PARTICIPATION AGREEMENT
AMONG
X. XXXX PRICE EQUITY SERIES, INC.,
X. XXXX PRICE INTERNATIONAL SERIES, INC.,
X. XXXX PRICE INVESTMENT SERVICES, INC.,
AND
MODERN WOODMEN OF AMERICA
THIS AGREEMENT, made and entered into as of this 11th day of April,
2002 by and among Modern Woodmen of America (hereinafter, the "Society"), an
Illinois corporation, on its own behalf and on behalf of each segregated
asset account of the Society set forth on Schedule A hereto as may be amended
from time to time (each account hereinafter referred to as the "Account"),
and the undersigned funds, each, a corporation organized under the laws of
Maryland (each hereinafter referred to as the "Fund") and X. Xxxx Price
Investment Services, Inc. (hereinafter the "Underwriter"), a Maryland
corporation.
WHEREAS, the Fund engages in business as an open-end management
investment company and is or will be available to act as the investment vehicle
for separate accounts established for variable life insurance and variable
annuity certificates (the "Variable Insurance Products") to be offered by
insurance companies which have entered into participation agreements with the
Fund and Underwriter (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 ("SEC") granting Participating Insurance Companies and
variable annuity and variable life insurance separate accounts 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 shares of the Portfolios are registered under the
Securities Act of 1933, as amended (hereinafter the "1933 Act"); and
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WHEREAS, X. Xxxx Price Associates, Inc. and X. Xxxx Price
International, Inc. (each hereinafter referred to as the "Adviser") are each
duly registered as an investment adviser under the Investment Advisers Act of
1940, as amended, and any applicable state securities laws; and
WHEREAS, the Society has registered or will register certain
variable life insurance or variable annuity certificates supported wholly or
partially by the Account (the "Contracts") under the 1933 Act, and said
Contracts are listed in Schedule A hereto, as it may be amended from time to
time by mutual written agreement; and
WHEREAS, the Account is duly established and maintained as a
segregated asset account, established by resolution of the Board of Directors
of the Society, on the date shown for such Account on Schedule A hereto, to
set aside and invest assets attributable to the aforesaid Contracts; and
WHEREAS, the Society has registered or will register the Account as a
unit investment trust under the 1940 Act; and
WHEREAS, the Underwriter is registered as a broker dealer with the SEC
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 laws and
regulations, the Society intends to purchase shares in the Portfolios listed
in Schedule A hereto, as it may be amended from time to time by mutual
written agreement (the "Designated Portfolios") on behalf of the Account to
fund the aforesaid Contracts, and the Underwriter is authorized to sell such
shares to unit investment trusts such as the Account at net asset value;
NOW, THEREFORE, in consideration of their mutual promises, the
Society, the Fund and the Underwriter agree as follows:
ARTICLE I. SALE OF FUND SHARES
1.1 The Underwriter agrees to sell to the Society those shares
of the Designated Portfolios which the 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 Designated Portfolios.
1.2 The Fund agrees to make shares of the Designated Portfolios
available for purchase at the applicable net asset value per share by the
Society and the Account on those days on which the Fund calculates its net asset
value pursuant to rules of the SEC, and the Fund shall use its best 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 Directors of the
Fund (hereinafter the "Board") may refuse to sell shares of any Designated
Portfolio to any person, or suspend or terminate the offering of shares of any
Designated Portfolio if such action is required by law or by regulatory
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authorities having jurisdiction, or is, 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, necessary in the best interests of the
shareholders of such Designated Portfolio (it being understood that for this
purpose shareholders means Contract owners). Notice of election to suspend or
terminate shall be furnished by the Fund, said termination to be effective 10
business days after receipt of such notice by the Society in order to give
the Society sufficient time to take appropriate steps in response to such
suspension or termination.
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 Designated Portfolios will be sold to the general
public. 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 and VII of this Agreement is in effect
to govern such sales.
1.4 The Fund agrees to redeem, on the Society's request, any
full or fractional shares of the Designated Portfolios held by the Society,
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, except
that the Fund reserves the right to suspend the right of redemption or postpone
the date of payment or satisfaction upon redemption consistent with Section
22(e) of the 1940 Act and any sales thereunder, and in accordance with the
procedures and policies of the Fund as described in the then current prospectus.
1.5 For purposes of Sections 1.1 and 1.4, the Society shall be
the designee of the Fund for receipt of purchase and redemption orders from the
Account, and receipt by such designee shall constitute receipt by the Fund;
provided that the Society receives the order by 4:00 p.m. Baltimore time and the
Fund receives notice of such order by 9:30 a.m. Baltimore 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 SEC.
