Exhibit 1.A.9.J.
JANUARY 31, 2001 AMENDMENT TO
FUND PARTICIPATION AGREEMENT
AMONG
▇▇▇▇▇▇▇▇ PORTFOLIOS, INC., ▇▇▇▇▇▇▇▇ ADVISORS, INC. AND
CONSECO VARIABLE INSURANCE COMPANY , INC.
For good and valuable consideration, the receipt of which is hereby
acknowledged, the parties agree to amend the May 1, 2000 Fund Participation
Agreement among ▇▇▇▇▇▇▇▇ Portfolios, Inc., ▇▇▇▇▇▇▇▇ Advisors, Inc. and Conseco
Variable Insurance Company as follows:
1. Schedule A thereto is hereby modified by adding one new segregated asset
account of the Conseco Variable Insurance Company to that schedule, which
shall read as follows:
SCHEDULE A
SEGREGATED ASSET ACCOUNTS
- Conseco Variable Annuity Account C
- Conseco Variable Annuity Account E
- Conseco Variable Annuity Account F
- Conseco Variable Annuity Account G
- Conseco Variable Annuity Account H
- Conseco Variable Annuity Account I
- Conseco Variable Account L
2. All other terms of the Agreement shall remain in full force and effect.
Page 1 of 2
IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment
to be executed in its name and on its behalf by its duly authorized
representative as of this date, Feb 12, 2001.
▇▇▇▇▇▇▇▇ PORTFOLIOS, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
----------------------------
Name:
Title:
▇▇▇▇▇▇▇▇ ADVISORS, INC.
By: /s/ Illegible
----------------------------
Name:
Title:
CONSECO VARIABLE INSURANCE COMPANY
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇
Vice President
Page 2 of 2
FUND PARTICIPATION AGREEMENT
THIS AGREEMENT, effective as of the 1st day of May, 2000, between
▇▇▇▇▇▇▇▇ Portfolios, Inc., an open-end management investment company organized
as a Maryland Corporation (the "Fund"), ▇▇▇▇▇▇▇▇ Advisors, Inc., a Delaware
Corporation (the "Distributor"), and Conseco Variable Insurance Company, a life
insurance company organized under the laws of the State of Texas (the
"Company"), on its own behalf and on behalf of each segregated asset account of
the Company set forth on Schedule A, as may be amended from time to time (the
"Account").
WITNESSETH:
-----------
WHEREAS, the Fund is a registered open-end management investment company
under the Investment Company Act of 1940, as amended (the "1940 Act"), and has
filed a currently effective registration statement to offer and sell its shares
under the Securities Act of 1933, as amended (the "1933 Act"); and
WHEREAS, the Fund desires to act as an investment vehicle for separate
accounts established for variable life insurance policies and variable annuity
contracts to be offered by insurance companies that have entered into
participation agreements with the Fund (the "Participating Insurance
Companies"); and
WHEREAS, the shares of the Fund are divided into several series of
shares, each series representing an interest in a particular managed portfolio
of securities and other assets (the "Portfolios"); and
WHEREAS, the Fund has obtained an order from the Securities and Exchange
Commission ("SEC") granting Participating Insurance Companies (as defined in the
Fund's application for such order) and their separate accounts exemptions from
the provisions of sections 9(a), 13(a), 15(a) and 15(b) of the 1940 Act, and
Rules 6e-2(b)(15) and 6e-3(T)(b)(15) thereunder, to the extent necessary to
permit shares of the Fund to be sold to and held by variable annuity and
variable life insurance separate accounts of both affiliated and unaffiliated
life insurance companies and certain qualified pension and retirement plans (the
"Exemptive Order"); and
WHEREAS, the Distributor is registered as a broker-dealer with the SEC
and is a member in good standing of the National Association of Securities
Dealers, Inc. (the "NASD"); and
WHEREAS, the Distributor currently serves as the Distributor of the
Fund's shares; and
WHEREAS, the Company has registered or will register certain variable
life insurance policies and/or variable annuity contracts under the 1933 Act
(the "Contracts"); and
WHEREAS, the Company has registered or will register each Account as a
unit investment trust under the 1940 Act; and
WHEREAS, the Company desires to utilize shares of one or more Portfolios
as an investment vehicle of the Accounts;
NOW THEREFORE, in consideration of the mutual covenants contained herein,
the parties hereto agree as follows:
ARTICLE I.
