Exhibit 23(h)(5)
PARTICIPATION AGREEMENT
By and Among
THE KELMOORE STRATEGY(TM) VARIABLE TRUST
And
AGL LIFE ASSURANCE COMPANY
And
KELMOORE INVESTMENT COMPANY, INC.
THIS AGREEMENT, made and entered into this 6th day of November, 2001,
by and among AGL Life Assurance Company (the "Company"), on its own behalf and
on behalf of each separate account of the Company named in Exhibit A to this
Agreement, as may be amended from time to time (each separate account, a
"Separate Account"), and The Kelmoore Strategy(TM) Variable Trust, an open-end
diversified management investment company organized under the laws of the State
of Delaware (the "Trust"), and Kelmoore Investment Company, Inc. (the
"Underwriter").
WHEREAS, the Trust engages in business as an open-end diversified,
management investment company and was established for the purpose of serving as
the investment vehicle for separate accounts established for variable life
insurance contracts and variable annuity contracts to be offered by insurance
companies which have entered into participation agreements substantially similar
to this Agreement ("Participating Insurance Companies"); and
WHEREAS, beneficial interests in the Trust currently are divided into
two series of shares each representing an interest in a managed portfolio of
securities and other assets (the "Current Funds");
WHEREAS, beneficial interests in the Trust may be divided further into
one or more additional series of shares, each representing an interest in a
particular managed portfolio of securities and other assets (each, a "Future
Fund") (each Future Fund and the Current Funds are referred to herein
individually and collectively as a "Fund"); and
WHEREAS, an order from the U.S. Securities and Exchange Commission (the
"SEC" or "Commission"), dated May 16, 2000 (File No. 812-11886), grants
Participating Insurance Companies and variable annuity separate accounts and
variable life insurance separate accounts relief from the provisions of Sections
9(a), 13(a), 15(a) and 15(b) of the Investment Company Act of 1940, as amended
(the "1940 Act") and Rules 6e-2(b)(15) and 6e-3(T)(b)(15) thereunder, to the
extent necessary to permit shares of the Trust to be sold to and held by
variable annuity separate accounts and variable life insurance separate accounts
of both affiliated and unaffiliated Participating Insurance Companies and
qualified pension and retirement plans ("Mixed and Shared Funding Order"), and
WHEREAS, the Trust is registered as an open-end management investment
company under the 1940 Act and its shares are registered under the Securities
Act of 1933, as amended (the "1933 Act"); and
WHEREAS, the Company has registered or will register certain variable
annuity and variable life insurance contracts under the 1933 Act and named in
Exhibit A to this Agreement, as it may be amended from time to time, unless such
contracts are exempt from registration thereunder (the "Contracts"); and
WHEREAS, the Separate Accounts are duly organized, validly existing
segregated asset accounts, established by resolution of the Board of Directors
of the Company under the insurance laws of the Commonwealth of Pennsylvania, to
set aside and invest assets attributable to the Contracts; and
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WHEREAS, the Company has registered the Separate Accounts as unit
investment trusts under the 1940 Act, unless exempt from registration
thereunder; and
WHEREAS, the Underwriter is registered as a broker-dealer with the SEC
under the Securities Exchange Act of 1934, as amended (hereinafter the "1934
Act"), and is a member in good standing of the National Association of
Securities Dealers, Inc. (hereinafter "NASD");
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares in the Funds named in
Exhibit B on behalf of the Separate Accounts to fund the Contracts, and the
Underwriter is authorized to sell such shares to unit investment trusts such as
the Separate Accounts at net asset value;
NOW, THEREFORE, in consideration of their mutual promises, the Company,
the Trust, and the Underwriter agree as follows:
ARTICLE I Sale of Trust Shares
1.1. The Underwriter agrees to sell to the Company those shares of the Trust
which the Company orders on behalf of the Separate Accounts, executing
such orders on a daily basis at the net asset value next computed after
receipt and acceptance by the Trust or its designee of the order for
the shares of the Trust. For purposes of this Section 1.1, the Company
shall be the designee of the Trust for receipt of such orders from each
Separate Account and receipt by such designee shall constitute receipt
by the Trust; provided that the Trust receives notice of such order by
9:30 a.m. Eastern 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 relevant Fund calculates its net asset
value.
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1.2. The Trust agrees to make its shares available indefinitely for purchase
at the applicable net asset value per share by Participating Insurance
Companies and their separate accounts on those days on which the Trust
calculates its net asset value pursuant to rules of the SEC; provided,
however, that the Board of Trustees of the Trust (hereinafter the
"Trustees") may refuse to sell shares of any Fund to any person, or
suspend or terminate the offering of shares of any Fund, 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 their fiduciary duties under federal and any applicable state
laws, necessary in the best interests of the shareholders of any Fund.
1.3. The Trust and the Underwriter agree that shares of the Trust will be
sold only to Participating Insurance Companies and their separate
accounts, and to qualified pension and retirement plans. No shares of
the Trust will be sold to the general public.
1.4. The Trust and the Underwriter will not sell Trust shares to any
insurance company or separate account unless an agreement containing
provisions substantially the same as Articles I, III, V, VII, and
Section 2.8 of Article II of this Agreement are in effect to govern
such sales.
1.5. The Trust will not accept a purchase order from a qualified pension or
retirement plan if such purchase would make the plan shareholder an
owner of 10 percent or more of the assets of a Fund unless such plan
executes an agreement with the Trust governing participation in such
Fund that includes the conditions set forth herein to the extent
applicable. A qualified pension or retirement plan will execute an
application containing an acknowledgment of this condition at the time
of its initial purchase of shares of any Fund.
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1.6. The Trust agrees to redeem for cash, upon the Company's request, any
full or fractional shares of the Trust held by the Company, executing
such requests on a daily basis at the net asset value next computed
after receipt and acceptance by the Trust or its designee of the
request for redemption. For purposes of this Section 1.6, the Company
shall be the designee of the Trust for receipt of requests for
redemption from each Separate Account and receipt by such designee
shall constitute receipt by the Trust; provided the Trust receives
notice of request for redemption by 9:30 a.m. Eastern Time on the next
following Business Day. Payment shall be in federal funds transmitted
by wire to the Company's account as designated by the Company in
writing from time to time.
