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Exhibit 1-(d)(i)
Xxxxxx Investors Life
EXECUTION COPY
PARTICIPATION AGREEMENT
BY AND AMONG
XXXXXX INVESTORS LIFE INSURANCE COMPANY
AND
WARBURG, XXXXXX TRUST
AND
WARBURG, XXXXXX COUNSELLORS, INC.
AND
COUNSELLORS SECURITIES INC.
THIS AGREEMENT, made and entered into this 10th day of March, 1997, by and
among Xxxxxx Investors Life Insurance Company, organized under the laws of
Illinois (the "Company"), on its own behalf and on behalf of each separate
account of the Company named in Schedule 1 to this Agreement as may be amended
from time to time (each account referred to as the "Account"), Warburg, Xxxxxx
Trust, an open-end management investment company and business trust organized
under the laws of the Commonwealth of Massachusetts (the "Fund"); Warburg,
Xxxxxx Counsellors, Inc. a corporation organized under the laws of the State of
Delaware (the "Adviser"); and Counsellors Securities Inc., a corporation
organized under the laws of the State of New York ("CSI").
WHEREAS, the Fund engages in business as an open-end management investment
company and was established for the purpose of serving as the investment
vehicle for separate accounts established for variable life insurance contracts
and variable annuity contracts to be offered by insurance companies that have
entered into participation agreements similar to this Agreement (the
"Participating Insurance Companies"), and
WHEREAS, beneficial interests in the Fund are divided into several series
of shares, each representing the interest in a particular managed portfolio of
securities and other assets (the "Portfolios"); and
WHEREAS, the Fund has received an order from the Securities and Exchange
Commission (the "SEC") granting Participating Insurance Companies and variable
annuity separate accounts and variable life insurance separate accounts relief
from the provisions of Sections 9(a), 13(a), 15(a), and 15(b) of the Investment
Company Act of 1940, as amended (the "1940 Act"), and Rules 6e-2(b)(15) and
6e-3(T)(b)(15) thereunder, to the extent
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necessary to permit shares of the Fund to be sold to and held by variable
annuity separate accounts and variable life insurance separate accounts of both
affiliated and unaffiliated Participating Insurance Companies and qualified
pension and retirement plans outside of the separate account context (the
"Mixed and Shared Funding Exemptive Order"). The parties to this Agreement
agree that the conditions or undertakings specified in the Mixed and Shared
Funding Exemptive Order and that may be imposed on the Company, the Fund, the
Adviser and/or CSI by virtue of the receipt of such order by the SEC will be
incorporated herein by reference, and such parties agree to comply with such
conditions and undertakings to the extent applicable to each such party; and
WHEREAS, the Fund is registered as an open-end management investment
company under the 1940 Act and its shares are registered under the Securities
Act of 1933, as amended (the "1933 Act"); and
WHEREAS, the Company has registered or will register certain variable
annuity contracts (the "Contracts") under the 1933 Act; and
WHEREAS, the Account is a duly organized, validly existing segregated
asset account, established by resolution of the Board of Directors of the
Company under the insurance laws of Illinois, to set aside and invest assets
attributable to the Contracts; and
WHEREAS, the Company has registered the Account as a unit investment trust
under the 1940 Act; and
WHEREAS, CSI, the Fund's distributor, is registered as a broker-dealer
with the SEC under the Securities Exchange Act of 1934 (the "1934 Act") and is
a member in good standing of the National Association of Securities Dealers,
Inc. (the "NASD"); and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares of the Portfolios named in
Schedule 2, as such schedule may be amended from time to time (the "Designated
Portfolios"), on behalf of the Accounts to fund the Contracts, and the Fund is
authorized to sell such shares to unit investment trusts such as the Accounts
at net asset value; and
WHEREAS, each Account is subdivided into subaccounts (each, a
"Subaccount"), each of invests in a Designated Portfolio;
NOW, THEREFORE, in consideration of their mutual promises, the Company,
the Fund, the Adviser and CSI agree as follows:
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ARTICLE I. SALE OF FUND SHARES
1.1. CSI agrees to sell to the Company those shares of the Designated
Portfolios that each Account orders, executing such orders on a daily basis at
the net asset value next computed after receipt and acceptance by CSI or its
designee of the order for the shares of the Fund. For purposes of this Section
1.1, the Company will be the designee of CSI for receipt of such orders from
each Account and receipt by such designee will constitute receipt by CSI;
provided that CSI receives notice of such order by 10:00 a.m. Eastern Time on
the next following Business Day ("T+1"). "Business Day" will mean any day on
which the New York Stock Exchange, Inc. (the "NYSE") is open for trading and on
which the Fund calculates its net asset value pursuant to the rules of the SEC.
1.2. The Company will pay for Fund shares on T+1 in each case that an order to
purchase Fund shares is made in accordance with Section 1.1 above. Payment
will be in federal funds transmitted by wire. This wire transfer will be
initiated by 12:00 p.m. Eastern Time.
1.3. CSI and the Adviser agree to make, and to cause the Fund to make, shares
of the Designated Portfolios available indefinitely for purchase at the
applicable net asset value per share by Participating Insurance Companies and
their separate accounts on those days on which the Fund calculates its
Designated Portfolio net asset value pursuant to rules of the SEC and the Fund
shall use reasonable efforts to calculate such net asset value on each day the
NYSE is open for trading; provided, however, that the Fund or CSI 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
Fund acting in good faith, necessary in the best interests of the shareholders
of such Portfolio.