SALE OF FUND SHARES
1.1. The Fund shall make Class l or Class 2 shares of its Portfolios as
indicated on Schedule A to this Agreement, as amended from time to time,
available to the Accounts at the net asset value next computed after receipt of
such purchase order by the Fund (or its agent), as established in accordance
with the provisions of the then current prospectus of the Portfolio or
Portfolios. Shares of a particular Portfolio of the Fund shall be ordered in
such quantities and at such times as determined by the Company to be necessary
to meet the requirements of the Contracts. The Directors of the Fund (the
"Directors") 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 jurisdiction or is, in the
sole discretion of the Directors acting in good faith and in light of their
fiduciary duties under federal and any applicable state laws, necessary in the
best interests of the shareholders of such Portfolio.
1.2. The Fund will redeem any full or fractional shares of any
Portfolio when requested by the Company on behalf of an Account at the net asset
value next computed after receipt by the Fund (or its agent) of the request for
redemption, as established in accordance with the provisions of the then current
prospectus of the Fund. The Fund shall make payment for such shares in the
manner established from time to time by the Fund, but in no event shall payment
be delayed for a greater period than is permitted by the 1940 Act.
1.3. For the purposes of Sections 1.1 and 1.2, the Fund hereby appoints
the Company as its agent for the limited purpose of receiving and accepting
purchase and redemption orders resulting from investment in and payments under
the Contracts. Receipt by the Company shall constitute receipt by the Fund
provided that (i) such orders are received by the Company in good order prior to
4:00 p.m. New York time each Business Day that the net asset value of each
Portfolio is priced in accordance with its prospectus and (ii) the Fund receives
notice of such orders by 10:00 a.m. New York time on the next following Business
Day. "Business Day" shall
2
mean any day on which the New York Stock Exchange is open for trading and on
which the Fund calculates its net asset value pursuant to the rules of the SEC.
1.4. Purchase orders that are transmitted to the Fund in accordance
with Section 1.3 shall be paid for on the same Business Day that the Fund
receives notice of the order. Payments shall be made in federal funds
transmitted by wire.
1.5. Issuance and transfer of the Fund's shares will be by book entry
only. Stock certificates will not be issued to the Company or the Account.
Shares ordered from the Fund will be recorded in the appropriate title for each
Account or the appropriate subaccount of each Account.
1.6. The Fund shall furnish prompt notice to the Company of any income
dividends or capital gain distributions payable on the Fund's shares. The
Company hereby elects to receive all such income dividends and capital gain
distributions as are payable on a Portfolio's shares in additional shares of
that Portfolio. The Fund shall notify the Company of the number of shares so
issued as payment of such dividends and distributions.
1.7. The Fund shall make the net asset value per share for each
Portfolio available to the Company on a daily basis as soon as reasonably
practical after the net asset value per share is calculated and shall use its
best efforts to make such net asset value per share available by 6 p.m. New York
time. If the Fund provides the Company with materially incorrect share net asset
value information, the Account(s) shall be entitled to an adjustment to the
number of shares purchased or redeemed to reflect the correct share net asset
value. Any material error in the calculation of net asset value per share,
dividend or capital gain information shall be reported promptly upon discovery
to the Company.
1.8. The Fund agrees that its shares will be sold only to Participating
Insurance Companies and their separate accounts and to certain qualified pension
and retirement plans to the extent permitted by the Exemptive Order and in
accordance with Section 817(h)(4) of the Internal Revenue Code of 1986, as
amended, and Treasury Regulation 1.817-5. No shares of any Portfolio will be
sold directly to the general public. The Company agrees that Fund shares will be
used only for the purposes of funding the Contracts and Accounts listed in
Schedule A, as amended from time to time.
1.9. The Fund and the Company agree that they shall amend any provision
of this Agreement to the extent that it is inconsistent with any condition
imposed by the SEC in the Exemptive Order.
ARTICLE II.
OBLIGATIONS OF THE PARTIES
2.1. The Fund shall prepare and be responsible for filing with the SEC
and any state regulators requiring such filing all shareholder reports, notices,
proxy materials (or similar materials such as voting instruction solicitation
materials), prospectuses and statements of
3
additional information of the Fund. The Fund shall bear the cost of registration
and qualification of its shares, preparation and filing of the documents listed
in this section 2.1 and all taxes to which an issuer is subject on the issuance
and transfer of its shares.