1.7. Each purchase, redemption, and exchange order placed by the Company
shall be placed separately for each Fund and shall not be netted with
respect to any Fund. However, with respect to payment of the purchase
price by the Company and of redemption proceeds by the Trust, the
Company and the Trust shall net purchase and redemption orders with
respect to each Fund and shall transmit one net payment for all Funds
in accordance with Section 1.8.
1.8. The Company agrees that purchases and redemptions of Fund shares
offered by the then current prospectus of the Fund shall be made in
accordance with the provisions of such prospectus. The Company agrees
that all net amounts available under the variable contracts with the
form number(s) which are listed on Schedule A attached hereto and
incorporated herein by this reference, as such Schedule A may be
amended from time to time hereafter by mutual written agreement of all
the parties hereto (the "Contracts") shall be invested in the Funds, in
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such other Funds managed by Kelmoore Investment Company, Inc. as may be
mutually agreed to in writing by the parties hereto, or in the
Company's general account, provided that such amounts may also be
invested in an investment company other than the Trust if (a) such
other investment company, or series thereof, has investment objectives
or policies that are substantially different from the investment
objectives and policies of all the Funds of the Trust which are
actually used by the Company to fund the Contracts; or (b) the Company
gives the Fund and the Underwriter 45 days written notice of its
intention to make such other investment company available as a funding
vehicle for the Contacts; or (c) such other investment company was
available as a funding vehicle for the Contracts prior to the date of
this Agreement and the Company so informs the Fund and Underwriter
prior to their signing this Agreement (a list of such funds appearing
on Schedule C to this Agreement); or (d) the Fund or Underwriter
consents to the use of such other investment company.
1.9. In the event of net purchase, the Company shall pay for shares by 2:00
p.m. Eastern Time on the next Business Day after an order to purchase
the Shares is deemed to be received in accordance with the provisions
of Section 1.1 hereof. In the event of net redemptions, the Trust shall
pay the redemption proceeds in accordance with the terms of the
then-current prospectus for the Trust. All such payments shall be in
federal funds transmitted by wire. For purposes of Section 2.4 and
Section 2.11, upon receipt by the Trust 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.
1.10. Issuance and transfer of the Trust's shares will be by book entry only.
Stock certificates will not be issued to the Company or any Separate
Account. Purchase and redemption orders for Trust shares will be
recorded in an appropriate title for each Separate Account or the
appropriate subaccount of each Separate Account.
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1.11. The Trust shall furnish notice as soon as reasonably practicable to the
Company of any income, dividends, or capital gain distributions payable
on the Trust's shares. The Company hereby elects to receive all such
dividends and distributions as are payable on the Fund shares in the
form of additional shares of that Fund. The Company reserves the right
to revoke this election and to receive all such dividends and
distributions in cash. The Trust shall notify the Company of the number
of shares so issued as payment of such dividends and distributions.
1.12. The Trust shall make the net asset value per share for each Fund
available to the Company on a daily basis as soon as reasonably
practical after the net asset value per share is calculated and shall
use its best efforts to make such net asset value per share available
by 4:00 p.m. Pacific Time, each business day.
ARTICLE II Representations and Warranties
2.1. The Company represents and warrants that the Contracts are or will be
registered under the 1933 Act, unless exempt therefrom, and that the
Contracts will be issued and sold in compliance with all applicable
federal and state laws and that the sale of the Contracts shall comply
in all material respects with state insurance suitability requirements.
The Company further represents and warrants that: (i) it is an
insurance company duly organized and in good standing under applicable
law; (ii) it has legally and validly established each Separate Account
as a segregated asset account under applicable state law and has
registered each Separate Account as a unit investment trust in
accordance with the provisions of the 1940 Act, unless exempt
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therefrom, to serve as segregated investment accounts for the
Contracts; (iii) it will maintain such registration, if required, for
so long as any Contracts are outstanding; (iv) the Contracts'
disclosure document or 1933 Act registration statement, together with
any amendments thereto, will at all times comply in all material
respects with applicable requirements of the federal securities laws
and rules thereunder; and (v) the Contract prospectus or disclosure
document will at all times comply in all material respects with
applicable requirements of the federal securities laws and the rules
thereunder. The Company shall amend any registration statement under
the 1933 Act or disclosure document for the Contracts and any
registration statement under the 1940 Act for the Separate Accounts
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 register and qualify the Contracts for sale in
accordance with the securities laws of the various states only if, and
to the extent, deemed necessary by the Company.
2.2. (a) Subject to Article VI hereof, the Company represents that the
Contracts are currently and at the time of issuance will be treated as
life insurance, endowment, or annuity contracts under applicable
provisions of the Internal Revenue Code and that it will maintain such
treatment and that it will notify the Trust and the Underwriter
immediately upon having a reasonable basis for believing that the
Contracts have ceased to be so treated or that they might not be so
treated in the future.
(b) The Company represents that any prospectus or disclosure document
offering a Contract that is a life insurance contract where it is
reasonably probable that such Contract would be a "modified endowment
contract," as that term is defined in Section 7702A of the Internal
Revenue Code will identify such Contract as a modified endowment
contract (or policy).
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2.3. The Company represents and warrants that neither it nor any of its
affiliates or agents will, at any time before or after termination of
this Agreement, seek to cause or facilitate the exchange by any
Contract owner into another annuity contract, unless the Company has
given the Underwriter at least ninety (90) days prior written notice
that it, its affiliate(s), or its agents intends to seek to cause or
facilitate such an exchange.
2.4. The Company represents and warrants that all of its directors,
officers, employees, investment advisers, and other
individuals/entities dealing with the money and/or securities of the
Trust are covered by a blanket fidelity bond or similar coverage in an
amount not less than $5 million. The aforesaid includes coverage for
larceny and embezzlement and is issued by a reputable bonding company.
The Company agrees to see that this bond or another bond containing
these provisions is always in effect, and agrees to notify the Trust
and the Underwriter in the event that such coverage no longer applies.
