdiction, including, without limitation, any circumstances in
which (a) such shares are not registered and, in all material
respects, issued and sold in accordance with applicable state and
federal law, or (b) such law precludes the use of such shares as
an underlying investment medium of the Contracts issued or to be
issued by Company. Ivy Funds VIP and W&R will make every
reasonable effort to prevent the issuance, with respect to any
Portfolio, of any such stop order, cease and desist order or
similar order and, if any such order is issued, to obtain the
lifting thereof at the earliest possible time.
-13-
(2) Company will immediately notify Ivy Funds VIP of (i) the issuance
by any court or regulatory body of any stop order, cease and
desist order, or other similar order with respect to each
Variable Account's registration statement under the 1933 Act
relating to the Contracts or each Variable Account Prospectus,
(ii) any request by the SEC for any amendment to such
registration statement or Variable Account Prospectus that may
affect the offering of shares of Ivy Funds VIP, (iii) the
initiation of any proceedings for that purpose or for any other
purpose relating to the registration or offering of each Variable
Account's interests pursuant to the Contracts, or (iv) any other
action or circumstances that may prevent the lawful offer or sale
of said interests in any state or jurisdiction, including,
without limitation, any circumstances in which said interests are
not registered and, in all material respects, issued and sold in
accordance with applicable state and federal law. Company will
make every reasonable effort to prevent the issuance of any such
stop order, cease and desist order or similar order and, if any
such order is issued, to obtain the lifting thereof at the
earliest possible time.
14. INDEMNIFICATION.
(a) INDEMNIFICATION BY COMPANY.
(1) Company agrees to reimburse and/or indemnify and hold harmless
W&R, Ivy Funds VIP, and each of their directors, officers,
employees, agents and each person, if any, who controls or is
controlled by W&R within the meaning of the 1933 Act
(collectively, "Affiliated Party") against any losses, claims,
damages or liabilities ("Losses") to which W&R or any such
Affiliated Party may become subject, under the 1933 Act or
otherwise, insofar as such Losses arise out of or are based upon,
but not limited to:
(i) any untrue statement or alleged untrue statement of any
material fact contained in information furnished by Company;
(ii) the omission or the alleged omission to state in the
Registration Statements or Prospectuses of the Variable
Accounts, or Contract, or in any sales literature or other
public communication generated by Company on behalf of the
Variable Accounts or Contracts, a material fact required to
be stated therein or necessary to make the statements
therein not misleading;
(iii) statements or representations of Company or its agents or
third parties, with respect to the offer, sale or
distribution of Contracts for which Portfolio shares are an
underlying investment, or negligent or wrongful conduct of
Company or its agents or third parties with respect to
offers or sales of Contracts or Portfolio shares;
(iv) the failure of Company to comply with applicable legal or
self-regulatory requirements to which it is subject;
-14-
(v) a material breach of this Agreement or of any of the
representations or warranties contained herein; or
(vi) any failure to register the Contracts or the Variable
Accounts under federal or state securities laws, state
insurance laws or to otherwise comply with such laws, rules,
regulations or orders.
(2) Provided however, that Company shall not be liable in any such
case to the extent any such Losses arise out of or are based upon
an act, statement, omission or representation or alleged act,
alleged statement, alleged omission or alleged representation
which was made in reliance upon and in conformity with written
information furnished to Company by or on behalf of W&R
specifically for its use.
(3) Company shall reimburse any legal or other expenses reasonably
incurred by W&R, Ivy Funds VIP, or any Affiliated Party in
connection with investigating or defending any such Losses,
provided, however, that Company shall have prior approval of the
use of said counsel or the expenditure of said fees.
(4) This indemnity agreement shall be in addition to any liability
which Company may otherwise have and shall survive termination of
this Agreement.
(b) INDEMNIFICATION BY W&R AND/OR IVY FUNDS VIP.