2.2. At the option of the Company, the Fund shall either (i) provide
the Company (at the Company's expense) with as many copies of the Fund's or the
relevant Portfolio's current prospectus, annual reports, semi-annual report and
other shareholder communications, including any amendments or supplements to any
of the foregoing, as the Company shall reasonably request; or (ii) provide the
Company with a camera ready copy of such documents in a form suitable for
printing together with the Contract prospectus and the prospectuses of other
funds offered under the Contract. The Fund or the Distributor shall provide the
Company with a copy of its statement of additional information in a form
suitable for duplication by the Company. The Fund, statements of additional
information and other shareholder information (at its expense) shall provide the
Company with copies of any Fund-sponsored proxy materials in such quantity as
the Company shall reasonably require for distribution to Contract owners.
2.3. The expense of such printing will be apportioned between the
Company and the Fund in proportion to the number of pages of contract and
prospectus taking account of other relevant factors affecting the expenses of
printing such as covers, columns, graphs and charts. The Fund will bear the cost
of printing the Fund's prospectus portion of such document for distribution only
to owners of existing Contracts funded by the Fund shares and the Company will
bear the expense of printing the portion of such documents relating to the
Account and the other Fund's offered under the Contract, provided, however, the
Company shall bear all printing expenses of such combined documents where used
for distribution to prospective purchasers. The Company shall also bear the
costs of distributing the Fund's prospectus, statement of additional information
and other shareholder information. The Fund shall bear the costs of printing and
distributing any proxy materials and related documents to Contract owners. The
Company assumes sole responsibility for ensuring that such materials are
delivered to Contract owners in accordance with applicable federal and state
securities laws.
2.4 The Company agrees and acknowledges that the Fund's manager, J. &
▇. ▇▇▇▇▇▇▇▇ & Co. Incorporated ("▇▇▇▇▇▇▇▇"), is the sole owner of the name and
▇▇▇▇ "▇▇▇▇▇▇▇▇" and that all use of any designation comprised in whole or part
of ▇▇▇▇▇▇▇▇ (a "▇▇▇▇▇▇▇▇ ▇▇▇▇") under this Agreement shall inure to the benefit
of ▇▇▇▇▇▇▇▇. Except as provided in section 2.5, the Company shall not use any
▇▇▇▇▇▇▇▇ ▇▇▇▇ on its own behalf or on behalf of the Accounts or Contracts in any
registration statement, advertisement, sales literature or other materials
relating to the Accounts or Contracts without the prior written consent of
▇▇▇▇▇▇▇▇. Upon termination of this Agreement for any reason, the Company shall
cease all use of any ▇▇▇▇▇▇▇▇ ▇▇▇▇(s) as soon as reasonably practicable.
2.5. The Company shall fully disclose in each Contract prospectus any
fees paid or to be paid by the relevant Portfolio under a plan adopted pursuant
to Rule 12b-1 of the 1940 Act. The Company shall furnish, or cause to be
furnished, to the Fund or the Distributor, a copy of each Contract prospectus or
statement of additional information in which the Fund, a Portfolio or ▇▇▇▇▇▇▇▇
is named prior to the filing of such document with the SEC. The Company shall
4
furnish, or shall cause to be furnished, to the Fund or the Distributor, each
piece of advertising, sales literature or other promotional material in which
the Fund, a Portfolio or ▇▇▇▇▇▇▇▇ is named, at least fifteen Business Days prior
to its use. No such material shall be used if the Fund or that Distributor
reasonably objects to such use within ten Business Days after receipt of such
material.
2.6. The Company shall not give any information or make any
representations or statements on behalf of the Fund or concerning the Fund or
▇▇▇▇▇▇▇▇ in connection with the sale of the Contracts other than information or
representations contained in and accurately derived from the registration
statement or prospectus for the Fund shares (as such registration statement and
prospectus may be amended or supplemented from time to time), reports of the
Fund, Fund sponsored proxy statements, or in any advertisements, sales
literature or other promotional material approved by the Fund or the
Distributor, or except as required by legal process or regulatory authorities or
with the written permission of the Fund or the Distributor.
2.7. Neither the Fund nor the Distributor shall give any information or
make any representations or statements on behalf of the Company, or concerning
the Company, the Accounts or the Contracts other than information or
representations contained in and accurately derived from the registration
statement or prospectus for the Contracts (as such registration statement and
prospectus may be amended or supplemented from time to time), or in materials
approved by the Company for distribution including advertisements, sales
literature or other promotional materials, except as required by legal process
or regulatory authorities or with the written permission of the Company.