2.5. The Trust represents and warrants that Trust shares sold pursuant to
this Agreement shall be registered under the 1933 Act and duly
authorized for issuance in accordance with applicable law, and that the
Trust is and shall remain registered under the 1940 Act for as long as
the Trust shares are sold. The Trust shall amend the registration
statement for its shares under the 1933 and the 1940 Acts from time to
time as required in order to effect the continuous offering of its
shares. The Trust and Underwriter further represent and warrant that:
(i) the Trust does and will comply in all material respects with the
requirements of the 1940 Act and rules thereunder, (ii) the Trust's
1933 Act registration statement, together with any amendments thereto,
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will at all times comply in all material respects with the requirements
of the 1933 Act and rules thereunder, and (iii) the Trust prospectus
will at all times comply in all material respects with the requirements
of the 1933 Act and the rules thereunder. The Trust shall register and
qualify the shares for sale in accordance with the laws of the various
states only if, and to the extent, deemed advisable by the Trust or the
Underwriter.
2.6. The Trust represents that it is currently qualified as a Regulated
Investment Company under Subchapter M of the Internal Revenue Code, and
that it will make every effort to maintain such qualification (under
Subchapter M or any successor or similar provision).
2.7. The Trust makes no representations as to whether any aspect of its
operations, including but not limited to, investment policies, fees and
expenses, complies with the insurance and other applicable laws of the
various states, except that the Trust represents that it is and shall
at all times remain in compliance with the laws of the state of
Delaware to the extent required to perform this Agreement.
2.8. The Trust represents and warrants that to the extent that it decides to
finance distribution expenses pursuant to Rule 12b-1 under the 1940
Act, the Trust undertakes to have its Board of Trustees, a majority of
whom are not interested persons of the Trust, formulate and approve any
plan under Rule 12b-1 ("Rule 12b-1 Plan") to finance distribution
expenses. The Trust shall notify the Company immediately upon
determining to finance distribution expenses pursuant to Rule 12b-1.
2.9. The Trust represents that it is lawfully organized and validly existing
under the laws of Delaware and that it does and will comply with
applicable provisions of the 1940 Act.
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2.10. The Trust represents and warrants that it and all of its trustees,
officers, employees and other individuals/entities having access to the
funds and/or securities of the Trust are and continue to be at all
times covered by a blanket fidelity bond or similar coverage for the
benefit of the Trust in an amount not less than the minimal coverage as
required currently by Rule 17g-1 of the 1940 Act or related provisions
as may be promulgated from time to time. The aforesaid bond includes
coverage for larceny and embezzlement and is issued by a reputable
bonding company.
2.11. 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
Trust's shares in accordance with all applicable federal and state
securities laws, including without limitation the 1933 Act, the 1934
Act, and the 0000 Xxx.
2.12. The Underwriter represents and warrants that the Trust's investment
manager, Kelmoore Investment Company, Inc., is registered as an
investment adviser under all applicable federal and state securities
laws and that the investment manager will perform its obligations to
the Trust in accordance with any applicable state and federal
securities laws.
ARTICLE III Prospectuses, Disclosure Documents and Proxy Statements; Voting
3.1. The Underwriter shall provide the Company, at the Company's expense,
with as many copies of the Trust's current prospectus as the Company
may reasonably request. If requested by the Company in lieu thereof,
the Trust shall provide such documentation including a final copy of a
current prospectus set in type at the Trust's expense and other
assistance as is reasonably necessary in order for the Company at least
annually (or more frequently if the Trust's prospectus is amended more
frequently) to have the new prospectus or disclosure documents for the
Contracts and the Trust's new prospectus printed together in one
document; in such case at the Company's expense.
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3.2. The Trust's prospectus shall state that the statement of additional
information for the Trust is available from the Underwriter (or, in the
Trust's discretion, the prospectus shall state that such statement is
available from the Trust).
3.3. The Trust, at its expense, shall provide the Company with copies of its
proxy material, if any, reports to shareholders and other
communications to shareholders in such quantity as the Company shall
reasonably require and the Company shall bear the costs of distributing
them to existing Contract owners or participants.
3.4. The Trust hereby notifies the Company that it is appropriate to include
in the prospectuses or disclosure documents pursuant to which the
Contracts are offered disclosure regarding the potential risks of mixed
and shared funding.
3.5. To the extent required by law the Company shall:
(i) solicit voting instructions from Contract owners or
participants;
(ii) vote the Trust shares held in each Separate Account
in accordance with instructions received from
Contract owners or participants; and
(iii) vote Trust shares held in each Separate Account for
which no timely instructions have been received, in
the same proportion as Trust shares of such Fund for
which instructions have been received from the
Company's Contract owners or participants;
for so long as and to the extent that the 1940 Act requires
pass-through voting privileges for variable contract owners. The
Company reserves the right to vote Trust shares held in any segregated
asset account in its own right, to the extent permitted by law.
Participating Insurance Companies shall be responsible for assuring
that each of their separate accounts participating in the Trust
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calculates voting privileges in a manner consistent with other
Participating Insurance Companies and as required by the Mixed and
Shared Funding Order. The Trust will notify the Company of any changes
of interpretation or amendment to the Mixed and Shared Funding Order.
3.6. The Trust will comply with all provisions of the 1940 Act requiring
voting by shareholders, and in particular, the Trust will either
provide for annual meetings (except to the extent that the Commission
may interpret Section 16 of the 1940 Act not to require such meetings)
or comply with Section 16(c) of the 1940 Act (although the Trust is not
one of the trusts described in Section 16(c) of that Act) as well as
with Sections 16(a) and, if and when applicable, 16(b) of the 1940 Act.
Further, the Trust will act in accordance with the Commission's
interpretation of the requirements of Section 16(a) with respect to
periodic elections of Trustees and with whatever rules the Commission
may promulgate with respect thereto.
ARTICLE IV Sales Material and Information
4.1. The Company shall furnish, or shall cause to be furnished, to the Trust
or the Underwriter, each piece of sales literature or other promotional
material in which the Trust or the Trust's investment manager,
sub-advisers or Underwriter is named, at least five business days prior
to its use. No such material shall be used if the Trust or the
Underwriter reasonably objects in writing to such use within five
business days after receipt of such material.
4.2. The Company represents and agrees that sales literature for the
Contracts prepared by the Company or its affiliates will be consistent
with every law, rule, and regulation of any regulatory agency or
self-regulatory agency that applies to the Contracts or to the sale of
the Contracts, including, but not limited to, NASD Conduct Rule 2210
and IM-2210-2 thereunder.
