AMENDED AND RESTATED PARTICIPATION AGREEMENT AMONG CALAMOS® ADVISORS TRUST CALAMOS® ASSET MANAGEMENT, INC. CALAMOS® FINANCIAL SERVICES, INC. and KANSAS CITY LIFE INSURANCE COMPANY
AMENDED
AND RESTATED PARTICIPATION AGREEMENT
AMONG
CALAMOS® ADVISORS
TRUST
CALAMOS® ASSET
MANAGEMENT, INC.
CALAMOS®
FINANCIAL SERVICES, INC.
and
KANSAS
CITY LIFE INSURANCE COMPANY
THIS
AGREEMENT, made and entered into as of this 1st day of May 1999 by and among
Kansas City Life Insurance Company (hereinafter, the “Company”), a Missouri
insurance company, on its own behalf and on behalf of each separate account of
the Company set forth on Schedule A hereto as may be amended from time to time
(each account hereinafter referred to as an “Account” and collectively as the
“Accounts”), Calamos Advisors Trust, a business trust organized under the laws
of the Commonwealth of Massachusetts (hereinafter the “Fund”), Calamos Asset
Management, Inc. (hereinafter the “Adviser”), an Illinois corporation, and
Calamos Financial Services, Inc. (hereinafter the “Underwriter”), an Illinois
corporation.
WHEREAS,
the Fund engages in business as an open-end management investment company and is
available to act as (i) the investment vehicle for separate accounts established
for variable life insurance and variable annuity contracts (hereinafter the
“Variable Insurance Products”) offered by insurance companies that have entered
into participation agreements with the Fund (hereinafter “Participating
Insurance Companies”); and (ii) the investment vehicle for certain pension plans
and retirement arrangements and accounts (“Retirement Plans”); and
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ARTICLE
I
1.1 The
Underwriter agrees to sell to the Company those shares of the Designated
Portfolios that the Accounts order, 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 each Designated Portfolio available for purchase
at
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the
applicable net asset value per share by the Company on behalf of the Accounts on
those days on which the Fund calculates such Designated Portfolio’s net asset
value pursuant to rules of the SEC, and the Fund shall use reasonable efforts to
calculate such net asset value on the days and at the times described in the
Fund’s prospectus (as of the close of the New York Stock Exchange on each day
when the New York Stock Exchange is open for trading). Notwithstanding the
foregoing, the Board of Trustees of the Fund (“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 authorities having jurisdiction, or is, in the sole discretion of the
Board acting in good faith and in light of its fiduciary duties under federal
and any applicable state laws, necessary in the best interest of the
shareholders of such Designated Portfolio.
1.3 The Fund
and the Underwriter agree that shares of the Fund will be sold only to
Participating Insurance Companies or their separate accounts, or to certain
Retirement Plans. No shares of any Designated Portfolios will be sold to the
general public. The Fund and the Underwriter will not sell shares of any
Designated Portfolio to any insurance company or separate account unless an
agreement containing provisions substantially the same as Sections 2.1, 3.4, 3.5
and 3.6 and Article VII of this Agreement is in effect to govern such sales. In
addition, the Fund and the Underwriter agree that shares of the Fund will be
sold only to the Company, on behalf of the Accounts, and not to any other
insurance company or separate account or Retirement Plans until such time as the
Fund has obtained the Shared Funding Exemption Order.
1.4 The Fund
agrees- to
redeem, on the Company’s request, any full or fractional shares of the
Designated Portfolios held by the Company, executing such requests on a daily
basis at the net asset value next computed after receipt by the Fund or its
designee of the request for redemption, and receipt of requests for redemption
by such designee by 4:00 p.m. New York time shall constitute receipt by the
Fund, 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 rules or order thereunder, and in
accordance with the procedures and policies of the Fund as described in the
Fund’s then current prospectus.
1.5 For
purposes of Sections 1.1 and 1.4, the Company shall be the designee of the Fund
solely for receipt of purchase and redemption orders from the Accounts, and
receipt by such designee shall constitute receipt by the Fund; provided that the
Company receives the order prior to 4:00 p.m. New York time on a Business Day
and the Fund receives notice of such order by 9:30 a.m. New York 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
Company agrees to purchase and redeem the shares of each Designated Portfolio
offered by the Fund’s then current prospectus in accordance with the provisions
of such prospectus.
1.7 The
Company shall pay for shares of a Designated Portfolio on the next Business Day
after receipt of an order to purchase shares of such Designated
Portfolio. Payment shall be in
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federal
funds transmitted by wire by 11:00 a.m. New York time. If payment in federal
funds for any purchase is not received or is received by the Fund
after 11:00 a.m. New York time on such Business Day, the Company 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 borrowing 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 Company and shall become the responsibility of the
Fund.
1.7A In
the event of net redemptions, the Fund shall pay the redemption proceeds in
federal funds transmitted by wire on the next Business Day after an order to
redeem a Designated Portfolio’s shares is made in accordance with the provision
of Section 1.4 hereof. Notwithstanding the foregoing, if the payment of
redemption proceeds on the next Business day would require the Designated
Portfolio to dispose of securities or otherwise incur substantial additional
costs and if the Fund had determined to settle redemption transactions for all
shareholder of the Designated Portfolio on a delayed basis, proceeds shall be
wired to the Company within seven (7) days and the Designated Portfolio shall
notify in writing the person designated by the Company as the recipient for such
notice of such delay by 3:00 p.m. New York time on the same Business Day that
the Company transmits the redemption order to the Fund. For purposes of Section
2.8 and 2.9 hereof, upon receipt by the Company of the federal funds so wired,
such funds shall cease to be the responsibility of the Fund and shall become the
responsibility of the Company.