1.6 The Society agrees to purchase and redeem the shares of each
Designated Portfolio offered by the then current prospectus of the Fund and in
accordance with the provisions of such prospectus.
1.7 The Society shall pay for Fund shares one Business Day after
receipt of an order to purchase Fund shares is made in accordance with the
provisions of Section 1.5 hereof. Payment shall be in federal funds transmitted
by wire by 3:00 p.m. Baltimore time. If payment in Federal Funds for any
purchase is not received or is received by the Fund after 3:00 p.m. Baltimore
time on such Business Day, the Society shall promptly, upon the Fund's request,
reimburse the Fund for any charges, costs, fees, interest or other expenses
incurred by the Fund in connection with any advances to, or borrowings or
overdrafts by, the Fund, or any similar expenses incurred by the Fund, as a
result of portfolio transactions effected by the Fund based upon such purchase
request. For purposes of Section 2.8 and 2.9 hereof, upon receipt by the Fund of
the federal funds so wired, such funds shall cease to be the responsibility of
the Society 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 Society 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.
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1.9 The Fund shall furnish same day notice (by wire or
telephone, followed by written confirmation) to the Society of any income,
dividends or capital gain distributions payable on the Designated Portfolios'
shares. The Society hereby elects to receive all such income, dividends, and
capital gain distributions as are payable on Designated Portfolio shares in
additional shares of that Portfolio. The Society 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 Society 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 Designated Portfolio available to the Society on a daily basis as soon
as reasonably practical after the net asset value per share is calculated
(normally by 6:30 p.m. Baltimore time) and shall use its best efforts to make
such net asset value per share available by 7 p.m. Baltimore time. If the
Fund is unable to meet the 7:00 p.m. time stated herein, it may provide
additional time for the Society to place orders for the purchase and
redemption of shares and make any applicable purchase payments, provided
further, that such additional time periods are at the discretion of the Fund
and shall be no more favorable to the Society than those provided to other
shareholders. If the net asset value is materially incorrect through no fault
of the Society, the Society on behalf of each Account, shall be entitled to
an adjustment to the number of shares purchased or redeemed to reflect the
correct net asset value in accordance with Fund procedures. Any material
error in the net asset value shall be reported to the Society promptly upon
discovery. Any administrative or other costs or losses incurred for
correcting underlying Contract owner accounts shall be at Society's expense.
1.11 The Parties hereto acknowledge that the arrangement
contemplated by this Agreement is not exclusive; the Fund's shares may be sold
to other insurance companies (subject to Section 1.3 and Article VI hereof) and
the cash value of the Certificates may be invested in other investment
companies.
ARTICLE II. REPRESENTATIONS AND WARRANTIES
2.1 The Society 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
Society further represents and warrants that it is a fraternal benefit
society duly organized and in good standing under applicable law and that it
has legally and validly established the Account prior to any issuance or sale
thereof as a segregated asset account under the Illinois insurance laws and
has registered or, prior to any issuance or sale of the Contracts, will
register the 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 Society represents:
(i) Subject to the Fund's compliance with applicable
diversification requirements, the variable life
insurance contracts that the Society intends to
offer will qualify as life insurance contracts
within the meaning of Section 7702 of the Internal
Revenue Code of 1986, as amended (the "Code").
(ii) Subject to the Fund's compliance with applicable
diversification requirements, the variable annuity
contracts it intends to offer will be considered to
be annuity contracts in accordance with the customary
practice of life insurance companies, will contain
the language required by Section 72(a) of the Code,
and will be treated as annuity contracts, not as debt
instruments, under Section 1275(a)(1)(B)(ii) of the
Code; and
(iii) Subject to the Fund's compliance with applicable
diversification requirements, the variable contracts
the Society will offer will qualify as variable
contracts under Section 817(d) of the Code, i.e. the
variable contracts will provide for the allocation of
all or part of the amounts received under the
contract to an account which, pursuant to state law
or regulations, will be segregated from the Society's
general asset accounts; the variable contracts will
provide for the payment of annuities or qualify as
life insurance contracts; under the variable annuity
contracts, the amounts paid out will reflect the
investment return and the market value of a Society
segregated asset account; and under the variable life
insurance contracts, the amount of the death benefit
(or the period of coverage) will be adjusted on the
basis of the investment return and the market value
of a Society segregated asset account.