(1) W&R and/or Ivy Funds VIP, as applicable, agree to indemnify and
hold harmless Company and each of its directors, officers,
employees, agents and each person, (collectively, "Company
Affiliated Party"), who controls Company within the meaning of
the 1933 Act against any Losses to which Company or any such
Company Affiliated Party may become subject, under the 1933 Act
or otherwise, insofar as such Losses arise out of or are based
upon; but not limited to:
(i) any untrue statement or alleged untrue statement of any
material fact contained in any information furnished by W&R
or Ivy Funds VIP, including but not limited to, the
Registration Statements, Prospectuses or sales literature of
the Portfolios;
(ii) the omission or the alleged omission to state in the
Registration Statements or Prospectuses of the Portfolios or
in any sales literature generated by W&R, Ivy Funds VIP or
their affiliates a material fact required to be stated
therein or necessary to make the statements therein not
misleading;
(iii) W&R's failure to keep the Portfolios fully diversified and
qualified as regulated investment companies as required by
the applicable provisions of the Code, the 1940 Act, and the
applicable regulations promulgated thereunder;
-15-
(iv) the failure of W&R or Ivy Funds VIP to comply with
applicable legal or selfregulatory requirements to which
they are subject;
(v) a material breach of this Agreement or of any of the
representations or warranties contained herein; or
(vi) any failure to register the Portfolios under federal or
state securities laws or to otherwise comply with such laws,
rules, regulations or orders.
(2) Provided however, that W&R and Ivy Funds VIP shall not be liable
in any such case to the extent that any such Losses arise out of
or are based upon an act, statement, omission or representation
or alleged act, alleged statement, alleged omission or alleged
representation which was made in reliance upon or in conformity
with written information furnished to W&R or Ivy Funds VIP by
Company specifically for their use.
(3) W&R and/or Ivy Funds VIP, as applicable, shall reimburse any
reasonable legal or other expenses reasonably incurred by Company
or any Company Affiliated Party in connection with investigating
or defending any such Losses, provided, however, that W&R and Ivy
Funds VIP shall have prior approval of the use of said counsel or
the expenditure of said fees.
(4) This indemnity agreement will be in addition to any liability
which W&R and/or Ivy Funds VIP, as applicable, may otherwise have
and shall survive termination of this Agreement.
(c) NOTICE AND DEFENSE OF CLAIMS. Each party shall promptly notify the
other party(ies) in writing of any situation which presents or appears
to involve a claim which may be the subject of indemnification under
this Agreement and the indemnifying party shall have the option to
defend against any such claim. In the event the indemnifying party so
elects, it shall notify the indemnified party and shall assume the
defense of such claim, and the indemnified party shall cooperate fully
with the indemnifying party, at the indemnifying party's expense, in
the defense of such claim. Notwithstanding the foregoing, the
indemnified party shall be entitled to participate in the defense of
such claim at its own expense through counsel of its own choosing.
Neither party shall admit to wrong-doing nor make any compromise in
any action or proceeding which may result in a finding of wrongdoing
by the other party without the other party's prior written consent,
which shall not be unreasonably withheld. Any notice given by the
indemnifying party to an indemnified party or participation in or
control of the litigation of any such claim by the indemnifying party
shall in no event be deemed to be an admission by the indemnifying
party of culpability, and the indemnifying party shall be free to
contest liability among the parties with respect to the claim.
15. SUBSTITUTION APPLICATIONS. Subject to Section 12(a)(5) of this Agreement,
W&R may request or Company may initiate the filing of a substitution
application pursuant to
-16-
Section 26(c) of the 1940 Act to substitute shares of a Portfolio held by a
Company Variable Account for another investment media ("Substitution
Application"). The costs associated with a Substitution Application shall
be allocated as follows:
(a) In the event W&R requests Company to submit a Substitution
Application, W&R shall reimburse Company for all reasonable costs
incurred by Company in preparing and filing the Substitution
Application and any amendment thereto. W&R shall be obligated to
reimburse Company under this provision irrespective of whether the
Substitution Application requested by W&R is granted by the SEC or the
substitution is effectuated. W&R shall not have any liability to
reimburse any other costs or expenses incurred in connection with
effecting the substitution.
(b) In the event Company initiates a Substitution Application, Company
shall bear all costs associated with the Substitution Application
irrespective of whether the Substitution Application is granted or the
substitution is effectuated.
(c) In the event Company initiates a Substitution Application in
accordance with Section 12(a)(5), Company shall bear the costs
incurred in the transfer.
