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EXHIBIT 9(c)
FUND PARTICIPATION AND VARIABLE CONTRACT
MARKETING AGREEMENT
AMONG
SECURITY BENEFIT LIFE INSURANCE COMPANY
ON ITS BEHALF AND ON BEHALF OF
THE PARKSTONE VARIABLE ANNUITY ACCOUNT,
THE PARKSTONE ADVANTAGE FUND,
FIRST OF AMERICA INVESTMENT CORPORATION,
SECURITY MANAGEMENT COMPANY,
SECURITY DISTRIBUTORS, INC.,
FIRST OF AMERICA BROKERAGE SERVICE, INC.
AND
FIRST OF AMERICA BANK CORPORATION
DATED AS OF SEPTEMBER 10, 1993
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TABLE OF CONTENTS
ARTICLE I OFFER OF VARIABLE CONTRACTS................................................................. 2
1.1 Form of Contracts.................................................................... 2
1.2 Acceptance of Applications........................................................... 2
1.3 Related Agreements................................................................... 2
ARTICLE II PURCHASE AND SALE OF FUND SHARES........................................................... 3
2.1 Agreements to Purchase and Sell...................................................... 3
2.2 Diversification...................................................................... 3
2.3 Mixed and Shared Funding............................................................. 3
2.4 Redemption........................................................................... 4
2.5 Settlement Upon Sales................................................................ 4
2.6 Book Entry........................................................................... 4
2.7 Dividends............................................................................ 4
2.8 Net Asset Value...................................................................... 4
ARTICLE III REPRESENTATIONS AND WARRANTIES............................................................ 4
A. Insurer.............................................................................. 4
3.1 The Insurance Company................................................................ 4
3.2 Separate Account..................................................................... 5
3.3 Variable Contracts................................................................... 5
3.4 Separate Account..................................................................... 5
3.5 Annuity Contracts.................................................................... 5
B. The Fund and Administrator........................................................... 5
3.6 Organization......................................................................... 5
3.7 Shares............................................................................... 5
C. The Fund, Investment Adviser and Administrator....................................... 5
3.8 Regulated Investment Company......................................................... 5
D. The Investment Adviser............................................................... 6
3.9 Investment Adviser................................................................... 6
E. Distributor.......................................................................... 6
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3.10 Broker-Dealer........................................................................ 6
F. The Servicing Agent.................................................................. 6
3.11 Broker-Dealer........................................................................ 6
ARTICLE IV GENERAL DUTIES............................................................................. 6
A. The Fund and/or the Administrator.................................................... 6
4.1 Registration of Fund Shares.......................................................... 6
4.2 Organizational Expenses.............................................................. 6
4.3 Statutory Seed Money................................................................. 7
B. The Fund and the Investment Adviser.................................................. 7
4.4 Subchapter M......................................................................... 7
4.5 Diversification...................................................................... 7
4.6 Other Requirements................................................................... 7
C. The Insurer.......................................................................... 7
4.7 Organizational Expenses for Separate Account......................................... 7
4.8 Registration of Separate Account..................................................... 7
4.9 Annuities............................................................................ 8
4.10 Compliance........................................................................... 8
D. The Distributor...................................................................... 8
4.11 Compliance........................................................................... 8
E. All Parties.......................................................................... 8
4.12 Cooperation.......................................................................... 8
4.13 Compliance Responsibilities.......................................................... 8
ARTICLE V PROSPECTUSES AND PROXY STATEMENTS; VOTING................................................... 9
5.1 Fund Documents....................................................................... 9
5.2 Fund Prospectus...................................................................... 9
5.3 Fund SAI............................................................................. 9
5.4 Proxy Statements and Periodic Reports................................................ 9
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5.5 Separate Account Documents........................................................... 9
5.6 Separate Account Prospectus and SAI.................................................. 10
5.7 Voting............................................................................... 10
ARTICLE VI MARKETING AND PROMOTION.................................................................... 10
6.1 [Reserved]........................................................................... 10
6.2 Insurer's, Administrator's and Distributor's Sales Literature........................ 10
6.3 Representations About Fund........................................................... 11
6.4 Servicing Agent's, Investment Adviser's and Holding Company's Sales
Literature........................................................................... 11
6.5 Representations About Insurer........................................................ 11
6.6 Fund SEC Filings..................................................................... 11
6.7 Separate Account SEC Filings......................................................... 11
6.8 Sales Literature..................................................................... 12
6.9 Confidentiality...................................................................... 12
ARTICLE VII INDEMNIFICATION........................................................................... 12
7.1 Indemnification by the Insurer....................................................... 12
7.2 Indemnification by the Administrator................................................. 13
7.3 Indemnification by the Investment Adviser............................................ 14
7.4 Indemnification by the Servicing Agent............................................... 15
7.5 Indemnification by Distributor....................................................... 16
7.6 Indemnification Not Applicable....................................................... 17
7.7 Notification......................................................................... 17
7.8 Notice............................................................................... 17
ARTICLE VIII EXCLUSIVITY.............................................................................. 18
8.1 The Fund............................................................................. 18
8.2 The Separate Account................................................................. 18
ARTICLE IX APPLICABLE LAW............................................................................. 18
9.1 Kansas Law........................................................................... 18
9.2 Securities Acts...................................................................... 18
ARTICLE X REINSURANCE OF VARIABLE CONTRACTS........................................................... 18
10.1 Change in Law........................................................................ 18
10.2 Change in Rating of Insurer.......................................................... 19
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ARTICLE XI SUBSTITUTION AND TERMINATION............................................................... 19
11.1 Substitution......................................................................... 19
11.2 Grounds for Termination.............................................................. 19
11.3 Notice............................................................................... 20
11.4 Effect of Termination................................................................ 21
ARTICLE XII NOTICES................................................................................... 21
ARTICLE XIII MISCELLANEOUS............................................................................ 22
13.1 Trustees and Shareholders Not Liable................................................. 22
13.2 Rights of Trustees and Shareholders.................................................. 23
13.3 "Parkstone" Name..................................................................... 23
13.4 Protection of Name................................................................... 23
13.5 Consultation......................................................................... 23
13.6 Captions............................................................................. 23
13.7 Execution in Counterpart............................................................. 23
13.8 Invalidity of a Provision............................................................ 24
13.9 Assignment........................................................................... 24
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FUND PARTICIPATION AND VARIABLE CONTRACT
MARKETING AGREEMENT
THIS AGREEMENT is made as of the 10th day of September, 1993, by and
among SECURITY BENEFIT LIFE INSURANCE COMPANY ("Insurer"), a Kansas mutual life
insurance corporation, on its behalf and on behalf of The Parkstone Variable
Annuity Account (the "Separate Account"), a segregated asset account of the
Insurer; the PARKSTONE ADVANTAGE FUND (the "Fund"), a Massachusetts business
trust; FIRST OF AMERICA INVESTMENT CORPORATION ("Investment Adviser"), a
Michigan corporation; SECURITY MANAGEMENT COMPANY ("Administrator"), a Kansas
corporation; SECURITY DISTRIBUTORS, INC. (Distributor"), a Kansas corporation
and a subsidiary of Insurer; FIRST OF AMERICA BROKERAGE SERVICE, INC.
("Servicing Agent"), a Michigan corporation and an affiliate of Investment
Adviser; and FIRST OF AMERICA BANK CORPORATION ("Holding Company"), a Michigan
corporation and the parent of Investment Adviser and Servicing Agent.
