Exhibit h.9
PARTICIPATION AGREEMENT
THIS AGREEMENT is made and entered by and between XXXXXX ADVISORS TRUST, an
unincorporated business trust formed under the laws of Massachusetts (the
"Trust"), and KEYPORT LIFE INSURANCE COMPANY, a Rhode Island life insurance
company (the "Company"), on its own behalf and on behalf of each separate
account of the Company identified herein. This agreement shall become effective
at the Effective Time as defined in the Agreement and Plan of Merger among
Xxxxxx Asset Management, Ltd., Xxxxxx Asset Management, L.P. and Liberty
Financial Companies, Inc. and WAM Acquisition L.P. dated as of June 9, 2000.
WHEREAS, the Trust is a series-type mutual fund offering shares of
beneficial interest (the "Trust shares") consisting of one or more separate
series ("Series") of shares ("Series shares"), each such series representing an
interest in a particular managed portfolio of securities and other assets; and
WHEREAS, the Trust was established for the purpose of serving as an
investment vehicle for (i) separate accounts supporting variable annuity
contracts and variable life insurance policies to be offered by insurance
companies, and (ii) certain pension and retirement plans receiving favorable tax
treatment under the Internal Revenue Code of 1986, as amended; and
WHEREAS, the Company desires that the Trust serve as an investment vehicle
for certain separate accounts of the Company;
NOW, THEREFORE, in consideration of their mutual promises, the Trust and
the Company agree as follows:
ARTICLE I
Additional Definitions
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1.1 "Account" -- each separate account of the Company described more
specifically in Schedule 1 to this Agreement.
1.2. "Business Day" -- each day that the Trust is open for business as
provided in the Trust Prospectus.
1.3. "Code" -- the Internal Revenue Code of 1986, as amended.
1.4. "Contracts" -- the class or classes of variable annuity contracts or
variable life insurance contracts issued by the Company and described more
specifically on Schedule 2 to this Agreement.
1.5. "Contract Owners" -- the owners of the Contracts, as distinguished
from all Product Owners.
1.6. "Investment Adviser" -- the investment manager of the Trust.
1.7. "Participating Account" -- a separate account investing all or a
portion of its assets in the Trust, including the Account.
1.8. "Participating Insurance Company" -- any insurance company investing
in the Trust on its behalf or on behalf of a Participating Account, including
the Company.
1.9. "Products" -- variable annuity contracts and variable life insurance
policies supported by Participating Accounts investing assets attributable
thereto in the Trust, including the Contracts.
1.10. "Product Owners" -- owners of Products.
1.11. "Prospectus" -- with respect to a class of Contracts, each version
of the definitive prospectus or supplement thereto filed with the SEC pursuant
to Rule 497 under the 1933 Act ("Contracts Prospectus"). With respect to Trust
shares, each version of the definitive prospectus or supplement thereto filed
with the SEC pursuant to Rule 497 under the 1933 Act with respect to a series of
the Trust listed on Schedule 3 to this Agreement ("Trust Prospectus"). With
respect to any provision of this Agreement requiring a party to take action in
accordance with a Prospectus, such reference thereto shall be deemed to be to
the version last filed prior to the taking of such action. For purposes of
Article VIII, the term "Prospectus" shall include any statement of additional
information incorporated therein.
1.12. "Qualified Entity" -- A person or plan, including a pension or
retirement plan receiving favorable tax treatment under the Code, that qualifies
to purchase shares of the Trust under Section 817(h) of the Code. A natural
person having an indirect interest in the Trust by virtue of such natural
person's participation in a Qualified Entity is a "Qualified Participant."
1.13. "Registration Statement" -- with respect to the Trust Shares ("Trust
Registration Statement") or a class of Contracts ("Contracts Registration
Statement"), the registration statement filed with the SEC to register the
securities issued thereby under the 1933 Act, or the most recently filed
amendment thereto, in either case in the form in which it was declared or became
effective. The Contracts Registration Statement is described more specifically
on Schedule 2 to this Agreement. The Trust Registration Statement was filed on
Form N-1A (File No. 33-83548).
1.14. "1940 Act Registration Statement" -- with respect to the Trust or
the Account, the registration statement filed with the SEC to register such
entity as an investment company under the 1940 Act, or the most recently filed
amendment thereto. The Account 1940 Act Registration Statement is described
more specifically on Schedule 2 to this Agreement. The Trust 1940 Act
Registration Statement was filed on Form N-1A (File No. 811-8748).
1.15. "Statement of Additional Information" -- with respect to the Trust
or a class of Contracts, each version of the definitive statement of additional
information or supplement thereto filed with the SEC pursuant to Rule 497 under
the 0000 Xxx.
1.16. "SEC" -- the Securities and Exchange Commission.
1.17. "1933 Act" -- the Securities Act of 1933, as amended.