(iv) As set forth in the private letter ruling received by
the Society (copy attached), the Society meets the
available definitions of an insurance company for
purposes of Section 817(h) and the regulations
thereunder, and nothing in the definitions precludes
that status simply because the Society is not taxed
as an insurance company by virtue of its fraternal
activities and lodge system of organization.
2.3 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
Illinois 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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2.4 The Fund currently does not intend to make any payments to
finance distribution expenses pursuant to Rule 12b-1 under the 1940 Act,
although it may make such payments in the future. To the extent that it decides
to finance distribution expenses pursuant to Rule 12b-1, the Fund will undertake
to have the Board, a majority of whom are not interested persons of the Fund,
formulate and approve any plan pursuant to Rule 12b-1 under the 1940 Act to
finance distribution expenses.
2.5 The Fund makes no representations as to whether any aspect
of its operations, including but not limited to, investment policies, fees and
expenses, complies with the insurance and other applicable laws 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 laws
of the state of IL to the extent required to perform this Agreement.
2.6 The Fund represents that it is lawfully organized and
validly existing under the laws of the State of Maryland and that it does and
will comply in all material respects with the 1940 Act.
2.7 The Underwriter represents and warrants that it is duly
organized and in good standing under the laws of the State of Maryland. The
Underwriter further represents and warrants that it is a member in good
standing of the NASD and is registered as a broker-dealer with the SEC.
2.8 The Underwriter represents that it will sell and
distribute the Fund shares in accordance with the laws of the State of
Illinois and any applicable state and federal securities laws.
2.9 The Underwriter represents and warrants that the Adviser is
and shall remain duly registered 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 Illinois
and any applicable state and federal securities laws.
2.10 The Fund and the Underwriter represent and warrant that all
of their directors, officers, employees, investment advisers, and other
individuals or 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
minimum coverage as required currently by Rule 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 Society represents and warrants that all of its
directors, officers, employees, and other individuals/entities employed or
controlled by the Society dealing with the money and/or securities of the Fund
are covered by a blanket fidelity bond or similar coverage in an amount not less
than $5 million. The aforesaid bond includes coverage for larceny and
embezzlement and is issued by a reputable bonding company. The Society agrees
that any amounts received under such bond in connection with claims that arise
from the arrangements described in this Agreement will be held by the Society
for the benefit of the Fund. The Society agrees to make all reasonable efforts
to see that this bond or another bond containing these provisions is always in
effect, and agrees to notify the Fund and the Underwriter in the event that such
coverage no longer applies. The Society agrees to exercise its best efforts to
ensure that other individuals/entities not employed or controlled
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by the Society and dealing with the money and/or securities of the Fund maintain
a similar bond or coverage in a reasonable amount.
ARTICLE III. PROSPECTUSES, STATEMENTS OF ADDITIONAL INFORMATION, AND
PROXY STATEMENTS; VOTING
3.1 The Underwriter shall provide the Society (at the Society's
expense) with as many copies of the Fund's current prospectus (describing only
the Designated Portfolios listed on Schedule A) as the Society may reasonably
request. If requested by the Society in lieu thereof, the Fund shall provide
such documentation (including a final copy of the new prospectus as set in type
or on a diskette, at the Fund's expense) and other assistance as is reasonably
necessary in order for the Society (at the Society's expense) 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 Society's expense).
3.2 The Fund's prospectus shall state that the current Statement
of Additional Information ("SAI") for the Fund is available from the Society
(or, in the Fund's discretion, from the Fund), and the Underwriter (or the
Fund), at its expense, shall print, or otherwise reproduce, and provide
sufficient copies of such SAI free of charge to the Society for itself, and for
any owner of a Contract who requests such SAI. The Society shall send an SAI
to any such Contract owner within 3 business days of the receipt of a
request.
3.3 The Fund, at its expense, shall provide the Society with
copies of its proxy material, reports to shareholders, and other
communications to shareholders in such quantity as the Society shall
reasonably require for distributing to Contract owners in the Fund. The
Underwriter (at the Society's expense) shall provide the Society with copies
of the Fund's annual and semi-annual reports to shareholders in such quantity
as the Society shall reasonably request for use in connection with offering
the Variable Contracts issued by the Society. If requested by the Society in
lieu thereof, the Underwriter shall provide such documentation (which may
include a final copy of the Fund's annual and semi-annual reports as set in
type or on diskette) and other assistance as is reasonably necessary in order
for the Society (at the Society's expense) to print such shareholder
communications for distribution to Contract owners. The Society shall send a
copy of the Fund's annual or semi-annual report within 3 business days of the
receipt of a request by a Contract owner.