1.4. On each Business Day on which the net asset value of the Fund is
calculated, the Company will aggregate and calculate the net purchase or
redemption orders for each Subaccount investing in a Designated Portfolio. Net
orders will only reflect orders that the Company has received prior to the
close of regular trading on the NYSE currently 4:00 p.m., Eastern Time) on that
Business Day. Orders that the Company has received after the close of regular
trading on the NYSE will be treated as though received on the next Business
Day. Each communication of orders by the Company will constitute a
representation that such orders were received by it prior to the close of
regular trading on the NYSE on the Business Day on which the purchase or
redemption order is priced in accordance with Rule 22c-1 under the 1940 Act.
Other procedures relating to the handling of orders will be in accordance with
the prospectus and statement of information of the relevant Designated
Portfolio or with instructions that CSI will forward to the Company from time
to time, as practice may develop by mutual agreement of the parties hereto over
the course of performance of this Agreement.
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1.5. CSI and the Adviser agree that shares of the Fund will be sold only to
Participating Insurance Companies and their separate accounts, qualified
pension and retirement plans or such other persons as are permitted under
applicable provisions of the Internal Revenue Code of 1986, as amended (the
"Internal Revenue Code"), and regulations promulgated thereunder, the sale to
which will not impair the tax treatment currently afforded the Contracts. No
shares of any Portfolio will be sold to the general public except as set forth
in this Section 1.5.
1.6. CSI and the Adviser agree to cause the redemption for cash, upon the
Company's request, any full or fractional shares of the Fund held by the
Company, executing such requests on a daily basis at the net asset value next
computed after receipt and acceptance by the Fund or its designee of the
request for redemption. For purposes of this Section 1.6, the Company will be
the designee of the Fund for receipt of requests for redemption from each
Subaccount and receipt by such designee will constitute receipt by the Fund,
provided the Fund receives notice of request for redemption by 10:00 a.m.
Eastern Time on the next following Business Day. Payment will be in federal
funds transmitted by wire to the Company's account as designated by the Company
in writing from time to time, on the same Business Day the Fund receives notice
of the redemption order from the Company. The Fund reserves the right to delay
payment of redemption proceeds in extraordinary circumstances where such action
is necessary in the best interests of the shareholders of the relevant
Portfolio, but in no event may such payment be delayed longer than the period
permitted by the 0000 Xxx. The Fund will not bear any responsibility
whatsoever for the proper disbursement or crediting of redemption proceeds; the
Company alone will be responsible for such action. If notification of
redemption is received after 10:00 a.m. Eastern Time, payment for redeemed
shares will be made on the next following Business Day.
1.7. The Company agrees to purchase and redeem the shares of the Designated
Portfolios offered by the then current prospectus of the Fund in accordance
with the provisions of such prospectus.
1.8. Issuance and transfer of the Fund's shares will be by book entry only.
Stock certificates will not be issued to the Company or any Account. Purchase
and redemption orders for Fund shares will be recorded in an appropriate title
for each Account or the appropriate Subaccount.
1.9. CSI or the Adviser will furnish same day notice (by telecopier, followed
by written confirmation) to the Company of the declaration of any income,
dividends or capital gain distributions payable on each Designated Portfolio's
shares. The Company hereby elects to receive all such dividends and
distributions as are payable on the Designated Portfolio shares in the form of
additional shares of that Designated Portfolio. CSI or the Adviser will notify
the Company of the number of shares so issued as payment of such dividends and
distributions. The Company reserves the right to revoke this election upon
reasonable prior
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notice to the Fund and to receive all such dividends and distributions in cash.
To the extent practicable, CSI or the Adviser will furnish the Company with
advance notice of any such declaration of income, dividends or distributions.
1.10. CSI and the Adviser will make the net asset value per share for each
Designated Portfolio available to the Company on a daily basis as soon as
reasonably practical after the net asset value per share is calculated and will
use its best efforts to make such net asset value per share available by 6:00
p.m., Eastern Time, but in no event later than 7:00 p.m., Eastern Time, each
Business Day.
1.11. The Advisor or CSI will provide notice of any error in calculation of net
asset value of a Designated Portfolio as soon as reasonably practical after
discovery thereof. Any such notice will state for each day for which an error
occurred the incorrect price, the correct price and the reason for the price
change. CSI and the Advisor shall make the Account whole for any payments or
adjustments to the number of Shares in a Subaccount that are reasonably
demonstrated to be required as a result of pricing errors.
ARTICLE II. REPRESENTATIONS AND WARRANTIES
2.1. The Company represents and warrants that the Contracts are or will be
registered under the 1933 Act and that the Contracts will be issued and sold in
compliance with all applicable federal and state laws. The Company further
represents and warrants that it is an insurance company duly organized and in
good standing under applicable law and that it has legally and validly
established each Account as a separate account under applicable state law and
has registered each Account as a unit investment trust in accordance with the
provisions of the 1940 Act to serve as segregated investment accounts for the
Contracts, and that it will maintain such registration for so long as any
Contracts are outstanding. The Company will amend the registration statement
under the 1933 Act for the Contracts and the registration statement under the
1940 Act for each of the Accounts 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 will register and qualify the Contracts for
sale in accordance with the securities laws of the various states only if and
to the extent deemed necessary by the Company.