WHEREAS, the Fund is registered with the Securities and Exchange
Commission ("SEC") as an open-end management investment company under the
Investment Company Act of 1940, as amended ("1940 Act"), and the Fund is
authorized to issue separate series of shares of beneficial interest ("shares"),
each representing an interest in a separate portfolio of assets ("series"), and
each series has its own investment objective or objectives, policies, and
limitations; and
WHEREAS, the Fund is currently comprised of five separate series, and
other series may be established in the future; and
WHEREAS, the Separate Account is registered with the SEC as a unit
investment trust under the 1940 Act: and
WHEREAS, pursuant to Investment Advisory Agreements, the Investment
Adviser serves as investment adviser to the Fund and its series; and
WHEREAS, pursuant to an Administration Agreement, the Administrator is
promoter of the Fund, and provides administrative services to the Fund; and
WHEREAS, pursuant to a Distribution Agreement, the Distributor is
distributor of the Fund's shares; and
WHEREAS, shares of one or more of the Fund's series are or will be
available to be offered to the Separate Account to serve as an investment medium
for variable annuity contracts to be issued by the Insurer ("Variable
Contracts"); and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Insurer wishes to purchase shares of one or more of the Fund's
series on behalf of the Separate
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Account to serve as an investment medium for Variable Contracts funded by the
Separate Account; and
WHEREAS, pursuant to an Application and Service Agreement, the
Servicing Agent has agreed to assist Distributor and First Advantage Insurance
Agency, Inc. in accepting applications for Variable Contracts; and
NOW, THEREFORE, in consideration of the foregoing and the mutual
promises and covenants hereinafter set forth, the parties hereby agree as
follows:
ARTICLE I
OFFER OF VARIABLE CONTRACTS
1.1 FORM OF CONTRACTS. The Variable Contracts funded or to be funded by
the Separate Account shall be substantially similar to the form of the variable
annuity contracts attached hereto as Exhibits A and B, although the Insurer may
make such immaterial changes to the form of the contracts in Exhibits A and B as
deemed appropriate by the Insurer. The Insurer shall notify Holding Company and
Servicing Agent prior to making any such changes.
1.2 ACCEPTANCE OF APPLICATIONS. The Insurer shall appoint Distributor
as the exclusive principal underwriter for the sale of the Variable Contracts,
and shall direct that, subject to agreement among Distributor and the Servicing
Agent, Distributor shall enter into an agreement, substantially in the form
attached hereto as Exhibit C, with the Servicing Agent under which the Servicing
Agent, or such affiliates of Insurer, Distributor or Servicing Agent as shall be
or become parties to such agreement pursuant to Section 1.3 hereof, will be
authorized to accept applications and render related services for the Variable
Contracts ("Application and Service Agreement"), for which the Servicing Agent
shall be the broker/dealer of record.
1.3 RELATED AGREEMENTS. In those states that do not permit the
necessary licensing of Servicing Agent or as to which Insurer or Distributor and
Servicing Agent otherwise agree, Insurer shall establish, or cause Distributor
to establish, appropriately licensed insurance agencies ("Other Agencies") and
shall cause each of such Other Agencies to accept applications for the Variable
Contracts in accordance with the terms of the Application and Service Agreement.
Insurer and Distributor, as appropriate, shall cause each of the Other Agencies
to enter into agreements, substantially in the form attached hereto as Exhibit
D, with registered representatives of and designated by Servicing Agent under
which such registered representatives shall be appointed agents of Insurer and
authorized by the Other Agency to accept, on behalf of the Other Agency,
customer applications for the Variable Contracts (each a "Dual Service
Agreement"). Insurer, and Distributor, as appropriate, shall enter into, and
shall cause the Other Agencies to enter into, agreements, substantially in the
form attached hereto as Exhibit E, with Servicing Agent or an affiliate of
Servicing Agent under which Insurer and the Other
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Agency grant Servicing Agent or its affiliate an option to purchase all of the
assets and to assume the liabilities of the Other Agencies (each an "Option
Agreement").
ARTICLE II
PURCHASE AND SALE OF FUND SHARES
2.1 AGREEMENTS TO PURCHASE AND SELL. The Fund agrees to offer and make
available and Distributor agrees to sell to the Separate Account and on behalf
of the Separate Account, Insurer agrees to purchase from Distributor and the
Fund shares of the series offered and made available as the investment medium
for the Variable Contracts and identified on Schedule A, as such may be amended
from time to time, ("Series"). Distributor and the Fund agree to make such
shares available to the Insurer and Separate Account and to execute such orders
on each day on which the Fund calculates its net asset value pursuant to rules
of the SEC ("business day") at the net asset value next computed after receipt
and acceptance by the Fund or its agent of the order for the shares of the Fund,
without the imposition of any sales load; provided, however, that the Board of
Trustees of the Fund may refuse to sell shares of any Series to any person, or
suspend or terminate the offering of shares of any Series, if such action is
required by law or by regulatory authorities having jurisdiction or is, in the
sole discretion of the Trustees, acting in good faith and in light of the
Trustees' fiduciary duties under applicable law, necessary in the best interests
of the shareholders of any Series.
2.2 DIVERSIFICATION. The Fund and Distributor agree that shares of the
Series of the Fund will be sold only to the Insurer on behalf of the Separate
Account and other persons consistent with each Series being adequately
diversified pursuant to Section 817(h) of the Internal Revenue Code of 1986, as
amended ("Code") and the regulations thereunder. No shares of any Series will be
sold directly to the general public to the extent prohibited by Section 817(h)
and the regulations thereunder.
2.3 MIXED AND SHARED FUNDING. Subject to the provisions of Articles
VIII and X of this Agreement, the Fund and Distributor will not sell shares of
the Fund to any insurance company or separate account to serve as an investment
vehicle for variable life insurance policies unless the Fund has first obtained
an appropriate exemptive order from the SEC if required by the 1940 Act and the
rules thereunder, such as an order to permit "mixed funding" or "shared
funding" if the Fund offers its shares to a variable life separate account of
the Insurer or of an unaffiliated life insurer. In such event, all parties to
this Agreement agree to comply with any applicable conditions imposed under any
exemptive order issued by the SEC, or any applicable conditions specified in
Rule 6e-2 or Rule 6e-3(T) under the 1940 Act (or, if permanently adopted, Rule
6e-3), whichever is applicable. The Fund and Distributor will not sell shares
of the Series to any insurance company or separate account other than the
Insurer, and the Separate Account unless there is in effect an agreement
containing provisions necessary to comply with any applicable conditions of an
SEC exemptive order, Rule 6e-2 or 6e-3(T) (or, if permanently adopted, Rule
6e-3), whichever is applicable.
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2.4 REDEMPTION. Upon receipt of a request for redemption in proper form
from the Insurer, the Fund agrees to redeem any full or fractional shares of the
Series held by the Insurer, including shares held on behalf of the Separate
Account, ordinarily executing such requests on each business day at the net
asset value next computed after receipt and acceptance by the Fund or its agent
of the request for redemption, except that the Fund reserves the right to
suspend the right of redemption, consistent with Section 22(e) of the 1940 Act
and any rules thereunder. Such redemption ordinarily shall be paid not later
than one business day following receipt by the Fund or its agent of the request
for redemption, although the Fund reserves the right to delay payment upon
redemption, consistent with Section 22(e) of the 1940 Act and any rules
thereunder.
2.5 SETTLEMENT UPON SALES. The Insurer shall pay for shares of the
Series not later than one business day after it places an order to purchase
shares of the Series. Payment shall be in federal funds transmitted by wire.
2.6 BOOK ENTRY. Issuance and transfer of shares of the Series will be
by book entry only unless otherwise agreed by the Fund. Stock certificates will
not be issued to the Insurer or the Separate Account unless otherwise agreed by
the Fund. Shares ordered from the Fund will be recorded in an appropriate title
for the Separate Account or the appropriate subaccounts of the Separate Account.