16. CONFIDENTIALITY.
(a) COMPANY. Ivy Funds VIP acknowledges that the identities of the
customers of Company or any of its affiliates (collectively, the "the
Company Protected Parties" for purposes of this Section 16),
information maintained regarding those customers, and all computer
programs and procedures or other information developed by the Company
Protected Parties or any of their employees or agents in connection
with Company's performance of its duties under this Agreement are the
valuable property of the Company Protected Parties. Ivy Funds VIP
agrees that if it comes into possession of any list or compilation of
the identities of or other information about the Company Protected
Parties' customers, or any other information or property of the
Company Protected Parties, other than such information as may be
independently developed or compiled by Ivy Funds VIP from information
supplied to it by the Company Protected Parties' customers who also
maintain accounts directly with Ivy Funds VIP, Ivy Funds VIP will hold
such information or property in confidence and refrain from using,
disclosing or distributing any of such information or other property
except: (a) with Company's prior written consent; or (b) as required
by law or judicial process.
(b) IVY FUNDS VIP. Company acknowledges that the identities of the
customers of Ivy Funds VIP or any of its affiliates (collectively, the
"Ivy Funds VIP Protected Parties" for purposes of this Section 16),
information maintained regarding those customers, and all computer
programs and procedures or other information developed by the Ivy
Funds VIP Protected Parties or any of their employees or agents in
connection with Ivy Funds VIP's performance of its duties under this
Agreement are the valuable property of the Ivy Funds VIP Protected
Parties. Company agrees that if it comes into possession of any list
or compilation of the identities of or other information about the Ivy
Funds VIP Protected Parties' customers or any other information or
property of the Ivy Funds VIP Protected
-17-
Parties, other than such information as may be independently developed
or compiled by Company from information supplied to it by the Ivy Funds
VIP Protected Parties' customers who also maintain accounts directly
with Company, Company will hold such information or property in
confidence and refrain from using, disclosing or distributing any of
such information or other property except: (a) with Ivy Funds VIP's
prior written consent; or (b) as required by law or judicial process.
(c) BOTH PARTIES. Each party acknowledges that any breach of the agreements
in this Section 16 would result in immediate and irreparable harm to
the other parties for which there would be no adequate remedy at law
and agree that in the event of such a breach, the other parties will be
entitled to equitable relief by way of temporary and permanent
injunctions, as well as such other relief as any court of competent
jurisdiction deems appropriate.
17. TRADEMARKS AND FUND NAMES.
(a) Except as may otherwise be provided in Section 8 of this Agreement, or
in any license agreement entered into among Ivy Funds VIP and Company,
neither Company or any of its respective affiliates, shall use any
trademark, trade name, service xxxx or logo of W&R, Ivy Funds VIP or
any of their respective affiliates, or any variation of any such
trademark, trade name, service xxxx or logo, without W&R's or Ivy
Funds VIP's prior written consent, as applicable, the granting of
which shall be at the sole option of W&R or Ivy Funds VIP, as
applicable.
(b) Except as otherwise expressly provided in this Agreement, neither Ivy
Funds VIP, its investment adviser, its principal underwriter, or any
affiliates thereof shall use any trademark, trade name, service xxxx
or logo of Company or any of its affiliates, or any variation of any
such trademark, trade name, service xxxx or logo, without Company's
prior written consent, the granting of which shall be at Company's
sole option.
18. FORCE MAJEURE. Each party shall be excused from the performance of any of
its obligations to the other where such nonperformance is occasioned by any
event beyond its control which shall include, without limitation, any
applicable order, rule or regulation of any federal, state or local body,
agency or instrumentality with jurisdiction, work stoppage, accident,
natural disaster, war, acts of terrorism or civil disorder, provided that
the party so excused shall use all reasonable efforts to minimize its
nonperformance and overcome, remedy, cure or remove such event as soon as
is reasonably practicable, and such performance shall be excused only for
so long as, in any given case, the force or circumstances making
performance impossible shall exist.
19. NO WAIVER. The forbearance or neglect of any party to insist upon strict
compliance by another party with any of the provisions of this Agreement,
whether continuing or not, or to declare a forfeiture of termination
against the other parties, shall not be construed as a waiver of any of the
rights or privileges of any party hereunder. No waiver of any right or
privilege of any party arising from any default or failure of performance
by any party shall affect the
-18-
rights or privileges of the other parties in the event of a further default
or failure of performance.