2.2. The Company represents that the Contracts are currently and at the time of
issuance will be treated as annuity or life insurance contracts under
applicable provisions of the Internal Revenue Code, and that it will make every
effort to maintain such treatment and that it will notify the Fund and the
Adviser 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.
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2.3. CSI and the Adviser represent and warrant that Fund shares of the
Designated Portfolios sold pursuant to this Agreement will be registered under
the 1933 Act and duly authorized for issuance in accordance with applicable law
and that the Fund is and will remain registered under the 1940 Act for as long
as such shares of the Designated Portfolios are outstanding. CSI and the
Adviser will amend the registration statement for shares of the Fund under the
1933 Act and the 1940 Act from time to time as required in order to effect the
continuous offering of shares of the Fund or as may otherwise be required by
applicable law. CSI and the Adviser will register and qualify the shares of
the Designated Portfolios for sale in accordance with the laws of the various
states only if and to the extent deemed advisable by the Fund.
2.4. CSI and the Adviser represent that each Designated Portfolio is currently
qualified as a Regulated Investment Company under Subchapter M of the Internal
Revenue Code and that it will make every effort to maintain such qualification
(under Subchapter M or any successor or similar provision) and that it will
notify the Company immediately upon having a reasonable basis for believing
that a Designated Portfolio has ceased to so qualify or that it might not so
qualify in the future. CSI and the Adviser acknowledge that failure of the
Fund to so qualify as a Regulated Investment Company may affect the tax status
of the Contracts as life insurance or annuity contracts.
2.5. In performing the services described in this Agreement, CSI and the
Adviser will comply with, and will cause the Fund to comply with, all
applicable laws, rules and regulations governing the issuance and sale of
shares of the Fund. Neither the Fund, the Adviser nor CSI makes any
representation as to whether any aspect of its operations (including, but not
limited to, fees and expenses and investment policies, objectives and
restrictions) complies with the insurance laws and regulations of any state.
The Adviser and CSI each agree that upon request they will use their best
efforts to furnish the information required by state insurance laws so that the
Company can obtain the authority needed to issue the Contracts in the various
states.
2.6. The Fund currently does not intend to make any payments to finance
distribution expenses pursuant to Rule 12b-1 under the 1940 Act, although it
reserves the right to make such payments in the future. To the extent that it
decides to finance distribution expenses pursuant to Rule 12b-1 the Fund
undertakes to have its Fund Board formulate and approve any plan under Rule
12b-1 to finance distribution expenses in accordance with the 1940 Act.
2.7. CSI and the Adviser represent that the Fund is lawfully organized and
validly existing under the laws of The Commonwealth of Massachusetts and that
it does and will comply in all material respects with applicable provisions of
the 1940 Act.
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2.8. CSI represents and warrants that it will distribute the Fund shares of the
Designated Portfolios in accordance with all applicable federal and state
securities laws including, without limitation, the 1933 Act, the 1934 Act and
the 0000 Xxx.
2.9. CSI represents and warrants that it is and will remain duly registered
under all applicable federal and state securities laws and that it will perform
its obligations for the Fund in accordance in all material respects with any
applicable state and federal securities laws.
2.10. The Fund represents and warrants that all of its trustees, officers,
employees, and other individuals/entities having access to the funds and/or
securities of the Fund are and continue to be at all times covered by a blanket
fidelity bond or similar coverage for the benefit of the Fund in an amount not
less than the minimal coverage as required currently by Rule 17g-(1) of the
1940 Act or related provisions as may be promulgated from time to time. The
aforesaid bond includes coverage for larceny and embezzlement and is issued by
a reputable bonding company. CSI and the Adviser represent and warrant that
they are and continue to be at all times covered by policies similar to the
aforesaid bond.
ARTICLE III. PROSPECTUSES AND PROXY STATEMENTS; VOTING
3.1. The Adviser or CSI will create and file a definitive prospectus with the
SEC under Rule 497 of the 1933 Act. The Adviser or CSI will provide the
Company, at the Fund's or its affiliate's expense, with as many copies of the
current prospectus only for the Designated Portfolios as the Company may
reasonably request for distribution, at the Company's expense, to prospective
contractowners and applicants. The Advisor or CSI will provide, at the Fund's
or its affiliate's expense, as many copies of said prospectus as necessary for
distribution, at the Company's expense, to existing contractowners. The
Adviser or CSI will provide the copies of said prospectus to the Company or to
its mailing agent. If requested by the Company, the Adviser or CSI will
provide such documentation, including a computer diskette of the Company's
specification or a final copy of a current prospectus set in type at the Fund's
or its affiliate's expense, and such other assistance as is reasonably
necessary in order for the Company at least annually (or more frequently if the
relevent Designated Portfolio prospectus is amended more frequently) to have
the Designated Portfolios' prospectuses, the prospectus for the Contracts and
the prospectuses of other mutual funds in which assets attributable to the
Contracts may be invested printed together in one document (the "Multifund
Prospectus"), in which case the Fund or its affiliate will bear its reasonable
share of expenses as described above, allocated based on the proportionate
number of pages of the Fund's and other fund's respective portions of the
document.