2.7 DIVIDENDS. The Fund shall promptly furnish notice (by wire or
telephone, followed by written confirmation) to the Insurer of any dividends or
capital gains distributions payable on the shares of the Series. The Insurer
hereby elects to reinvest in the Series all such dividends and distributions as
are payable on a Series' shares and to receive such dividends and distributions
in additional shares of that Series. The Insurer reserves the right to revoke
this election in writing, giving at least five days prior notice, and to receive
all such dividends and distributions in cash. The Fund shall notify the Insurer
of the number of shares so issued as payment of such dividends and
distributions.
2.8 NET ASSET VALUE. The Fund shall instruct its recordkeeping agent to
advise the Insurer on each business day of the net asset value per share for
each Series by 5:00 p.m. New York City time, or, if not possible by 5:00 p.m.,
as soon as reasonably practical after the net asset value per share is
calculated.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
A. INSURER
3.1 THE INSURANCE COMPANY. The Insurer represents and warrants
that it is a life insurance company duly organized and in good standing under
Kansas law, that the Insurer is
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authorized to offer the Variable Contracts in those states set forth in Schedule
B and that it is taxed as an insurance company under Subchapter L of the Code.
3.2 SEPARATE ACCOUNT. The Insurer represents and warrants that it has
legally and validly established the Separate Account as a segregated asset
account under the insurance laws and regulations of the state of Kansas, and
that the Separate Account is a validly existing segregated asset account under
applicable federal and state law.
3.3 VARIABLE CONTRACTS. The Insurer represents and warrants that the
Variable Contracts to be issued by the Insurer or interests in the Separate
Account under such Variable Contracts are or, prior to issuance, will be
registered as securities under the Securities Act of 1933 ("1933 Act").
3.4 SEPARATE ACCOUNT. The Insurer represents and warrants that the
Separate Account is or, prior to issuance, will be registered as a unit
investment trust in accordance with the provisions of the 1940 Act.
3.5 ANNUITY CONTRACTS. The Insurer represents that it believes, in good
faith and in accordance with current law, that the Variable Contracts, when
issued, will be treated as annuity contracts under applicable provisions of the
Code.
B. THE FUND AND ADMINISTRATOR
3.6 ORGANIZATION. The Fund and Administrator represent and warrant that
the Fund is duly organized as a business trust under the laws of the
Commonwealth of Massachusetts, and is in good standing under applicable law.
3.7 SHARES. The Fund and Administrator represent and warrant that the
shares of the Series are duly authorized for issuance in accordance with
applicable law, that the shares of the Series are or, prior to issuance, will be
registered as securities under the 1933 Act, and that the Fund is registered as
an open-end management investment company under the 1940 Act.
C. THE FUND, INVESTMENT ADVISER AND ADMINISTRATOR
3.8 REGULATED INVESTMENT COMPANY. The Fund and the Investment Adviser
and Administrator represent and warrant that they believe that each Series of
the Fund shall be eligible to qualify as a regulated investment company under
Subchapter M of the Code, and each has no reason to believe that any Series will
not so qualify, and has no reason to believe that any Series will not be able to
meet the diversification requirements of Section 817(h) of the Code and the
regulations thereunder.
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D. THE INVESTMENT ADVISER
3.9 INVESTMENT ADVISER. The Investment Adviser represents and warrants
that it is registered as an investment adviser with the SEC and with each state
in which it is required to be registered in connection with its responsibilities
to the Fund pursuant to the Investment Advisory Agreements.
E. DISTRIBUTOR
3.10 BROKER-DEALER. Distributor represents and warrants that it is a
member in good standing of the NASD and is registered as a broker-dealer with
the SEC under the Securities Exchange Act of 1934 ("1934 Act") and with each
state in which it is required to be registered in connection with its
responsibilities to the Fund pursuant to the Distribution Agreement.
F. THE SERVICING AGENT
3.11 BROKER-DEALER. The Servicing Agent represents and warrants that it
is a member in good standing of the NASD and is registered as a broker-dealer
with the SEC under the 1934 Act and with each state in which it is required to
be registered in connection with its responsibilities pursuant to the
Application and Service Agreement.
ARTICLE IV
GENERAL DUTIES
A. THE FUND AND/OR THE ADMINISTRATOR
4.1 REGISTRATION OF FUND SHARES. The Fund and the Administrator shall
take all such actions as are necessary to permit the sale of the shares of each
Series to the Separate Account, including, but not limited to, maintaining the
Fund's registration as an investment company under the 1940 Act and registering
the shares of the Series sold to the Separate Account under the 1933 Act for so
long as required by applicable law. The Fund and the Administrator shall amend
the Registration Statement of the Fund filed with the SEC under the 1933 Act and
the 1940 Act from time to time as required in order to effect the continuous
offering of the shares of the Series. The Fund and Administrator shall register
and qualify the shares of the Fund for sale in accordance with the laws of the
various states to the extent required by applicable law.
4.2 ORGANIZATIONAL EXPENSES. The Administrator will pay, on behalf of
the Fund and subject to recovery from the Fund, all expenses of the Fund
incurred on or prior to the commencement of operations of the Fund, including,
but not limited to, legal fees, auditing fees, SEC registration fees, and
organizational fees that are determined to be "organizational costs" of the
Fund.
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4.3 STATUTORY SEED MONEY. The Administrator agrees that prior to the
effective date of the Registration Statement for the Fund, the Administrator
shall invest $100,000 in the Fund to the extent required by Section 14(a) of the
1940 Act, subject to the understanding that at the time of investment, the
Administrator has no current intention of reselling the shares so acquired, and
that all redemptions by the Administrator of any part of its investment in the
Fund will be effected in accordance with any applicable legal standards,
including restrictions on the amount that may be redeemed.
B. THE FUND AND THE INVESTMENT ADVISER
4.4 SUBCHAPTER M. The Fund and Investment Adviser shall take all
necessary steps to ensure that each Series qualifies and to maintain each
Series' qualification as a Regulated Investment Company under Subchapter M of
the Code (or any successor or similar provision), and shall notify the Insurer
immediately upon having a reasonable basis for believing that a Series has
ceased to so qualify or that it might not so qualify in the future.
4.5 DIVERSIFICATION. The Fund and Investment Adviser shall take all
necessary steps to ensure that each Series complies and maintains compliance
with the diversification provisions of Section 817(h) of the Code and the
regulations issued thereunder relating to the diversification requirements for
variable annuity contracts and any prospective amendments or other modifications
to Section 817 or regulations thereunder, and shall notify the Insurer
immediately upon having a reasonable basis for believing that any Series has
ceased to comply.
4.6 OTHER REQUIREMENTS. The Fund and Investment Adviser shall take all
steps necessary to adhere to any requirements under tax or insurance law or
otherwise that pertain to the Fund by virtue of serving as an investment vehicle
for the Variable Contracts and for which notice is provided, pursuant to Section
4.13, to the Fund, Investment Adviser or Administrator by the Insurer.
C. THE INSURER
4.7 ORGANIZATIONAL EXPENSES FOR SEPARATE ACCOUNT. The Insurer will pay
all expenses in connection with organization of the Separate Account incurred on
or prior to its commencement of operations, including, but not limited to, legal
fees, auditing fees, SEC registration fees for the Separate Account, the cost of
any necessary applications for exemptive relief from the provisions of the 1940
Act in connection with the offering of the Variable Contracts, and any other
expenses that arise in connection with the organization of the Separate Account,
and will pay the expense of filing or obtaining approval for the Variable
Contracts with the insurance commissioners or other applicable authorities in
the states indicated on Schedule B.