20. GOVERNING LAW AND VENUE. This Agreement shall be construed and the
provisions hereof interpreted under and in accordance with the laws of
Kansas, without respect to its choice of law provisions and in accordance
with the 1940 Act. In the case of any conflict, the 1940 Act shall control.
Any civil action commenced in connection with this Agreement shall be
brought, and venue shall only be proper, in District Court for Xxxxxxx
County, Kansas.
21. AUTHORIZATION. Each party hereby represents and warrants to the other that
the persons executing this Agreement on its behalf are duly authorized and
empowered to execute and deliver the Agreement and that the Agreement
constitutes its legal, valid and binding obligation, enforceable against it
in accordance with its terms. Except as particularly set forth herein,
neither party assumes any responsibility hereunder, and will not be liable
to the other for any damage, loss of data, delay or any other loss
whatsoever caused by events beyond its reasonable control.
22. RELATIONSHIP OF PARTIES. Nothing in this Agreement shall be deemed to
create a partnership or joint venture by and among the parties hereto.
23. ENTIRE AGREEMENT AND AMENDMENT. This Agreement, including all exhibits
hereto, constitutes the entire agreement and understanding between the
parties with respect to the matters addressed herein. Except to amend
Exhibit B, which may be amended unilaterally by W&R and/or Ivy Funds VIP in
its sole discretion, or as otherwise provided in this Agreement, this
Agreement may not be amended or modified except by a written amendment
executed by each of the parties.
24. COOPERATION. Each party shall cooperate with each other party and all
appropriate government authorities (including without limitation the SEC,
FINRA and state securities and insurance regulators) and shall permit such
authorities having jurisdiction reasonable access to its books and records
in connection with any investigation or inquiry relating to this Agreement
or the transactions contemplated hereby.
25. NON-EXCLUSIVE AGREEMENT. The parties of this Agreement acknowledge and
agree that this Agreement shall not be exclusive in any respect.
26. COUNTERPARTS. This Agreement may be executed by facsimile or other
electronic signature and it may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
-19-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the date first above
written.
AMERITAS LIFE INSURANCE CORP.
/s/ Xxxxxx X. Xxxxx
BY: Xxxxxx X. Xxxxx
Title: Senior Vice President & CFO
THE UNION CENTRAL LIFE INSURANCE COMPANY
/s/ Xxxxxx de Xxxxx
By: Xxxxxx de Xxxxx
Title: Second Vice President
XXXXXXX & XXXX, INC.
/s/ Xxxxxx X. Xxxxx
By: Xxxxxx X. Xxxxx
Title: President
IVY FUNDS VARIABLE INSURANCE PORTFOLIOS, INC.
/s/ Xxxxx X. Xxxxxxx
By: Xxxxx X. Xxxxxxxx
Title: President
-20-
EXHIBIT A
Variable Accounts of Companies
Ameritas Life Insurance Corp.
-------------------------------------------------------------------------------
Name SEC File No.
-------------------------------------------------------------------------------
Ameritas Variable Separate Account V 811-04473
-------------------------------------------------------------------------------
Ameritas Variable Separate Account VA-2 811-05192
-------------------------------------------------------------------------------
Ameritas Life Insurance Corp. Separate Account LLVL 811-08868
-------------------------------------------------------------------------------
Ameritas Life Insurance Corp. Separate Account LLVA 811-07661
-------------------------------------------------------------------------------
The Union Central Life Insurance Company
-------------------------------------------------------------------------------
Name SEC File No.
-------------------------------------------------------------------------------
Carillon Life Account 811-09076
-------------------------------------------------------------------------------
Carillon Account 811-04063
-------------------------------------------------------------------------------
Variable Life Insurance Policies/Variable Annuity Contracts
Funded by the Separate Accounts
Portfolios of the Ivy Funds Variable Insurance Portfolios, Inc. listed on
Exhibit B may be available as variable investment options ("Subaccounts")
offered through any individual variable life insurance policy or individual
variable annuity contract issued by Ameritas Life Insurance Corp. or The Union
Central Life Insurance Company under the above-listed variable accounts and
registered with the Securities and Exchange Commission under the Securities Act
of 1933.
-21-
EXHIBIT B
Ivy Funds Variable Insurance Portfolios, Inc.