3.2. The Adviser or CSI will provide the Company, at the Fund's or its
affiliate's expense, with as many copies of the statement of additional
information as the Company may reasonably request for distribution, at the
Company's expense, to prospective contractowners
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and applicants. The Adviser or CSI will provide, at the Fund's or its
affiliate's expense, as many copies of said statement of additional information
as necessary for distribution, at the Company's expense, to any existing
contractowner who requests such statement or whenever state or federal law
otherwise requires that such statement be provided. The Adviser or CSI will
provide the copies of said statement of additional information to the Company
or to its mailing agent.
3.3. To the extent that the Adviser, the Fund or CSI makes a discretionary
change that requires a change (whether by revision or supplement) to any of the
material information contained in any form of Designated Portfolio prospectus
or statement of additional information provided to the Company for inclusion in
a Multifund Prospectus, the Company agrees to make such changes within a
reasonable period of time after receipt of a request to make such change from
the Advisor or CSI. The expenses of printing and mailing incurred by the
Company in complying with such request shall be reimbursed by the Fund or its
affiliates. To the extent that the Fund is legally required to make a change
to a Designated Portfolio prospectus or statement of additional information
provided to the Company for inclusion in a Multifund Prospectus, the Company
agrees to make any such change as soon as possible following receipt of the
form of revised prospectus and/or statement of additional information or
supplement, as applicable, but in no event later than five days following
receipt. To the extent that the Fund is required by law to cease selling
shares of a Designated Portfolio, the Company agrees to cease offering
interests in the Subaccount corresponding to such Designated Portfolio until
the Fund or CSI notifies the Company otherwise.
The Company agrees to provide the Fund or its designee with such
information as may be reasonably requested by the Fund to assure that the
Fund's expenses do not include the cost of printing any prospectuses or
statements of additional information other than those actually distributed to
existing owners of the Contracts.
3.4. The Adviser or CSI, at the Fund's or its affiliate's expense, will provide
the Company or its mailing agent with copies of its proxy material, if any,
reports to shareholders and other communications to shareholders in such
quantity as the Company will reasonably require. The Company will distribute
this proxy material, reports and other communications to existing contract
owners and tabulate the votes.
3.5. If and to the extent required by law the Company will:
(a) solicit voting instructions from contractowners;
(b) vote the shares of the Designated Portfolios held in the
appropriate Subaccount in accordance with instructions received from
contractowners; and
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(c) vote shares of the Designated Portfolios held in the
appropriate Subaccount for which no timely instructions have been received, as
well as shares it owns, in the same proportion as shares of such Designated
Portfolio for which instructions have been received from the Company's
contractowners;
so long as and to the extent that the SEC continues to interpret the 1940
Act to require pass-through voting privileges for variable contractowners.
Except as set forth above, the Company reserves the right to vote Fund shares
held in any segregated asset account in its own right, to the extent permitted
by law. The Company will be responsible for assuring that each of its separate
accounts participating in the Fund calculates voting privileges in a manner
consistent with all legal requirements, including the Mixed and Shared Funding
Exemptive Order.
3.6. CSI and the Adviser will comply with, and will cause the Fund to comply
with, all provisions of the 1940 Act requiring voting by shareholders, and in
particular, either will provide for annual meetings (except insofar as the SEC
may interpret Section 16 of the 1940 Act not to require such meetings) or, as
is currently intended, will comply with Section 16(c) of the 1940 Act (although
the Fund is not one of the trusts described in Section 16(c) of that Act) as
well as with Sections 16(a) and, if and when applicable, 16(b). Further, the
Adviser and CSI will cause the Fund to act in accordance with the SEC's
interpretation of the requirements of Section 16(a) with respect to periodic
elections of trustees, with whatever rules the SEC may promulgate with respect
thereto and with the Mixed and Shared Funding Exemptive Order.
ARTICLE IV. SALES MATERIAL AND INFORMATION
4.1. CSI will provide the Company on a timely basis with investment performance
information for each Designated Portfolio in which a Subaccount invests,
including total return for the preceding calendar month and calendar quarter,
the calendar year to date, and the prior one-year, five-year, and ten year (or
life of the Designated Portfolio) periods. The Company may, based on such
information supplied by CSI, prepare communications for contractowners
("Contractowner Materials"). The Company will provide copies of all
Contractowner Materials concurrently with their first use for CSI's internal
recordkeeping purposes. It is understood that neither CSI nor any Designated
Portfolio will be responsible for errors or omissions in, or the content of,
Contractowner Materials except to the extent that the error or omission
resulted from information provided by or on behalf of CSI or the Designated
Portfolio. Any printed information that is furnished to the Company pursuant
to this Agreement other than each Designated Portfolio's prospectus or
statement of additional information (or information supplemental thereto),
periodic reports and proxy solicitation materials is CSI's sole responsibility
and not the responsibility of any Designated Portfolio or the Fund. The Company
agrees that the Portfolios, the shareholders of the Portfolios and the
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officers and governing Board of the Fund will have no liability or
responsibility to the Company in these respects.
4.2. The Company will not give any information or make any representations or
statements on behalf of the Fund or concerning the Fund in connection with the
sale of the Contracts other than the information or representations contained
in the registration statement, prospectus or statement of additional
information for Fund shares, as such registration statement, prospectus and
statement of additional information may be amended or supplemented from time to
time, or in reports or proxy statements for the Fund, or in published reports
for the Fund which are in the public domain or approved by the Fund or CSI for
distribution, or in sales literature or other material provided by the Fund,
the Adviser or by CSI, except with permission of CSI. The Company will
furnish, or will cause to be furnished, to the Fund, the Adviser or CSI, each
piece of sales literature or other promotional material in which the Company or
an Account is named, at least eight (8) business days prior to its use.