4.8 REGISTRATION OF SEPARATE ACCOUNT. The Insurer shall take all such
actions as are necessary under applicable federal and state law to permit the
sale of the Variable Contracts issued by the Insurer, including registering the
Separate Account as an investment company under the 1940 Act, and registering
the Variable Contracts or interests in the Separate Account
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under the Variable Contracts under the 1933 Act, and obtaining all necessary
approvals to offer the Variable Contracts from state insurance commissioners or
other insurance authorities in the states indicated on Schedule B.
4.9 ANNUITIES. The Insurer shall, to the extent consistent with
applicable law, take all reasonable steps necessary to maintain the treatment of
the Variable Contracts issued by the Insurer as annuity contracts under
applicable provisions of the Code, and shall notify the other parties to this
Agreement immediately upon having a reasonable basis for believing that such
Variable Contracts have ceased to be so treated or that they might not be so
treated in the future.
4.10 COMPLIANCE. The Insurer shall offer the Variable Contracts issued
by the Insurer in accordance with applicable provisions of the 1933 Act, the
1934 Act, the 1940 Act, the NASD Rules of Fair Practice, and state law
respecting the offering of variable annuity contracts.
D. THE DISTRIBUTOR
4.11 COMPLIANCE. Distributor shall sell and distribute the shares of
the Series of the Fund in accordance with the applicable provisions of the 1933
Act, the 1934 Act, the 1940 Act, the NASD Rules of Fair Practice, and state law.
E. ALL PARTIES
4.12 COOPERATION. Each party hereto shall cooperate with each other
party and all appropriate governmental authorities having jurisdiction
(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.
4.13 COMPLIANCE RESPONSIBILITIES. Each party hereto shall take all
reasonable steps necessary to comply with any requirements under applicable law,
including without limitation those respecting securities, insurance, banking or
variable annuity contracts, that relate to the responsibilities of such party
under this Agreement or under the Application and Service Agreement. The
Insurer, the Administrator and/or the Distributor shall notify the Investment
Adviser, Servicing Agent, Holding Company and the Fund of changes subsequent to
the date hereof in applicable insurance law, regulation or interpretations
thereof affecting the responsibilities of any such party under this Agreement or
the Application and Service Agreement. The Holding Company, Investment Adviser
and/or Servicing Agent shall notify the Insurer, the Administrator, the
Distributor and the Fund of changes subsequent to the date hereof in applicable
banking law, regulation or interpretations thereof affecting the
responsibilities of any such party under this Agreement or the Application and
Service Agreement.
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ARTICLE V
PROSPECTUSES AND PROXY STATEMENTS; VOTING
5.1 FUND DOCUMENTS. The Distributor shall provide and the Servicing
Agent shall deliver such prospectuses, statements of additional information
("SAIs"), proxy statements, and periodic reports of the Fund to the owners of
Variable Contracts as are required to be distributed to such Variable Contract
Owners under applicable federal or state law.
5.2 FUND PROSPECTUS. The Distributor shall provide the Servicing Agent
with as many copies of the current prospectus of the Fund as the Servicing Agent
may reasonably request. If requested by the Servicing Agent in lieu thereof, the
Distributor shall provide such documentation (including a final copy of the
Fund's prospectus as set in type or in camera-ready copy) and other assistance
as is reasonably necessary in order for the Servicing Agent to print together in
one document the current prospectus for the Variable Contracts issued by the
Insurer and the current prospectus for the Fund. The Fund shall bear the expense
of printing copies of its current prospectus that will be distributed to
existing Variable Contract Owners, and the Distributor shall bear the expense of
printing copies of the Fund's prospectus that are used in connection with
accepting applications for the Variable Contracts.
5.3 FUND SAI. The Fund and the Distributor shall provide (1) at the
Fund's expense, such copies of the Fund's current SAI to the Servicing Agent as
the Servicing Agent may reasonably request for purposes of delivering the SAI to
any owner of a Variable Contract who requests such SAI, (2) at the Distributor's
expense, such additional copies of the Fund's current SAI as the Servicing Agent
shall reasonably request and that shall be required in accordance with
applicable law in connection with accepting applications for the Variable
Contracts.
5.4 PROXY STATEMENTS AND PERIODIC REPORTS. The Fund and the
Administrator shall provide to the Servicing Agent, at the Fund's expense,
copies of the Fund's proxy material, periodic reports to shareholders and other
communications to shareholders in such quantity as the Servicing Agent shall
reasonably require for purposes of delivering to owners of Variable Contracts.
The Fund and the Administrator shall provide to the Servicing Agent, at the
Administrator's expense, copies of the Fund's periodic reports to shareholders
and other communications to shareholders in such quantity as the Servicing Agent
shall reasonably request for use in connection with accepting applications for
the Variable Contracts. If requested by the Servicing Agent in lieu thereof, the
Fund and Administrator shall provide such documentation (including a final copy
of the Fund's proxy materials, periodic reports to shareholders and other
communications to shareholders, as set in type or in camera-ready copy) and
other assistance as reasonably necessary in order for the Servicing Agent to
print such shareholder communications for distribution to owners of the Variable
Contracts.
5.5 SEPARATE ACCOUNT DOCUMENTS. The Insurer and the Distributor shall
provide and the Servicing Agent shall deliver such prospectuses, SAIs and
periodic reports of the Separate
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Account to the Owners of the Variable Contracts as are required to be delivered
to such Variable Contract Owners under applicable federal or state law.
5.6 SEPARATE ACCOUNT PROSPECTUS AND SAI. The Insurer and the
Distributor, at their expense, shall provide the Servicing Agent with as many
copies of the current prospectus and SAI of the Separate Account and any
periodic reports of the Separate Account as the Servicing Agent may reasonably
request. If requested by the Servicing Agent in lieu thereof, the Insurer and
the Distributor shall provide such documentation (including a final copy of any
of such documents as set in type or in camera-ready copy) and other assistance
as is reasonably necessary in order for the Servicing Agent to print together in
one document the current prospectus and/or SAI for the Separate Account and the
current prospectus and/or SAI for the Fund or the periodic reports for the
Separate Account and the Fund.
5.7 VOTING. For so long as the SEC interprets the 1940 Act to require
that owners of variable contracts funded by a registered separate account be
given "pass through" voting rights in connection with meetings of shareholders
of an underlying fund in which the separate account invests, the Insurer shall
vote shares of each Series of the Fund held in the Separate Account or a
subaccount thereof at regular and special meetings of the Fund in accordance
with instructions timely received by the Insurer (or its designated agent for
these purposes, which may be the Servicing Agent) from owners of Variable
Contracts funded by the Separate Account or subaccount thereof having a voting
interest in the Series. The Insurer shall vote shares of a Series of the Fund
held in the Separate Account or a subaccount thereof that are attributable to
the Variable Contracts as to which no timely instructions are received, as well
as shares held in the Separate Account or subaccount thereof that are not
attributable to the Variable Contracts and are owned beneficially by the Insurer
(resulting from charges against the Variable Contracts or otherwise), in the
same proportion as the votes cast by owners of the Variable Contracts funded by
the Separate Account or subaccount thereof having a voting interest in the
Series from whom instructions have been timely received. The Insurer shall vote
shares of each Series of the Fund held in its general account, if any, in the
same proportion as the votes cast with respect to shares of the Series held in
all separate accounts of the Insurer or subaccounts thereof that invest in the
Fund, in the aggregate.