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4.3. The Company shall not give any information or make any representations
or statements on behalf of the Trust or concerning the Trust in
connection with any sales activities by the Company or any of its
affiliates or agents with regard to the Contracts other than the
information or representations contained in the registration statement
or prospectus for the Trust shares as such registration statement and
prospectus may be amended or supplemented from time to time, or in
reports or proxy statements for the Trust, or in sales literature or
other promotional material approved by the Trust or by the Underwriter,
except with the permission of the Trust or the Underwriter. The Trust
and the Underwriter agree to respond to any request for approval on a
prompt and timely basis. The Company shall adopt and implement
procedures reasonably designed to ensure that information concerning
the Trust, the Underwriter, or any of their affiliates which is
intended for use by brokers or agents selling the Contracts (i.e.,
information that is not intended for distribution to Contract owners or
prospective Contract owners) is so used, and neither the Trust, the
Underwriter, nor any of their affiliates shall be liable for any
losses, damages, or expenses relating to the improper use of such
broker only materials by agents of the Company or its affiliates who
are unaffiliated with the Trust or the Underwriter. The parties hereto
agree that this Section 4.3 is not intended to designate nor otherwise
imply that the Company is an underwriter or distributor of the Trust's
shares.
4.4. The Trust or the Underwriter shall furnish, or shall cause to be
furnished, to the Company or its designee, each piece of sales
literature or other promotional material in which the Company, its
Separate Account, or the Contracts are named, at least five business
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days prior to its use. No such material shall be used if the Company
reasonably objects in writing to such use within five business days
after receipt of such material.
4.5. The Trust represents and agrees that sales literature for the Trust
prepared by the Trust or its affiliates in connection with the sale of
the Contracts will be consistent with every law, rule, and Regulation
of any regulatory agency or self regulatory agency that applies to the
Trust or to the sale of Trust shares, including, but not limited to,
NASD Conduct Rule 2210 and IM-2210-2 thereunder.
4.6. The Trust and the Underwriter shall not give any information or make
any representations on behalf of the Company or concerning the Company,
each Separate Account, or the Contracts other than the information or
representations contained in a registration statement or prospectus or
disclosure documents for the Contracts, as such registration statement
and prospectus or disclosure documents may be amended or supplemented
from time to time, or in published reports for each Separate Account
which are in the public domain or approved by the Company for
distribution to Contract owners or participants, or in sales literature
or other promotional material approved by the Company, except with the
permission of the Company. The Company agrees to respond to any request
for approval on a prompt and timely basis. The Trust and the
Underwriter shall xxxx information produced by or on behalf of the
Trust "FOR BROKER USE ONLY" which is intended for use by brokers or
agents selling the Contracts (i.e., information that is not intended
for distribution to Contract owners or prospective Contract owners),
and neither the Company nor any of its affiliates shall be liable for
any losses, damages, or expenses arising on account of the use by
brokers of such information with third parties in the event that is not
so marked.
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4.7. The Trust will provide to the Company at least one complete copy of all
registration statements, prospectuses, statements of additional
information, reports, proxy statements, sales literature and other
promotional materials, applications for exemptions, requests for
no-action letters, and all amendments to any of the above, that relate
to the Trust or its shares, contemporaneously with the filing of such
document with the SEC or other regulatory authorities.
4.8. The Company will provide to the Trust at least one complete copy of all
registration statements, prospectuses, statements of additional
information, disclosure documents, reports, solicitations for voting
instructions, sales literature and other promotional materials,
applications for exemptions, requests for no action letters, and all
amendments to any of the above, that relate to the Contracts or each
Separate Account, contemporaneously with the preparation or filing of
such document with the SEC or other regulatory authorities. The Company
shall promptly inform the Trust of the results of any examination for
cause by the SEC, or any special state insurance regulatory
examination, that would adversely affect the Contracts or the Trust,
and the Company shall provide the Trust with a copy of relevant
portions of any "deficiency letter" or other correspondence or written
report regarding any such examination.
4.9. For purposes of this Article IV, 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, or
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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, registration
statements, prospectuses, statements of additional information,
disclosure documents, shareholder reports, and proxy materials and any
other material constituting sales literature or advertising under NASD
Conduct Rules, the 1940 Act or the 1933 Act.
ARTICLE V Fees and Expenses
5.1. The Trust and Underwriter shall pay no fee or other compensation to the
Company under this Agreement, except subject to a Rule 12b-1 Plan to
finance distribution expenses, in which case, subject to obtaining any
required exemptive orders or other regulatory approvals, the
Underwriter may make payments to the Company or to the underwriter for
the Contracts if and in amounts agreed to by the Underwriter in
writing. Each party, however, shall, in accordance with the allocation
of expenses specified in this Agreement, reimburse other parties for
expenses initially paid by one party but allocated to another party. In
addition, nothing herein shall prevent the parties hereto from
otherwise agreeing to perform, and arranging for appropriate
compensation for, other services relating to the Trust and/or to the
Separate Accounts.
5.2. All Trust shares will be duly authorized for issuance and registered in
accordance with applicable federal law and to the extent deemed
advisable by the Trust, in accordance with applicable state law, prior
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to sale. The Trust shall bear the expenses for the cost of registration
and qualification of the Trust's shares, preparation and filing of the
Trust's prospectus and registration statement, Trust proxy materials
and reports, printing proxy materials and annual reports for existing
Contract owners, setting in type the Trust's prospectuses, the
preparation of all statements and notices required by any federal or
state law, all taxes on the issuance or transfer of the Trust's shares,
and any expenses permitted to be paid or assumed by the Trust pursuant
to any Rule 12b-1 Plan under the 1940 Act duly adopted by the Trust.
5.3. The Company shall bear the expenses of printing and distributing the
Trust prospectuses and proxy statements and shareholder reports. The
Company shall bear all expenses associated with the registration,
qualification, and filing of the Contracts under applicable federal
securities and state insurance laws; the cost of preparing, printing,
and distributing the Contracts' prospectuses and statements of
additional information or disclosure documents; and the cost of
printing and distributing annual individual account statements for
Contract owners as required by state insurance laws.