Nothing in this Section 4.2 will be construed as preventing the Company's
affiliates from giving advice on investment in the Fund.
4.3. The Adviser and CSI will not give, or allow the Fund to give, any
information or make, or allow the Fund to make, any representations or
statements on behalf of the Company or concerning the Company, each Account, or
the Contracts other than the information or representations contained in a
registration statement, prospectus or statement of additional information for
the Contracts, as such registration statement, prospectus and statement of
additional information may be amended or supplemented from time to time, or in
published reports for each Account or the Contracts which are in the public
domain or approved by the Company for distribution to contractowners, or in
sales literature or other material provided by the Company, except with
permission of the Company. The Company agrees to respond to any request for
approval on a prompt and timely basis. The Adviser or CSI will furnish, or
will cause to be furnished, to the Company or its designee, each piece of sales
literature or other promotional material in which the Company or an Account is
named at least eight (8) business days prior to its use. No such material will
be used if the Company reasonably objects to such use within five (5) business
days after receipt of such material.
4.4. CSI or the Adviser will provide to the Company at least one complete copy
of all registration statements, prospectuses, statements of additions
information, reports, proxy statements, sales literature and other promotional
materials, applications for exemptions, requests for no-action letters, and all
amendments to any of the above, that relate to the Fund or its shares,
contemporaneously with the filing of such document with the SEC, the NASD or
other regulatory authority.
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4.5. The Company will provide to the Fund at least one complete copy of all
registration statements, prospectuses, statements of additional information,
reports, solicitations for voting instructions, sales literature and other
promotional materials, applications for exemptions, requests for no action
letters, and all amendments to any of the above, that relate to the Contracts
or any Account, contemporaneously with the filing of such document with the
SEC, the NASD or other regulatory authority.
4.6. For purposes of this Article IV, the phrase "sales literature or other
promotional material" includes, but is not limited to, advertisements (such as
material published, or designed for use in, a newspaper, magazine, or other
periodical, radio, television, telephone or tape recording, videotape display,
signs or billboards, motion pictures, or other public media (e.g., on-line
networks such as the Internet or other electronic messages)), sales literature
(i.e., any written communication distributed or made generally available to
customers or the public, including brochures, circulars, research reports,
market letters, form letters, seminar texts, reprints or excerpts of any other
advertisements sales literature, or published article), educational or training
materials or other communications distributed or made generally available to
some or all agents or employees, registration statements, prospectuses,
statements of additional information, shareholder reports, proxy materials and
any other material constituting sales literature or advertising under the NASD
rules, the 1933 Act or the 0000 Xxx.
4.7. The Fund and CSI hereby consent to the Company's use of the names Warburg,
Xxxxxx Trust International Equity Portfolio, Warburg, Xxxxxx Trust Small
Company Value Portfolio, Warburg, Xxxxxx Trust Post-Venture Capital Portfolio
or other Designated Portfolio and Warburg, Xxxxxx Counsellors, Inc. in
connection with the marketing of the Contracts, subject to the terms of
Sections 4.1 and 4.2 of this Agreement. Such consent will continue only as
long as any Contracts are invested in the relevant Designated Portfolio and
only as long as such use is consistent with the provision of historical
information on the Contracts.
ARTICLE V. FEES AND EXPENSES
5.1. The Fund, the Adviser and CSI will pay no fee or other compensation to the
Company (other than as set forth in the administrative services letter
agreement between CSI and the Company) except if the Fund or any Designated
Portfolio adopts and implements a plan pursuant to Rule 12b-1 under the 1940
Act to finance distribution expenses, then, subject to obtaining any required
exemptive orders or other regulatory approvals, the Fund may make payments to
the Company or to the underwriter for the Contracts if and in such amounts
agreed to by the Fund in writing.
5.2. All expenses incident to performance by the Fund of this Agreement will be
paid by the Fund to the extent permitted by law. The Fund will bear the
expenses for the cost of
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registration and qualification of the Fund's shares; preparation and filing of
the Fund's prospectus, statement of additional information and registration
statement, proxy materials and reports; setting in type and printing the Fund's
prospectus; setting in type and printing proxy materials and reports by it to
contractowners (including the costs of printing a Fund prospectus that contains
an annual report); the preparation of all statements and notices required by
any federal or state law; all taxes on the issuance or transfer of the Fund's
shares; any expenses permitted to be paid or assumed by the Fund pursuant to a
plan, if any, under Rule 12b-1 under the 1940 Act; and all other expenses set
forth in Article III of this Agreement.
ARTICLE VI. DIVERSIFICATION
6.1. The Adviser will ensure that the Fund will at all times invest money from
the Contracts in such a manner as to ensure that the Contracts will be treated
as variable annuity contracts under the Internal Revenue Code and the
regulations issued thereunder. Without limiting the scope of the foregoing,
the Adviser will cause the Fund to comply with Section 817(h) of the Internal
Revenue Code and Treasury Regulation 1.817-5, as amended from time to time,
relating to the diversification requirements for variable annuity, endowment,
or life insurance contracts and any amendments or other modifications to such
Section or Regulation. In the event of a breach of this Article VI, the
Adviser will take all reasonable steps: (a) to notify the Company of such
breach; and (b) to adequately diversify the Fund so as to achieve compliance
within the grace period afforded by Treasury Regulation 1.817-5.