ARTICLE VI
MARKETING AND PROMOTION
6.1 [Reserved]
6.2 INSURER'S, ADMINISTRATOR'S AND DISTRIBUTOR'S SALES LITERATURE. The
Insurer, the Administrator and the Distributor shall each furnish, or shall
cause to be furnished, to the Servicing Agent, each piece of sales literature or
other promotional material that it generates in which the Fund (or any Series
thereof), the Variable Contracts, the Investment Adviser, the Servicing Agent,
Holding Company or any of their affiliates is named, and no such sales
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literature or other promotional material shall be used without the approval of
the Servicing Agent or its designee.
6.3 REPRESENTATIONS ABOUT FUND. The Insurer and Distributor each agree
that each and the affiliates of each shall not give any information or make any
representations or statements on behalf of the Fund or concerning the Fund other
than the information or representations contained in the Registration Statement
or prospectus for the Fund shares, as such registration statement and prospectus
may be amended or supplemented from time to time, or in periodic reports or
proxy statements for the Fund, or in sales literature or other promotional
material approved by the Servicing Agent or its designee, except with the
permission of the Servicing Agent; provided, however, that Administrator shall
not be prohibited by this provision from providing any information necessary in
connection with its duties under the Administration Agreement.
6.4 SERVICING AGENT'S, INVESTMENT ADVISER'S AND HOLDING COMPANY'S SALES
LITERATURE. The Servicing Agent, the Investment Adviser and the Holding Company
shall each furnish, or shall cause to be furnished, to the Insurer or its
designee and to the Administrator or its designee, each piece of sales
literature or other promotional material that it generates in which the Insurer,
its Separate Account, the Administrator, or either of the Variable Contracts is
named, and no such material shall be used without the approval of the Insurer or
its designee and the Administrator or its designee.
6.5 REPRESENTATIONS ABOUT INSURER. The Fund and the Servicing Agent
each agree that each and the affiliates of each shall not give any information
or make any representations on behalf of the Insurer or concerning the Insurer,
the Separate Account, or the Variable Contracts, other than the information or
representations contained in a registration statement or prospectus for such
Separate Account, as such registration statement and prospectus may be amended
or supplemented from time to time, or in periodic reports for the Separate
Account, or in sales literature or other promotional material approved by the
Insurer or its designee, except with the permission of the Insurer; provided,
however, that Investment Adviser shall not be prohibited by this provision from
providing any information necessary in connection with its duties under the
Investment Advisory Agreements.
6.6 FUND SEC FILINGS. The Fund and the Administrator will provide to
the Insurer and Investment Adviser at least one complete copy of all
prospectuses, Statements of Additional Information, reports, proxy statements
and other voting solicitation materials, and all amendments and supplements to
any of the above, that relate to the Fund or its shares, promptly after the
filing of such document with the SEC or other regulatory authorities.
6.7 SEPARATE ACCOUNT SEC FILINGS. The Insurer will provide to the
Administrator and Investment Adviser at least one complete copy of all
prospectuses, Statements of Additional Information, reports, solicitations for
voting instructions, and all amendments or supplements to any of the above, that
relate to the Variable Contracts issued by the Company or the Separate Account
promptly after the filing of such document with the SEC or other regulatory
authority.
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6.8 SALES LITERATURE. For purposes of this Article VI, the phrase
"sales literature or other promotional material" includes, but is not limited
to, advertisements (such as material published, or designed for use in, a
newspaper, magazine, or other periodical, radio, television, telephone or tape
recording, videotape display, signs or billboards, motion pictures,
computerized media, or other public media), sales literature (i.e., any written
communication distributed or made generally available to customers or the
public, including brochures, circulars, research reports, market letters, 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.
6.9 CONFIDENTIALITY. Each of the parties hereto shall keep information
about the other parties' business, finances, operations, and customers
confidential; provided, however, that this Section shall not prevent Servicing
Agent and its affiliates from marketing products and services other than the
Variable Contracts to the owners of the Variable Contracts.
ARTICLE VII
INDEMNIFICATION
7.1 INDEMNIFICATION BY THE INSURER. Except as provided in Sections 7.6
or 7.7 of this Agreement, the Insurer agrees to indemnify and hold harmless
the Fund, the Investment Adviser, and the Servicing Agent, each of their
directors, trustees, and officers, and each person, if any, who controls the
Investment Adviser and the Servicing Agent within the meaning of Section 15 of
the 1933 Act (collectively, the "Indemnified Parties" for purposes of this
Section 7.1) against any and all losses, claims, damages, liabilities
(including amounts paid in settlement with the written consent of the Insurer)
or litigation expenses (including legal and other expenses), to which the
Indemnified Parties may become subject under any statute, regulation, at common
law or otherwise, insofar as such losses, claims, damages, liabilities or
litigation expenses are related to the sale or acquisition of the Fund's shares
or the Variable Contracts or to the acceptance of applications for the Variable
Contracts or to the operation of the Separate Account or the Fund, and, in any
such case:
(i) arise out of or are based upon any untrue statement or
alleged untrue statement material fact contained in the
registration statement or prospectus for the Separate
Account or sales literature for the Variable Contracts or
the Fund generated by the Insurer (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 Insurer,
directly or indirectly, by or on behalf
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of any Indemnified Party for use in the registration
statement or prospectus for the Separate Account or sales
literature (or any amendment or supplement thereto) or
otherwise for use in connection with the sale of such
Variable Contracts or Fund shares or the acceptance of
applications for the Variable Contracts;
(ii) arise out of or as a result of any statement or
representation (other than statements or representations
contained in the registration statement or prospectus of the
Fund or in sales literature that were not supplied by the
Insurer) or wrongful conduct of the Insurer or any of its
affiliates, employees or agents (but not including agents
that are Indemnified Parties or employees or agents of
Indemnified Parties) with respect to the sale or
distribution of the Variable Contracts or Fund shares or the
acceptance of applications for the Variable Contracts;
(iii) arise out of or are based upon any untrue statement or
alleged untrue statement of a material fact contained in a
registration statement or prospectus of the Fund or any
amendment thereof or supplement thereto or in sales
literature, 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 statement or omission was made in reliance upon
information furnished to an Indemnified Party by or on
behalf of the Insurer; or
(iv) arise as a result of a failure by the Insurer to meet its
responsibilities under Section 4.9 of this Agreement.
7.2 INDEMNIFICATION BY THE ADMINISTRATOR. Except as provided in Section
and 7.7 of this Agreement, the Administrator and Insurer agree, jointly and
severally, to indemnify and hold harmless the Fund, the Investment Adviser, the
Servicing Agent, and Holding Company, each of their directors, trustees, and
officers, and each person, if any, who controls the Fund, the Investment
Adviser, the Servicing Agent or Holding Company within the meaning of Section 15
of the 1933 Act (collectively, the "Indemnified Parties" for purposes of this
Section 7.2) against any and all losses, claims, damages, liabilities (including
amounts paid in settlement with the written consent of the Insurer and
Administrator) or litigation expenses (including legal and other expenses), to
which the Indemnified Parties may become subject under any statute, regulation,
at common law or otherwise, insofar as such losses, claims, damages, liabilities
or litigation expenses are related to the sale or acquisition of the Fund's
shares or the Variable Contracts or to the operation of the Fund, and, in any
such case:
(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 for the Fund or
sales literature for the Variable Contracts or the Fund
generated by the Distributor (or any amendment or supplement
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19
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
Administrator directly or indirectly, by or on behalf of any
Indemnified Party for use in the registration statement or
prospectus for the Fund or sales literature (or any
amendment or supplement thereto) or otherwise for use in
connection with the sale of such Variable Contracts or Fund
shares or the acceptance of applications for the Variable
Contracts:
(ii) arise out of or are based upon any untrue statement or
alleged untrue statement of a material fact contained in a
registration statement or prospectus of the Fund or any
amendment thereof or supplement thereto or in sales
literature, 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 statement or omission was made in reliance upon
information furnished to an Indemnified Party by or on
behalf of the Administrator; or
(iii) arise as a result of a failure by the Administrator to meet
its responsibilities under Section 4.1 through 4.3 and 4.6
of this Agreement.