2.8. So long as, and to the extent that the SEC interprets the 1940 Act
to require pass through voting privileges for variable policyowners, the Company
will provide pass-through voting privileges to owners of policies whose cash
values are invested, through the Accounts, in shares of the Fund. The Fund shall
require all Participating Insurance Companies to calculate voting privileges in
the same manner and the Company shall be responsible for assuring that the
Accounts calculate voting privileges in the manner established by the Fund. With
respect to each Account, the Company will vote shares of the Fund held by the
Account and for which no timely voting instructions for policyowners are
received as well as shares it owns that are held by that Account, in the same
proportion as those shares for which voting instructions are received. The
Company and its agents will in no way recommend or oppose or interfere with the
solicitation of proxies for Fund shares held by Contract owners without the
prior written consent of the Fund, which consent may be withheld in the Fund's
sole discretion.
2.9 The Company shall, where reasonable, establish and disclose to
Contract owners a reasonable policy designed to discourage frequent and
disruptive purchases and redemptions of Fund shares by Contract owners and shall
cooperate with the Fund to minimize the impact on the Fund of such transactions.
2.10 The Fund hereby notifies the Company that it may be appropriate to
include in the prospectus pursuant to which Contracts are offered disclosure
regarding the potential risks of mixed and shared-funding.
5
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
3.1. The Company represents and warrants that it is an insurance
company duly organized and in good standing under the laws of the State of Texas
and that it has legally and validly established each Account as a segregated
asset account under such law on the date set forth in Schedule A.
3.2. The Company represents and warrants that it has registered or,
prior to any issuance or sale of the Contracts, will register each Account as a
unit investment trust in accordance with the provisions of the 1940 Act to serve
as a segregated investment account for the Contracts.
3.3. The Company represents that it has full power and authority under
applicable law and has taken all actions necessary, to enter into this
Agreement. The Company represents and warrants that the Contracts will be
registered under the 1933 Act prior to any issuance or sale of the Contracts;
the Contracts will be issued and sold in compliance in all material respects
with all applicable federal and state laws; and the sale of the Contracts shall
comply in all material respects with state insurance suitability requirements.
3.4. The Fund represents and warrants that it is duly organized and
validly existing under the laws of the State of Maryland.
3.5. The Fund represents and warrants that the Fund shares offered and
sold pursuant to this Agreement will be registered" under the 1933 Act and the
Fund shall be registered under the 1940 Act prior to any issuance or sale of
such shares. The Fund shall amend its registration statement under the 1933 Act
and the 1940 Act from time to time as required in order to effect the continuous
offering of its shares. The Fund shall make notice or other filings in
accordance with the laws of the various states only if and to the extent deemed
necessary by the Fund.
3.6 The Fund represents and warrants that the investments of each
Portfolio will comply with the diversification requirements set forth in Section
817(h) of the Internal Revenue Code of 1986, as amended, and the rules and
regulations thereunder and will notify the Company immediately upon having a
reasonable basis for believing any Portfolio has ceased to comply or might not
so comply and will immediately take all reasonable steps to adequately diversify
the Portfolio to achieve compliance.
3.7 The Fund represents that it has full power and authority under
applicable law and has taken all actions necessary, to enter into this
Agreement.
3.8 The Fund represents and warrants that each Portfolio will be
treated as a "regulated investment company" under Subchapter M of the Code, and
will notify the Company immediately upon having a reasonable basis for believing
it has ceased to so qualify or might not so qualify in the future.
6
3.9 The Distributor represents and warrants that it is duly organized
and validly existing under the laws of the State of Delaware.
3.10 The Distributor represents that it has full power and authority
under applicable law and has taken all actions necessary, to enter into this
Agreement.
ARTICLE IV.
POTENTIAL CONFLICTS
4.1. The parties acknowledge that the Fund's shares may be made
available for investment to other Participating Insurance Companies and
qualified pension and retirement plans ("Qualified Plans"). In such event, the
Directors will monitor the Fund for the existence of any material irreconcilable
conflict between the interests of the contract owners of all Participating
Insurance Companies and of Qualified Plans. An irreconcilable material conflict
may arise for a variety of reasons, including: (a) an action by any state
insurance regulatory authority; (b) a change in applicable federal or state
insurance, tax, or securities laws or regulations, or a public ruling, private
letter ruling, no-action or interpretative letter, or any similar action by
insurance, tax, or securities regulatory authorities; (c) an administrative or
judicial decision in any relevant proceeding; (d) the manner in which the
investments of any Portfolio are being managed; (e) a difference in voting
instructions given by variable annuity contract and variable life insurance
contract owners; or (f) a decision by an insurer to disregard the voting
instructions of contract owners. The Directors shall promptly inform the Company
if they determine that an irreconcilable material conflict exists and the
implications thereof.