ARTICLE VII. POTENTIAL CONFLICTS
7.1. The Board of Trustees of the Fund (the "Fund Board") will monitor the Fund
for the existence of any irreconcilable material conflict among the interests
of the contractowners of all separate accounts investing in the Fund. 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 Participating Insurance Companies or
by variable annuity and variable life insurance contractowners; or (f) a
decision by an insurer to disregard the voting instructions of contractowners.
The Fund Board will promptly inform the Company if it determines that an
irreconcilable material conflict exists and the implications thereof.
7.2. The Company will report any potential or existing conflicts of which it is
aware to the Fund Board. The Company agrees to assist the Fund Board in
carrying out its
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responsibilities, as delineated in the Mixed and Shared Funding Exemptive
Order, by providing the Fund Board with all information reasonably necessary
for the Fund Board to consider any issues raised. This includes, but is not
limited to, an obligation by the Company to inform the Fund Board whenever
contractowner voting instructions are to be disregarded. The Company's
responsibilities hereunder will be carried out with a view only to the interest
of contractowners.
7.3. If it is determined by a majority of the Fund Board, or a majority of its
disinterested trustees, that an irreconcilable material conflict exists, the
Company will, at its expense and to the extent reasonably practicable (as
determined by a majority of the disinterested trustees), take whatever steps
are necessary to remedy or eliminate the irreconcilable material conflict, up
to and including: (a) withdrawing the assets allocable to some or all of the
Subaccounts from the Fund or any Designated Portfolio and reinvesting such
assets in a different investment medium, including (but not limited to) another
Portfolio of the Fund, or submitting the question whether such segregation
should be implemented to a vote of all affected contractowners and, as
appropriate, segregating the assets of any appropriate group (i.e., variable
annuity contractowners or variable life insurance contractowners of one or more
Participating Insurance Companies) that votes in favor of such segregation, or
offering to the affected contractowners the option of making such a change; and
(b) establishing a new registered management investment company or managed
separate account.
7.4. If a material irreconcilable conflict arises because of a decision by the
Company to disregard contractowner voting instructions, and the Company's
judgment represents a minority position or would preclude a majority vote, the
Company may be required, at the Fund's election, to withdraw the affected
Subaccount's investment in the Fund and terminate this Agreement with respect
to such Subaccount; provided, however, that such withdrawal and termination
will be limited to the extent required by the foregoing irreconcilable material
conflict as determined by a majority of the disinterested trustees of the Fund
Board. No charge or penalty will be imposed as a result of such withdrawal.
7.5. 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 insurance regulators, then the Company will withdraw
the affected Subaccount's investment in the Fund and terminate this Agreement
with respect to such Subaccount; provided, however, that such withdrawal and
termination will be limited to the extent required by the foregoing
irreconcilable material conflict as determined by a majority of the
disinterested directors of the Fund Board. No charge or penalty will be
imposed as a result of such withdrawal.
7.6. For purposes of Sections 7.3 through 7.6 of this Agreement, a majority of
the disinterested members of the Fund Board will determine whether any proposed
action
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adequately remedies any irreconcilable material conflict, but in no event will
the Fund or the Adviser (or any other investment adviser to the Fund) be
required to establish a new funding medium for the Contracts. The Company will
not be required by Section 7.3 to establish a new funding medium for the
Contracts if an offer to do so has been declined by vote of a majority of
contractowners materially affected by the irreconcilable material conflict.
7.7. The Company will at least annually submit to the Fund Board such reports,
materials or data as the Fund Board may reasonably request so that the Fund
Board may fully carry out the duties imposed upon it as delineated in the Mixed
and Shared Funding Exemptive Order, and said reports, materials and data will
be submitted more frequently if deemed appropriate by the Fund Board.
7.8. 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 Mixed and Shared Funding Exemptive Order) on terms and
conditions materially different from those contained in the Mixed and Shared
Funding Exemptive Order, then: (a) the Fund and/or the Participating Insurance
Companies, as appropriate, will 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; and (b) Sections 3.5, 3.6, 7.1, 7.2, 7.3,
7.4, and 7.5 of this Agreement will continue in effect only to the extent that
terms and conditions substantially identical to such Sections are contained in
such Rule(s) as so amended or adopted.