7.3 INDEMNIFICATION BY THE INVESTMENT ADVISER. Except as provided in
Sections 7.6 or 7.7 of this Agreement, the Investment Adviser and Holding
Company agree, jointly and severally, to indemnify and hold harmless the
Insurer, the Administrator, Distributor, and the Fund, and each of their
directors, trustees, and officers, and each person, if any, who controls the
Insurer, Administrator, or Distributor within the meaning of Section 15 of the
1933 Act (collectively, the "Indemnified Parties" for purposes of this Section
7.3) against any and all losses, claims, damages, liabilities (including
amounts paid in settlement with the written consent of the Investment Adviser
and Holding Company) or litigation expenses (including legal and other
expenses) to which the Indemnified Parties may become subject under any
statute, regulation, at common law or otherwise, insofar as such losses,
claims, damages, liabilities or litigation expenses are related to the sale or
acquisition of the Fund's shares or the Variable Contracts or to the acceptance
of applications for the Variable Contracts or to the operation of the Separate
Account or the Fund, and, in any such case:
(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 for the Fund or
sales literature for the Variable Contracts or the Fund
generated by the Investment Adviser, Holding Company or an
affiliate thereof (or any amendment or supplement to any of
the
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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 Investment
Adviser or the Fund or the designee of either by or on
behalf of the Insurer or Administrator for use in the
registration statement or prospectus for the Fund or in
sales literature (or any amendment or supplement thereto) or
otherwise for use in connection with the sale of the
Variable Contracts or Fund shares or the acceptance of
applications for the Variable Contracts;
(ii) arise out of any untrue statement or alleged untrue
statement of a material fact contained in a registration
statement or prospectus for the Separate Account or any
amendment thereof or supplement thereto, or in sales
literature, 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 statement or omission was made in reliance upon
information furnished to the Insurer or Administrator by or
on behalf of the Investment Adviser; or
(iii) arise as a result of a failure by the Fund and/or the
Investment Adviser to meet the responsibilities under
Section 4.4, 4.5, or 4.6 of this Agreement.
7.4 INDEMNIFICATION BY THE SERVICING AGENT. Except as provided in
Sections 7.6 or 7.7 of this Agreement, the Servicing Agent and Holding Company
agree, jointly and severally, to indemnify and hold harmless the Insurer, the
Administrator, and the Fund, and each of their directors, trustees, and
officers and each person, if any, who controls the Insurer or Administrator
within the meaning of Section 15 of the 1933 Act (collectively, the
"Indemnified Parties" for purposes of this Section 7.4) against any and all
losses, claims, damages, liabilities (including amounts paid in settlement with
the written consent of the Servicing Agent and Holding Company) or litigation
expenses (including legal and other expenses) to which the Indemnified Parties
may become subject under any statute, at common law or otherwise, insofar as
such losses, claims, damages, liabilities or litigation expenses are related to
the sale or acquisition of the Fund's shares or the Variable Contracts issued
by the Insurer or the acceptance of applications for the Variable Contracts,
and in any such case:
(i) arise out of or are based upon any untrue statement or
alleged untrue statement of a material fact contained in the
sales literature for the Variable Contracts or the Fund
generated by the Servicing Agent, or arise out of or are
based upon the omission or alleged omission to state in such
sales literature a material fact required to be stated
therein or necessary to make the statements therein not
misleading, provided that this
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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 Servicing Agent
or its designee by or on behalf of the Insurer or
Administrator (which, for these purposes, shall be deemed to
include information furnished directly by the Insurer or
Administrator or persons under the sole control of the
Insurer or Administrator) for use in the sales literature or
otherwise for use in connection with the sale of the
Variable Contracts or Fund shares or the acceptance of
applications for the Variable Contracts;
(ii) arise out of or as a result of any statement or
representation (other than statements or representations
contained in the registration statement or prospectus for
the Separate Account or the Fund not supplied by the
Servicing Agent or the Investment Adviser), any unauthorized
use of any sales materials related to the Variable
Contracts, or wrongful conduct of the Servicing Agent, or
the affiliates, employees, or agents of the Servicing Agent
with respect to the sale or distribution of the Variable
Contracts or Fund shares or the acceptance of applications
for the Variable Contracts, including but not limited to any
verbal or written misrepresentations, unlawful sales
practices, and failure to deliver the Separate Account or
Fund prospectus; or
(iii) arise as a result of a failure by the Servicing Agent to
meet its responsibilities under Section 2.3 of the
Application and Service Agreement.
7.5 INDEMNIFICATION BY DISTRIBUTOR. Except as provided in Section 7.6
and 7.7 of this Agreement, Distributor and the Insurer agree, jointly and
severally, to indemnify and hold harmless the Fund, the Investment Adviser, the
Servicing Agent and Holding Company, each of their directors, trustees, and
officers, and each person, if any, who controls the Fund, the Investment
Adviser, the Servicing Agent or Holding Company within the meaning of Section
15 of the 1933 Act (collectively, the "Indemnified Parties" for purposes of
this Section 7.5) against any and all losses, claims, damages, liabilities
(including amounts paid in settlement with the written consent of Insurer and
Distributor) or litigation expenses (including legal and other expenses), to
which the Indemnified Parties may become subject under any statute, regulation,
at common law or otherwise, insofar as such losses, claims, damages,
liabilities or litigation expenses are related to the sale or acquisition of
the Fund's shares or the Variable Contracts or to the operation of the Fund,
and, in any such case:
(i) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in
sales literature for the Fund generated by Distributor, or
arise out of or are based upon the omission or the alleged
omission to state therein a material fact required to be
stated
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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 Distributor directly or indirectly, by or on behalf of
any Indemnified Party (which for these purposes shall be
deemed to include information furnished directly by any
Indemnified Party and persons under the sole control of an
Indemnified Party) for use in the sales literature or
otherwise for use in connection with the sale of such Fund
shares; or
(ii) arise out of or as a result of any unauthorized use of any
sales materials related to the Fund, or wrongful conduct of
Distributor, or the affiliates, employees, or agents of
Distributor with respect to the sale or distribution of the
Fund shares, including but not limited to any verbal or
written misrepresentations, and unlawful sales practices.
7.6 INDEMNIFICATION NOT APPLICABLE. No person required to provide
indemnification under the terms of Sections 7.1, 7.2, 7.3, 7.4 or 7.5 of
this Agreement shall be liable under any such section with respect to any
losses, claims, damages, liabilities or litigation expenses to which an
Indemnified Party under any such section would otherwise be subject by reason
of willful misfeasance or bad faith on the part of such Indemnified Party, or
gross negligence in the performance of such Indemnified Party's duties to the
Fund or the Separate Account, as the case may be, or by reason of such
Indemnified Party's reckless disregard of obligations or duties under this
Agreement or to the Fund or the Separate Account, as the case may be.
7.7 NOTIFICATION. Any person required to provide indemnification under
the terms of Sections 7.1, 7.2, or 7.5 of this Agreement ("Indemnifying
Party") shall not be liable under the indemnification provisions of Section
7.1, 7.2, 7.5 with respect to any claim made against an Indemnified Party
under any such section unless such Indemnified Party shall have notified the
Indemnifying Party 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 Party shall have
received notice of such service on any designated agent), but failure to notify
the Indemnifying Party of any such claim shall not relieve the Indemnifying
Party from any liability which it may have to the Indemnified Party against
whom such action is brought otherwise than on account of the above-designated
indemnification provisions. In case any such action is brought against an
Indemnified Party, the Indemnifying Party shall be entitled to participate, at
its own expense, in the defense of such action, and counsel selected by any
Indemnified Party must be satisfactory to the Indemnifying Party.