Portfolios Available to Variable Accounts
Science and Technology
-22-
EXHIBIT C
Fees or Other Compensation
Company shall provide the administrative services set out in Schedule A hereto
and made a part hereof, as the same may be amended from time to time. For such
services, W&R agrees to pay to Company as follows:
(a) Assets Under Management. Each quarter, W&R shall calculate and pay to
Company a fee that shall be equal to 0.25%, or Twenty-Five (_25_) basis
points, on an annualized basis, of the average daily account value of all
assets in the Portfolios in connection with the Contracts ("Aggregated
Assets"), provided, however, that the fee is subject to change pursuant to
Paragraph (b) below. The fee (the "Total Fee") shall include and not be in
addition to the payment by W&R of the 12b-1 fees received by W&R from Ivy
Funds VIP relating to the Aggregated Assets.
(b) Changes in Law. If a change in the law requires a reduction in the fees
paid by a pooled investment vehicle pursuant to Rule 12b-1 of the
Investment Company Act of 1940 (or its functional equivalent), and if Ivy
Funds VIP is required to reduce the 12b-1 fees it pays that are based upon
the value of the Aggregated Assets as a result of such change in the law,
then there shall be a corresponding reduction in the amount of the Total
Fee due pursuant to above.
The parties to this Agreement recognize and agree that W&R's payments hereunder
are for administrative services and personal Contract Owner services (as
described in Schedule A) only and do not constitute payment in any manner for
investment advisory services or for costs of distribution of Contracts or of
Portfolio shares, and are not otherwise related to investment advisory or
distribution services or expenses. The Company represents and warrants that the
fees to be paid by W&R for services to be rendered by Company pursuant to the
terms of this Agreement are to compensate Company for providing administrative
services to Ivy Funds VIP and for providing personal services to Contract Owners
as described in Schedule A, and are not designed to reimburse or compensate
Company for providing any other services with respect to the Contracts or any
Variable Account.
Expenses for the respective obligations of each party incident to its
performance under the Agreement shall be as set forth in SCHEDULE B, attached.
-23-
SCHEDULE A
ADMINISTRATIVE SERVICES FOR
IVY FUNDS VARIABLE INSURANCE PORTFOLIOS, INC.
Company shall provide certain administrative services respecting the operations
of Ivy Funds VIP and certain personal services to Contract Owners investing in
Ivy Funds VIP, as set forth below. This Schedule, which may be amended from time
to time as mutually agreed upon by Company and W&R, constitutes an integral part
of the Agreement to which it is attached. Capitalized terms used herein shall,
unless otherwise noted, have the same meaning as the defined terms in the
Agreement to which this Schedule relates.
A. RECORDS OF PORTFOLIO SHARE TRANSACTIONS; MISCELLANEOUS RECORDS.
1. Company shall maintain master accounts with Ivy Funds VIP, on behalf
of each Portfolio, which accounts shall bear the name of Company as
the record owner of Portfolio shares on behalf of each Variable
Account investing in the Portfolio.
2. Company shall maintain a daily journal setting out the number of
shares of each Portfolio purchased, redeemed or exchanged by Contract
Owners each day, to, among other things, assist W&R, Ivy Funds VIP
and/or Ivy Funds VIP's transfer agent in tracking and recording
Portfolio share transactions, and to facilitate the computation of
each Portfolio's net asset value per share. Company shall daily
provide W&R, Ivy Funds VIP and Ivy Funds VIP's transfer agent with a
copy of such journal entries or information appearing thereon in such
format as may be reasonably requested by W&R. Company shall provide
such other assistance to W&R, Ivy Funds VIP and Ivy Funds VIP's
transfer agent as may be necessary to cause various Portfolio share
transactions effected by Contract Owners to be properly reflected on
the books and records of Ivy Funds VIP.
3. In addition to the foregoing records, and without limitation, Company
shall maintain and preserve all records as required by law to be
maintained and preserved in connection with providing administrative
services hereunder.
B. ORDER PLACEMENT AND PAYMENT.
1. Company shall determine the net amount to be transmitted to the
Variable Accounts as a result of redemptions of each Portfolio's
shares based on Contract Owner redemption requests and shall disburse
or credit to the Variable Accounts all proceeds of redemptions of
Portfolio shares. Company shall notify Ivy Funds VIP of the cash
required to meet redemption payments.
