EXHIBIT 23(m)(2)
DISTRIBUTION AND SERVICES AGREEMENT
THIS AGREEMENT is made as of July 28, 2000, by and among Kelmoore
Investment Company, Inc. (the "Distributor"), a California corporation with its
principal offices at 0000 Xxxx Xxxxxxxx Xxxx, Xxxx Xxxx, Xxxxxxxxxx 00000, as
distributor of the shares of The Kelmoore Strategy" Variable Trust (the
"Trust"), and [INSURANCE COMPANY] (the "Company"), a [STATE] corporation having
its principal office and place of business at [INSURANCE COMPANY ADDRESS],
concerning certain distribution and administrative services to be provided by
the Company with respect to the Trust.
1. THE TRUST. The Trust is a Delaware business trust registered with the
Securities and Exchange Commission (the "SEC") under the Investment Company Act
of 1940, as amended (the "Act"), as an open-end management investment company.
The Trust consists of one or more separate series of shares ("Funds") and serves
as a funding vehicle for variable annuity contracts and variable life insurance
contracts (collectively, referred to herein as "Variable Contracts") and
qualified pension and retirement plans ("Qualified Plans"). As such, the Trust
may sell its shares to insurance companies, their separate accounts and
Qualified Plans.
2. THE COMPANY. _______________ is a [STATE] life insurance company. The Company
has entered into a participation agreement with the Trust (the "Participation
Agreement") pursuant to which the Company purchases shares of the Funds for the
separate accounts identified in the Participation Agreement (the "Separate
Accounts") supporting the Company's Variable Contracts.
3. THE DISTRIBUTOR. The Distributor serves as the distributor for the Trust, and
investment adviser to the Funds.
4. DISTRIBUTION AGREEMENT. Under a distribution agreement entered into by the
Trust and the Distributor on July 28, 2000 (the "Distribution Agreement"), the
Trust, on behalf of each Fund that has approved a distribution plan in
accordance with Section 12(b) of the Act, Rule 12b-1 and the other rules and
regulations thereunder (the "Plan"), is authorized to pay the Distributor a fee
for remittance to life insurance companies that purchase shares of the Fund to
fund their Variable Contracts (or their affiliates) for costs incurred or paid
in connection with the indirect distribution of shares of the Fund ("Fund
Servicing Fee"). Reimbursable distribution and administrative expenses
("Eligible Expenses") include, but are not limited to, the following:
a) the cost for printing and mailing of Trust prospectuses,
statements of additional information, and any supplements
thereto, and shareholder reports for existing and prospective
Variable Contract owners;
b) the costs relating to the development, preparation, printing
and mailing of Trust advertisements, sales literature and
other promotional materials describing and/or relating to the
Trust and including materials intended for use within the
Company, for broker-dealer-only use, or retail use;
c) expenses incurred in connection with the presentation of
seminars and sales meetings designed to promote the
distribution of shares of the Trust;
d) the cost of obtaining information and providing explanations
to Variable Contract owners regarding the Funds' investment
objectives and policies and other information about the Trust
and the Funds, including the performance of the Funds;
e) the cost of training sales personnel regarding the Trust;
f) compensation of sales personnel in connection with the
allocation of cash values and premiums of the Variable
Contracts to the Trust;
g) the cost of personal service and/or maintenance of Variable
Contract owner accounts with respect to shares of the Trust
attributable to such accounts; and
h) the cost of financing any other activity that the Board of
Trustees of the Trust may determine is primarily intended to
result in the sale of shares of the Funds.
5. DISTRIBUTION AND ADMINISTRATIVE SERVICES. The Company has agreed to provide
distribution and administrative services to the Trust, as they may relate to the
investment in the Trust by the Company's Separate Account(s) through the
Variable Contracts, as described under 4 above.
6. NATURE OF PAYMENTS. In consideration of the services to be provided by the
Company in connection with the Variable Contracts, the Distributor shall remit
the Fund Servicing Fee to [SPECIFY COMPANY OR AFFILIATE] on a quarterly basis
equal to a percentage of the average daily net assets of the Funds attributable
to the Variable Contracts, at the annual rate of 0.25%. From time to time, the
parties hereto shall review the Fund Servicing Fee to determine whether it
reasonably approximates the incurred and anticipated costs, over time of the
Company in connection with its duties hereunder. The parties agree to negotiate
in good faith any change to the Fund Servicing Fee proposed by a party in good
faith.
7. TERM.
a) This Agreement shall take effect on the date hereof after it
has been approved by a vote of the majority of Trustees of the
Trust and those Trustees of the Trust who are not "interested
persons" of the Trust and who have no direct or indirect
financial interest in the operation of the Plan, the
Distribution Agreement or this Agreement (the "Disinterested
Trustees"), cast in person at meeting called for the purpose
of voting on this Agreement. This Agreement shall remain in
full force and effect until one year from the effective date
hereof, and may be continued for twelve month periods (or
portions thereof) thereafter; provided that such continuance
shall be specifically approved annually by the Board of
Trustees of
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the Trust or by a majority of the outstanding voting
securities of each Fund of the Trust as it applies to that
Fund, and in either case, also by a majority of the
Disinterested Trustees. This Agreement may be amended, with
respect to any Fund, with the approval of the Board of
Trustees or of a majority of the outstanding voting securities
of each Fund of the Trust as it applies to that Fund,
provided, that in either case, such amendment shall also be
approved by a majority of the Disinterested Trustees.