ARTICLE VI Diversification
6.1. The Trust will at all times invest money from the Contracts in such a
manner as to ensure that the Contracts will be treated as variable
contracts under the Internal Revenue Code and the regulations issued
thereunder. Without limiting the scope of the foregoing, the Trust will
comply with Section 817(h) of the Internal Revenue Code and Treasury
Regulation 1. 817-5, relating to the diversification requirements for
variable annuity, endowment, or life insurance contracts and any
amendments or other modifications to such Section or Regulations or
successors thereto.
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ARTICLE VII Potential Conflicts
7.1. If and to the extent that the Trust engages in mixed and shared funding
as contemplated by exemptive relief provided by the SEC and applicable
to the Trust, this Article VII shall apply.
7.2. The Board of Trustees of the Trust (the "Trust Board") will monitor the
Trust for the existence of any material irreconcilable conflict among
the interests of the Contract owners of all separate accounts investing
in the Trust. A material irreconcilable conflict may arise for a
variety of reasons, including: (a) an action by any state insurance
regulatory authority; (b) a change in applicable federal or state
insurance, tax, or securities laws or regulations, or a public ruling,
private letter ruling, no-action or interpretative letter, or any
similar action by insurance, tax, or securities regulatory authorities;
(c) an administrative or judicial decision in any relevant proceeding;
(d) the manner in which the investments of any Fund are being managed;
(e) a difference in voting instructions given by variable annuity
contract owners, variable life insurance contract owners, and trustees
of qualified pension or retirement plans; (f) a decision by a
Participating Insurance Company to disregard the voting instructions of
Contract owners; or (g) if applicable, a decision by a qualified
pension or retirement plan to disregard the voting instructions of plan
participants. The Trust Board shall promptly inform the Company if it
determines that a material irreconcilable conflict exists and the
implications thereof. A majority of the Trust Board shall consist of
Trustees who are not "interested persons" of the Trust.
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7.3. The Company has reviewed a copy of the Mixed and Shared Funding Order,
and in particular, has reviewed the conditions to the requested relief
set forth therein. The Company agrees to assist the Trust Board in
carrying out its responsibilities under the Mixed and Shared Funding
Order, by providing the Trust Board with all information reasonably
necessary for the Trust Board to consider any issues raised. This
includes, but is not limited to, an obligation by the Company to inform
the Trust Board whenever (i) the Company is required to solicit voting
instructions from Contract owners, and (ii) Contract owner voting
instructions are disregarded. The Trust Board shall record in its
minutes or other appropriate records, all reports received by it and
all action with regard to a conflict.
7.4. If it is determined by a majority of the Trust Board, or a majority of
its disinterested Trustees, or if it is anticipated by the Underwriter
to be likely to be determined by a majority of the Trust Board, or a
majority of its disinterested Trustees, that a material irreconcilable
conflict exists, then the Trust or the Underwriter will provide notice
to the Company as soon as possible. In such case, the Company shall, at
its expense and to the extent reasonably practicable (as determined by
a majority of the disinterested Trustees), take whatever steps are
necessary to remedy or eliminate the material irreconcilable conflict,
up to and including: (a) withdrawing the assets allocable to some or
all of the Separate Accounts from the relevant Fund and reinvesting
such assets in a different investment medium, including another Fund,
or in the case of insurance company participants submitting the
question as to whether such segregation should be implemented by a vote
of all affected Contract owners and, as appropriate, segregating the
assets of any appropriate group (i.e., annuity Contract owners or life
insurance Contract owners of one or more Participating Insurance
Companies) that votes in favor of such segregation, or offering to the
-20-
affected Contract owners the option of making such a change; and (b)
establishing a new registered management investment company or managed
separate account.
7.5. If (i) the Company is required to solicit voting instructions from
Contract owners, and (ii) the Company's disregard of voting
instructions could conflict with the majority of Contract owner voting
instructions, and (iii) the Company's judgment represents a minority
position or would preclude a majority vote, the Company may be
required, at the Trust's election, to withdraw the Separate Account's
investment in the Trust and terminate this Agreement with respect to
such Separate Account, and no charge or penalty will be imposed as a
result of such withdrawal. Any such withdrawal and termination shall
take place within 30 days after written notice is given that this
provision is being implemented, subject to applicable law but in any
event consistent with the terms of the Mixed and Shared Funding Order.
Until such withdrawal and termination is implemented, the Underwriter
and the Trust shall continue to accept and implement orders by the
Company for the purchase and redemption of shares of the Trust. Such
withdrawal and termination shall be limited to the extent required by
the foregoing material irreconcilable conflict as determined by a
majority of disinterested Trustees.
7.6. If a particular state insurance regulator's decision applicable to the
Company conflicts with the majority of other state insurance
regulators, then the Company will withdraw the Separate Account's
investment in the Trust and terminate this Agreement with respect to
such Separate Account within 30 days after the Trust informs the
Company of a material irreconcilable conflict, subject to applicable
law but in any event consistent with the terms of the Mixed and Shared
-21-
Funding Order. Until such withdrawal and termination is implemented,
the Underwriter and the Trust shall continue to accept and implement
orders by the Company for the purchase and redemption of shares of the
Trust. Such withdrawal and termination shall be limited to the extent
required by the foregoing material irreconcilable conflict as
determined by a majority of disinterested Trustees.
7.7. For purposes of Sections 7.3 through 7.6 of this Agreement, a majority
of the disinterested members of the Trust Board shall determine whether
any proposed action adequately remedies any material irreconcilable
conflict, but in no event will the Trust or the Underwriter 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 Contracts if an offer to do so has been declined by vote of a
majority of Contract owners materially adversely affected by the
material irreconcilable conflict.
7.8. The Trust Board's determination of the existence of a material
irreconcilable conflict and its implication will be made known in
writing to the Company.
7.9. The Company shall at least annually submit to the Trust Board such
reports, materials, or data as the Trust Board may reasonably request
so that the Trustees may fully carry out the duties imposed upon the
Trust Board by the Mixed and Shared Funding Order, and said reports,
materials and data shall be submitted more frequently if deemed
appropriate by the Trust Board.
7.10. If and to the extent that Rule 6e-2 and Rule 6e-3(T) are amended, or
Rule 6e-3(T) is adopted, to provide exemptive relief from any provision
of the 1940 Act or the rules promulgated thereunder with respect to
mixed or shared funding (as defined in the Mixed and Shared Funding
-22-
Order) on terms and conditions materially different from those
contained in the Mixed and Shared Funding Order, the Trust and/or the
Company, 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.
