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EXHIBIT 1(i)
PARTICIPATION AGREEMENT
PARTICIPATION AGREEMENT (the "Agreement") made by and between XXXXXXX
VARIABLE LIFE INVESTMENT FUND (the "Fund"), a Massachusetts business trust
created under a Declaration of Trust dated March 15, 1985, as amended, with a
principal place of business in Boston, Massachusetts and XXXXXX INVESTORS LIFE
INSURANCE COMPANY, an Illinois corporation (the "Company"), with a principal
place of business One Xxxxxx Drive, Long Grove, Illinois, on behalf of one or
more separate accounts of the Company, as set forth on Schedule A hereto, as it
may be amended from time to time upon written notice to the Fund in accordance
with Paragraph 10 herein (each, an "Account").
WHEREAS, the Fund acts as the investment vehicle for the separate
accounts established for variable life insurance policies and variable annuity
contracts (collectively referred to herein as "Variable Insurance Products") to
be offered by insurance companies which have entered into participation
agreements substantially identical to this Agreement ("Participating Insurance
Companies") and their affiliated insurance companies; and
WHEREAS, the beneficial interest in the Fund is divided into several
series of shares of beneficial interest without par value ("Shares"), and
additional series of Shares may be established, each designated a "Portfolio"
and representing the interest in a particular managed portfolio of securities;
and
WHEREAS, each Portfolio of the Fund, except the Money Market Portfolio,
is divided into two classes of Shares, and additional classes of Shares may be
established; and
WHEREAS, the Parties desire to evidence their agreement as to certain
other matters,
NOW THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements hereinafter contained, the parties hereto agree as
follows:
1. Duty of Fund to Sell.
The Fund shall make its Shares available for purchase at the applicable
net asset value per Share by Participating Insurance Companies and their
affiliates and separate accounts on those days on which the Fund calculates its
net asset value pursuant to rules of the Securities and Exchange Commission (the
"SEC"); provided, however, that the Trustees of the Fund may refuse to sell
Shares of any Portfolio to any person, or suspend or terminate the offering of
Shares of any Portfolio, if such action is required by law or by regulatory
authorities having
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jurisdiction or is, in the sole discretion of the Trustees, acting in good faith
and in light of their duties under federal and any applicable state laws,
necessary in the best interest of the shareholders of any Portfolio.
The Company's orders for such Shares of the Portfolios and one or more
classes thereof which are available for purchase under this Agreement, as set
forth on Schedule B hereto, as it may be amended from time to time, shall be
executed on a daily basis at the net asset value per Share next computed after
receipt by the Fund of the order for the Shares. The Company's order may net the
purchase orders and redemption requests for each Portfolio or class thereof. For
purposes of this Paragraph 1, the Company shall be the designee of the Fund for
receipt of such orders from the Account(s), and receipt by such designee shall
constitute receipt by the Fund; provided that the Fund receives notice of such
order by 10:00 a.m., New York time on the next following Business Day. "Business
Day" shall mean any day on which the New York Stock Exchange is open for trading
and on which the Fund calculates its net asset value per Share pursuant to the
rules of the SEC.
The Company shall pay for Shares on the next Business Day after an
order to purchase Shares is made in accordance with the provisions hereof.
Payment shall be made by wiring federal funds to the Fund or to its designated
custodial account by 2:00 p.m., New York time. For purposes of Paragraph 1, upon
receipt by the Fund of the federal funds so wired, such funds shall cease to be
the responsibility of the Company and shall become the responsibility of the
Fund. If payment in federal funds for any purchase is not received by the Fund
or its designated custodian or is received after 2:00 p.m., New York time, the
Company shall promptly upon the Fund's written request, reimburse the Fund for
any charges, costs, fees, interest, or other expenses incurred by the Fund in
connection with any advances to, or borrowings or overdrafts by, the Fund, or
any similar expenses incurred by the Fund as a result of transactions effected
by the Fund based upon such purchase order.