4.2. The Company agrees to promptly report any potential or existing
conflicts of which it is aware to the Directors. The Company will assist the
Directors in carrying out their responsibilities under the Exemptive Order by
providing the Directors with all information reasonably necessary for the
Directors to consider any issues raised including, but not limited to,
information as to a decision by the Company to disregard Contact owner voting
instructions.
4.3 If it is determined by a majority of the Directors, or a majority
of its disinterested Directors, that a material irreconcilable conflict exists
that affects the interests of Contract owners, the Company shall, in cooperation
with other Participating Insurance Companies whose contract owners are also
affected, at its expense and to the extent reasonably practicable (as determined
by the Directors) take whatever steps are necessary to remedy or eliminate the
irreconcilable material conflict, which steps could include: (i) withdrawing the
assets allocable to some or all of the Accounts from the Fund or any Portfolio
and reinvesting such assets in a different investment medium, including (but not
limited to) another Portfolio of the Fund, or submitting the question of whether
or not such segregation should be implemented to a vote of all affected Contract
owners and, as appropriate, segregating the assets of any appropriate group
(i.e., variable annuity contract owners or variable life insurance contract
owners that vote in favor of such segregation) or offering to the affected
Contract owners the option of making such a
7
change; and (ii) establishing a new registered management investment company or
managed separate account.
4.4. If a material irreconcilable conflict arises because of a decision
by the Company to disregard Contract owner voting instructions and that decision
represents a minority position or would preclude a majority vote, the Company
may be required, at the Fund's election, to withdraw the affected Account if
requested by the Fund's Directors, terminate this Agreement with respect to such
Account within six months after the Directors inform the Company in writing that
it has determined that such decision has created a material irreconcilable
conflict; provided, however that such withdrawal and termination shall be
limited to the extent required by the foregoing material irreconcilable conflict
as determined by a majority of the disinterested Directors. Until the end of
such six month period, the Fund shall continue to accept and implement orders by
the Company for the purchase and redemption of shares of the Fund.
4.5. If a material irreconcilable conflict arises because a particular
state insurance regulator's decision applicable to the Company conflicts with
the majority of other state regulators, then the Company will withdraw the
affected Account's investment in the Fund and, if requested by the Fund's
Directors, terminate this Agreement with respect to such Account within six
months after the Directors inform the Company in writing that it has determined
that such decision has created an irreconcilable material conflict; provided,
however, that such withdrawal and termination shall be limited to the extent
required by the foregoing material irreconcilable conflict as determined by a
majority of the disinterested Directors. Until the end of such six month period,
the Fund shall continue to accept and implement orders by the Company for the
purchase and redemption of shares of the Fund.
4.6. For purposes of Sections 4.3 through 4.6 of this Agreement, a
majority of the disinterested Directors shall determine whether any proposed
action adequately remedies any irreconcilable material conflict, but in no event
will the Company be required to establish a new funding medium for the Contracts
if an offer to do so has been declined by vote of a majority of Contract owners
materially adversely affected by the irreconcilable material conflict. In the
event that the Directors determine that any proposed action does not adequately
remedy any irreconcilable material conflict, then the Company will withdraw the
Account's investment in the Fund and terminate this Agreement within six (6)
months after the Directors inform the Company in writing of the foregoing
determination; provided, however, that such withdrawal and termination shall be
limited to the extent required by any such material irreconcilable conflict as
determined by a majority of the disinterested Directors.
4.7. The Company and ▇▇▇▇▇▇▇▇ shall at least annually submit to the
Directors such reports, materials or data as the Directors may reasonable
request so that the Directors may fully carry out the duties imposed upon them
by the Exemptive Order, and said reports, materials and data shall be submitted
more frequently if deemed appropriate by the Directors.
4.8. If and to the extent that Rule 6e-2 and Rule 6e-3(T) are amended,
or Rule 6e-3 is adopted, to provide exemptive relief from any provision of the
1940 Act or the rules promulgated thereunder with respect to mixed or shared
funding (as defined in the Exemptive Order) on terms
8
and conditions materially different from those contained in the Exemptive Order,
then the Fund and/or the Participating Insurance Companies, as appropriate,
shall take such steps as may be necessary to comply with Rules 6e-2 and 6e-3(T),
as amended, and Rule 6e-3, as adopted, to the extent such rules are applicable.