1.18. "1940 Act" -- the Investment Company Act of 1940, as amended.
ARTICLE II
Sale of Trust Shares
--------------------
2.1. The Trust shall make shares of those Series listed on Schedule 3 to
this Agreement available for purchase by the Company on behalf of the Account,
such purchases to be effected at net asset value in accordance with Section 2.3
of this Agreement. Notwithstanding the foregoing, (i) Trust Series in existence
now or that may be established in the future and not listed on Schedule 3 will
be made available to the Company only as the Trust and the Company may agree
pursuant to Article XI hereof, and (ii) the Board of Trustees of the Trust (the
"Trust Board") may suspend or terminate the offering of Trust shares of any
Series in any jurisdiction, if such action is required by law or by regulatory
authorities having jurisdiction or if, in the sole discretion of the Trust Board
acting in good faith and in light of its fiduciary duties under Federal and any
applicable state laws, suspension or termination is necessary or in the best
interests of the shareholders of any Series (it being understood that
"shareholders" for this purpose shall mean Product Owners and Qualified
Participants).
2.2. The Trust shall redeem, at the Company's request, any full or
fractional shares of the Trust held by the Company on behalf of the Account,
such redemptions to be effected at net asset value in accordance with Section
2.3 of this Agreement. Notwithstanding the foregoing, (i) the Company shall not
redeem Trust shares attributable to Contract Owners except in the circumstances
permitted in Section 2.7 of this Agreement, and (ii) the Trust may delay
redemption of Trust shares of any Series to the extent permitted by the 1940
Act, any rules, regulations or orders thereunder, or as described in the Trust
Prospectus.
2.3. (a) The Trust hereby appoints the Company as its designee for the
limited purpose of receiving purchase allocations of net amounts to the Account
or subaccounts thereof under the Contracts and other transactions relating to
the Contracts or the Account. Purchase and redemption requests shall be
processed by the Trust at the net asset value per share next calculated after
the Trust receives and accepts such request. The Trust shall calculate its net
asset value per share at the Trust's close of business on each Business Day (as
defined from time to time in the Trust Prospectus, and which as of the date of
execution of this Agreement is the time of the close of regular session trading
on the New York Stock Exchange, which is generally 4:00 p.m. Eastern Time.
Receipt of any such request on any Business Day by the Company as designee of
the Trust prior to the Trust's close of business shall constitute receipt by the
Trust on that same Business Day, provided that the Trust receives notice of such
request by 10 a.m. Eastern Time on the next following Business Day.
(b) The Company shall pay for shares of each Series on the same day
that it notifies the Trust of a purchase request for such shares. Payment for
Series shares shall be made in Federal funds transmitted to the Trust by wire to
be received by the Trust by 12:00 p.m. Eastern Time on the day the Trust is
notified of the purchase request for Series shares (unless the Trust determines
and so advises the Company that sufficient proceeds are available from
redemption of shares of other Series effected pursuant to redemption requests
tendered by the
Company on behalf of the Account). If payment in Federal funds for any purchase
is not received, or is received by the Trust after 3 p.m. Eastern Time on such
Business Day, the Company shall promptly, upon the Trust's request, reimburse
the Trust for any charges, costs, fees, interest or other expenses incurred by
the Trust in connection with any advances to, or borrowings or overdrafts by,
the Trust, or any similar expenses incurred by the Trust, as a result of non-
payment or late payment.
(c) Payment for Series shares redeemed by the Account or the Company
shall be made in Federal funds transmitted by wire to the Company or any other
designated person by 3 p.m. Eastern Time on the next Business Day after the
Trust is properly notified of the redemption order of Series shares (unless
redemption proceeds are to be applied to the purchase of Trust shares of other
Series in accordance with Section 2.3(b) of this Agreement), except that (i) if
payment of the redemption proceeds would require the Trust to dispose of
portfolio securities or otherwise incur additional costs, proceeds shall be
wired to the Company within seven days and the Trust shall notify the Company of
such delay by 3 p.m. Eastern Time on such Business Day; and (ii) the Trust
reserves the right to delay payment of redemption proceeds to the extent
permitted under Section 22(e) of the 1940 Act; and (iii) the Trust reserves the
right to effect payment of redemptions in kind, but only to the extent described
in the Trust Prospectus. The Trust 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.
2.4. The Trust shall use reasonable efforts to make the net asset value
per share for each Series available to the Company by 7 p.m. Eastern Time each
Business Day, and in any event, as soon as reasonably practicable after the net
asset value per share for such Series is calculated, and shall calculate such
net asset value in accordance with the Trust Prospectus. Neither the Trust, any
Series, the Investment Adviser, nor any of their affiliates shall be liable for
any information provided to the Company pursuant to this Agreement which
information is based on incorrect information supplied by the Company or any
other Participating Company to the Trust or the Investment Adviser.