3.4 The Society shall:
(i) solicit voting instructions from Contract
owners;
(ii) vote the Fund shares in accordance with
instructions received from Contract owners;
and
(iii) vote Fund shares for which no instructions have
been received in the same proportion as Fund
shares of such Designated Portfolio for which
instructions have been received,
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so long as and to the extent that the SEC continues to interpret the 1940 Act to
require pass-through voting privileges for variable Contract owners or to
the extent otherwise required by law. The Society reserves the right to vote
Fund shares held in any segregated asset account in its own right, to the extent
permitted by law.
3.5 Participating Insurance Companies shall be responsible for
assuring that each of their separate accounts participating in a Designated
Portfolio calculates voting privileges as required by the Shared Funding
Exemptive Order and consistent with any reasonable standards that the Fund may
adopt.
3.6 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 SEC's interpretation of the requirements of Section
16(a) with respect to periodic elections of directors or trustees and with
whatever rules the SEC may promulgate with respect thereto.
ARTICLE IV. SALES MATERIAL AND INFORMATION
4.1 The Society shall furnish, or shall cause to be furnished,
to the Fund or its designee, each piece of sales literature or other promotional
material that the Society develops or uses and in which the Fund (or a Portfolio
thereof) or the Adviser or the Underwriter is named, at least ten calendar days
prior to its use. No such material shall be used if the Fund or its designee
reasonably object to such use within ten calendar days after receipt of such
material. The Fund or its designee reserves the right to reasonably object to
the continued use of such material, and no such material shall be used if the
Fund or its designee so object.
4.2 The Society 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 or SAI
for the Fund shares, as such registration statement and prospectus or SAI 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 Society, each piece of sales literature or
other promotional material in which the Society, and/or its Account, is named at
least ten calendar days prior to its use. No such material shall be used if the
Society reasonably objects to such use within ten calendar days after receipt of
such material. The Society reserves the right to reasonably object to the
continued use of such material and no such material shall be used if the Society
so objects.
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4.4. The Fund and the Underwriter shall not give any information
or make any representations on behalf of the Society or concerning the
Society, the Account, or the Contracts other than the information or
representations contained in a registration statement, prospectus, or SAI for
the Contracts, as such registration statement, prospectus or SAI may be
amended or supplemented from time to time, or in published reports for the
Account which are in the public domain or approved by the Society for
distribution to Contract owners, or in sales literature or other promotional
material approved by the Society or its designee, except with the permission
of the Society.
4.5 The Fund will provide to the Society at least one complete
copy of all registration statements, prospectuses, SAIs, 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, within a reasonable time after the
filing of such document(s) with the SEC or other regulatory authorities.
4.6 The Society will provide to the Fund at least one complete
copy of all registration statements, prospectuses, SAIs, 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 the Account, within a
reasonable time after the filing of such document(s) with the SEC or other
regulatory authorities.
4.7 For purposes of this Article IV, the phrase "sales
literature and other promotional materials" includes, but is not limited to, any
of the following that refer to the Fund or any affiliate of the Fund:
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, reports,
market letters, 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,
SAIs, shareholder reports, proxy materials, and any other communications
distributed or made generally available with regard to the Funds.
ARTICLE V. FEES AND EXPENSES
5.1 The Fund and the Underwriter shall pay no fee or other
compensation to the Society under this Agreement, except that if the Fund or
any Portfolio adopts and implements a plan pursuant to Rule 12b-1 to finance
distribution expenses, then the Underwriter may make payments to the Society
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, past profits of the Underwriter, or
other resources available to the Underwriter. No such payments shall be made
directly by the Fund. Currently, no such payments are contemplated.
5.2 All expenses incident to performance by the Fund under this
Agreement shall be paid by the Fund, except as otherwise provided herein. The
Fund shall see to it that all its shares are
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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
materials 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, and all taxes on the issuance
or transfer of the Fund's shares.
5.3 The Society shall bear the expenses of printing the Fund's
prospectus (in accordance with 3.1) and of distributing the Fund's
prospectus, proxy materials, and reports to Contract owners and prospective
Contract owners.