1.8 Unless
otherwise determined by the Board, issuance and transfer of the shares of a
Designated Portfolio will be by book entry only. Stock certificates will not be
issued to the Company or any Account. Shares of a Designated Portfolio ordered
from the Fund will be recorded in an appropriate title for each Account or the
appropriate subaccount of each Account.
1.9 The Fund
shall furnish same-day notice by 6:00 p.m. New York time by wire or telephone,
followed by written confirmation, to the Company of any income, dividends or
capital gain distributions payable on shares of the Designated Portfolios. The
Company hereby elects to receive all such income, dividends, and capital gain
distributions as are payable on shares of a Designated Portfolio in additional
shares of that Designated Portfolio. The Fund shall notify the Company of the
number of shares so issued as payment of such dividends and distributions. The
Company reserves the right to revoke this election and to receive all such
dividends and capital gain distributions in cash. The Fund shall use its best
efforts to furnish advance notice of the day such dividends and distributions
are expected to be paid.
1.10 The Fund
shall use its best efforts to make the net asset value per share for each
Designated Portfolio available to the Company on a daily basis as soon as
reasonably practical after the net asset value per share is calculated (normally
by 6:30 p.m. New York time) and shall use its best efforts to make such net
asset value per share available by 7:00 p.m. New York time. The Fund will
provide NAV per share by modem with fax follow-up. Neither the Adviser nor the
Fund shall be liable for any information provided to the Company pursuant to
this Agreement, which information is based on incorrect information supplied by
the Company or any
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1.11 If the
Fund provides materially incorrect share net asset value information through no
fault of the Company, the Company shall be entitled to an adjustment with
respect to the Fund shares purchased or redeemed to reflect the correct net
asset value per share. The determination of the materiality of any net asset
value pricing error shall be based on the SEC’s recommended guidelines, if any.
The correction of any such errors shall be made at the Company level and shall
be made pursuant to the SEC’s recommended guidelines. Any material error in the
calculation or reporting of net asset value per share, dividend or capital gain
information shall be reported promptly upon discovery to the
Company.
1.12 The Fund
shall provide statements of account no less frequently than monthly (and if
possible, shall provide same daily or weekly on a rolling monthly basis) by the
15th
day of the following month.
1.13 (a) The
Company may withdraw the Account’s investment in the Fund or a Portfolio of the
Fund only: (i) as necessary to facilitate Contract Owner requests; (ii) as
provided in Article VII; or (iii) in the event that the shares of another
investment company are substituted for Portfolio shares in accordance with the
terms of the Contracts upon the (x) requisite vote of the contract owners having
an interest in the affected Portfolios and the written consent of the Fund
(unless otherwise required by applicable law); (y) upon issuance of an SEC
exemptive order pursuant to Section 26(b) of the 1940 Act permitting such
substitution; or (z) as may otherwise be permitted under applicable
law.
(b) The
Company shall not, without the prior written consent of the Fund (unless
otherwise required by applicable law), take any action to operate the
Account as a management investment company under the 1940
Act.
(c) The Fund
shall not, without the prior written consent of the Company (unless
otherwise required by applicable law), take any action to operate the
Trust as a unit investment trust under the 1940 Act.
(d) The
Company shall not, without the prior written consent of the Fund (unless
otherwise required by applicable law), solicit, induce or encourage
Contract Owners to change or modify the Fund or change the Fund’s investment
adviser.
1.14 The
Parties hereto acknowledge that the arrangement contemplated by this Agreement
is not exclusive; the shares of the Designated Portfolios (and other Portfolios
of the Fund) may be sold to other insurance companies (subject to Section 1.3
and Article VII hereof) and Retirement Plans and the cash value of the Contracts
may be invested in other investment companies.
ARTICLE
II
2.1 The
Company represents and warrants that the interests of the Account (the
“Contracts”) are or will be registered under the 1933 Act; that the
Contracts will be continually issued, offered
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for sale
and sold in compliance in all material respects with all applicable federal and
state laws. The Company further represents and warrants that it is an insurance
company duly organized and in good standing under applicable law and that it has
legally and validly established each Account prior to any issuance or sale
thereof as a separate account under the Missouri insurance laws and has
registered or, prior to any issuance or sale of the Contracts, will register
each Account as a unit investment trust in accordance with the provisions of the
1940 Act to serve as a separate account for the Contracts.
2.2 The Fund
represents and warrants that shares of the Designated Portfolios sold pursuant
to this Agreement shall be registered under the 1933 Act, duly authorized for
issuance in accordance with the laws of the Commonwealth of Massachusetts and
sold in compliance with 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 file all notification filings related to the sale of
shares of the Designated Portfolios in accordance with the laws of the various
states only if and to the extent deemed advisable by the
Fund.
2.3 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 subject to applicable law and after providing notice to the.
Company.
2.4 The Fund
makes no representations as to whether any aspect of its operation, including
but not limited to, investments policies, fees and expenses, complies with the
insurance and other applicable laws of the various states, except that the Fund
represents that the investment policies, fees and expenses of the Designated
Portfolios are and shall at all times remain in compliance with the insurance
laws of the State of Missouri to the extent required to perform this Agreement.
The Company will advise the Fund in writing as to any requirements of Missouri
insurance law that affect the Designated Portfolios, and the Fund will be deemed
to be in compliance with this Section 2.4 so long as the Fund complies with such
advice of the Company.
2.5 The Fund
represents that it is lawfully organized and validly existing as a business
trust under the laws of the Commonwealth of Massachusetts and that it does and
will comply in all material respects with the 1940 Act.