7.8 NOTICE. Each party to this Agreement shall promptly notify the
other parties to the Agreement of the commencement of any litigation or
proceedings against it or any of its officers or directors or affiliated persons
in connection with the issuance or sale of the Variable Contracts or the Fund's
shares, or with the acceptance of applications for the Variable Contracts, or
with the operation of the Variable Contracts, the Separate Account, or the Fund.
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ARTICLE VIII
EXCLUSIVITY
8.1 THE FUND. Other than shares sold in connection with seeding the
Fund and the purchase of shares of the Series by the First of America Bank
Corporation Employees Retirement Plan, the Fund shall offer and sell the shares
of the Series exclusively to the Separate Account and other separate accounts of
the Insurer for the term of this Agreement, except that the Fund with the
written consent of the Insurer and Investment Adviser, may offer and sell the
shares of the Series to any insurance company or separate account in accordance
with Section of this Agreement. Such written consent shall not be unreasonably
withheld.
8.2 THE SEPARATE ACCOUNT. The Separate Account shall invest
exclusively in the Series of the Fund for the term of this Agreement, unless
otherwise agreed to in writing by the Insurer, the Servicing Agent, and the
Investment Adviser.
ARTICLE IX
APPLICABLE LAW
9.1 KANSAS LAW. This Agreement shall be construed and the
provisions hereof interpreted under and in accordance with the laws of the State
of Kansas.
9.2 SECURITIES ACTS. This Agreement shall be subject to the provisions
of the 1933, 1934, and 1940 Acts, and the rules and regulations and rulings
thereunder, and the terms of this Agreement shall be interpreted and construed
in accordance therewith. The word "affiliate" or "affiliated" shall have the
meaning as defined in Section 2(a)(3) of the 1940 Act.
ARTICLE X
REINSURANCE OF VARIABLE CONTRACTS
10.1 CHANGE IN LAW. In the event of a change in applicable law such
that the Servicing Agent, Holding Company or any of their affiliates are
permitted to engage in insurance underwriting and other insurance-related
activities, the Servicing Agent, or such affiliate ("transferee") shall have the
right subject to conformance with applicable law and to the reasonable
determination by the Insurer that the transferee is suitable and creditworthy,
to require the Insurer to transfer all or part of the assets of the Separate
Account invested in the Fund to the transferee, provided that such transferee is
duly licensed as a life insurance company under the laws of each state in which
owners of the Variable Contracts reside and is authorized to issue variable
annuity contracts in all such states, and to cause the Variable Contracts to be
reinsured by such transferee and further provided that, in the event Holding
Company elects to require the Insurer to transfer only part of the assets of the
Separate Account invested in the Fund to the transferee, the amount of such
assets remaining after the transfer is at least
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$50 million. The terms of reinsurance shall be negotiated in good faith by the
Servicing Agent, Holding Company or other transferee and the Insurer and shall
provide for the Insurer to receive from the transferee the fair market value of
the Variable Contracts to be reinsured. The transferee shall bear the costs
associated with the transfer of the Separate Account assets, including but not
limited to obtaining any approvals required from the SEC, state insurance
departments or Contract Owners.
10.2 CHANGE IN RATING OF INSURER. In the event that the rating of the
claims-paying ability of the Insurer by Standard & Poors Corporation ("S&P")
falls below BBB, the Insurer shall, at the option of the Holding Company, cause
the Variable Contracts to be reinsured by a life insurance company that is
acceptable to Holding Company, the claims-paying ability of which is rated BBB
or better by S&P, that is duly licensed as a life insurance company under the
laws of each state in which owners of the Variable Contracts reside, and is
authorized to issue variable contracts in all such states. The terms of
reinsurance shall be negotiated in good faith by the Insurer, in consultation
with Holding Company, and the reinsuring life insurance company, and the Insurer
shall be free to seek from the reinsuring life insurance company the fair market
value of the Variable Contracts to be reinsured.
ARTICLE XI
SUBSTITUTION AND TERMINATION
11.1 SUBSTITUTION. All parties agree that the Variable Contracts will
provide that the Insurer reserves the right to substitute the shares of another
investment company or series thereof for the shares of the Fund or a Series
thereof if, shares of any or all of the Series of the Fund are no longer
available for investment, or if, in the judgment of the Insurer's management,
further investment in the shares of the Fund or any or all Series of the Fund
would be inappropriate in view of the purposes of the Variable Contracts.
11.2 GROUNDS FOR TERMINATION. This Agreement shall terminate:
(a) at the option of the Fund, the Investment Adviser, the
Servicing Agent, the Administrator, Distributor, or the Insurer, and upon 90
days advance written notice, at any time after three years from the commencement
of operations of the Separate Account; or
(b) at the option of the Fund, the Investment Adviser, or the
Servicing Agent, upon institution of formal proceedings against the Insurer, the
Administrator, or Distributor by the NASD, the SEC, or any state securities or
insurance department or any other regulatory body that relate to or are likely
to affect the Insurer's, the Administrator's, or Distributor's duties under this
Agreement, the sale or acceptance of applications for the Variable Contracts,
the operation of the Separate Account, or the purchase of the Fund's shares; or
(c) at the option of the Insurer, Administrator, or
Distributor, upon institution of formal proceedings against the Fund, the
Investment Adviser, the Servicing Agent, or any
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affiliate thereof by the NASD, the SEC, banking authorities, or any state
securities or insurance department or any other regulatory body that relate to
or are likely to affect the duties of any of such persons under this Agreement,
the sale or acceptance of applications for the Variable Contracts, the operation
of the Fund, or the purchase of the Fund's shares; or
(d) at the option of the Insurer, Administrator, or
Distributor, upon the commencement of bankruptcy, liquidation or similar
proceedings respecting the Investment Adviser, or Servicing Agent; and at the
option of the Investment Adviser, Fund, or Servicing Agent, upon the
commencement of bankruptcy, liquidation or similar proceedings respecting the
Insurer, the Administrator, or Distributor; or
(e) upon the substitution by the Insurer of the shares of
another investment company or series thereof for the corresponding shares of the
Fund or a Series thereof in accordance with the terms of the Variable Contracts;
or
(f) at the option of any party in the event of a material
breach in performing the duties specified under this Agreement by any other
unaffiliated party or in the event of a material breach of any representation or
warranty made in this Agreement by any other unaffiliated party; or
(g) at the option of any party in the event that such party
reasonably determines that performance of the duties under this Agreement by any
other unaffiliated party to this Agreement would likely result in a violation of
applicable law, and for these purposes, such a determination shall be deemed
reasonable if supported by an opinion of qualified outside counsel; or
(h) at the option of the Fund, the Investment Adviser, or the
Servicing Agent in the event that any such party reasonably determines that the
Variable Contracts will not be treated as annuity contracts under applicable
provisions of the Code, and for these purposes, such a determination shall be
deemed reasonable if supported by an opinion of qualified outside counsel; or
(i) at the option of any party upon a merger of the Fund
or any of its Series, or the sale of substantially all of the assets of the Fund
or a Series thereof, or a change in the investment adviser to the Fund: or
(j) upon termination of the Application and Service
Agreement between Distributor and the Servicing Agent; or
(k) upon the mutual agreement of all parties to this
Agreement.