ARTICLE VI. DIVERSIFICATION AND QUALIFICATION
6.1 Subject to the Society's representations in Section 2.2,
the Fund will invest the assets of each Designated Portfolio in such a manner
as to ensure that the Contracts will be treated as annuity, endowment, or
life insurance Contracts, whichever is appropriate, under the Code and the
regulations issued thereunder (or any successor provisions). Without limiting
the scope of the foregoing, each Designated Portfolio of the Fund will comply
with Section 817(h) of the Code and Treasury Regulation 1.817-5, and any
Treasury interpretations thereof, relating to the diversification
requirements for variable annuity, endowment, or life insurance contracts,
and any amendments or other modifications or successor provisions to such
Section or Regulations. In the event of a breach of this Article VI by the
Fund, it will take all reasonable steps (a) to notify the Society of such
breach and (b) to adequately diversify the Fund so as to achieve compliance
within the grace period afforded by Regulation 817.5.
6.2 The Fund represents that each Designated Portfolio is or
will be qualified as a Regulated Investment Company under Subchapter M of the
Code, and that it will make every effort to maintain such qualification (under
Subchapter M or any successor or similar provisions) and that it will notify the
Society 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.
6.3 Subject to the Fund's compliance with applicable
diversification requirements, the Society represents that the Contracts are
currently, and at the time of issuance shall be, treated as life insurance,
endowment contracts, or annuity 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 the Contracts have ceased to be
so treated or that they might not be so treated in the future. The Society
agrees that any prospectus offering a contract that is a "modified endowment
contract" as that term is defined in Section 7702A of the Code (or any
successor or similar provision), shall identify such contract as a modified
endowment contract.
ARTICLE VII. POTENTIAL CONFLICTS.
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7.1 The Board will monitor the Fund for the existence of any
material irreconcilable conflict between the interests of the Contract
owners of all separate accounts 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 Society if it determines that an
irreconcilable material conflict exists and the implications thereof.
7.2. The Society will report any potential or existing conflicts
of which it is aware to the Board. The Society 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 Society 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 members, that a material irreconcilable
conflict exists, the Society and other Participating Insurance Companies
shall, at their expense and to the extent reasonably practicable (as
determined by a majority of the disinterested Board members), 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
Contracts 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 managed separate account.
7.4 If a material irreconcilable conflict arises because of a
decision by the Society to disregard Contract owner voting instructions and
that decision represents a minority position or would preclude a majority
vote, the Society may be required, at the Fund's election, to withdraw the
affected Account's investment in the Fund and terminate this Agreement with
respect to such Account 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 Fund
shall continue to accept and implement orders by the Society 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 Society
conflicts with the majority of other state regulators, then
11
the Society will withdraw the affected Account's investment in the Fund and
terminate this Agreement with respect to such Account within six months after
the Board informs the Society 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 Fund shall continue to accept and implement orders by the Society
for the purchase (and redemption) of shares of the Fund.
7.6 For purposes of Section 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 Society shall not be required by Section 7.3 to
establish a new funding medium for the Contract if an offer to do so has
been declined by vote of a majority of Contract owners materially adversely
affected by the irreconcilable material conflict. In the event that the Board
determines that any proposed action does not adequately remedy any
irreconcilable material conflict, then the Society will withdraw the
Account's investment in the Fund and terminate this Agreement within six (6)
months after the Board informs the Society 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 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
1940 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-3, as adopted, to the extent such
rules are applicable; and (b) Sections 3.4, 3.5, 3.6, 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 SOCIETY
8.1(a). The Society agrees to indemnify and hold harmless
the Fund and the Underwriter and each of their officers and directors and
each person, if any, who controls the Fund or the Underwriter 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 Society) or litigation (including legal and other
expenses), to which the Indemnified Parties may become subject under any
statute or regulation, at common law or otherwise, insofar as such losses,
claims, damages, liabilities or expenses (or actions in respect thereof) or
settlements are related to the sale or acquisition of the Fund's shares or
the Contracts and:
12
(i) arise out of or are based upon any untrue
statements or alleged untrue statements of any
material fact contained in the Registration
Statement, prospectus, or statement of additional
information ("SAI") for the Contracts or
contained in the Contracts or sales literature
or other promotional material 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 Society by or on behalf of the Fund for use
in the Registration Statement, prospectus or SAI
for the Contracts or in the Contracts or
sales literature or other promotional material (or
any amendment or supplement) or otherwise for use
in connection with the sale of the Contracts or
Fund shares; or
(ii) 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 or other
promotional material of the Fund not supplied by
the Society or persons under its control) or
wrongful conduct of the Society or persons under
its authorization or control, with respect to the
sale or distribution of the Contracts or Fund
Shares; or
(iii) arise out of any untrue statement or alleged
untrue statement of a material fact contained in a
Registration Statement, prospectus, SAI, or sales
literature or other promotional material 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
Society; or
(iv) arise as a result of any material failure by the
Society 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
qualification requirements specified in Article VI
of this Agreement); or
(v) arise out of or result from any material breach of
any representation and/or warranty made by the
Society in this Agreement or arise out of or
result from any other material breach of this
Agreement by the Society,
as limited by and in accordance with the provisions of Sections 8.1(b) and
8.1(c) hereof.