2.6 The
Underwriter represents and warrants that it is a member in good standing of the
NASD and is registered as a broker-dealer with the SEC. The Underwriter further
represents that it will sell and distribute the shares of the Designated
Portfolios in accordance with any applicable state and federal securities
laws.
2.7 The
Adviser represents and warrants that it is and shall remain duly registered as
an investment adviser under all applicable federal laws and that the Adviser
shall perform its obligations for the Fund in compliance in all material
respects with any applicable state and federal securities
laws.
2.8 The Fund,
the Adviser and the Underwriter represent and warrant that all their
directors,
6
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 required currently by
Rule 17g-1 under the 1940 Act or such 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.
2.9 The
Company represents and warrants that all its directors, officers, employees,
investment advisers, and other individuals or entities employed or controlled by
the Company dealing with the money and/or securities of the Fund are covered by
a blanket fidelity bond or similar coverage in an amount equal to the greater of
the bond required under the preceding Section 2.8 or any amount required by
applicable federal or state law or regulation. The aforesaid bond includes
coverage for larceny and embezzlement and is issued by a reputable bonding
company. The Company agrees that this bond or another bond containing these
provisions will always be in effect, and agrees to notify the Fund, the Adviser
and the Underwriter in the event that such coverage no longer
applies.
2.10 The
Company represents and warrants that all shares of the Designated Portfolios
purchased by the Company will be purchased on behalf of one or more unmanaged
separate accounts that offer interests therein that are registered under the
1933 Act and upon which a registration fee has been or will be paid; and the
Company acknowledges that the Fund intends to rely upon this representation and
warranty for purposes of calculating SEC registration fees payable with respect
to such shares of the Designated Portfolios pursuant to Instruction C.3. to Form
24F-2 or any similar form or SEC registration fee calculation procedure that
allows the Fund to exclude shares so sold for purposes of calculating its SEC
registration fee. The Company agrees to cooperate with the Fund on no less than
an annual basis to certify as to its continuing compliance with this
representation and warranty.
2.11 The
Company shall amend the Contracts registration statement and the Account 1940
Act registration statement from time to time as required in order to effect the
continuous offering of the Contracts or as may otherwise be required by
applicable law. The Company shall maintain a current effective Contracts
registration statement and the Account’s registration under the 1940 Act for so
long as the contracts are outstanding, unless (a) a no-action letter from the
SEC has been obtained by the Company to the effect that such registration
statement need no longer be maintained; or (b) the Company has supplied the Fund
with an opinion of counsel to the effect that maintaining such registration
statement is no longer required; or (c) the Company has notified the Fund in
writing that, with respect to such registration statement, the Company meets the
terms and conditions of, and is relying on Great
West Life &
Annuity
Insurance Company (pub. Avail. Oct. 23, 1990), and any subsequent
no-action letter released by the staff of the SEC addressing the same subject
matter.
2.12 Each
party represents that the execution and delivery of this Agreement and the
consummation of the transactions contemplated herein have been authorized by all
necessary corporate or trust action, as applicable, by such party, and, when so
executed and delivered, this Agreement will be the valid and binding obligation
of such party, enforceable in accordance with its terms.
7
ARTICLE
III
Prospectuses,
Statements of Additional
3.1 The Fund
shall provide ( in hard copy, camera ready form or on diskette, as the Company
may specify) the Company with as many copies of the Fund’s current
prospectus for the Designated Portfolios as the Company may reasonably request.
If requested by the Company in lieu thereof, the Fund shall provide such
documentation (including a final copy of the new prospectus) and other
assistance as is reasonably necessary in order for the Company once each year
(or more frequently if the prospectus for a Designated Portfolio is amended) to
have the prospectus for the Contracts and the prospectus for the Designated
Portfolios printed together in one document. Expenses with respect to the
foregoing shall be borne as provided under Article V.
3.2 The
Fund’s prospectus shall disclose that (a) the Fund is intended to be a funding
vehicle for all types of variable annuity and variable life insurance
contracts offered by Participating Insurance Companies and as an investment
vehicle for Retirement Plans, (b) material irreconcilable conflicts of interest
may arise, and (c) the Fund’s Board will monitor events in order to identify the
existence of any material irreconcilable conflicts and determine what action, if
any, should be taken in response to such conflicts. The Fund hereby notifies the
Company that disclosure in the prospectus• for the Contracts regarding the:
potential risks of mixed and shared funding may be appropriate. Further; the
Fund’s prospectus shall state that the current Statement of Additional
Information (“SAI”) for the Fund is available from the Fund, and the Fund shall
provide a copy of such SAT to any owner of a Contract who requests such SAT and
to the Company in such quantities as the Company may reasonably request.
Expenses with respect to the foregoing shall be borne as provided under Article
V.
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3.3 The
Fund shall provide the Company with copies of its proxy material, reports to
shareholders, and other communications to shareholders for the Designated
Portfolios in such quantity as the Company shall reasonably require for
distributing to Contract owners. Expenses with respect to the foregoing shall be
borne as provided under Article V.
3.4 The
Company shall.
(i) solicit
voting instructions from Contract owners;
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(ii)
|
vote
the shares of each Designated Portfolio in accordance with instructions
received from Contract owners; and
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(iii)
|
vote
shares of each Designated Portfolio for which no instructions have been
received in the same proportion as 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 Company reserves the right to vote shares of each
Designated Portfolio held in any separate account in its own right, to the
extent permitted by law.