ARTICLE VIII. INDEMNIFICATION
8.1. Indemnification By The Company
(a) The Company agrees to indemnify and hold harmless the Fund, the
Adviser, CSI, and each person, if any, who controls or is associated with the
Fund, the Adviser or CSI within the meaning of such terms under the federal
securities laws and any director, trustee, officer, partner, employee or agent
of the foregoing (collectively, the "Indemnified Parties" for purposes of this
Section 8.1) against any and all losses, claims, expenses, damages, liabilities
(including amounts paid in settlement with the written consent of the Company)
or litigation (including reasonable legal and other expenses), to which the
Indemnified Parties may become subject under any statute, regulation, at common
law or otherwise, insofar as such losses, claims, damages, liabilities or
expenses (or actions in respect thereof) or settlements:
(1) arise out of or are based upon any untrue statements or alleged
untrue statements of any material fact contained in the registration statement,
prospectus or statement of additional information for the Contracts or
contained in the Contracts or sales literature or
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other promotional material for the Contracts (or any amendment or supplement
to any of the foregoing), including any prospectuses or statements of
additional information of the Fund to which the Company has made any changes to
the information provided to the Company or arise out of or are based upon the
omission or the alleged omission to state therein a material fact required to
be stated or necessary to make such statements not misleading in light of the
circumstances in which they were made; provided that this agreement to
indemnify will not apply as to any Indemnified Party if such statement or
omission or such alleged statement or omission was made in reliance upon and in
conformity with written information furnished to the Company by the Fund, the
Adviser or CSI for use in the registration statement, prospectus or statement
of additional information for the Contracts or in the Contracts or sales
literature (or any amendment or supplement) or otherwise for use in connection
with the sale of the Contracts or Fund shares; or
(2) arise out of or as a result of statements or representations by or
on behalf of the Company or wrongful conduct of the Company or persons under
its control, with respect to the sale or distribution of the Contracts or Fund
shares (other than statements or representations contained in the Fund
registration statement, Fund prospectus, Fund statement of additional
information, sales literature or other promotional material of the Fund not
supplied by the Company or persons under its control); or
(3) arise out of any untrue statement or alleged untrue statement of a
material fact contained in the Fund registration statement, prospectus,
statement of additional information or sales literature or other promotional
material of the Fund (or amendment or supplement) or the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make such statements not misleading in light of the circumstances
in which they were made, if such a statement or omission was made in reliance
upon and in conformity with information furnished to the Fund by or on behalf
of the Company or persons under its control; or
(4) arise as a result of any failure by the Company to provide the
services and furnish the materials under the terms of this Agreement; or
(5) arise out of 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 by the Company of this Agreement, including, but not
limited to, a failure to comply with the provisions of Section 3.3;
except to the extent provided in Sections 8.1(b) and 8.3 hereof. This
indemnification will be in addition to any liability that the Company otherwise
may have.
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(b) No party will be entitled to indemnification under Section 8.1(a) to
the extent such loss, claim, damage, liability or litigation is due to the
willful misfeasance, bad faith, or gross negligence in the performance of such
party's duties under this Agreement, or by reason of such party's reckless
disregard of its obligations or duties under this Agreement by the party
seeking indemnification.
(c) The Indemnified Parties promptly will notify the Company of the
commencement of any litigation, proceedings, complaints or actions by
regulatory authorities against them in connection with the issuance or sale of
the Fund shares or the Contracts or the operation of the Fund.
8.2. Indemnification By The Adviser, the Fund and CSI
(a) The Adviser, the Fund and CSI, in each case solely to the extent
relating to such party's responsibilities hereunder, agree to indemnify and
hold harmless the Company and each person, if any, who controls or is
associated with the Company within the meaning of such terms under the federal
securities laws and any director, trustee, officer, partner, employee or agent
of the foregoing (collectively, the "Indemnified Parties" for purposes of this
Section 8.2) against any and all losses, claims, expenses, damages, liabilities
(including amounts paid in settlement with the written consent of the Adviser)
or litigation (including reasonable legal and other expenses) to which the
Indemnified Parties may become subject under any statute, regulation, at common
law or otherwise, insofar as such losses, claims, damages, liabilities or
expenses (or actions in respect thereof) or settlements:
(1) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the registration statement,
prospectus or statement of additional information for the Fund or sales
literature or other promotional material of the Fund (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 or necessary to make such statements not misleading in light of the
circumstances in which they were made (in each case substantially as
transmitted to you by the Fund or CSI), provided that this agreement to
indemnify will not apply as to any Indemnified Party if such statement or
omission or such alleged statement or omission was made in reliance upon and in
conformity with information furnished to the Adviser, CSI or the Fund by or on
behalf of the Company for use in the registration statement, prospectus or
statement of additional information for the Fund or in sales literature of the
Fund (or any amendment or supplement thereto) or otherwise for use in
connection with the sale of the Contracts or Fund shares; or
(2) arise out of or as a result of statements or representations or
wrongful conduct of the Adviser, the Fund or CSI or persons under the control
of the Adviser, the Fund or CSI respectively, with respect to the sale of the
Fund shares (other than statements or
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representations contained in a registration statement, prospectus, statement
of additional information, sales literature or other promotional material
covering the Contracts not supplied by CSI or persons under its control); or
(3) arise out of any untrue statement or alleged untrue statement of a
material fact contained in a registration statement, prospectus, statement of
additional information or sales literature or other promotional material
covering the Contracts (or any amendment or supplement thereto), or the
omission or alleged omission to state therein a material fact required to be
stated or necessary to make such statement or statements 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 written information
furnished to the Company by the Adviser, the Fund or CSI or persons under the
control of the Adviser, the Fund or CSI; or
(4) arise as a result of any failure by the Fund, the Adviser or CSI to
provide the services and furnish the materials under the terms of this
Agreement (including a failure, whether unintentional or in good faith or
otherwise, to comply with the diversification requirements and procedures
related thereto specified in Article VI of this Agreement); or
(5) arise out of or result from any material breach of any
representation and/or warranty made by the Adviser, the Fund or CSI in this
Agreement, or arise out of or result from any other material breach of this
Agreement by the Adviser, the Fund or CSI;
except to the extent provided in Sections 8.2(b) and 8.3 hereof.
These indemnifications will be in addition to any liability that the Fund, the
Adviser or CSI otherwise may have.