ARTICLE VIII Indemnification
8.1. Indemnification By The Company
(a) The Company agrees to indemnify and hold harmless the
Trust, the Underwriter, and each of the Trust's or the Underwriter's
directors, officers, employees, or agents and each person, if any, who
controls the Trust or the Underwriter within the meaning of such terms
under the federal securities laws (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
reasonable 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
expenses (or actions in respect thereof) or settlements are related to
the sale or acquisition of the Trust's shares 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 statements,
prospectuses, statements of additional information or
disclosure documents for the Contracts or contained
in the Contracts, or sales literature or other
promotional material for the Contracts (or any
amendment or supplement to any of the foregoing), or
arise out of or are based upon the omission or the
alleged omission to state therein a material fact
required to be stated therein or necessary to make
the statements therein not misleading in light of the
circumstances in which they were made; provided that
this agreement to indemnify shall not apply as to any
indemnified party if such statement or omission or
-23-
such alleged statement or omission was made in
reliance upon and in conformity with information
furnished to the Company by or on behalf of the Trust
for use in the registration statement, prospectus,
statement of information or disclosure documents for
the Contracts, or in the Contracts or sales
literature (or any amendment or supplement) or
otherwise for use in connection with the sale of the
Contracts or Trust shares; or
(ii) arise out of or as a result of statements or
representations by or on behalf of the Company (other
than statements or representations contained in the
Trust registration statement, Trust prospectus or
sales literature or other promotional material of the
Trust not supplied by the Company or persons under
its control) or wrongful conduct of the Company or
persons under its control, with respect to the sale
or distribution of the Contracts or Trust shares; or
(iii) arise out of any untrue statement or alleged untrue
statement of a material fact contained in the Trust's
registration statement, prospectus, statement of
additional information, or sales literature or other
promotional material of the Trust 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 in light of the
circumstances in which they were made, if such a
statement or omission was made in reliance upon and
in conformity with information furnished to the Trust
by or on behalf of the Company or persons under its
control; or
(iv) arise as a result of any failure by the Company to
provide the services and furnish the materials or to
make any payments under the terms of this Agreement,
provided that in the case of any non-material
failure, the Company also shall not have cured such
non-material failure within thirty (30) days; or
(v) arise out of 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 by the Company of this
Agreement;
except to the extent provided in Sections 8.1(b) and 8.4 hereof. This
indemnification shall be in addition to any liability which the Company
may otherwise have.
-24-
(b) No party shall be entitled to indemnification by the
Company if such loss, claim, damage, liability or litigation is due to
the willful misfeasance, bad faith, gross negligence, or reckless
disregard of duty by the party seeking indemnification.
(c) 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 Trust shares or the
Contracts or the operation of the Trust.
8.2. Indemnification By the Underwriter
(a) The Underwriter agrees to indemnify and hold harmless the
Company and each of its directors, officers, employees, or agents and
each person, if any, who controls the Company within the meaning of
such terms under the federal securities laws (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 reasonable 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 expenses (or actions in respect thereof) or settlements
are related to the sale or acquisition of the Trust's shares 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 statement of additional information for the Trust,
or sales literature or other promotional material of
the Trust (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 in light of the circumstances in which
they were made; 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
-25-
in conformity with information furnished to the
Underwriter or the Trust by or on behalf of the
Company for use in the registration statement,
prospectus, or statement of additional information
for the Trust or in sales literature of the Trust (or
any amendment or supplement thereto) or otherwise for
use in connection with the sale of the Contracts or
Trust shares; or
(ii) arise out of or as a result of statements or
representations (other than statements or
representations contained in the Contracts or in the
Contract or Trust registration statement or
disclosure statement, the Contract or Trust
prospectus, statement of additional information,
disclosure document or sales literature or other
promotional material for the Contracts or of the
Trust not supplied by the Underwriter or Trust or
persons under the control of the Underwriter or
Trust) or wrongful conduct of the Underwriter or
Trust or persons under the control of the Underwriter
or Trust, with respect to the sale or distribution of
the Contracts or Trust shares; or
(iii) arise out of any untrue statement or alleged untrue
statement of a material fact contained in a
registration statement, prospectus, statement of
additional information, disclosure document or sales
literature or other promotional material covering 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 in light of the
circumstances in which they were made, if such
statement or omission was made in reliance upon and
in conformity with information furnished to the
Company by or on behalf of the Underwriter or persons
under the control of the Underwriter; or
(iv) arise as a result of any failure by the Underwriter
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
requirements and procedures related thereto specified
in Article VI of this Agreement), provided that in
the case of any non-material failure, the Underwriter
also shall not have cured such non-material failure
within thirty (30) days.; or
(v) arise out of or result from any material breach of
any representation and/or warranty made by the
Underwriter in this Agreement or arise out of or
result from any other material breach of this
Agreement by the Underwriter;
except to the extent provided in Sections 8.2(b) and 8.4 hereof. This
indemnification shall be in addition to any liability which the
Underwriter may otherwise have.
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(b) No party shall be entitled to indemnification by the
Underwriter if such loss, claim, damage, liability or litigation is due
to the willful misfeasance, bad faith, gross negligence, or reckless
disregard of duty by the party seeking indemnification.
(c) The indemnified parties will promptly notify the
Underwriter of the commencement of any litigation or proceedings
against them in connection with the issuance or sale of the Contracts
or the operation of each Separate Account.
8.3. Indemnification By the Trust
(a) The Trust agrees to indemnify and hold harmless the
Company and each of its directors, officers, employees, or agents and
each person, if any, who controls the Company within the meaning of
such terms under the federal securities laws (collectively, the
"indemnified parties" for purposes of this Section 8.3) against any and
all losses, claims, damages, liabilities (including amounts paid in
settlement with the written consent of the Trust), or litigation
(including reasonable 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 expenses (or actions in respect thereof) or settlements
are related to the operations of the Trust and:
(i) arise as a result of any failure by the Trust 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 requirements and
procedures related thereto specified in Article VI of
this Agreement), provided that in the case of any
non-material failure, the Trust also shall not have
cured such non-material failure within thirty (30)
days; or
(ii) arise out of or result from any material breach of
any representation and/or warranty made by the Trust
in this Agreement or arise out of or result from any
other material breach of this Agreement by the Trust;
-27-
except to the extent provided in Sections 8.3(b) and 8.4 hereof. This
indemnification shall be in addition to any liability which the Trust
may otherwise have.