2.5. The Trust shall furnish notice to the Company as soon as reasonably
practicable of any income dividends or capital gain distributions payable on any
Series shares. The Trust shall notify the Company promptly of the number of
Series shares so issued as payment of such dividends and distributions. The
Company, on its behalf and on behalf of the Account, hereby elects to receive
all such dividends and distributions as are payable on any Series shares in the
form of additional shares of that Series. The Company reserves the right, on
its behalf and on behalf of the Account, to revoke this election and to receive
all such dividends in cash.
2.6. Issuance and transfer of Trust shares shall be by book entry only.
Stock certificates will not be issued to the Company or the Account. Purchase
and redemption orders for Trust shares shall be recorded in an appropriate
ledger for the Account or the appropriate subaccount of the Account.
2.7. (a) The Company shall invest amounts available for investment under
the Contracts in the Series of the Trust specified in Schedule 3 in accordance
with allocation
instructions received from Contract Owners, it being understood that no changes
shall be made to Schedule 3 without the prior written consent of the Trust and
the Investment Adviser. The Company may withdraw the Account's investment in
the Trust or a Series of the Trust only: (i) as necessary to facilitate Contract
Owner requests; (ii) upon a determination by a majority of the Trust Board, or a
majority of disinterested Trust Board members, that an irreconcilable material
conflict exists among the interests of (x) some or all Product Owners or (y) the
interests of some or all of the Participating Insurance Companies and/or
Qualified Entities investing in the Trust; or (iii) in the event that the shares
of another investment company are substituted for series shares in accordance
with the terms of the Contracts upon the (x) requisite vote of the Contract
Owners having an interest in the affected Series and the written consent of the
Trust (unless otherwise required by applicable law); (y) upon issuance of an SEC
exemptive order pursuant to Section 26(b) of the 1940 Act permitting such
substitution; or (z) as may otherwise be permitted under applicable law.
(b) The Company shall not, without the prior written consent of the
Trust (unless otherwise required by applicable law), take any action to operate
the Account as a management investment company under the 1940 Act.
(c) The Trust shall not, without the prior written consent of the
Company (unless otherwise required by applicable law), take any action to
operate the Trust as a unit investment trust under the 1940 Act.
(d) The Company shall not, without the prior written consent of the
Trust (unless otherwise required by applicable law), solicit, induce or
encourage Contract Owners to change or modify the Trust or change the Trust's
investment adviser.
(e) The Company and the Trust acknowledge that the arrangement
contemplated by this Agreement is not exclusive; Trust shares may be sold to
other insurance companies; and the cash value of the Contracts may be invested
in other investment companies, provided, however, that (a) such other investment
company, or series thereof, has investment objectives or policies that are
substantially different from the investment objectives and policies of the
Trust; or (b) the Company gives the Trust 45 days written notice of its
intention to make such other investment company available as a funding vehicle
for the Contracts; 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 Trust prior to the execution of this Agreement; or (d)
the Trust consents to the use of such other investment company, such consent not
to be unreasonably withheld.
2.8. The Trust shall sell Trust shares only to Participating Insurance
Companies and their separate accounts and to Qualified Entities. The Trust
shall not sell Trust shares to any insurance company or separate account unless
an agreement complying with Article VII of this Agreement is in effect to govern
such sales.
ARTICLE III
Representations and Warranties
------------------------------
3.1. The Company represents and warrants that: (i) the Company is an
insurance company duly organized and in good standing under applicable law; (ii)
the Account is a validly existing separate account, duly established and
maintained in accordance with applicable law; (iii) the Account 1940 Act
Registration Statement has been filed with the SEC in accordance with the
provisions of the 1940 Act and the Account is duly registered as a unit
investment trust thereunder; (iv) the Contracts Registration Statement has been
declared effective by the SEC; (v) the Contracts will be issued in compliance in
all material respects with all applicable Federal and state laws; and (vi) the
Contracts currently are and at the time of issuance will be treated as annuity
contracts under applicable provisions of the Code.
3.2. The Trust represents and warrants that: (i) the Trust is an
unincorporated business trust duly formed under Massachusetts law; (ii) the
Trust 1940 Act Registration Statement has been filed with the SEC in accordance
with the provisions of the 1940 Act and the Trust is duly registered as an open-
end management investment company thereunder; (iii) the Trust Registration
Statement has been declared effective by the SEC; (iv) Trust shares sold
pursuant to this Agreement have been duly authorized for issuance in accordance
with applicable law; (v) the Trust believes that it (x) currently qualifies as a
"regulated investment company" under Subchapter M of the Code and (y) currently
complies with Section 817(h) of the Code and regulations thereunder; and (vi)
the Trust's investment policies are in material compliance with any investment
restrictions set forth on Schedule 4 to this Agreement. The Trust, however,
makes no representation as to whether any aspect of its operations (including,
but not limited to, fees and expenses and investment policies) otherwise
complies with the insurance laws or regulations of any state.