3.5 The
Company shall be responsible for assuring that each of its separate accounts
participating in a Designated Portfolio calculates voting privileges as required
by the Shared Funding Exemption Order and consistent with any reasonable
standards that the Fund has adopted or may adopt and that have been provided to
the Company.
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, Section 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 from time to time with respect thereto. The Fund
reserves the right, upon prior written notice to the Company (given at the
earliest practicable time), to take all actions, including but not limited to,
the dissolution, termination, merger and sale of all assets of the Fund or any
Designated Portfolio upon the sole authorization of the Board, to the extent
permitted by the laws of the Commonwealth of Massachusetts and the 0000
Xxx.
3.7 It is
understood and agreed that (except with respect to information regarding the
Fund, the Underwriter, the Adviser or Designated Portfolios provided in writing
by the Fund, the Underwriter or the Adviser), none of the Fund, the Underwriter
or the Adviser is responsible for the content of the prospectus or statement of
additional information for the Contracts.
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ARTICLE
IV
4.1 The
Company shall furnish, or shall cause to be furnished, to the Fund or the
Underwriter, each piece of sales literature or other promotional material
(“sales literature”) that the Company develops or uses and in which the Fund (or
a Designated Portfolio thereof) or the Adviser or the Underwriter is named, at
least eight business days prior to its use. No such material shall be used if
the Fund or its designee reasonably objects to such use within eight business
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
Company shall not give any information or make any representation or statement
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, prospectus or SAI for the shares of the Designated
Portfolios, as such registration statement, 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 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
or the Underwriter shall furnish, or shall cause to be furnished, to the
Company, each piece of sales literature that the Fund or Underwriter develops or
uses in which the Company and/or its Account is named, at least eight business
days prior to its use. No such material shall be used if the Company reasonably
objects to such use within eight business days after receipt of such material.
The Company reserves the right to reasonably object to the continued use of such
material and no such material shall be used if the Company so
objects.
4.4 The Fund
and the Underwriter shall not give any information or make any representations
on behalf of the Company or concerning the. Company, the Account, or the
Contracts other than the information or representations contained in a
registration statement, prospectus, or statement of additional information for
the Contracts, as such registration statement, prospectus or statement of
additional information may be amended or supplemented from time to time, or in
published reports for the Accounts which are the public domain or approved by
the Company for distribution to Contract owners, or in sales literature approved
by the Company or its designee, except with the permission of the
Company.
4.5 At the
request of the Company, the Fund will provide to the Company at least one
complete copy of all registration statements, prospectuses, SATs, reports, proxy
statements, sales literature, applications for exemptions, requests for
no-action letters, and all amendments to any of the above, that relate to the
Designated Portfolios, contemporaneously with the filing of such document(s)
with the SEC or other regulatory authorities.
4.6 At the
request of the Fund, the Company will provide to the Fund at least one complete
copy of all registration statements, prospectuses, statements of additional
information, shareholder reports, solicitations for voting instructions, sales
literature, applications for exemptions, request for no-action letters, and all
amendments to any of the above, that relate to
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the
Contracts or the Accounts, contemporaneously with the filing of such document(s)
with the SEC or other regulatory authorities.
4.7 For
purposes of this Agreement. the phrase “sales literature” includes, but is not
limited to, any of the following: advertisements (such as material
published, or designed for use in, a newspaper, magazine, or other periodical,
radio, television, electronic media, 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) and educational or training materials or other
communications distributed or made generally available to some or all agents or
employees.
4.8 At the
request of any party to this Agreement, any other party will make available to
the requesting party’s independent auditors all records, data and access
to operating procedures that may reasonably be requested in connection with
compliance and regulatory requirements related to this Agreement or any party’s
obligations under this Agreement.
ARTICLE
V
5.1 All
expenses incident to performance by the Fund under this Agreement shall be paid
by the Fund, except and as further provided in Schedule B.
5.2 The
parties hereto shall bear the expenses of typesetting, printing and distributing
the Fund’s prospectus, SAI, proxy materials and reports as provided in Schedule
B.
5.3 Administrative
services to variable Contract owners shall be the responsibility of the
Company and shall not be the responsibility of the Fund, Underwriter or
Adviser. The Fund recognizes the Company as the sole shareholder of shares of
the Designated Portfolios issued under the Agreement.
ARTICLE
VI
6.1 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 or life insurance
contracts, whichever is appropriate, under the Internal Revenue Code of 1986, as
amended (“Code”) and the regulations issued thereunder (or any successor
provisions). Without limiting the scope of the foregoing, the Fund will, with
respect to each Designated Portfolio, 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, the Fund will take all reasonable steps (a) to notify the Company of
such breach and (b) to adequately diversify the affected Designated Portfolio so
as to seek to achieve compliance within the grace period afforded by Treasury
Regulation § 1.817-5.
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6.2 The Fund
represents that each Designated Portfolio is currently qualified (and for new
Designated Portfolios, intends to qualify) 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 Company immediately upon having a reasonable basis
for believing that a Designated Portfolio has ceased to so qualify or that a
Designated Portfolio might not so qualify in the future.
6.3 The
Company represents that the Contracts are currently, and at the time of issuance
shall be, treated as life insurance 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, the Adviser 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 Company 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.
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ARTICLE
VII
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 but not limited to: (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 Designated 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 a Participating Insurance Company to
disregard the voting instructions of contract owners. The Board shall promptly
inform the Company if it determines that an irreconcilable material conflict
exists and the implications thereof.