11.3 NOTICE. Each party to this Agreement shall promptly notify the
other parties to the Agreement of the institution against such party of any such
formal proceedings as described in Sections 11.2(b), 11.2(c) or 11.2(d) or
hereof.
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11.4 EFFECT OF TERMINATION. Notwithstanding any termination of this
Agreement, the Fund, the Administrator, and Distributor shall at the option of
the Insurer, continue to make available additional shares of the Fund pursuant
to the terms and conditions of this Agreement, for all Variable Contracts in
effect on the effective date of termination of this Agreement (hereinafter
referred to as "Existing Contracts"). Specifically, without limitation, based
upon instructions from the owners of the Existing Contracts, the Separate
Account shall be permitted to reallocate investments in the series of the Fund
and redeem investments in the series, and shall be permitted to invest in the
series in the event that owners of the Existing Contracts make additional
purchase payments under the Existing Contracts. If this Agreement terminates,
the parties agree that Article VII, and Sections 4.12, 13.1, 13.2, 13.3 and
13.5 to the extent that all or a portion of the assets of the
Separate Account continue to be invested in the Fund or any Series of the Fund,
Article II and Sections 4.1, 4.4, 4.5, 4.6, 4.8, 4.9, 4.10, and 5.7 will remain
in effect after termination.
ARTICLE XII
NOTICES
Any notice shall be sufficiently given when sent by registered or
certified mail to the other party at the address of such party set forth below
or at such other address as such party may from time to time specify in writing
to the other party.
IF TO THE FUND: The Parkstone Advantage Fund
000 X.X. Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxx 00000
Attention: Xx. Xxx X. Xxx
Vice President and Assistant
Secretary
IF TO THE ADMINISTRATOR: Security Management Company
000 X.X. Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxx 00000
Attention: Xx. Xxxxx X. Xxxxxxx
Senior Vice President
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IF TO THE DISTRIBUTOR: Security Distributors, Inc.
000 X.X. Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxx 00000
Attention: Xx. Xxx X. Xxx
Secretary
IF TO THE INVESTMENT ADVISER: First of America Investment Corporation
000 Xxxxx Xxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxxxxx X. Xxxx
President and Chief
Executive Officer
IF TO THE SERVICING AGENT: First of America Brokerage Service, Inc.
000 Xxxxx Xxxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxxx X. Xxxxxxx
President and Chief
Executive Officer
IF TO HOLDING COMPANY: First of America Bank Corporation
000 Xxxxx Xxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxx X. Xxxx
Executive Vice President
IF TO THE INSURER: Security Benefit Life Insurance Company
000 X.X. Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxx 00000
Attention: Xx. Xxx X. Xxx
Assistant Counsel
ARTICLE XIII
MISCELLANEOUS
13.1 TRUSTEES AND SHAREHOLDERS NOT LIABLE. A copy of the Fund's
Declaration of Trust is on file with the Secretary of the Commonwealth of
Massachusetts and notice is hereby given that such Declaration of Trust has been
executed on behalf of the Fund by a Trustee of the Fund in his or her capacity
as Trustee and not individually. The obligations of this
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Agreement shall only be binding upon the assets and property of the Fund and
shall not be binding upon any Trustee, officer or shareholder of the Fund
individually.
13.2 RIGHTS OF TRUSTEES AND SHAREHOLDERS. Nothing in this Agreement
shall impede the Fund's Trustees or shareholders of the shares of the Fund's
Series from exercising any of the rights provided to such Trustees or
shareholders in the Fund's Declaration of Trust, as amended, a copy of which
will be provided to the Insurer upon request.
13.3 "PARKSTONE" NAME. It is understood that the name "Parkstone" or
any derivative thereof or logo associated with that name is a registered
trademark and the valuable property of The Parkstone Group of Funds, a
Massachusetts business trust, and an open-end management investment company
registered under the 1940 Act.
13.4 PROTECTION OF NAME. It is understood that the name "Security
Benefit," "SBL" or any derivative thereof or logo associated with that name is
the valuable property of the Insurer and its affiliates, and that the Insurer
and other parties to this Agreement have the right to use such name (or
derivative or logo) only so long as this Agreement is in effect. Upon
termination of this Agreement all parties other than the Insurer shall forthwith
cease to use such name (or derivative or logo).
13.5 CONSULTATION. In the event Insurer or a subsidiary of Insurer has,
as a result of actions not within the control of Insurer or its subsidiaries or
Holding Company or its subsidiaries, failed to be reimbursed for amounts
intended by the Insurer and the Holding Company or any of its subsidiaries to be
reimbursable and expended by it in connection with a business relationship
involving Holding Company or its subsidiaries and other than those to which this
Agreement relates, then Holding Company or a subsidiary shall pay to the Insurer
a consultation fee in advance in an amount at least equal to unreimbursed amount
expended, and the Insurer shall provide to the Holding Company or its
subsidiaries for a period of one-year consultation service with respect to
insurance and annuity marketing, mutual fund management, administration,
shareholder servicing, transfer agency, and fund accounting, or any combination
of the foregoing, as Insurer and Holding Company shall agree. Such consultation
service will relate only to matters within the expertise and knowledge of
Insurer or its subsidiaries and will not require more than 500 hours of employee
time for the one-year period.
13.6 CAPTIONS. 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.
13.7 EXECUTION IN COUNTERPART. This Agreement may be executed
simultaneously in two or more counterparts, each of which taken together shall
constitute one and the same instrument.
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13.8 INVALIDITY OF A PROVISION. 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.
13.9 ASSIGNMENT. This Agreement may not be assigned by any party to the
Agreement except with the written consent of the other parties to the Agreement,
which may not be unreasonably withheld. For purposes of this Section,
"assignment" shall have the meaning as defined in Section 2(a)(4) of the 1940
Act.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
ATTEST: SECURITY BENEFIT LIFE INSURANCE COMPANY
/s/ Xxx X. Xxx By: /s/ Xxxx X. Xxxxxxxxxx
---------------------------------- ---------------------------------
Xxxx X. Xxxxxxxxxx
Its: Executive Vice President
THE PARKSTONE ADVANTAGE FUND
/s/ Xxx X. Xxx By: /s/ Xxxxx X. Xxxxxxx
--------------------------------- --------------------------------
Xxxxx X. Xxxxxxx
Its: President
FIRST OF AMERICA INVESTMENT CORPORATION
/s/ R. Xxxxxxx Xxxxxxx By: /s/ Xxxxxxx X. Xxxx
--------------------------------- ------------------------------------
Xxxxxxx X. Xxxx
Its: President and Chief Executive Officer
FIRST OF AMERICA BROKERAGE SERVICE, INC.
/s/ R. Xxxxxxx Xxxxxxx By: /s/ Xxxxx X. Xxxxxxx
--------------------------------- ------------------------------------
Xxxxx X. Xxxxxxx
Its: President and Chief Executive Officer
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FIRST OF AMERICA BANK CORPORATION
/s/ R. Xxxxxxx Xxxxxxx By: /s/ Xxxx X. Xxxx
------------------------------ ------------------------------------
Xxxx X. Xxxx
Its: Executive Vice President
SECURITY MANAGEMENT COMPANY
/s/ Xxx X. Xxx By: /s/ Xxxxx X. Xxxxxxx
------------------------------- ----------------------------------
Xxxxx X. Xxxxxxx
Its: Senior Vice President - Chief
Financial Officer and Treasurer
SECURITY DISTRIBUTORS, INC.
/s/ Xxxxx X. Xxxxxxx By: /s/ Xxx X. Xxx
--------------------------------- ------------------------------------
Xxx X. Xxx
Its: Secretary
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