3.3. 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.
ARTICLE IV
Filings, Information and Expenses
---------------------------------
4.1. The Trust shall amend the Trust Registration Statement and the Trust
1940 Act Registration Statement from time to time as required in order to effect
the continuous offering of Trust shares and to maintain the Trust's registration
under the 1940 Act for so long as Trust shares are sold.
4.2. The Company shall amend the Contracts Registration Statement and the
Account 1940 Act Registration Statement from time to time as required in order
to effect the continuous offering of the Contracts or as may otherwise be
required by applicable law. The Company shall maintain a current effective
Contracts Registration Statement and the Account's registration under the 1940
Act for so long as the Contracts are outstanding, unless (a) a no-action letter
from the SEC has been obtained by the Company to the effect that such
registration statement need no longer be maintained; or (b) the Company has
supplied the Trust with an opinion of counsel to
the effect that maintaining such registration statement is no longer required;
or (c) the Company has notified the Trust in writing that, with respect to such
registration statement, the Company meets the terms and conditions of, and is
relying on, Great West Life & Annuity Insurance Company (pub. avail. Oct. 23,
1990), and any subsequent no-action letter released by the staff of the SEC
addressing the same subject matter. The Company shall file, register, qualify
or obtain approval of the Contracts for sale to the extent required by
applicable insurance and securities laws of the various states.
4.3 The Trust shall provide the Company with as many copies of the Trust
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 the Trust Prospectus as set in type at the Trust's expense) and other
assistance as is reasonably necessary in order for the Company once each year
(or more frequently if the Trust Prospectus is more frequently amended) to have
the Contracts Prospectus and Trust Prospectus printed together in one document.
4.4 The Company shall deliver Contracts, Contracts and Trust Prospectuses,
Contracts and Trust Statements of Additional Information, and all amendments or
supplements to any of the foregoing to Contract Owners and prospective Contract
Owners, as required by applicable federal securities laws.
4.5. The Company shall:
(a) inform the Trust of any state in which the Trust is required
under such state's securities laws to qualify for sale of its shares pursuant to
this participation agreement; and
(b) inform the Trust of any investment restrictions imposed by state
insurance law that may become applicable to the Trust from time to time as a
result of the Account's investment therein (including, but not limited to,
restrictions with respect to fees and expenses and investment policies), other
than those set forth on Schedule 4 to this Agreement.
4.6. Upon receipt of information from the Company pursuant to Section
4.5(b), the Trust shall determine whether it is in the best interests of
shareholders (it being understood that "shareholders" for this purpose shall
mean Product Owners and Qualified Participants) to comply with any such
restrictions. If the Trust determines that it is not in the best interests of
shareholders, the Trust shall so inform the Company, and the Trust and the
Company shall discuss alternative accommodations in the circumstances. If the
Trust determines that it is in the best interests of shareholders to comply with
such restrictions, the Trust and the Company shall amend Schedule 4 to this
Agreement to reflect such restrictions.
4.7. All expenses incident to each party's performance under this
Agreement (including expenses expressly assumed by such party pursuant to this
Agreement) shall be paid by the such party to the extent permitted by law.
(a) Expenses assumed by the Trust include, but are not limited to,
the costs of: registration and qualification of the Trust shares under the
federal securities laws; preparation and filing with the SEC of the Trust
Prospectus, Trust Registration Statement, Trust proxy
materials and shareholder reports; the printing and mailing of all proxy
statements and periodic reports; the preparation of camera-ready copy of Trust
Prospectuses and Statements of Additional Information required to be provided by
the Trust to its then-current shareholders; preparation of all statements and
notices required by any Federal or state securities law; all taxes on the
issuance or transfer of Trust shares; and any expenses permitted to be paid or
assumed by the Trust pursuant to a plan, if any, under Rule 12b-1 under the 1940
Act. The Trust shall pay no fee or other compensation to the Company under this
Agreement, and shall not be charged for the costs of printing and mailing to
prospective Contract Owners copies of the Trust Prospectus, Trust Statement of
Additional Information, notices, proxy statements, periodic reports, or other
printed materials.
(b) Expenses assumed by the Company include, but are not limited to,
the costs of: registration and qualification of the Contracts under the federal
securities laws; preparation and filing with the SEC of the Contracts
Prospectus, Contracts Registration Statement, and Contract Owner reports; and
the printing and mailing of all periodic reports, Contracts Prospectuses,
Statements of Additional Information, and notices to current and prospective
Contract Owners required by any Federal or state insurance law other than those
paid for by the Trust.
4.8. No piece of advertising or sales literature or other promotional
material in which the Trust is named shall be used, except with the prior
written consent of the Trust. Any such piece shall be furnished to the Trust
for such consent prior to its use. The Trust shall respond to any request for
written consent on a prompt and timely basis, but failure to respond shall not
relieve the Company of the obligation to obtain the prior written consent of the
Trust. The Trust may at any time in its sole discretion revoke such written
consent, and upon notification of such revocation, the Company shall no longer
use the material subject to such revocation. The Trust may delegate its rights
and responsibilities under this provision to the Investment Adviser.