7.2 The
Company and the Adviser will report any potential or existing conflicts of which
each is aware to the Board. The Company will assist the Board in carrying out
its responsibilities under the Shared Funding Exemption Order, by providing the
Board with all information reasonably necessary for the Board to consider any
issues raised. This includes, but is not limited to, an obligation by the
Company to inform the Board whenever Contract owner voting instructions are
disregarded. At least annually, and more frequently if deemed appropriate by the
Board, the Company shall submit to the Adviser, and the Adviser shall at least
annually submit to the Board, such reports, materials and data as the Board may
reasonably request so that the Board may finally carry out the obligations
imposed upon it by the conditions contained in the Shared Funding Exemption
Order; and said reports, materials and data shall be submitted more frequently
if deemed appropriate by the Board. The responsibility to report such
information and conflicts to the Board will be carried out with a view only to
the interests of the contract owners.
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 Company and any
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: (a) withdrawing the
assets allocable to some or all of the separate accounts from the Fund or any
Designated Portfolio and reinvesting such assets in a different investment
medium, which may include another Designated Portfolio of the Fund, or
submitting to a vote of all affected contract owners the question whether such
segregation should be implemented and, as appropriate, segregating the assets of
any appropriate group (i.e.
annuity contract owners, life insurance contract owners, or variable contract
owners of one or more Participating Insurance Companies) that votes in favor of
such segregation, or offering to the affected contract owners the option of
making such a change; and (b) 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 Company to
disregard contract owner voting instructions and that decision represents a
minority position or
13
would
preclude a majority vote, the Company may be required, at the Fund’s election,
to withdraw the affected Account’s investment in any Designated Portfolio 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. The Company will bear the cost of any
remedial action, including such withdrawal and termination. No penalty will be
imposed by the Fund upon the affected Account for withdrawing assets from the
Fund in the event of a material irreconcilable conflict 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 effective date of
such termination the Fund shall continue to accept and implement orders by the
Company for the purchase (and redemption) of shares of such Designated
Portfolio.
7.5 If a
material irreconcilable conflict arises because a particular state insurance
regulator’s decision applicable to the Company conflicts with the majority of
other state regulators, then the Company will withdraw the affected Account’s
investment in the affected Designated Portfolio and terminate this Agreement
with respect to such Account within six months after the Board informs the
Company in writing that it has determined that such decision has created an
irreconcilable material conflict; provided, however, that such withdrawal and
termination shall be limited to the extent required by the foregoing material
irreconcilable conflict as determined by a majority of the disinterested members
of the Board. Until the effective date of such termination the Fund shall
continue to accept and implement orders by the Company for the purchase (and
redemption) of shares of such Designated Portfolios.
7.6 For
purposes of Sections 7.3 through 7.6 of this Agreement, a majority of the
disinterested members of the Board shall determine whether any proposed action
adequately remedies any irreconcilable material conflict; but in no event will
the Fund be required to establish a new funding medium for the Contracts. The
Company shall not be required by Section 7.3 to establish a new funding medium
for the 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 Company
will withdraw an Account’s investment in any Designated Portfolio and terminate
this Agreement within six (6) months after the Board informs the Company in
writing of the foregoing determination; provided, however, that such withdrawal
and termination shall be limited to the extent required by any such material
irreconcilable conflict as determined by a majority of the disinterested members
of the Board.
7.7 If and to
the extent the Shared Funding Exemption Order contains terms and conditions
different from Sections 3.4, 3.5, 3.6, 7.1, 7.2, 7.3, 7.4 and 7.5 of this
Agreement, then the Fund and/or the Participating Insurance Companies, as
appropriate, shall take such steps as may be necessary to comply with the Shared
Funding Exemption Order, and Sections 3.4, 3.5, 3.6, 7.1, 7.2, 7.3, 7.4 and 7.5
of the Agreement shall continue in effect only to the extent that terms and
conditions substantially identical to such Sections are contained in the Shared
Funding Exemption Order or any amendment thereto. If and to the extent that Rule
6e-2 and Rule 6e-3(T) are amended, or Rule 6e-3 is adopted, to provide exemptive
relief from any provision of the 1940
14
Act or
the rules promulgated thereunder with respect to mixed or shared funding (as
defined in the Shared Funding Exemption Order) on terms and conditions
materially different from those contained in the Shared Funding Exemption 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
(a) The
Company agrees to indemnify and hold harmless the Fund, the Adviser, the
Underwriter and each of their officers, trustees, directors and each person, if
any, who controls the Fund, the Adviser 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 Company)
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 shares of the Designated Portfolios or the Contracts
and;
|
(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 for the Contracts or
contained in the Contracts or sales literature for the Contracts (or any
amendment or supplement to any of the foregoing), or arise out of or are
based upon the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading; provided that this agreement to
indemnify shall not apply as to any Indemnified Party if such statement or
omission or such alleged statement or omission was made in reliance upon
and in conformity with information furnished in writing to the Company by
or on behalf of the Fund for use in the Registration Statement, prospectus
or statement of additional information for the Contracts or in the
Contracts or sales literature for the Contracts (for any amendment or
supplement) or otherwise for use in connection with the sale of the
Contracts or shares of the Designated Portfolios;
or
|
|
(ii)
|
arise
out of or as a result of statements or representations (other than
statements or representations contained in the Registration Statement,
prospectus, SAT or sales literature of the Fund not supplied by the
Company or persons under its control) or wrongful conduct of the Company
or persons under its authorization or control, with respect to the sale or
distribution of the Contracts or shares of the Designated Portfolios;
or
|
15
|
(iii)
|
arise
out of any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, prospectus, SAI or sales
literature of the Fund or any amendment thereof or supplement thereto or
the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading if such a statement or omission was made in reliance upon
information furnished to the Fund by or on behalf of the Company;
or
|
|
(iv)
|
arise
as a result of any material failure by the Company 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 are based upon any untrue statements or alleged untrue
statements of any material fact contained in any Registration Statement,
prospectus, statement of additional information or sales literature for
any Unaffiliated Fund, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, or
otherwise pertain to or arise in connection with the availability of any
Unaffiliated Fund as an underlying funding vehicle in respect of the
Contracts; or
|
|
(vi)
|
arise
out of or result from any material breach of any representation and/or
warranty made by the Company in this Agreement or arise out of or result
from any other material breach of this Agreement by the
Company;
|
as
limited by and in accordance with the provisions of Sections 8.1(b) and
8.1(c).