8.1(b). The Society shall not be liable under this
indemnification provision with respect to any losses, claims, damages,
liabilities or litigation to which an Indemnified Party would
13
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 its
obligations or duties under this Agreement.
8.1(c). The Society 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 Society 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 Society of any
such claim shall not relieve the Society 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 an Indemnified Party, the Society shall be entitled to participate, at
its own expense, in the defense of such action. The Society also shall be
entitled to assume the defense thereof, with counsel satisfactory to the party
named in the action and to settle the claim at its own expense; provided,
however, that no such settlement shall, without the Indemnified Parties' written
consent, include any factual stipulation referring to the Indemnified Parties or
their conduct. After notice from the Society to such party of the Society'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 Society 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). The Indemnified Parties will promptly notify the
Society 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 Society and each of it directors and officers and each person, if
any, who controls the Society 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 Indemnified Parties may become
subject under any statute or regulation, at common law or otherwise, insofar as
such losses, claims, damages, liabilities or expenses (or actions in respect
thereof) or settlements are related to the sale or acquisition of the Fund's
shares or the Certificates; and
(i) 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 SAI or sales literature
or other promotional material 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
14
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 Underwriter or Fund by or on
behalf of the Society for use in the Registration
Statement or prospectus for the Fund or in sales
literature or other promotional material (or any
amendment or supplement) or otherwise for use in
connection with the sale of the Certificates or
Fund shares; or
(ii) 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 or other
promotional material for the Contracts not
supplied by the Underwriter or persons under its
control) or wrongful conduct of the Fund or
Underwriter or persons under their control, with
respect to the sale or distribution of the
Contracts or Fund shares; or
(iii) arise out of any untrue statement or alleged
untrue statement of a material fact contained in a
Registration Statement, prospectus, SAI, or sales
literature or other promotional material of 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 Society by or on
behalf of the Fund; or
(iv) arise as a result of any material 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 and other qualification
requirements specified in Article VI of this
Agreement); or
(v) arise out of or result from any material breach of
any representation and/or warranty made by the
Fund or the Underwriter in this Agreement or arise
out of or result from any other material breach of
this Agreement by the Fund or the Underwriter;
as limited by and in accordance with the provisions of Sections 8.2(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
15
Party's reckless disregard of obligations and duties under this Agreement or
to the Society 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 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 Party, 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 and to settle the claim at its own expense; provided,
however, that no such settlement shall, without the Indemnified Parties' written
consent, include any factual stipulation referring to the Indemnified Parties or
their conduct. 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 Society 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 the Account.
8.3 INDEMNIFICATION BY THE FUND
8.3(a). The Fund agrees to indemnify and hold harmless the
Society and each of its directors and officers and each person, if any, who
controls the Society 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, expenses, 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 be
required to pay or may become subject under any statute or regulation, at common
law or otherwise, insofar as such losses, claims, expenses, damages, liabilities
or expenses (or actions in respect thereof) or settlements, are related to the
operations of the Fund and:
(i) arise as a result of any material 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 and other qualification
requirements specified in Article VI of this
Agreement); or
16
(ii) 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 Society, the Fund, the Underwriter or the
Account, whichever is applicable.
8.3(c). The Fund 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 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 expense thereof, with counsel satisfactory to the party named in the
action and to settle the claim at its own expense; provided, however, that no
such settlement shall, without the Indemnified Parties' written consent, include
any factual stipulation referring to the Indemnified Parties or their conduct.
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 expenses 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 Society and the Underwriter agree promptly to
notify the Fund of the commencement of any litigation or proceeding against it
or any of its respective officers or directors in connection with the Agreement,
the issuance or sale of the Contracts the operation of the 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 State of Maryland.
9.2 This Agreement shall be subject to the provisions 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 SEC
may grant (including, but not limited to, any Shared Funding Exemptive Order)
and the terms hereof shall be interpreted and construed in accordance therewith.