ARTICLE V.
INDEMNIFICATION
5.1. INDEMNIFICATION BY THE COMPANY. The Company agrees to indemnify
and hold harmless the Fund, the Distributor and each of their Directors,
officers, employees and agents and each person, if any, who controls the Fund or
the Distributor within the meaning of Section 15 of the 1933 Act (collectively,
the "Company Indemnified Parties" for purposes of this Article V) against any
and all losses, claims, damages, liabilities (including amounts paid in
settlement with the written consent of the Company) or expenses (including the
reasonable costs of investigating or defending any alleged loss, claim, damage,
liability or expense and reasonable legal counsel fees incurred in connection
therewith) (collectively, "Losses"), to which the Company Indemnified Parties
may become subject under any statute or regulation, or at common law or
otherwise, insofar as such Losses:
(a) arise out of or are based upon any untrue statements or
alleged untrue statements of any material fact contained in a
registration statement or prospectus for the Contracts or in the
Contracts themselves or in any advertising, sales literature or other
promotional literature generated or approved by the Company on behalf of
the Contracts or Accounts (or any amendment or supplement to any of the
foregoing) (collectively, "Company Documents" for the purposes of this
Article V), or arise out of or are based upon the omission or the alleged
omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, provided that
this indemnity shall not apply as to any Company Indemnified Party if
such statement or omission or such alleged statement or omission was made
in reliance upon and was accurately derived from written information
furnished to the Company by or on behalf of the Fund or the Distributor
for use in Company Documents or otherwise for use in connection with the
sale of the Contracts or Fund shares; or
(b) arise out of or result from statements or representations
(other than statements or representations contained in and accurately
derived from Fund Documents as defined in Section 5.2(a)) or wrongful
conduct of the Company or persons under its control, or subject to its
authorization or supervision with respect to the sale or acquisition of
the Contracts or Fund shares; or
(c) arise out of or result from any untrue statement or alleged
untrue statement of a material fact contained in Fund Documents as
defined in Section 5.2(a) or the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to
make the statements therein not misleading if such statement or omission
was made in reliance upon and accurately derived from written information
furnished to the Fund or the Distributor by or on behalf of the Company;
or
(d) arise out of or result from any failure by the Company to
provide the services or furnish the materials required under the terms of
this Agreement; or
9
(e) arise out of or result from any material breach of any
representation and/or warranty made by the Company in this Agreement or
arise out of or result from any other material breach of this Agreement
by the Company.
5.2 INDEMNIFICATION BY THE FUND. The Fund agrees to indemnify and hold
harmless the Company and each of its directors, officers, employees and agents
and each person, if any, who controls the Company within the meaning of Section
15 of the 1933 Act (collectively, the "Company Indemnified Parties" for purposes
of this Article V) against any and all losses, claims, damages, liabilities
(including amounts paid in settlement with the written consent of the Fund) or
expenses (including the reasonable costs of investigating or defending any
alleged loss, claim, damage, liability or expense and reasonable legal counsel
fees incurred in connection therewith) (collectively, "Losses"), to which the
Company Indemnified Parties may become subject under any statute or regulation,
or at common law or otherwise, insofar as such Losses:
(a) arise out of or are based upon any untrue statements or
alleged untrue statements of any material fact contained in the
registration statement or prospectus for the Fund (or any amendment or
supplement thereto), (collectively, "Fund Documents" for the purposes of
this Article V), or arise out of or are based upon the omission or the
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading,
provided that this indemnity shall not apply as to any Company
Indemnified Party if such statement or omission or such alleged statement
or omission was made in reliance upon and was accurately derived from
written information furnished to the Fund or the Distributor by or on
behalf of the Company for use in Fund Documents or otherwise for use in
connection with the sale of the Contracts or Fund shares; or
(b) arise out of or result from statements or representations
(other than statements or representations contained in and accurately
derived from Company Documents) or wrongful conduct of the Fund or
persons under its control, or subject to its authorization or supervision
with respect to the sale or acquisition of the Contracts or Fund shares;
or
(c) arise out of or result from any untrue statement or alleged
untrue statement of a material fact contained in Company Documents or the
omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statement therein not
misleading if such statement or omission was made in reliance upon and
accurately derived from written information furnished to the Company by
or on behalf of the Fund; or
(d) arise out of or result from any failure by the Fund to
provide the services or furnish the materials required under the terms of
this Agreement; or
10
(e) arise out of or result from any material breach of any
representation and/or warranty made by the Fund in this Agreement or
arise out of or result from any other material breach of this Agreement
by the Fund.