(b) The
Company shall not be liable under this indemnification provision with respect to
any losses, claims damages, liabilities or litigation to which an Indemnified
Party would otherwise be subject by reason of such Indemnified Party’s willful
misfeasance, bad faith, or gross negligence in the performance of such
Indemnified Party’s duties or by reason of such Indemnified Party’s reckless
disregard of its obligations or duties under this Agreement.
(c) The
Company shall not be liable under this indemnification provision with respect to
any claim made against an Indemnified Party unless such Indemnified Party shall
have notified the Company in writing within a reasonable time after the summons
or other first legal process giving information of the nature of the claim shall
have been served upon such Indemnified Party (or after such Indemnified Party
shall have received notice of such service on any designated agent), but failure
to notify the Company of any such claim shall not relieve the Company from any
liability that it may have to the Indemnified Party against whom such action is
brought otherwise than on account of this indemnification provision, except to
the extent that the Company has been prejudiced by such failure to give notice.
In case any such action is brought against an Indemnified Party, the Company
shall be entitled to participate, at its own expense, in the defense of such
action. The Company also shall be entitled to assume the defense thereof, with
counsel satisfactory to the party named in the action 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
16
conduct.
After notice from the Company to such party of the Company’s election to assume
the defense thereof, the Indemnified Party shall bear the fees and expenses of
any additional counsel retained by it, and the Company will not be liable to
such party under this Agreement for any legal or other expenses subsequently
incurred by such party independently in connection with the defense thereof
other than reasonable costs of investigation.
(d) The
Indemnified Parties will promptly notify the Company of the commencement of any
litigation or proceedings against them in connection with the issuance or sale
of the shares of the Designated Portfolios or the Contracts or the operation of
the Fund.
(a) The
Underwriter and the Adviser agree to indemnify and hold harmless the Company and
its broker-dealer subsidiary and each of their directors and officers and each
person, if any, who controls the Company or its broker-dealer subsidiary 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 shares of the Designated Portfolios or the
Contracts; 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, prospectus
or SAI of the Fund or sales literature of the Fund (or any amendment or
supplement to any of the foregoing), or arise out of or are based upon the
omission or the alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, provided that this agreement to indemnify shall not apply as
to any Indemnified Party 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, Adviser or Fund by or on behalf
of the Company for use in the Registration Statement or prospectus for the
Fund or its sales literature (or any amendment or supplement thereto) or
otherwise for use in connection with the sale of the Contracts or shares
of the Designated Portfolios; 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 for the Contracts not supplied by the
Underwriter or persons under its control) or wrongful conduct of the Fund
or Underwriter or person under their control with respect to the sale or
distribution of the Contracts or shares of the Designated Portfolios;
or
|
|
(iii)
|
arise
out of any untrue statement or alleged untrue statement of a material fact
contained in a Registration Statement, prospectus or sales literature for
the Contracts, or any amendment thereof or supplement thereto, or the
omission or alleged omission to
|
17
state
therein a material fact required to be stated therein or necessary to make the
statement or statements therein not misleading, if such statement or omission
was made in reliance upon information furnished to the Company by or on behalf
of the Fund; or
|
(iv)
|
arise
as a result of any failure by the Fund to provide the services and furnish
the materials under the terms of this Agreement (including a failure,
whether unintentional or in good faith or otherwise, to comply with the
diversification 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 Underwriter or the Adviser in this Agreement or arise
out of or result from any other material breach of this Agreement by the
Underwriter;
|
as
limited by and in accordance with the provisions of Sections 8.2(b) and 8.2(c)
hereof.
(b) The
Underwriter and the Adviser 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 or such Indemnified Party’s duties or by reason of such Indemnified
Party’s reckless disregard of obligations and duties under this Agreement or to
the Company or the Accounts, whichever is applicable.
(c) The
Underwriter and the Adviser 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 or the Adviser 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 or
the Adviser of any such claim shall not relieve the Underwriter or the Adviser
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,
except to the extent that the Underwriter or the Adviser has been prejudiced by
such failure to give notice. In case any such action is brought against the
Indemnified Party, the Underwriter or the Adviser will be entitled to
participate, at its own expense, in the defense thereof. The Underwriter and the
Adviser 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 is 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
or the Adviser to such party of the Underwriter’s or the Adviser’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 or the
Adviser 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.
(d) The
Company and its broker-dealer subsidiary agree promptly to notify the
Underwriter or the Adviser of the commencement of any litigation or proceedings
against it or
18
any of
its officers or directors in connection with the issuance or sale of the
Contracts or the operation of the Account.