4.9. The Company shall not give any information or make any
representations or statements on behalf of the Trust or concerning the Trust
other than the information or representations contained in the Trust
Registration Statement or Trust Prospectus or in reports or proxy statements for
the Trust which are in the public domain or approved in writing by the Trust for
distribution to Contract Owners, or in sales literature or other promotional
material approved in accordance with Section 4.8 of this Agreement, except with
the prior written consent of the Trust.
4.10. The Trust shall not give any information or make any representations
on behalf of the Company or concerning the Company, the Account or the Contracts
other than the information or representations contained in the Contracts
Registration Statement or Contracts Prospectus or in reports of the Account
which are in the public domain or approved in writing by the Company for
distribution to Contract Owners, or in sales literature or other promotional
material approved in writing by the Company, except with the prior written
consent of the Company.
4.11. Each party shall provide to the other at least one complete copy of
all Registration
Statements, Prospectuses, Statements of Additional Information, periodic and
other shareholder or Contract Owner reports, proxy statements, solicitations of
voting instructions, sales literature and other promotional materials,
applications for exemptions, requests for no-action letters, and all amendments
or supplements to any of the above, that relate to the Trust, the Contracts or
the Account, as the case may be, promptly after the filing by or on behalf of
such party of such document with the SEC or other regulatory authorities.
4.12. Each party shall provide to the other upon request copies of draft
versions of any Registration Statements, Prospectuses, Statements of Additional
Information, periodic and other shareholder or Contract Owner reports, proxy
statements, solicitations for voting instructions, sales literature and other
promotional materials, applications for exemptions, requests for no-action
letters, and all amendments or supplements to any of the above, to the extent
that the other party reasonably needs such information for purposes of preparing
a report or other filing to be filed with or submitted to a regulatory agency.
If a party requests any such information before it has been filed, the other
party will provide the requested information if then available and in the
version then available at the time of such request.
4.13. Each party hereto shall cooperate with the 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. However, such access shall not extend to attorney-client
privileged information.
4.14. For purposes of this Article IV, the phrase "sales literature or
other promotional material" includes, but is not limited to, any material
constituting sales literature or advertising under the NASD rules, the 1940 Act
or the 1933 Act.
ARTICLE V
Voting of Trust Shares
----------------------
With respect to any matter put to vote by the holders of Trust shares or
Series shares ("Voting Shares"), the Company shall:
(a) solicit voting instructions from Contract Owners to which Voting
Shares are attributable;
(b) vote Voting Shares of each Series attributable to Contract Owners
in accordance with instructions or proxies timely received from such Contract
Owners;
(c) unless permitted under applicable law, vote Voting Shares of each
Series attributable to Contract Owners for which no instructions have been
received in the same proportion as Voting Shares of such Series for which
instructions have been timely received; and
(d) unless permitted under applicable law, vote Voting Shares of each
Series held by the Company on its own behalf or on behalf of the Account that
are not attributable to
Contract Owners in the same proportion as Voting Shares of such Series for which
instructions have been timely received.
The Company shall be responsible for assuring that voting privileges for
the Account are calculated in a manner consistent with the provisions set forth
above.
ARTICLE VI
Compliance with Code
--------------------
6.1. The Trust undertakes to comply with Section 817(h) of the Code, and
all regulations issued thereunder.
6.2. The Trust undertakes to maintain its qualification as a registered
investment company (under Subchapter M or any successor or similar provision),
and undertakes to notify the Company immediately upon having a reasonable basis
for believing that it has ceased to so qualify or that it might not so qualify
in the future.
6.3. The Company undertakes to maintain the treatment of the Contracts as
annuity contracts or life insurance policies, whichever is appropriate, under
applicable provisions of the Code and shall notify the Trust 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.
ARTICLE VII
Potential Conflicts
-------------------
The parties to this Agreement acknowledge that the Trust may file an
application with the SEC to request an order granting relief from various
provisions of the 1940 Act and the rules thereunder to the extent necessary to
permit Trust shares to be sold to and held by variable annuity and variable life
insurance separate accounts of both affiliated and unaffiliated Participating
Insurance Companies, as well as by Qualified Entities. Any conditions or
undertakings that may be imposed on the Company and the Trust by virtue of such
order shall be incorporated herein by this reference, as of the date such order
is granted, as though set forth herein in full, and the parties to this
Agreement shall comply with such conditions and undertakings to the extent
applicable to each such party. The Trust will not enter into a participation
agreement with any other Participating Insurance Company unless it imposes the
same conditions and undertakings imposed by virtue of such order and
incorporated by reference herein on the parties to such agreement.