The Fund agrees to redeem for cash, at the Company's request, any full
or fractional Shares held by the Company, executing such requests on a daily
basis at the net asset value per Share next computed after receipt by the Fund
of the request for redemption. The Company's request may net any purchase orders
and redemption requests for each Portfolio or class thereof. For purposes of
this Paragraph 1, the Company shall be the designee of the Fund for
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receipt of requests for redemption from the Account(s), and receipt by such
designee shall constitute receipt by the Fund; provided that the Fund receives
notice of such request for redemption by 10:00 a.m., New York time on the next
following Business Day.
Payment for Shares redeemed shall be made by wiring federal funds to
the Company by 2:00 p.m., New York time, on the next Business Day after the Fund
receives the request for redemption. If payment in federal funds for any
redemption request is received by the Company after 2:00 p.m., New York time,
the Fund shall promptly upon the Company's written request, reimburse the
Company for any charges, costs, fees, interest, or other expenses incurred by
the Company as a result of such failure to provide redemption proceeds within
the specified time. Notwithstanding the foregoing, the Trustees of the Fund may
suspend the right of redemption or postpone the date of payment or satisfaction
upon redemption: (a) for any period during which the New York Stock Exchange is
closed, other than customary week-end and holiday closings, and during which
trading on the New York Stock Exchange is restricted; (b) for any period during
which an emergency, as determined by the SEC, exists as a result of which
disposal by the Fund of securities owned by it is not reasonably practicable or
it is not reasonably practicable for the Fund fairly to determine the value of
its net assets; and (c) for such other periods as the SEC may by order permit
for the protection of holders of the Shares. The Fund shall not bear any
responsibility whatsoever for the proper disbursement or crediting of redemption
proceeds by the Company; the Company alone shall be responsible for such action.
Issuance and transfer of the Shares will be by book entry only. Stock
certificates will not be issued to the Company or any Account. Shares ordered
from the Fund will be recorded in an appropriate title for each Account or the
appropriate subaccount thereof.
The Fund shall furnish same day notice (by wire or telephone, followed
by written confirmation) to the Company of any income dividends or capital gain
distributions payable on the Shares. The Company hereby elects to receive all
such income dividends and capital gain distributions as are payable on the
Shares of the Portfolios and classes thereof in additional Shares of that
Portfolio or class thereof. The Company reserves the right to revoke this
election and to receive all such income dividends and capital gain distributions
in cash. The Fund shall notify the Company of the number of Shares so issued as
payment of such
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dividends and distributions. The Fund shall to the extent practicable provide
advance notice to Company of any date on which the Fund reasonably expects to
make a dividend distribution.
2. Fund Materials.
The Fund, at its expense, shall provide the Company or its designee
with camera-ready copy or, at the Company's request, computer diskette versions
of all prospectuses, statements of additional information, annual and
semi-annual reports and proxy materials (collectively, "Fund Materials") to be
printed and distributed by the Company or its broker/dealer to the Company's
existing or prospective contract owners, as appropriate. The Company agrees to
bear the cost of printing and distributing such Fund Materials.
The Fund shall provide such other assistance as is reasonably necessary
in order for the Company once each year (or more frequently if the prospectus
and/or statement of additional information ("SAI") for the Fund is amended
during the year) to have the prospectus for the Account(s), with respect to the
Variable Insurance Products, and the Fund's prospectus printed together in one
document, and to have the SAI for the Fund and the SAI for the Account(s), with
respect to the Variable Insurance Products, printed together in one document.
Alternatively, the Company may print the Fund's prospectus and/or its SAI in
combination with other investment companies' prospectuses and statements of
additional information. The Fund will cooperate with the Company in preparing
and filing with the SEC, pursuant to Rule 497 under the 1933 Act, appropriate
versions of the Fund's prospectus and/or SAI.
3. Requirement to Execute Participation Agreement; Requests.
Each Participating Insurance Company shall, prior to purchasing Shares
in the Fund, execute and deliver a participation agreement in a form
substantially identical to this Agreement.