5.3 INDEMNIFICATION BY THE DISTRIBUTOR. The Distributor agrees to
indemnify and hold harmless each of the Company Indemnified Parties against any
and all losses, claims, damages, liabilities (including amounts paid in
settlement with the written consent of the Distributor) or expenses (including
the reasonable costs of investigating or defending any alleged loss, claim,
damage, liability or expense and reasonable legal counsel fees incurred in
connection therewith) (collectively, "Losses"), to which the Company indemnified
Parties may become subject under any statute or regulation, or at common law or
otherwise, insofar as such Losses:
(a) arise out of or are based upon any untrue statements or
alleged untrue statements of any material fact contained in the Fund
Documents or any advertising, sales literature or other promotional
literature prepared or approved by the Distributor on behalf of the Fund
or any of the Portfolios (collectively, "Fund Sales Documents"), or arise
out of or are based upon the omission or the alleged omission to state
therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, provided that this indemnity
shall not apply as to any Company indemnified Party if such statement or
omission or such alleged statement or omission was made in reliance upon
and was accurately derived from written information furnished to the Fund
or the Distributor by or on behalf of the Company for use in Fund
Documents, the Fund Sales Documents or otherwise for use in connection
with the sale of the Contracts or Fund shares; or
(b) arise out of or result from statements or representations
(other than statements or representations contained in and accurately
derived from Company Documents) or wrongful conduct of the Fund or the
Distributor, or persons under their control, or subject to their
authorization or supervision with respect to the sale or acquisition of
the Contracts or Fund shares; or
(c) arise out of or result from any untrue statement or alleged
untrue statement of a material fact contained in Company Documents or the
omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statement therein not
misleading if such statement or omission was made in reliance upon and
accurately derived from written information furnished to the Company by
or on behalf of the Fund or the Distributor; or
(d) arise out of or result from any failure by the Fund or the
Distributor to provide the services or furnish the materials required
under the terms of this Agreement; or
(e) arise out of or result from any material breach of any
representation and/or warranty made by the Fund or the Distributor in
this Agreement or arise out of or result from any other material breach
of this Agreement by the Fund or the Distributor.
11
5.4 Neither the Company, the Fund nor the Distributor shall be liable
under the indemnification provisions of sections 5.1, 5.2 or 5.3, as applicable,
with respect to any Losses incurred or assessed against a Company Indemnified
Party or a Company Indemnified party (collectively, the "Indemnified Parties")
that arise from such Indemnified Party's willful misfeasance, bad faith or gross
negligence in the performance of such Indemnified Party's duties or by reason of
such Indemnified Party's reckless disregard of obligations or duties under this
Agreement.
5.5 Neither the Company, the Fund nor the Distributor shall be liable
under the indemnification provisions of sections 5.1, 5.2 or 5.3 as applicable,
with respect to any claim made against any Indemnified Party unless such
Indemnified Party shall have notified the other party in writing within a
reasonable time after the summons, or other first written notification, giving
information of the nature of the claim shall have been served upon or otherwise
received by such Indemnified Party (or after such indemnified Party shall have
received notice of service upon or other notification to any designated agent),
but failure to notify the party against whom indemnification is sought of any
such claim shall not relieve that party from any liability which it may have to
the indemnified Party in the absence of sections 5.1, 5.2 or 5.3.
5.6 In case any such action is brought against the Indemnified
Parties, the indemnifying party shall be entitled to participate, at its own
expense, in the defense of such action. The indemnifying party also shall be
entitled to assume the defense thereof, with counsel reasonably satisfactory to
the party named in the action. After notice from the indemnifying party to the
indemnified Party of an election to assume such defense, the indemnified Party
shall bear the fees and expenses of any additional counsel retained by it, and
the indemnifying party will not be liable to the indemnified Party under this
Agreement for any legal or other expenses subsequently incurred by such party
independently in connection with the defense thereof other than reasonable costs
of investigation.
ARTICLE VI.