ARTICLE VIII
Indemnification
---------------
8.1. The Company shall indemnify and hold harmless the Trust and each
person who controls or is associated with the Trust within the meaning of such
terms under the federal securities laws (but not any Participating Insurance
Companies or Qualified Entities) and any officer, trustee, director, employee or
agent of the foregoing, against any and all losses, claims, damages or
liabilities, joint or several (including any investigative, legal and other
expenses
reasonably incurred in connection with, and any amounts paid in settlement of,
any action, suit or proceeding or any claim asserted), to which they or any of
them may become subject under any statute or regulation, at common law or
otherwise, insofar as such losses, claims, damages or liabilities:
(a) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the Contracts Registration
Statement, Contracts Prospectus, sales literature or other promotional material
for the Contracts or the Contracts themselves (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 obligation to
indemnify shall not apply if such statement or omission or such alleged
statement or alleged omission was made in reliance upon and in conformity with
information furnished in writing to the Company by the Trust for use in the
Contracts Registration Statement, Contracts Prospectus or in the Contracts or
sales literature or promotional material for the Contracts (or any amendment or
supplement to any of the foregoing) or otherwise for use in connection with the
sale of the Contracts or Trust shares; or
(b) arise out of any untrue statement or alleged untrue statement of
a material fact contained in the Trust Registration Statement, Trust Prospectus
or sales literature or other promotional material of the Trust (or any amendment
or supplement to any of the foregoing), 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 statement or omission was made in reliance upon and in
conformity with information furnished in writing to the Trust by or on behalf of
the Company; or
(c) arise out of or are based upon any wrongful conduct of the
Company or persons under its control (or subject to its authorization or
supervision) with respect to the sale or distribution of the Contracts or Trust
shares; or
(d) arise as a result of any failure by the Company to perform its
obligations under the terms of this Agreement (including a failure, whether
unintentional or in good faith or otherwise, to comply with the undertaking
specified in Article VI of this Agreement, unless such failure is a result of
the Trust's material breach of this Agreement); or
(e) arise out of any material breach by the Company of this
Agreement, including but not limited to any failure to transmit a request for
redemption or purchase of Trust shares on a timely basis in accordance with the
procedures set forth in Article II.
This indemnification will be in addition to any liability that the Company
may otherwise have; provided, however, that no person otherwise entitled to
indemnification pursuant to this Section 8.1 shall be entitled to
indemnification if such loss, claim, damage or liability is due to the willful
misfeasance, bad faith, gross negligence or reckless disregard of duty by the
person seeking indemnification.
8.2. The Trust shall indemnify and hold harmless the Company and each
person who controls or is associated with the Company within the meaning of such
terms under the federal securities laws and any officer, director, employee or
agent of the foregoing, against any and all losses, claims, damages or
liabilities, joint or several (including any investigative, legal and other
expenses reasonably incurred in connection with, and any amounts paid in
settlement of, any action, suit or proceeding or any claim asserted), to which
they or any of them may become subject under any statute or regulation, at
common law or otherwise, insofar as such losses, claims, damages or liabilities:
(a) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the Trust Registration
Statement, Trust Prospectus 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 obligation to indemnify shall not apply if such statement or
omission or alleged statement or alleged omission was made in reliance upon and
in conformity with information furnished in writing by the Company to the Trust
for use in the Trust Registration Statement, Trust Prospectus or sales
literature or promotional material for the Trust (or any amendment or supplement
to any of the foregoing); or
(b) arise out of any untrue statement or alleged untrue statement of
a material fact contained in the Contracts Registration Statement, Contracts
Prospectus or sales literature or other promotional material for the Contracts
(or any amendment or supplement to any of the foregoing), 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 statement or omission was made in
reliance upon information furnished in writing by the Trust to the Company; or
(c) arise out of or are based upon wrongful conduct of the Trust with
respect to the sale of Trust shares; or
(d) arise as a result of any failure by the Trust to perform its
obligations under the terms of this Agreement (including a failure, whether
unintentional or in good faith or otherwise, to comply with the undertakings
specified in Article VI of this Agreement, unless such failure is a result of
the Company's material breach of this Agreement); or
(e) arise out of any material breach by the Trust of this Agreement.
This indemnification will be in addition to any liability that the Trust
may otherwise have; provided, however, that no person otherwise entitled to
indemnification pursuant to this Section 8.2 shall be entitled to
indemnification if such loss, claim, damage or liability is due to the willful
misfeasance, bad faith, gross negligence or reckless disregard of duty by the
person seeking indemnification.