The Fund shall make available, upon written request from the
Participating Insurance Company given in accordance with Paragraph 9, to each
Participating Insurance Company which has executed an Agreement and which
Agreement has not been terminated pursuant to Paragraph 8 (i) a list of all
other Participating Insurance Companies, and (ii) a copy of the Agreement as
executed by any other Participating Insurance Company.
The Fund shall also make available upon request to each Participating
Insurance Company which has executed an Agreement and Agreement has not been
terminated pursuant
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to Paragraph 8, the net asset value of any Portfolio of the Fund as of any date
upon which the Fund calculates the net asset value of its Portfolios for the
purpose of purchase and redemption of Shares.
The Fund shall make the net asset value per Share for each Portfolio
and class thereof available to the Company on a daily basis as soon as
reasonably practical after the net asset value per Share is calculated (normally
by 6:00 p.m., New York time) and shall use its best efforts to make such net
asset value per Share available by 7:00 p.m., New York time.
Each party to this Agreement shall have the right to rely on
information or confirmations provided by any other party (or by any affiliate of
any other party), and shall not be liable in the event that an error results
from any incorrect information or confirmations supplied by any other party. If
an error is made in reliance upon incorrect information or confirmations, any
amount required to make an account of a Variable Insurance Product owner whole
shall be borne by the party who provided the incorrect information or
confirmation.
4. Indemnification.
(a) The Company agrees to indemnify and hold harmless the Fund and each
of its Trustees and officers and each person, if any, who controls the Fund
within the meaning of Section 15 of the Securities Act of 1933 (the "Act")
against any and all losses, claims, damages, liabilities or litigation
(including legal and other expenses), arising out of the acquisition of any
Shares by any person, to which the Fund or such Trustees, officers or
controlling person may become subject under the Act, under any other statute, at
common law or otherwise, which (i) may be based upon any wrongful act by the
Company, any of its employees or representatives, any affiliate of or any person
acting on behalf of the Company or a principal underwriter of its insurance
products, or (ii) may be based upon any untrue statement or alleged untrue
statement of a material fact contained in a registration statement or prospectus
covering Shares or any amendment thereof or supplement thereto or the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading if such a
statement or omission was made in reliance upon information furnished to the
Fund by the Company, or (iii) may be based on any untrue statement or alleged
untrue statement of a material fact contained in a registration statement or
prospectus covering insurance products sold by the Company or any insurance
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company which is an affiliate thereof, or any amendments 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, unless such statement or omission was made in reliance upon
information furnished to the Company or such affiliate by or on behalf of the
Fund; provided, however, that in no case (i) is the Company's indemnity in favor
of a Trustee or officer or any other person deemed to protect such Trustee or
officer or other person against any liability to which any such person would
otherwise be subject by reason of willful misfeasance, bad faith, or gross
negligence in the performance of his duties or by reason of his reckless
disregard of obligations and duties under this Agreement or (ii) is the Company
to be liable under its indemnity agreement contained in this Paragraph 4 with
respect to any claim made against the Fund or any person indemnified unless the
Fund or such person, as the case may be, shall have notified the Company in
writing pursuant to Paragraph 10 within a reasonable time after the summons or
other first legal process giving information of the nature of the claims shall
have been served upon the Fund or upon such person (or after the Fund or such
person shall have received notice of such service on any designated agent), but
failure to notify the Company of any such claim shall not relieve the Company
from any liability which it may have to the Fund or any person against whom such
action is brought otherwise than on account of its indemnity agreement contained
in this Paragraph 4. The Company shall be entitled to participate, at its own
expense, in the defense, or, if it so elects, to assume the defense of any suit
brought to enforce any such liability, but, if it elects to assume the defense,
such defense shall be conducted by counsel chosen by it and satisfactory to the
Fund, to its officers and Trustees, or to any controlling person or persons,
defendant or defendants in the suit. In the event that the Company elects to
assume the defense of any such suit and retain such counsel, the Fund, such
officers and Trustees or controlling person or persons, defendant or defendants
in the suit, shall bear the fees and expenses of any additional counsel retained
by them, but, in case the Company does not elect to assume the defense of any
such suit, the Company will reimburse the Fund, such officers and Trustees or
controlling person or persons, defendant or defendants in such suit, for the
reasonable fees and expenses of any counsel retained by them. The Company agrees
promptly to notify the Fund pursuant
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to Paragraph 10 of the commencement of any litigation or proceedings against it
or any of its directors or officers in connection with the issue and sale of any
Shares.