TERMINATION
6.1. a) This Agreement shall be effective as of the date hereof and
shall continue in force until terminated in accordance with
the provisions herein.
b) This Agreement shall terminate as to the Fund in accordance
with the following provisions:
(i) At the option of the Company or the Fund at any time
for any reason upon 90 days' prior notice;
c) At the option of the Fund by written notice to the Company
if the Fund shall determine, in its sole judgment exercised
in good faith, that the Company
12
and/or its affiliated companies has suffered a material
adverse change in its business, operations, financial
condition or prospects since the date of this Agreement or
is the subject of material adverse publicity, or
d) At the option of the Company by written notice to the Fund,
if the Company shall determine, in its sole judgment
exercised in good faith, that either the Fund or its
affiliated companies has suffered a material adverse change
in its business, operations, financial condition or
prospects since the date of this Agreement or is the
subject of material adverse publicity; or
e) 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 satisfaction of the Company within ten
days after written notice of such breach is delivered to
the Fund; or
f) 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 satisfaction of the Fund within ten days
after written notice of such breach is delivered to the
Company.
6.2. Notwithstanding any termination of this Agreement (other than a
termination resulting from any action taken by the Fund's Board of Directors
pursuant to Article IV of this Agreement), the Fund shall, at the option of the
Company, continue to make available additional shares of the Fund (or any
Portfolio) pursuant to the terms and conditions of this Agreement for all
Contracts in effect on the effective date of termination of this Agreement,
provided that the Company continues to pay the costs set forth in section 2.3.
6.3. The provisions of Article V shall survive the termination of this
Agreement, and the provisions of Article IV and Section 2.8 shall survive the
termination of this Agreement as long as shares of the Fund are held on behalf
of the Contract owners in accordance with section 6.2.
ARTICLE VII.
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.
13
If to the Fund:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel, Law & Regulation
If to the Company:
Conseco Variable Insurance Company
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
ARTICLE VIII.
MISCELLANEOUS
8.1. 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.
8.2. This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
8.3. 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.
8.4 This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of State of New York. Each
party hereto unconditionally submits to the jurisdiction of any New York state
court or federal court of the United States sitting in New York City, and any
appellate court thereof, in any action or proceeding arising out of or relating
to this Agreement.
8.5 The parties to this Agreement acknowledge and agree that all
liabilities of the Fund arising, directly or indirectly, under this Agreement,
of any and every nature whatsoever, shall be satisfied solely out of the assets
of the Fund and that no Director, officer, agent or holder of shares of
beneficial interest of the Fund shall be personally liable for any such
liabilities.
8.6. Each party shall cooperate with each other party and all
appropriate governmental authorities (including without limitation the SEC, the
National Association of Securities Dealers and state insurance regulators) and
shall permit such authorities reasonable access to its books and records in
connection with any investigation or inquiry relating to this Agreement or the
transactions contemplated hereby.
14
8.7. 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, which the parties hereto are entitled to under
state and federal laws.
8.8. The parties to this Agreement acknowledge and agree that this
Agreement shall not be exclusive in any respect.
8.9. Neither this Agreement nor any rights or obligations hereunder may
be assigned by either party without the prior written approval of the other
party.
8.10 No provisions of this Agreement may be amended or modified in any
manner except by a written agreement properly authorized and executed by both
parties.
8.11 This Agreement constitutes the entire contract between the parties
relating to the subject matter hereof and supersedes any and all previous
agreements and understandings, oral or written, relating to the subject matter
hereof.
IN WITNESS WHEREOF, the parties have caused their duly authorized
officers to execute this Participation Agreement as of the date and year first
above written.
▇▇▇▇▇▇▇▇ Portfolios, Inc. Conseco Variable Insurance Company
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇ By: /s/ L. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-------------------------- -------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇ Name: L. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------- ---------------------------------
Title: President Title: Senior Vice President & Director
---------------------- ---------------------------------
15
SCHEDULE A
SEPARATE ACCOUNTS AND ASSOCIATED CONTRACTS
Names of Separate Account
and Date Established by Contracts Funded Class of
Board of Directors By Separate Account Shares
-------------------------- ------------------- ---------
Conseco Variable Annuity Annuity Contract Class 2
Account C -(5/1/93) Form No. 22-4025
Conseco Variable Annuity Annuity Contract Class 2
Account E -(11/12/93) Form No. 22-4047, 22-4048
Conseco Variable Annuity Annuity Contract Form Class 2
Account F -(9/26/97) No. 22-4061
Conseco Variable Annuity Annuity Contract Form Class 2
Account G -(1/18/96) No. 22-4056
Conseco Variable Annuity Annuity Contract Class 2
Account H -(11/1/99) Form No. CVIC-2000, CVIC-2001
Conseco Variable Life Contract Class 2
Account A -(tbd) Form No. CVIC-1000
A-l