8.3. After receipt by a party entitled to indemnification ("indemnified
party") under
this Article VIII of notice of the commencement of any action, if a claim in
respect thereof is to be made by the indemnified party against any person
obligated to provide indemnification under this Article VIII ("indemnifying
party"), such indemnified party will notify the indemnifying party in writing of
the commencement thereof as soon as practicable thereafter, provided that the
failure to so notify the indemnifying party will not relieve the indemnifying
party from any liability under this Article VIII, except to the extent that the
omission results in a failure of actual notice to the indemnifying party and
such indemnifying party is damaged solely as a result of the failure to give
such notice. The indemnifying party, upon the request of the indemnified party,
shall retain counsel reasonably satisfactory to the indemnified party to
represent the indemnified party and any others the indemnifying party may
designate in such proceeding and shall pay the fees and disbursements of such
counsel related to such proceeding. In any such proceeding, any indemnified
party shall have the right to retain its own counsel, but the fees and expenses
of such counsel shall be at the expense of such indemnified party 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.
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 Commonwealth of
Massachusetts, without giving effect to the principles of conflicts of laws.
9.2. This Agreement shall be subject to the provisions of the 1933 Act,
1940 Act and Securities Exchange Act of 1934, as amended, and the rules and
regulations and rulings thereunder, including such exemptions from those
statutes, rules and regulations as the SEC may grant, and the terms hereof shall
be limited, interpreted and construed in accordance therewith.
ARTICLE X
Termination
-----------
10.1 This Agreement shall not terminate until the Trust is dissolved,
liquidated, or merged into another entity, or, as to any Series of the Trust, an
Account no longer invests in that Series. However, certain obligations of, or
restrictions on, the parties to this Agreement may terminate as provided in
Sections 10.2 and 10.3.
10.2. The obligation of the Trust to sell shares to the Company pursuant
to Article II of this Agreement shall terminate at the option of the Trust upon
30 days notice to the Company:
(a) upon institution of formal proceedings against the Company by the
NASD, the SEC, the insurance commission of any state or any other regulatory
body regarding the Company's duties under this Agreement or related to the sale
of the Contracts, the operation of the Account, the administration of the
Contracts or the purchase of Trust shares, or an expected or anticipated ruling,
judgment or outcome which would, in the Trust's reasonable judgment, materially
impair the Company's ability to meet and perform the Company's obligations and
duties hereunder;
(b) in the event any of the Contracts are not registered, issued or
sold in accordance with applicable Federal and/or state law;
(c) if the Contracts cease to qualify as annuity contracts under the
Code, or if the Trust reasonably believes that the Contracts may fail to so
qualify;
(d) if the Trust shall determine, in its sole judgment exercised in
good faith, that either (1) the Company shall have suffered a material adverse
change in its business or financial condition or (2) the Company shall have been
the subject of material adverse publicity which is likely to have a material
adverse impact upon the business and operations of the Trust;
(e) upon the Company's assignment of this Agreement (including,
without limitation, any transfer of the Contracts or the Account to another
insurance company pursuant to an assumption reinsurance agreement) unless the
Trust consents thereto; or
(f) upon termination pursuant to Section 10.1 or notice from the
Company pursuant to Section 10.3.
In exercising its option to terminate its obligation to sell Shares to the
Company, the Trust shall continue to make its shares available to the extent
required by applicable law and may elect to continue to make Trust shares
available to the extent necessary to permit owners of Contracts in effect on the
effective date of such termination (hereinafter referred to as "Existing
Contracts") 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 Trust shall promptly notify the Company
whether the Trust is electing to make Trust shares so available after
termination.
10.3. The restrictions on the Company under Section 2.7 of this Agreement
shall terminate at the option of the Company upon 30 days notice to the Trust:
(a) if shares of any Series are not reasonably available to meet the
requirements of the Contracts as determined by the Company, and the Trust, after
receiving written notice from the Company of such non-availability, fails to
make available a sufficient number of Trust shares to meet the requirements of
the Contracts within 5 days after receipt thereof;
(b) upon institution of formal proceedings against the Trust by the
NASD, the SEC or any state securities or insurance commission or any other
regulatory body;
(c) if the Trust ceases to qualify as a Regulated Investment Company
under Subchapter M of the Code, or under any successor or similar provision, or
if the Company reasonably believes based on an opinion of counsel satisfactory
to the Trust that the Trust may fail to so qualify, and the Trust, upon written
request, fails to provide reasonable assurance that it will take action to cure
or correct such failure;
(d) if the Trust fails to meet the diversification requirements
specified in Section 817(h) of the Code and any regulations thereunder and the
Trust, upon written request, fails to provide reasonable assurance that it will
take action to cure or correct such failure; or
(e) if the Trust informs the Company pursuant to Section 4.6 that the
Trust will not comply with investment restrictions as requested by the Company
and the Trust and the Company are unable to agree upon any reasonable
alternative accommodations.
10.4. This Article X shall not apply to any termination made pursuant to
Article VII or any conditions or undertakings incorporated by reference in
Article VII, and the effect of such Article VII termination shall be governed by
the provisions set forth or incorporated by reference therein.