(b) The Fund agrees to indemnify and hold harmless the Company and each
of its directors and officers and each person, if any, who controls the Company
within the meaning of Section 15 of the Act against any and all losses, claims,
damages, liabilities or litigation (including legal and other expenses), to
which it or such directors, officers or controlling person may become subject
under the Act, under any other statute, at common law or otherwise, arising out
of the acquisition of any Shares by any person which (i) may be based upon any
wrongful act by the Fund, any of its employees or representatives, any affiliate
of or any person acting on behalf of the Fund or a principal underwriter of the
Fund, or (ii) may be based upon any untrue statement or alleged untrue statement
of a material fact contained in a registration statement or prospectus covering
Shares 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 unless such statement or
omission was made in reliance upon information furnished to the Fund by the
Company or (iii) may be based on any untrue statement or alleged untrue
statement of a material fact contained in a registration statement or prospectus
covering insurance products sold by the Company or any insurance company which
is an affiliate thereof, or any amendment or supplement thereto, or the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statement or statements therein not misleading,
if such statement or omission was made in reliance upon information furnished to
the Company or such affiliate by or on behalf of the Fund; provided, however,
that in no case (i) is the Fund's indemnity in favor of a director or officer or
any other person deemed to protect such director or officer or other person
against any liability to which any such person would otherwise be subject by
reason of willful misfeasance, bad faith, or gross negligence in the performance
of his duties or by reason of his reckless disregard of obligations and duties
under this Agreement or (ii) is the Fund to be liable under its indemnity
agreement contained in this Paragraph 4 with respect to any claims made against
the Company or any such director, officer or controlling person unless it or
such director, officer or controlling person, as the case may be, shall have
notified the Fund in writing pursuant to Paragraph 10 within a reasonable time
after the summons or
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other first legal process giving information of the nature of the claim shall
have been served upon it or upon such director, officer or controlling person
(or after the Company or such director, officer or controlling person shall have
received notice of such service on any designated agent), but failure to notify
the Fund of any claim shall not relieve it from any liability which it may have
to the Company or any person against whom such action is brought otherwise than
on account of its indemnity agreement contained in this Paragraph. The Fund will
be entitled to participate at its own expense, in the defense, or, if it so
elects, to assume the defense of any suit brought to enforce any such liability,
but if the Fund elects to assume the defense, such defense shall be conducted by
counsel chosen by it and satisfactory to the Company, its directors, officers or
controlling person or persons, defendant or defendants, in the suit. In the
event the Fund elects to assume the defense of any such suit and retain such
counsel, the Company, its directors, officers or controlling person or persons,
defendant or defendants in the suit, shall bear the fees and expenses of any
additional counsel retained by them, but, in case the Fund does not elect to
assume the defense of any such suit, it will reimburse the Company or such
directors, officers or controlling person or persons, defendant or defendants in
the suit, for the reasonable fees and expenses of any counsel retained by them.
The Fund agrees promptly to notify the Company pursuant to Paragraph 10 of the
commencement of any litigation or proceedings against it or any of its officers
or Trustees in connection with the issuance or sale of any Shares.
The provisions of this Section 4 shall survive the termination of the
Agreement.
5. Procedure for Resolving Irreconcilable Conflicts.
(a) The Trustees of the Fund will monitor the operations of the
Fund for the existence of any material irreconcilable conflict among the
interests of all the contract holders and policy owners of variable Insurance
Products (the "Participants") of all separate accounts investing in the Fund. An
irreconcilable material conflict may arise, among other things, from: (a) an
action by any state insurance regulatory authority; (b) a change in applicable
insurance laws or regulations; (c) a tax ruling or provision of the Internal
Revenue Code or the regulations thereunder; (d) any other development relating
to the tax treatment of insurers, contract holders or policy owners or
beneficiaries of Variable Insurance Products; (e) the manner in which the
investments of any Portfolio are being managed; (f) a difference in voting
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instructions given by variable annuity contract holders, on the one hand, and
variable life insurance policy owners, on the other hand, or by the contract
holders or policy owners of different participating insurance companies; or (g)
a decision by an insurer to override the voting instructions of Participants.