17
ARTICLE X. TERMINATION
10.1 This Agreement shall continue in full force and effect until
the first to occur of:
(a) termination by any party, for any reason with
respect to some or all Designated Portfolios, by
six (6) months' advance written notice delivered
to the other parties; or
(b) termination by the Society by written notice to
the Fund and the Underwriter with respect to any
Designated Portfolio based upon the Society's
determination that shares of the Fund are not
reasonably available to meet the requirements of
the Contracts; provided that such termination
shall apply only to the Designated Portfolio not
reasonably available; or
(c) termination by the Society by written notice to
the Fund and the Underwriter in the event any of
the Designated Portfolio'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 Society; or
(d) termination by the Fund or Underwriter in the
event that formal administrative proceedings are
instituted against the Society by the NASD, the
SEC, the Insurance Commissioner or like official
of any state or any other regulatory body
regarding the Society's duties under this
Agreement or related to the sale of the
Contracts, the operation of any Account, or the
purchase of the Fund shares; provided, however,
that the Fund or Underwriter 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
Society to perform its obligations under this
Agreement; or
(e) termination by the Society in the event that
formal administrative proceedings are instituted
against the Fund or Underwriter by the NASD, the
SEC, or any state securities or insurance
department or any other regulatory body; provided,
however, that the Society 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
(f) termination by the Society by written notice to
the Fund and the Underwriter with respect to any
Designated Portfolio in the event that such
Designated Portfolio ceases to qualify as a
Regulated Investment Company under Subchapter M or
fails to comply with the Section 817(h)
diversification requirements specified in Article
VI hereof, or if the Society reasonably believes
that such Designated Portfolio may fail to so
qualify or comply; or
18
(g) termination by the Fund or Underwriter by written
notice to the Society in the event that the
Certificates fail to meet the qualifications
specified in Section 6.3 hereof; or if the Fund or
Underwriter reasonably believes that such
Contracts may fail to so qualify; or
(h) termination by either the Fund or the Underwriter
by written notice to the Society, if either one or
both of the Fund or the Underwriter respectively,
shall determine, in their sole judgment exercised
in good faith, that the Society has suffered a
material adverse change in its business,
operations, financial condition, or prospects
since the date of this Agreement or is the subject
of material adverse publicity; or
(i) termination by the Society by written notice to
the Fund and the Underwriter, if the Society shall
determine, in its sole judgment exercised in good
faith, that the Fund or the Underwriter has
suffered a material adverse change in its
business, operations, financial condition or
prospects since the date of this Agreement or is
the subject of material adverse publicity; or
(j) termination by the Society, the Fund or the
Underwriter by written notice to the other parties
upon a material breach of the Agreement by the
other party; provided that the non-breaching
counter party determines in its sole judgment
exercised in good faith, that such breach would
not be cured within a reasonable period of time
or that such breach would have a material adverse
effect upon the ability of any party to perform
their obligations under this Agreement.
10.2 EFFECT OF TERMINATION. Notwithstanding any termination of
this Agreement, the Fund and the Underwriter shall, at the option of the
Society, 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 of this Agreement (hereinafter referred to as
"Existing Contracts"). Specifically, the owners of the Existing Contracts may
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 Contracts. The parties agree that this Section 10.2 shall
not apply to any termination under Article VII and the effect of such Article
VII termination shall be governed by Article VII of this Agreement. The parties
further agree that this Section 10.2 shall not apply to any termination under
Section 10.1(g) of this Agreement.
10.3 The provisions of Articles I (Sale of Fund Shares), II
(Representations and Warranties), VI (Diversification and Qualifications),
VIII (Indemnification), IX (Applicable Law) and XII (Miscellaneous) shall
survive termination of this Agreement. In addition, all other applicable
provisions of this Agreement shall survive termination as long as shares of
the Fund are held on behalf of Contract owners in accordance with section
10.2, except that the Fund and Underwriter shall have no further obligation
to make Fund shares available in Contracts issued after termination.
10.4 The Society shall not redeem Fund shares attributable to the
Contracts (as opposed to Fund shares attributable to the Society's assets
held in the Account) except (i) as necessary to implement Contract owner
initiated or approved transactions, or other transactions described in the
prospectus for the Contracts (ii) as required by state and/or federal laws or
regulations or judicial or other legal precedent of general application
(hereinafter referred to as a "Legally Required Redemption"), or (iii)
pursuant to the terms of a substitution order issued by the SEC pursuant to
Section 26(b) of the 1940 Act. Upon request, the Society will promptly
furnish to the Fund and the Underwriter the opinion of counsel for the
Society (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 Society shall not prevent
Contract owners from allocating payments to a Portfolio that was otherwise
available under the Certificates without first giving the Fund or the
Underwriter 90 days notice of its intention to do so.