ARTICLE XI
Applicability to New Accounts and New Contracts
-----------------------------------------------
The parties to this Agreement may amend the schedules to this Agreement
from time to time to reflect, as appropriate, changes in or relating to the
Contracts or Series, or additions of new classes of Contracts to be issued by
the Company through separate accounts investing in the Trust. The provisions
of this Agreement shall be equally applicable to each such class of Contracts,
Series and Accounts, effective as of the date of amendment of such Schedule,
unless the context otherwise requires.
ARTICLE XII
Non-Liability of Trustees and Shareholders
------------------------------------------
Any obligation of the Trust hereunder shall be binding only upon the assets
of the Trust (or applicable Series thereof) and shall not be binding upon any
trustee, officer, employee, agent or shareholder of the Trust. Neither the
authorization of any action by the Trust Board or shareholders of the Trust, nor
the execution of this Agreement on behalf of the Trust, shall impose any
liability upon any trustee, officer, or shareholder of the Trust.
ARTICLE XIII
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 Trust: Name:
Title:
Xxxxxx Advisors Trust
000 Xxxx Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
If to the Company: Name: Xxxxxxx X. Xxxxxxxxxxx
Title: General Counsel
Keyport Life Insurance Company
000 Xxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
ARTICLE XIV
Miscellaneous
-------------
14.1. The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions hereof or
otherwise affect their construction or effect.
14.2. This Agreement may be executed simultaneously in two or more
counterparts, each of which together shall constitute one and the same
instrument.
14.3. If any provision of this Agreement shall be held or made invalid by
a court decision, statute, rule or otherwise, the remainder of the Agreement
shall not be affected thereby.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed in its name and behalf by its duly authorized officer on the date
specified below.
KEYPORT LIFE INSURANCE COMPANY
(Company)
Date: By:
Name:
Title:
XXXXXX ADVISORS TRUST
(Trust)
Date: By:
Name:
Title:
Schedule 1
Accounts of the Company
Investing in the Trust
Effective as of the date the Agreement was executed, the following separate
accounts are subject to the Agreement:
================================================================================
Name of Date Established by SEC 1940 Act Type of Product
Account and Board of Directors Registration Supported by
Subaccounts of the Company Number Account
================================================================================
Variable Account A January 30, 1996 811-07543 Annuities
--------------------------------------------------------------------------------
Xxxxxx U.S. Small
Cap Sub-account
--------------------------------------------------------------------------------
Xxxxxx International
Small Cap
Sub-account
--------------------------------------------------------------------------------
Xxxxxx Twenty
Sub-account
--------------------------------------------------------------------------------
Xxxxxx Foreign Forty
Sub-account
================================================================================
IN WITNESS WHEREOF, the Trust and the Company hereby adopt this Schedule 1 in
accordance with Article XI of the Agreement.
----------------------------------- -----------------------------------
Xxxxxx Advisors Trust Keyport Life Insurance Company
Schedule 2
Classes of Contracts
Supported by Separate Accounts
Listed on Schedule 1
Effective as of the date the Agreement was executed, the following classes of
Contracts are subject to the Agreement:
================================================================================
SEC 1933 Act Name of Supporting
Contract Marketing Name Registration Number Account
================================================================================
--------------------------------------------------------------------------------
Keyport Charter 333-75729 Variable Account A
--------------------------------------------------------------------------------
Keyport Vista 333-01043 Variable Account A
================================================================================
IN WITNESS WHEREOF, the Trust and the Company hereby adopt this Schedule 2 in
accordance with Article XI of the Agreement.
_____________________________________ ______________________________________
Xxxxxx Advisors Trust Keyport Life Insurance Company
Schedule 3
Trust Series Available Under
Each Class of Contracts
Effective as of the date this Agreement was executed, the following Trust Series
are available under the Contracts:
================================================================
Contracts Marketing Name Trust Series
================================================================
Keyport Charter Xxxxxx U.S. Small Cap
Xxxxxx International Small Cap
Xxxxxx Twenty
Xxxxxx Foreign Forty
----------------------------------------------------------------
Keyport Vista Xxxxxx U.S. Small Cap
Xxxxxx International Small Cap
Xxxxxx Twenty
Xxxxxx Foreign Forty
================================================================
IN WITNESS WHEREOF, the Trust and the Company hereby adopt this Schedule 3 in
accordance with Article XI of the Agreement.
_____________________________________ ______________________________________
Xxxxxx Advisors Trust Keyport Life Insurance Company
Schedule 4
Investment Restrictions
Applicable to the Trust
Effective as of the date the Agreement was executed, the following investment
restrictions are applicable to the Trust:
None.
IN WITNESS WHEREOF, the Trust and the Company hereby adopt this Schedule 4 in
accordance with Article XI of the Agreement.
_____________________________________ ______________________________________
Xxxxxx Advisors Trust Keyport Life Insurance Company