2. Company shall determine the net amount to be transmitted to Ivy Funds
VIP as a result of purchases of Portfolio shares based on Contract
Owner purchase payments and transfers allocated to the Variable
Accounts investing in each Portfolio. Company shall transmit net
purchase payments to Ivy Funds VIP's custodian.
-24-
C. ACCOUNTING SERVICES. Company shall perform miscellaneous accounting
services as may be reasonably requested from time to time by W&R, which
services shall relate to the business contemplated by this Agreement, as
amended from time to time. Such services shall include, without limitation,
periodic reconciliation and balancing of Company's books and records with
those of Ivy Funds VIP with respect to such matters as cash accounts,
Portfolio share purchase and redemption orders placed with Ivy Funds VIP,
dividend and distribution payments by Ivy Funds VIP, and such other
accounting matters that may arise from time to time in connection with the
operations of Ivy Funds VIP as related to the business contemplated by this
Agreement.
D. BOARD REPORTS. Company acknowledges that W&R may, from time to time, be
called upon by the Board, to provide various types of information
pertaining to the operations of Ivy Funds VIP and related matters, and that
W&R also may, from time to time, decide to provide such information to the
Board in its own discretion. Accordingly, Company agrees to provide W&R
with such assistance as W&R may reasonably request so that W&R can report
such information to the Ivy Funds VIP's Board in a timely manner. Company
acknowledges that such information and assistance shall be in addition to
the information and assistance required of Company pursuant to Ivy Funds
VIP's mixed and shared funding SEC exemptive order, described in Section 11
of this Agreement.
Company further agrees to provide W&R with such assistance as W&R may
reasonably request with respect to the preparation and submission of
reports and other documents pertaining to Ivy Funds VIP to appropriate
regulatory bodies and third party reporting services.
X. XXX FUNDS VIP-RELATED CONTRACT OWNER SERVICES. Company agrees to provide
telephonic support for Contract Owners, including, without limitation,
advice with respect to inquiries about Ivy Funds VIP and each Portfolio
(not including information about performance or related to sales),
communicating with Contract Owners about Ivy Funds VIP (and Variable
Account) performance, and assisting with proxy solicitations, specifically
with respect to soliciting voting instructions from Contract Owners.
-25-
SCHEDULE B
EXPENSE ALLOCATIONS
--------------------------------------------------------------------------------------------------------
ITEM FUNCTION PARTY
RESPONSIBLE
FOR EXPENSE
--------------------------------------------------------------------------------------------------------
IVY FUNDS VIP
PROSPECTUS
--------------------------------------------------------------------------------------------------------
Update Typesetting W&R and/or IVY FUNDS VIP
--------------------------------------------------------------------------------------------------------
New Sales: Printing Company
Distribution Company
--------------------------------------------------------------------------------------------------------
Existing Owners: Printing W&R and/or IVY FUNDS VIP
Distribution W&R and/or IVY FUNDS VIP
--------------------------------------------------------------------------------------------------------
Ivy Funds VIP
STATEMENTS OF Same as Fund Prospectus Same as Fund Prospectus
ADDITIONAL
--------------------------------------------------------------------------------------------------------
PROXY MATERIALS Typesetting W&R and/or IVY FUNDS VIP
OF Ivy Funds VIP Printing W&R and/or IVY FUNDS VIP
Distribution W&R and/or IVY FUNDS VIP
Sending Information tape to Company
vendor
--------------------------------------------------------------------------------------------------------
ANNUAL REPORTS AND
OTHER COMMUNICATIONS
WITH SHAREHOLDERS OF
IVY FUNDS VIP
------------------------------------------------------------------------------------------------------------------------------
All Typesetting W&R and/or IVY FUNDS VIP
------------------------------------------------------------------------------------------------------------------------------
Marketing Printing Company
Distribution Company
------------------------------------------------------------------------------------------------------------------------------
Existing Owners: Printing W&R and/or IVY FUNDS VIP
Distribution W&R and/or IVY FUNDS VIP
------------------------------------------------------------------------------------------------------------------------------
OPERATIONS OF All operations and related W&R and/or IVY FUNDS VIP
IVY FUNDS VIP expenses, including 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, the
preparation of all statements and
notices required by any federal or
state law and all taxes on the
issuance of the Fund's shares, and
all costs of management of the
business affairs of the Fund.
------------------------------------------------------------------------------------------------------------------------------
-26-