(a) The Fund
agrees to indemnify and hold harmless the Company and its broker- dealer
subsidiary and each of their directors and officers and each person, if any, who
controls the Company or its broker-dealer subsidiary 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
thereto) or settlements, are related to the operations of the Fund
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, prospectus or SAI of
the Fund or sales literature of the Fund (or any amendment or supplement to any
of the foregoing), or arise out of or are based upon the omission or the alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, provided that this
agreement to indemnify shall not apply as to any Indemnify 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 Company for use in the Registration Statement or prospectus
for the Fund or its sales literature (or any amendment or supplement thereto) or
otherwise for use in connection with the sale of the Contracts or shares of the
Designated Portfolios;
(ii) or arise
out of or as a result of statements or representations (other than
statements or representations contained in the Registration Statement,
prospectus or sales literature for the Contracts not supplied by the Underwriter
or persons under its control) or wrongful conduct of the Fund or Underwriter or
person under their control with respect to the sale or distribution of the
Contracts or shares of the Designated Portfolios; or
(iii) arise out
of any untrue statement or alleged untrue statement of a material fact
contained in a Registration Statement, prospectus or sales literature of the
Contracts, or any amendment thereof or supplement thereto, or the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statement or statements therein not misleading, if such
statement or omission was made in reliance upon information furnished to the
Company by or on behalf of the Fund; or
(iv) arise as
a result of any failure by the Fund to provide the services and furnish
the materials under the terms of this Agreement ( including a failure, whether
unintentional or in good faith or otherwise, to comply with the diversification
and
19
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 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.
(b) The Fund
shall not be liable under this indemnification provision with respect to any
losses, claims, damages, liabilities or litigation to which an Indemnified Party
would otherwise be subject by reason of such Indemnified Party’s willful
misfeasance, bad faith, or gross negligence in the performance of such
Indemnified Party’s duties or by reason of such Indemnified Party’s reckless
disregard of obligations and duties under this Agreement or to the Company, the
Fund, the Underwriter, the Adviser or the Accounts, whichever is
applicable.
(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
that it may have to the Indemnified. Party against whom such action is brought
otherwise than on account of this indemnification provision, except to the
extent that the Fund has been prejudiced by such failure to give notice. In case
any such action is brought against the Indemnified Parties, the Fund will be
entitled to participate, at its own expense, in the defense thereof. The Fund
also shall be entitled to assume the defense thereof, with counsel satisfactory
to the party named in the action 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.
(d) The
Company, its broker-dealer subsidiary, the Adviser and the Underwriter agree to
notify the Fund promptly 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 any Account,
or the sale or acquisition of shares of the Designated
Portfolios.
ARTICLE
IX
9.1 This
Agreement shall be construed and the provisions hereof interpreted under and
in
20
accordance
with the laws of the Commonwealth of Massachusetts.
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 the statutes, rules and regulations as the SEC may grant (including, but
not limited to, the Shared Funding Exemption Order) and the terms hereof shall
be interpreted and construed in accordance therewith.
ARTICLE
X
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 any Designated Portfolio, by 6
months’ advance written notice delivered to the other parties;
or
(b) termination
by the Company by written notice to the Fund, the Adviser and the Underwriter
with respect to any Designated Portfolio based upon the Company’s reasonable and
good faith determination that shares of such Designated Portfolio are not
reasonably available to meet the requirements of the Contracts;
or
(c) termination
by the Company by written notice to the Fund, the Adviser and the Underwriter
with respect to any Designated Portfolio if the shares of such Designated
Portfolio are not registered, issued or sold in accordance with applicable state
and/or federal securities laws or such law precludes the use of such shares to
fund the Contracts issued or to be issued by the Company; or
(d) termination
by the Fund, the Adviser or Underwriter in the event that administrative
proceedings are instituted against the Company or any affiliate by the NASD, the
SEC, or the Insurance Commissioner or like official of any state or any other
regulatory body regarding the Company’s duties under this Agreement or related
to the sale of the Contracts, the operation of any Account, or the purchase of
the shares of a Designated Portfolio or the shares of any Unaffiliated Fund,
provided, however, that the Fund, the Adviser or Underwriter determines in its
sole judgement exercised in good faith, that any such administrative proceedings
will have a material adverse effect upon the ability of the Company to perform
its obligations under this Agreement; or
(e) termination
by the Company in the event that formal administrative proceedings are
instituted against the Fund, the Adviser or Underwriter by the NASD, the SEC, or
any state securities or insurance department or any other regulatory body,
provided, however, that the Company determines in its sole judgment exercised in
good faith, that any such administrative proceedings will have a material
adverse effect upon the ability of the Fund or Underwriter to perform its
obligations under this Agreement; or
(f) termination
by the Company by written notice to the Fund, the Adviser and the Underwriter
with respect to any Designated Portfolio in the event that such Designated
Portfolio
21
ceases to
qualify or the Company reasonably believes such Designated Portfolios may fail
to so 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
(g) termination
by the Fund, the Adviser or Underwriter by written notice to the Company
in the event that the Contracts fail to meet the qualifications specified in
Article VI hereof; or
(h) termination
by any of the Fund, the Adviser or the Underwriter by written notice to the
Company, if any of the Fund, the Adviser or the Underwriter, respectively, shall
determine, in their sole judgement exercised in good faith, that the Company has
suffered a material adverse change in its business, operations, financial
condition, insurance company rating or prospects since the date of this
Agreement or is the subject of material adverse publicity, and that material
adverse change or publicity will have a material adverse effect on the Company’s
ability to perform its obligations under this Agreement; or
(i) termination
by the Company by written notice to the Fund, the Adviser and the Underwriter,
if the Company shall determine, in its sole judgment exercised in good faith,
that the Fund, the Adviser 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 and that
material adverse change or publicity will have a material adverse effect on the
Fund’s or the Underwriter’s ability to perform its obligations under this
Agreement; or
(j) at the
option of the Company, as one party, or the Fund, the Adviser and the
Underwriter, as one party, upon the other party’s material breach of any
provision of this Agreement upon 30 days’ written notice and opportunity to
cure.