(b) No party shall be entitled to indemnification by the Trust
if such loss, claim, damage, liability or litigation is due to the
willful misfeasance, bad faith, gross negligence, or reckless disregard
of duty by the party seeking indemnification.
(c) The indemnified parties will promptly notify the Trust of
the commencement of any litigation or proceedings against it in
connection with the issuance or sale of the Contracts or the operation
of each Separate Account.
8.4. Indemnification Procedure
Any person obligated to provide indemnification under this Article VIII
("indemnifying party" for the purpose of this Section 8.4) shall not be
liable under the indemnification provisions of this Article VIII with
respect to any claim made against a party entitled to indemnification
under this Article VIII ("indemnified party" for the purpose of this
Section 8.4) 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 under the indemnification provision of this Article VIII,
except to the extent that the failure to notify results in the failure
of actual notice to the indemnifying party and such indemnifying party
is damaged solely as a result of failure to give such notice. In case
-28-
any such action is brought against the indemnified party, the
indemnifying party will be entitled to participate, at its own expense,
in the defense thereof. The indemnifying party also shall be entitled
to assume the defense thereof, with counsel satisfactory to the party
named in the action. After notice from the indemnifying party to the
indemnified party of the indemnifying party'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 indemnifying party
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, unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or
(ii) the named parties to any such proceeding (including any impleaded
parties) include both the indemnifying party and the indemnified party
and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between
them. The indemnifying party shall not be liable for any settlement of
any proceeding effected without its written consent but if settled with
such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and
against any loss or liability by reason of such settlement or judgment.
A successor by law of the parties to this Agreement shall be
entitled to the benefits of the indemnification contained in this
Article VIII. The indemnification provisions contained in this Article
VIII shall survive any termination of this Agreement.
-29-
ARTICLE IX Applicable Law
9.1. This Agreement shall be construed and the provisions hereof interpreted
under and in accordance with the laws of the State of Delaware without
giving effect to conflicts of laws provisions thereof.
9.2. This Agreement shall be subject to the provisions of the 1933, 1934,
and 1940 Acts, and the rules, regulations, and rulings thereunder,
including such exemptions from those statutes, rules and regulations as
the SEC may grant (including, but not limited to, the Mixed and Shared
Funding Order) and the terms hereof shall be interpreted and construed
in accordance therewith.
ARTICLE X Termination
10.1. This Agreement shall terminate automatically in the event of its
assignment, unless made with written consent of each party; or:
(a) at the option of any party upon ninety (90) days' advance
written notice to the other parties; or
(b) at the option of the Company if shares of the Funds
delineated in Exhibit B are not reasonably available to meet the
requirements of the Contracts as determined by the Company; or
(c) at the option of the Trust upon institution of formal
proceedings against the Company by the NASD, the SEC, the insurance
commission of any state or any other regulatory body, which would have
a material adverse effect on the Company's ability to perform its
obligations under this Agreement; or
-30-
(d) at the option of the Company upon institution of formal
proceedings against the Trust or the Underwriter by the NASD, the SEC,
or any state securities or insurance department or any other regulatory
body, which would have a material adverse effect on the Underwriter's
or the Trust's ability to perform its obligations under this Agreement;
or
(e) at the option of the Trust or the Underwriter by written
notice to the Company, if the Company gives the Trust and the
Underwriter the written notice specified in Section 1.8(b) hereof and
at the time such notice was given there was no notice of termination
outstanding under any other provision of this Agreement; provided,
however, any termination under this Section 10.1(e) shall be effective
sixty (60) days after the notice specified in Section 1.8(b) was given;
or
(f) at the option of the Company or the Trust upon a
determination by a majority of the Trust Board, or a majority of the
disinterested Trustees, that a material irreconcilable conflict exists
among the interests of (i) all contract owners of variable insurance
products of all separate accounts, or (ii) the interests of the
Participating Insurance Companies investing in the Trust as delineated
in Article VII of this Agreement; or
(g) at the option of the Company if the Trust ceases to
qualify as a Regulated Investment Company under Subchapter M of the
Internal Revenue Code, or under any successor or similar provision, or
if the Company reasonably believes that the Trust may fail to so
qualify; or
-31-
(h) at the option of the Company if the Trust fails to meet
the diversification requirements specified in Article VI hereof or if
the Company reasonably believes that the Trust will fail to meet such
requirements; or
(i) at the option of any party to this Agreement, upon another
party's material breach of any provision of this Agreement; or
(j) at the option of the Company, if the Company determines in
its sole judgment exercised in good faith, that either the Trust or the
Underwriter has suffered a material adverse change in its business,
operations, or financial condition since the date of this Agreement or
is the subject of material adverse publicity which is likely to have a
material adverse impact upon the business and operations of the Company
or the Contracts (including the sale thereof); or
(k) at the option of the Trust or Underwriter, if the Trust or
Underwriter respectively, shall determine in its sole judgment
exercised in good faith, that the Company has suffered a material
adverse change in its business, operations, or financial condition
since the date of this Agreement or is the subject of material adverse
publicity which is likely to have a material adverse impact upon the
business and operations of the Trust or Underwriter; or
(l) subject to the Trust's compliance with Article VI hereof,
at the option of the Trust in the event any of the Contracts are not
issued or sold in accordance with applicable requirements of federal
and/or state law. Termination shall be effective immediately upon such
occurrence without notice.
-32-
10.2. Notice Requirement
(a) In the event that any termination of this Agreement is
based upon the provisions of Article VII, such prior written notice
shall be given in advance of the effective date of termination as
required by such provisions.
(b) In the event that any termination of this Agreement is
based upon the provisions of Sections 10.l(b) - (d) or 10.1(g) - (i),
prompt written notice of the election to terminate this Agreement for
cause shall be furnished by the party terminating the Agreement to the
non-terminating parties, with said termination to be effective upon
receipt of such notice by the non-terminating parties.