b) This Agreement, with respect to any Fund, may be terminated,
at any time without payment of any penalty, by vote of a
majority of the Disinterested Trustees or by vote of a
majority of the outstanding voting securities of that Fund, or
may be terminated by the Distributor or the Company, in any
case on not more than 60 days' written notice delivered
personally or mailed by registered mail, postage prepaid to
the other party.
c) This Agreement shall terminate automatically in the event of
its assignment.
d) This Agreement shall terminate automatically upon the
redemption of the Company's and the Separate Account's
investment in the Trust, or upon termination of the
Participation Agreement.
Once terminated, no further payments shall be made under this Agreement
notwithstanding the existence of any unreimbursed expenses.
8. WRITTEN REPORTS. Distributor may request that the Company provide such
information as is reasonably necessary for the Distributor to prepare and submit
annual reimbursable distribution expense budgets and quarterly written reports
describing the amount of Eligible Expenses and the purposes of those Eligible
Expenses with respect to a Fund incurred or paid by the Company since the date
of this Agreement to the Board of Trustees of the Trust. The Company shall use
its best efforts to provide any such information as soon as practicable upon
request by the Distributor.
9. INDEMNIFICATION.
a) The Company agrees to indemnify and hold harmless the
Distributor and its officers, directors and affiliates from
any and all loss, liability and expense resulting from the
gross negligence or willful wrongful act of the Company under
this Agreement, except to the extent such loss, liability or
expense is the result of the willful misfeasance, bad faith or
gross negligence of the Distributor in the performance of its
duties, or by reason of the reckless disregard of its
obligations and duties under this Agreement.
b) The Distributor agrees to indemnify and hold harmless the
Company and its officers, directors and affiliates from any
and all loss, liability and expense resulting from the gross
negligence or willful wrongful act of the Distributor under
this Agreement, except to the extent such loss, liability or
expense is the result of
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the willful misfeasance, bad faith or gross negligence of the
Company in the performance of its duties, or by reason of the
reckless disregard of its obligations and duties under this
Agreement.
10. REPRESENTATIONS AND WARRANTIES.
a) The Company represents and warrants that:
(1) it is duly organized and in good standing as an
insurance company under the laws of the state of its
organization; and
(2) its entering into and performing its obligations under
this Agreement does not and will not violate its
charter documents or by-laws, rules or regulations, or
any agreement to which it is a party.
b) The Distributor represents and warrants that:
(1) it is duly organized and in good standing in the
state of its organization; and
(2) its entering into and performing its obligations
under this Agreement does not and will not violate
its charter documents or by-laws, rules or
regulations, or any agreement to which it is a party.
11. NOTICE. Notices and communications required or permitted hereby will be
given to the following persons at the following addresses and facsimile numbers,
or such other persons, addresses or facsimile numbers as the party receiving
such notices or communications may subsequently direct in writing:
Kelmoore Investment Company
0000 Xxxx Xxxxxxxx Xxxx
Xxxxx 000
Xxxx Xxxx, Xxxxxxxxxx 00000
Attn: _______________
Fax: (___) __________
[LIFE INSURANCE COMPANY]
[ADDRESS]
________________________
________________________
Attn: _______________
Fax: (___) __________
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12. APPLICABLE LAW. Except insofar as the Act or other federal laws and
regulations may be controlling, this Agreement will be construed and the
provisions hereof interpreted under and in accordance with California law,
without regard for that state's principles of conflict of laws.
13. SEVERABILITY. If any provision of this Agreement is held or made invalid by
a court decision, statute, rule or otherwise, the remainder of this Agreement
will not be affected thereby.
14. CUMULATIVE RIGHTS. The rights, remedies and obligations contained in this
Agreement are cumulative and are in addition to any and all rights, remedies and
obligations, at law or in equity, that the parties are entitled to under federal
and state laws.
15. CONFIDENTIALITY. Except to the extent that the Company's, Trust's or
Distributor's counsel may deem it necessary or advisable to disclose in Variable
Contract and/or Trust prospectuses or elsewhere, the terms of this Agreement
will be held confidential. The Distributor shall provide advance written
notification, including particulars, to the Company that it or the Trust is
making such disclosure. The Company shall provide advance written notification,
including particulars, to the Distributor that it is making such disclosure.
16. RECORDS. Each party shall provide each other party or its designated agent
reasonable access to its records to permit it to audit or review the accuracy of
the expenses submitted for payment under this Agreement.
17. MEANING OF CERTAIN TERMS. As used in this Agreement, the terms "interested
persons," "assignment" and "majority of the outstanding voting securities" will
be deemed to have the same meaning that those terms have under the Act and the
rules and regulations under the Act, subject to any exemption that may be
granted to the Trust under the Act by the Securities and Exchange Commission.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized officers signing below.
KELMOORE INVESTMENT COMPANY, INC.
By:
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Name:
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Title:
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[LIFE INSURANCE COMPANY]
By:
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Name:
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Title:
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