10.2 Effect
of Termination. Notwithstanding any termination of this Agreement, the
Fund and the Underwriter shall, at the option of the Company, continue to make
available additional shares of a Designated Portfolio 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 in such
event be permitted to reallocate investments in the Designated Portfolios,
redeem investments in the Designated Portfolios and/or invest in the Designated
Portfolios 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 Notwithstanding
any termination of this Agreement, each party’s obligation under Article VIII to
indemnify the other parties shall survive.
ARTICLE
XI
22
Any
notice shall be sufficiently given when sent by registered or certified mail to
the other party at the address of such party set forth below or at such other
address as such party may from time to time specify in writing to the other
party.
If to the
Fund:
Calamos
Advisors Trust
0000 X.
Xxxxxxxxxxx Xxxx
Xxxxxxxxxx,
Xxxxxxxx 00000-0000
Attention: Secretary
If to the
Company:
Kansas
City Life Insurance Company
0000
Xxxxxxxx
Xxxxxx
Xxxx, Xxxxxxxx 00000-0000
Attention:
Secretary
If to the
Adviser:
Calamos
Asset Management, Inc.
0000 X.
Xxxxxxxxxxx Xxxx
Xxxxxxxxxx,
Xxxxxxxx 00000-0000
Attention: Secretary
If to the
Underwriter:
Calamos
Financial Services, Inc.
0000 X.
Xxxxxxxxxxx Xxxx
Xxxxxxxxxx,
Xxxxxxxx 00000-0000
Attention: Secretary
ARTICLE
XII
The Fund
and the Adviser agree to consult with the Company concerning whether any
Designated Portfolio qualifies to provide a foreign tax credit pursuant to
Section 853 of the Code.
23
ARTICLE
XIII
12.1 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.
12.2 This
Agreement may be executed simultaneously in two or more counterparts, each of
which taken together shall constitute one and the same instrument.
12.3 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.
12.4 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.
12.5 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.
12.6 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.
12.7 All
persons are expressly put on notice of the Fund’s Agreement and Declaration of
Trust and all amendments thereto, all of which are on file with the Secretary of
the Commonwealth of Massachusetts, and the limitation of shareholder and trustee
liability contained therein. This Agreement has been executed by and on behalf
of the Fund by its representatives as such representatives and not individually,
and the obligations of the Fund with respect to a Designated Portfolio hereunder
are not binding upon any of the trustees, officers or shareholders of the Fund
individually, but are binding upon only the assets and property of such
Designated Portfolio. All parties dealing with the Fund with respect to a
Designated Portfolio shall look solely to the assets of such Designated
Portfolio for the enforcement of any claims against the Fund
hereunder.
12.8 This
Agreement has been executed on behalf of each party by officers in their
capacities as such. The obligations of this Agreement shall not be individually
binding on any shareholder, trustee, director, officer or employee of any such
party.
24
COMPANY: Kansas
City Life Insurance Company
By: /s/
Xxxxxxx X. Xxxx
Title: SVP
FUND: Calamos Advisors
Trust
By: /s/
Xxxx X. Xxxxxxx
Title: President
ADVISER
Calamos Asset Management, Inc.
By: /s/
Xxxx X. Xxxxxxx
Title: President
UNDERWRITER Calamos
Financial Services, Inc.
By: /s/ Xxxx X.
Xxxxxxx
Title: President
25
AMENDMENT TO PARTICIPATION
AGREEMENT
SCHEDULE
A
Name of
Separate Account and Date
Established by Board of
Directors
Kansas
City Life Variable Annuity Separate Account
Contracts
Funded
by Separate
Account
Individual
Flexible Premium Deferred Variable Annuity Contract
Individual
Flexible Premium Variable Life Insurance Contract
Flexible
Premium Survivorship Variable Universal Life Insurance Contract
Century
II VUL Alliance Series
Century
II VA Affinity Series
Century
II Heritage Survivorship Variable Universal Life Insurance Contract
Century
11 Freedom Variable Annuity Contract
Designated
Portfolios
Calamos
Growth and income Fund
26
SCHEDULE
B
EXPENSES
In the
event the prospectus, SAI, annual report or other communication of the Fund is
combined with a document of another party, the Fund will pay the costs based
upon the relative number of pages attributable to the Fund.
|
ITEM
|
FUNCTION
|
RESPONSIBLE
PARTY
|
|
PROSPECTUS
|
||
|
Update
|
Typesetting
|
Fund
|
|
New
Sales
|
Printing
Distribution
|
Company
Company
|
|
Existing
Owners
|
Printing
Distribution
|
Fund
Fund
|
|
STATEMENTS
OF ADDITIONAL INFORMATION
|
Same
as Prospectus
|
Same
|
|
PROXY
MATERIALS OF THE FUND
|
Typesetting
Printing
Distribution
|
Fund
Fund
Fund
|
27
|
ANNUAL
REPORTS & OTHER COMMUNICATIONS WITH SHAREHOLDERS OF THE
FUND
|
||
|
All
|
Typesetting
|
Fund
|
|
Marketing
|
Printing
Distribution
|
Company
Company
|
|
Existing
Owners:
|
Printing
Distribution
|
Fund
Fund
|
|
OPERATIONS
OF FUND
|
All
operations and related 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 sate
law and all taxes on the issuance of the Fund’s shares, and all costs of
management of the business of the Fund
|
Fund
|
28