(b) The Company will be responsible for reporting any potential or
existing conflicts to the Trustees of the Fund. The Company will be responsible
for assisting the Trustees in carrying out their responsibilities under this
Paragraph 5(b) and Paragraph 5(a), by providing the Trustees with all
information reasonably necessary for the Trustees to consider the issues raised.
The Fund will also request its investment adviser to report to the Trustees any
such conflict which comes to the attention of the adviser.
(c) If it is determined by a majority of the Trustees of the Fund,
or a majority of its disinterested Trustees, that a material irreconcilable
conflict exists involving the Company, 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 eliminate the
irreconcilable material conflict, including withdrawing the assets allocable to
some or all of the separate accounts from the Fund or any Portfolio or class
thereof and reinvesting such assets in a different investment medium, including
another Portfolio of the Fund or class thereof, offering to the affected
Participants the option of making such a change or establishing a new funding
medium including a registered investment company.
For purposes of this Paragraph 5(c), the Trustees, or the disinterested
Trustees, shall determine whether or not any proposed action adequately remedies
any irreconcilable material conflict. In the event of a determination of the
existence of an irreconcilable material conflict, the Trustees shall cause the
Fund to take such action, such as the establishment of one or more additional
Portfolios or classes, as they in their sole discretion determine to be in the
interest of all shareholders and Participants in view of all applicable factors,
such as cost, feasibility, tax, regulatory and other considerations. In no event
will the Fund be required by this Paragraph 5(c) to establish a new funding
medium for any variable contract or policy.
The Company shall not be required by this Paragraph 5(c) to establish a
new funding medium for any variable contract or policy if an offer to do so has
been declined by a vote of a majority of the Participants materially adversely
affected by the material irreconcilable
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conflict. The Company will recommend to its Participants that they decline an
offer to establish a new funding medium only if the Company believes it is in
the best interest of the Participants.
(d) The Trustees' determination of the existence of an
irreconcilable material conflict and its implications promptly shall be
communicated to all Participating Insurance Companies by written notice thereof
delivered or mailed, first class postage prepaid.
6. Voting Privileges.
The Company shall be responsible for assuring that its separate account
or accounts participating in the Fund shall use a calculation method of voting
procedures substantially the same as the following: those Participants permitted
to give instructions and the number of Shares for which instructions may be
given will be determined as of the record date for the Fund shareholders'
meeting, which shall not be more than 60 days before the date of the meeting.
Whether or not voting instructions are actually given by a particular
Participant, all Fund shares held in any separate account or sub-account thereof
and attributable to policies or contracts will be voted for, against, or
withheld from voting on any proposition in the same proportion as (i) the
aggregate record date cash value held in such sub-account for policies or
contracts giving instructions, respectively, to vote for, against, or withhold
votes on such proposition, bears to (ii) the aggregate record date cash value
held in the sub-account for all policies or contracts for which voting
instructions are received. Owners of policies or contracts continued in effect
under lapse options will not be permitted to give voting instructions. Shares
held in any other insurance company general or separate account or sub-account
thereof will be voted in the proportion specified in the second preceding
sentence for shares attributable to policies or contracts.
The Company will provide pass-through voting privileges as required by
Paragraph 6 of this Agreement and to all owners of Variable Insurance Products
which are registered under the Act and/or the 1940 Act so long as the SEC
continues to interpret the 1940 Act as requiring pass-through voting privileges.