19
ARTICLE XI. NOTICES
Any notice shall be sufficiently given when sent by registered or
certified mail or overnight 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
time specify in writing to the other party.
If to the Fund:
X. Xxxx Price Associates, Inc.
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx, Esq.
If to the Society:
0000 Xxxxx Xxxxxx
Xxxx Xxxxxx, XX 00000
Attention: C. Xxxxxx Xxxxx
General Counsel
-and-
c/o Farm Bureau Life Insurance Company
0000 Xxxxxxxxxx Xxxxxx
Xxxx Xxx Xxxxxx, XX 00000
Attention: Xx. Xxxxxx Xxxxxx, Vice President-
Investment Admin.
If to Underwriter:
X. Xxxx Price Investment Services
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx, Esq.
ARTICLE XII. MISCELLANEOUS
12.1 All references herein to the Fund are to each of the
undersigned Funds as if this agreement were between such individual Fund and the
Underwriter and the Society. All references herein to the Adviser relate solely
to the Adviser of such individual Fund, as appropriate. All persons dealing with
a Fund must look solely to the property of such Fund, and in the case of a
series company, the respective Designated Portfolio listed on Schedule A hereto
as though such Designated Portfolio had separately contracted with the Society
and the Underwriter for the enforcement of any claims against the Fund. The
parties agree that neither the Board, officers, agents or shareholders assume
any personal liability or responsibility for obligations entered into by or on
behalf of the Fund.
20
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 without the express written consent
of the affected party until such time as such information may come into the
public domain.
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 SEC,
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 transactions contemplated hereby.
Notwithstanding the generality of the foregoing, each party hereto further
agrees to furnish the Illinois Insurance Commissioner with any information or
reports in connection with services provided under this Agreement which such
Commissioner may request in order to ascertain whether the variable annuity
operations of the Society are being conducted in a manner consistent with
Illinois variable annuity laws and regulations and any other applicable law
or regulations.
12.7 The rights, remedies and obligations contained in this
Agreement are cumulative and are in addition to any and all rights, remedies,
and obligations, at law or in equity, which the parties hereto are entitled to
under state and federal laws.
12.8 This Agreement or any of the rights and obligations
hereunder may not be assigned by any party without the prior written consent of
all parties hereto.
12.9 The Society shall furnish or cause to be furnished, to the
Fund or its designee copies of the following reports:
(a) the Society's annual statement (prepared under statutory
accounting principles) and annual report (prepared under
generally accepted accounting principles ("GAAP"), if any),
as soon as practical and in any event within 90 days after
the end of each fiscal year.
(b) the Society's quarterly statements (statutory) (and GAAP, if
any), as soon as practical and in any event within 45 days
after the end of each quarterly period.
21
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed in its name and on its behalf by its duly authorized
representative and its seal to be hereunder affixed hereto as of the date
specified below.
SOCIETY: MODERN WOODMEN OF AMERICA
By its authorized officer
BY: /s/ Xxxxx X. Xxxxxxx
TITLE: President
DATE: 4/16/02
FUND: X. XXXX PRICE EQUITY SERIES, INC.
By its authorized officer
BY: /s/ Xxxxx X. Xxxxxxx
Title: Vice President
DATE: 4/12/02
22
FUND: X. XXXX PRICE INTERNATIONAL SERIES, INC.
By its authorized officer
BY: /s/ Xxxxx X. Xxxxxxx
Title: Vice President
DATE: 4/12/02
UNDERWRITER: X. XXXX PRICE INVESTMENT SERVICES, INC.
By its authorized officer
BY: /s/ Xxxxxxx X. Xxxxxx
Title: Vice President
DATE: 4/12/02
SCHEDULE A
NAME OF SEPARATE ACCOUNT AND CERTIFICATES FUNDED BY
DATE ESTABLISHED BY BOARD OF DIRECTORS SEPARATE ACCOUNT DESIGNATED PORTFOLIOS
-------------------------------------- ------------------- ------------------------
Modern Woodmen of America Individual flexible X. XXXX PRICE EQUITY
Variable Annuity Account premium deferred SERIES, INC.
Established 3/30/01 variable annuity contract Equity Income Portfolio
Form VAMWA Mid-Cap Growth Portfolio
New America Growth
Portfolio
Personal Strategy Balanced
Portfolio
Modern Woodmen of America Flexible premium X. XXXX PRICE INTERNATIONAL
Variable Account variable life insurance SERIES, INC.
Established 3/30/01 certificate - Form International Stock Portfolio
VULMWA
