The Fund and Adviser acknowledge that full compliance with the requirements referred to in Sections 6.1, 6.2, and 6.3 hereof is absolutely essential because any failure to meet those requirements would result in the Contracts not being treated as annuity Contracts for federal income tax purposes, which would have adverse tax consequences for Contract Owners and could also adversely affect Insurance Company corporate tax liability. The Fund and Adviser also acknowledge that it is solely within their power and control to meet those requirements. Accordingly, without in any way limiting the effect of Section 8.3 hereof and without in any way limiting or restricting any other remedies available to Insurance Company, the Adviser will pay all costs associated with or arising out of any failure, or any anticipated or reasonably foreseeable failure, of the Fund or any Designated Portfolio to comply with Sections 6.1, 6.2, or 6.3 hereof, including all costs associated with reasonable and appropriate corrections or responses to any such failure; such costs may include, but are not limited to, the costs involved in creating, organizing, and registering a new investment company as a funding medium for the Contracts and/or the costs of obtaining whatever regulatory authorizations are required to substitute shares of another investment company for those of the failed Portfolio (including but not limited to an order pursuant to Section 26(b) of the 1940 Act); such costs are to include, but are not limited to, fees and expenses of legal counsel and other advisors to Insurance Company and any federal income taxes or tax penalties (or "toll charges" or exactments or amounts paid in settlement) incurred by Insurance Company with respect to itself or owners of its Contracts in connection with any such failure or anticipated or reasonably foreseeable failure.
The Fund and Adviser acknowledge that full compliance with the requirements referred to in Sections 6.1, 6.2, and 6.3 hereof is absolutely essential because any failure to meet those requirements would result in the Contracts not being treated as annuity contracts for federal income tax purposes, which would have adverse tax consequences for Contract owners and could also adversely affect Transamerica's corporate tax liability. The Fund and Adviser also acknowledge that it is solely within their power and control to meet those requirements. Accordingly, without in any way limiting the effect of Section 8.3 hereof and without in any way limiting or restricting any other remedies available to Transamerica, the Adviser will pay all costs associated with or arising out of any failure, or any anticipated or reasonably foreseeable failure, of the Fund or any Designated Portfolio to comply with Sections 6.1, 6.2 or 6.3 hereof, including all costs associated with reasonable and appropriate corrections or responses to any such failure; such costs may include, but are not limited to, the costs involved in creating, organizing, and registering a new investment company as a funding medium for the Contracts and/or the costs of obtaining whatever regulatory authorizations are required to substitute shares of another investment company for those of the failed Portfolio (including but not limited to an order pursuant to Section 26(b) of the 1940 Act); such costs are to include, but are not limited to, fees and expenses of legal counsel and other advisors to Transamerica and any federal income taxes or tax penalties (or "toll charges" or exactments or amounts paid in settlement) incurred by Transamerica with respect to itself or owners of its Contracts in connection with any such failure or anticipated or reasonably foreseeable failure.
The Fund and Adviser acknowledge that full compliance with the requirements referred to in Sections 6.1 and 6.2 hereof is absolutely essential because any failure to meet those requirements would result in the Contracts not being treated as annuity contracts for federal income tax purposes, which would have adverse tax consequences for Contract owners and could also adversely affect Insurance Company's corporate tax liability. The Fund and Adviser also acknowledge that it is solely within their power and control to meet those requirements. Accordingly, without in any way limiting the effect of Section 7.2 hereof and without in any way limiting or restricting any other remedies available to Insurance Company, the Adviser will pay all costs associated with or arising out of any failure, or any anticipated or reasonably foreseeable failure, of the Fund or any Designated Portfolio to comply with Sections 6.1 or 6.2 hereof, including all costs associated with correcting or responding to any such failure; such costs may include, but are not limited to, the costs involved in creating, organizing, and registering a new investment company as a funding medium for the Contracts and/or the costs of obtaining whatever regulatory authorizations are required to substitute shares of another investment company for those of the failed Portfolio (including but not limited to an order pursuant to Section 26(b) of the 1940 Act); such costs are to include, but are not limited to, fees and expenses of legal counsel and other advisors to Insurance Company and any federal income taxes or tax penalties (or "toll charges" or enactments or amounts paid in settlement) incurred by Insurance Company in connection with any such failure or anticipated or reasonably foreseeable failure.
The Fund and Adviser shall make every effort to ensure that each Portfolio complies with the diversification provisions of Section 817(h) of the Code and the regulations issued thereunder relating to the diversification requirements for variable life insurance policies and variable annuity contracts and any prospective amendments or other modifications to Section 817 or regulations thereunder, and shall notify the Insurer immediately upon having a reasonable basis for believing that any Portfolio has ceased to comply. The Fund shall make every effort to remedy any Portfolio's failure to comply with Section 817(h) of the Code and regulations thereunder within the time frame set forth by Section 817(h) and the regulations thereunder.