The owners of Variable Insurance Products to whom the Company will provide
pass-through voting privileges pursuant to this Agreement are hereinafter
referred to as "Pass-through Voters". Accordingly, the Company, when applicable,
will distribute to Pass-through Voters all proxy material furnished and will
vote
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Shares of the Portfolios held in its Account(s) in a manner consistent with
voting instructions timely received from Pass-through Voters. The Company will
vote Shares for which it has not received timely voting instructions, as well as
Shares it owns, in the same proportion as it votes those Shares for which it has
received voting instructions. The Company reserves the right to disregard the
voting instructions of Pass-through Voters to the extent such action is
permitted by Rules 6e-2 or 6e-3(T) under the 1940 Act and is permitted under
applicable state insurance laws affecting Fund.
7. Duration and Termination.
This Agreement shall continue in force until terminated in
accordance with the provisions herein.
This Agreement shall terminate in accordance with the following
provisions:
(a) At the option of the Company or the Fund at any time
upon 180 days' notice, unless a shorter time is
agreed to by the parties;
(b) At the option of the Company, if Shares are not
reasonably available to meet the requirements of the
Variable Insurance Products as determined by the
Company. Prompt notice of election to terminate shall
be furnished by the Company, said termination to be
effective ten (10) days after receipt of notice
unless the Fund makes available a sufficient number
of Shares to reasonably meet the requirements of the
Variable Insurance Products within said ten-day
period;
(c) At the option of the Company, upon the institution of
formal proceedings against the Fund or the principal
underwriter for the Shares by the SEC, the National
Association of Securities Dealers, Inc. (the "NASD"),
or any other regulatory body, the expected or
anticipated ruling, judgment or outcome of which
would, in the Company's reasonable judgment,
materially impair Fund's ability to meet and perform
Fund's obligations and duties hereunder. Prompt
notice of election to terminate shall be furnished by
the Company with said termination to be effective
upon receipt of notice;
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(d) At the option of the Fund, upon the institution of
formal proceedings against the Company or the
principal underwriter for the Variable Insurance
Products by the SEC, the NASD, or any other
regulatory body, the expected or anticipated ruling,
judgment or outcome of which would, in the Fund's
reasonable judgment, materially impair the Company's
ability to meet and perform its obligations and
duties hereunder. Prompt notice of election to
terminate shall be furnished by the Fund with said
termination to be effective upon receipt of notice;
(e) In the event Shares are not registered, issued or
sold in accordance with applicable federal and/or
state law and any applicable rules and regulations
thereunder, or such law precludes the use of such
Shares as the underlying investment media for
Variable Insurance Products issued or to be issued by
the Company. Termination shall be effective upon such
occurrence without notice;
(f) Upon the receipt of any necessary regulatory
approvals, or requisite vote of Pass-through Voters
having an interest in the Portfolios, to substitute
for Shares of the Portfolios the shares of another
investment company in accordance with the terms of
the applicable Variable Insurance Products. The
Company shall give sixty (60) days' written notice to
the Fund of any proposed request for regulatory
approvals or vote to replace the Portfolios' Shares;
(g) At the option of the Company, upon the Fund's breach
of any material provision of this Agreement, which
breach has not been cured to the Company's
satisfaction within thirty (30) days after written
notice of such breach is delivered to the Fund;
(h) At the option of the Fund, upon the Company's breach
of any material provision of this Agreement, which
breach has not been cured to the Fund's satisfaction
within thirty (30) days after written notice of such
breach is delivered to the Company;
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(i) In the event this Agreement is assigned without the
prior written consent of the Company and the Fund.
Termination shall be effective immediately upon such
occurrence without notice.
In addition, this Agreement may be terminated at any time, at the
option of either of the Company or the Fund, when neither the Company, any
insurance company nor the separate account or accounts of such insurance company
which is an affiliate thereof which is not a Participating Insurance Company own
any Shares of the Fund or may be terminated by either party to the Agreement
upon a determination by a majority of the Trustees of the Fund, or a majority of
its disinterested Trustees, following certification thereof by a Participating
Insurance Company given in accordance with Paragraph 10 that an irreconcilable
conflict exists among the interests of (i) all contract holders and policy
holders of Variable Insurance Products of all separate accounts or (ii) the
interests of the Participating Insurance Companies investing in the Fund.