(c) In the event that any termination of this Agreement is
based upon the provisions of Sections 10.1(j) or 10.l(k), prior written
notice of the election to terminate this Agreement for cause shall be
furnished by the party terminating this Agreement to the
non-terminating parties. Such prior written notice shall be given by
the party terminating this Agreement to the non-terminating parties at
least 30 days before the effective date of termination.
10.3. It is understood and agreed that the right to terminate this Agreement
pursuant to Section 10.1(a) may be exercised for any reason or for no
reason.
10.4. Effect of Termination
(a) Notwithstanding any termination of this Agreement pursuant
to Section 10.1 of this Agreement and subject to Section 1.3 of this
Agreement, the Company may require the Trust and the Underwriter to
continue to make available additional shares of the Trust for so long
after the termination of this Agreement as the Company desires pursuant
-33-
to the terms and conditions of this Agreement as provided in paragraph
(b) below, for all Contracts in effect on the effective date of
termination of this Agreement (hereinafter referred to as "Existing
Contracts"). Specifically, without limitation, the owners of the
Existing Contracts shall be permitted to reallocate investments in the
Trust, redeem investments in the Trust and/or invest in the Trust upon
the making of additional purchase payments under the Existing
Contracts. The parties agree that this Section 10.4 shall not apply to
any terminations under Article VII and the effect of such Article VII
terminations shall be governed by Article VII of this Agreement.
(b) If shares of the Trust continue to be made available after
termination of this Agreement pursuant to this Section 10.4, the
provisions of this Agreement shall remain in effect except for Section
10.l(a) and thereafter the Trust, the Underwriter, or the Company may
terminate the Agreement, as so continued pursuant to this Section 10.4,
upon written notice to the other party, such notice to be for a period
that is reasonable under the circumstances but need not be for more
than 90 days.
ARTICLE XI Notices
Any notice shall be deemed duly given only if sent by hand, evidenced
by written receipt or by certified mail, return receipt requested, 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. All notices shall be deemed given three business days
after the date received or rejected by the addressee.
-34-
If to the Trust: The Kelmoore Strategy(TM) Variable Trust
0000 Xxxx Xxxxxxxx Xxxx,
Xxxxx 000
Xxxx Xxxx, XX 00000
Attention: Xxxxxxx Kelmon, President
Copy: Xxxxx Xxxxxxx
PFPC, Inc.
0000 Xxxxxxx Xxxxx
Xxxx xx Xxxxxxx, XX 00000-0000
If to the Company:
AGL Life Assurance Company
000 X. Xxxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxx Xxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxx, President
Copy to: Xxxxx X. Xxxxxxxx, General Counsel
If to the Underwriter: Kelmoore Investment Company, Inc.
0000 Xxxx Xxxxxxxx Xxxx,
Xxxxx 000
Xxxx Xxxx, XX 00000
Attention: Xxxxx X. Kelmon, Jr.
ARTICLE XII MISCELLANEOUS
12.1 All persons dealing with the Trust must look solely to the property of
the Trust for the enforcement of any claims against the Trust as
neither the Trustees, officers, agents or shareholders assume any
personal liability for obligations entered into on behalf of the Trust.
12.2 Subject to law and regulatory authority, each party hereto shall treat
as confidential all information reasonably identified as such in
writing by any other party hereto (including without limitation the
-35-
names and addresses of the owners of the Contracts) and, except as
contemplated by this Agreement, shall not disclose, disseminate, or
utilize such confidential information until such time as it may come
into the public domain without the express prior written consent of the
affected party.
12.3 The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions
hereof or otherwise affect their construction or effect.
12.4 This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the
same instrument.
12.5 If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the
Agreement shall not be affected thereby.
12.6 This Agreement shall not be assigned by any party hereto without the
prior written consent of all the parties.
12.7 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 each
other and 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.
12.8 Each party represents that the execution and delivery of this Agreement
and the consummation of the transactions contemplated herein have been
duly 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.
-36-
12.9 The parties to this Agreement may amend the schedules to this Agreement
from time to time to reflect changes in or relating to the Contracts,
the Separate Accounts or the Funds of the Trust.
12.10 The Trust has filed a Certificate of Trust with the Secretary of State
of The State of Delaware. The Company acknowledges that the obligations
of or arising out of the Trust's Declaration of Trust are not binding
upon any of the Trust's Trustees, officers, employees, agents or
shareholders individually, but are binding solely upon the assets and
property of the Trust in accordance with its proportionate interest
hereunder. The Company further acknowledges that the assets and
liabilities of each Fund are separate and distinct and that the
obligations of or arising out of this instrument are binding solely
upon the assets or property of the Fund on whose behalf the Trust has
executed this instrument. The Company also agrees that the obligations
of each Fund hereunder shall be several and not joint, in accordance
with its proportionate interest hereunder, and the Company agrees not
to proceed against any Fund for the obligations of another Fund.
12.11 Except as otherwise expressly provided in this Agreement, neither the
Trust nor the underwriter nor any affiliate thereof shall use any
trademark, trade name, service xxxx or logo of the Company or any of
its affiliates, or any variation of any such trademark, trade name
service xxxx or logo, without the Company's prior written consent, the
granting of which shall be at the Company's sole option. Except as
otherwise expressly provided in this Agreement, neither the Company nor
any affiliate thereof shall use any trademark, trade name, service xxxx
or logo of the Trust or of the Underwriter, or any variation of any
such trademark, trade name, service xxxx or logo, without the prior
written consent of either the Trust or of the Underwriter, as
appropriate, the granting of which shall be at the sole option of the
Trust or of the Underwriter, as applicable.
-37-
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
The Kelmoore Strategy(TM) Variable Trust
By: /s/ Xxxxx X. Xxxxx
------------------------------------
Name: Xxxxx X. Xxxxx
Title: President
AGL Life Assurance Company
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President and General Counsel
Kelmoore Investment Company, Inc.
By: /s/ Xxxxxxx Xxxxxxxxx
------------------------------------
Name: Xxxxxxx Xxxxxxxxx.
Title: Senior Executive Vice President
-38-
EXHIBIT A
Separate Accounts and Contracts
Subject to the Participation Agreement
AGL Variable Account Contract Form # __________________
-39-
EXHIBIT B
Funds Subject to the Participation Agreement
Kelmoore Strategy(TM) Variable Fund
Kelmoore Strategy(TM) Variable Eagle Fund