Notwithstanding any termination of this Agreement and unless the
further sale of Shares of the Portfolios is proscribed by applicable law or the
SEC or other regulatory body, the Fund shall, at the Company's option, continue
to make available additional Shares, as provided below, pursuant to the terms
and conditions of this Agreement, for all Variable Insurance Products 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 Fund,
redeem investments in the Fund and/or invest in the Fund upon the payment of
additional premiums under the Existing Contracts.
8. Compliance.
The Fund will comply with the provisions of Section 4240(a) of the New
York Insurance Law.
Each Portfolio of the Fund will comply with the provisions of Section
817(h) of the Internal Revenue Code of 1986, as amended (the "Code"), relating
to diversification requirements for variable annuity, endowment and life
insurance contracts. Specifically, each Portfolio will comply with either (i)
the requirement of Section 817(h)(1) of the Code that its assets be adequately
diversified, or (ii) the "Safe Harbor for Diversification" specified in
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Section 817(h)(2) of the Code, or (iii) in the case of variable life insurance
contracts only, the diversification requirement of Section 817(h)(1) of the Code
by having all or part of its assets invested in U. S. Treasury securities which
qualify for the "Special Rule for Investments in United States Obligations"
specified in Section 817(h)(3) of the Code. The Fund will notify the Company
immediately upon having a reasonable basis for believing that a Portfolio has
ceased to comply with the requirements of Section 817(h) of the Code or that the
Portfolio might not so comply in the future and will immediately take all steps
necessary to adequately diversify the Portfolio to achieve compliance.
The provisions of Paragraphs 5 and 7 of this Agreement shall be
interpreted in a manner consistent with any Rule or order of the Securities and
Exchange Commission under the Investment Company Act of 1940, as amended,
applicable to the parties hereto.
No Shares of any Portfolio of the Fund may be sold to the general
public.
9. 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:
Xxxxxxx Variable Life Investment Fund
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
(000) 000-0000
Attn: Xxxxxxx X. Xxxxxx
If to the Company:
Xxxxxx Investors Life Insurance Company
Xxx Xxxxxx Xxxxx
Xxxx Xxxxx, Xxxxxxxx 00000
Attn: General Counsel
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10. Massachusetts Law to Apply.
This Agreement shall be construed and the provisions hereof interpreted
under and in accordance with the laws of The Commonwealth of Massachusetts.
11. Miscellaneous.
The name "Xxxxxxx Variable Life Investment Fund" is the designation of
the Trustees for the time being under a Declaration of Trust dated March 15,
1985, as amended, and all persons dealing with the Fund must look solely to the
property of the Fund for the enforcement of any claims against the Fund as
neither the Trustees, officers, agents or shareholders assume any personal
liability for obligations entered into on behalf of the Fund. No Portfolio shall
be liable for any obligations properly attributable to any other Portfolio.
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. This Agreement may be executed
simultaneously in two or more counterparts, each of which taken together shall
constitute one and the same instrument.
12. Entire Agreement.
This Agreement incorporates the entire understanding and agreement
among the parties hereto, and supersedes any and all prior understandings and
agreements between the parties hereto with respect to the subject matter hereof.
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed in its name and behalf by its duly authorized
representative and its seal to be hereunder affixed hereto as of the 26th day of
June, 1998.
SEAL XXXXXXX VARIABLE LIFE
INVESTMENT FUND
By: /s/ Xxxxxxx Xxxxxx
Xxxxxxx Xxxxxx
President
SEAL XXXXXX INVESTORS LIFE
INSURANCE COMPANY
By: /s/ Xxxx X. Xxxxxxx, Xx.
Its: Marketing Officer
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SCHEDULE A
TO PARTICIPATION AGREEMENT
Separate Account(s) of the Company
KILICO Variable Separate Account - 2
KILICO Variable Separate Account
KILICO Variable Annuity Separate Account
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SCHEDULE B
TO PARTICIPATION AGREEMENT
Portfolios and Classes Available for Purchase
Growth and Income Class A
Growth and Income Class B
International Class A
International Class B
Capital Growth Class A
Global Discovery Class A