(b) No party will be entitled to indemnification under Section 8.2(a) to
the extent such loss, claim, damage, liability or litigation is due to the
willful misfeasance, bad faith, or gross negligence in the performance of such
party's duties under this Agreement, or by reason of such party's reckless
disregard of its obligations or duties under this Agreement by the party
seeking indemnification.
(c) The Indemnified Parties will promptly notify the Adviser, the Fund and
CSI of the commencement of any litigation, proceedings, complaints or actions
by regulatory authorities against them in connection with the issuance or sale
of the Contracts or the operation of the account.
8.3. Indemnification Procedure
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Any person obligated to provide indemnification under this Article VIII
("Indemnifying Party" for the purpose of this Section 8.3) will not be liable
under the indemnification provisions of this Article VIII with respect to any
claim made against a party entitled to indemnification under this Article VIII
("Indemnified Party" for the purpose of this Section 8.3) unless such
Indemnified Party will have notified the Indemnifying Party in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim will have been served upon such
Indemnified Party (or after such party will have received notice of such
service on any designated agent), but failure to notify the Indemnifying Party
of any such claim will not relieve the Indemnifying Party from any liability
which it may have to the Indemnified Party against whom such action is brought
otherwise than on account of the indemnification provision of this Article
VIII, except to the extent that the failure to notify results in the failure of
actual notice to the Indemnifying Party and such Indemnifying Party is damaged
solely as a result of failure to give such notice. In case any such action is
brought against the Indemnified Party, the Indemnifying Party will be entitled
to participate, at its own expense, in the defense thereof. The Indemnifying
Party also will be entitled to assume the defense thereof, with counsel
satisfactory to the party named in the action. After notice from the
Indemnifying Party to the Indemnified Party of the Indemnifying Party's
election to assume the defense thereof, the Indemnified Party will bear the
fees and expenses of any additional counsel retained by it, and the
Indemnifying Party will not be liable to such 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, unless: (a) the Indemnifying Party and the Indemnified Party
will have mutually agreed to the retention of such counsel; or (b) 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 will not be liable for
any settlement of any proceeding effected without its written consent but if
settled with such consent or if there is 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 will be entitled to the
benefits of the indemnification contained in this Article VIII. The
indemnification provisions contained in this Article VIII will survive any
termination of this Agreement.
ARTICLE IX. APPLICABLE LAW
9.1. This Agreement will be construed and the provisions hereof interpreted
under and in accordance with the laws of the State of New York.
9.2. This Agreement will be subject to the provisions of the 1933 Act, the 1934
Act and the 1940 Act, and the rules and regulations and rulings thereunder,
including such exemptions
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from those statutes, rules and regulations as the SEC may grant (including,
but not limited to, the Mixed and Shared Funding Exemptive Order) and the terms
hereof will be interpreted and construed in accordance therewith.
ARTICLE X. TERMINATION
10.1. This Agreement will terminate:
(a) at the option of any party, with or without cause, with respect to
some or all of the Designated Portfolios, upon ninety (90) days' advance
written notice to the other parties; or
(b) at the option of the Company, upon receipt of the Company's written
notice by the other parties, with respect to any Designated Portfolio if shares
of the Designated Portfolio are not reasonably available or appropriate to meet
the requirements of the Contracts as determined in good faith by the Company;
or
(c) at the option of the Company, upon receipt of the Company's written
notice by the other parties, with respect to any Designated Portfolio in the
event any of the Designated Portfolio's shares are not registered, issued or
sold in accordance with applicable state and/or Federal law or such law
precludes the use of such shares as the underlying investment media of the
Contracts issued or to be issued by Company; or
(d) at the option of the Fund, upon receipt of the Fund's written notice
by the other parties, 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 administration of the Contracts, the
operation of the Account, or the purchase of the Fund shares, provided that the
Fund determines in its sole judgment, exercised in good faith, that any such
proceeding would have a material adverse effect on the Company's ability to
perform its obligations under this Agreement; or
(e) at the option of the Company, upon receipt of the Company's written
notice by the other parties, upon institution of formal proceedings against the
Fund, Adviser or CSI by the NASD, the SEC, or any state securities or insurance
department or any other regulatory body, provided that the Company determines
in its sole judgment, exercised in good faith, that any such proceeding would
have a material adverse effect on the Fund's, Adviser's or CSI's ability to
perform its obligations under this Agreement; or
(f) at the option of the Company, upon receipt of the Company's written
notice by the other parties, with respect to any Designated Portfolio if the
Designated Portfolio ceases to
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qualify as a Regulated Investment Company under Subchapter M of the Internal
Revenue Code, or under any successor or similar provision, or if the Company
reasonably and in good faith believes that the Designated Portfolio may fail to
so qualify; or
(g) at the option of the Company, upon receipt of the Company's written
notice by the other parties, with respect to any Designated Portfolio if the
Designated Portfolio fails to meet the diversification requirements specified
in Article VI hereof or if the Company reasonably and in good faith believes
the Designated Portfolio may fail to meet such requirements; or
(h) at the option of any party to this Agreement, upon written notice to
the other parties, upon another party's material breach of any provision of
this Agreement which material breach is not cured within thirty (30) days of
said notice; or
(i) at the option of the Company, if the Company determines in its sole
judgment exercised in good faith, that either the Fund, the Adviser or CSI has
suffered a material adverse change in its business, operations or financial
condition since the date of this Agreement or is the subject of material
adverse publicity which is likely to have a material adverse impact upon the
business and operations of the Company, such termination to be effective sixty
(60) days' after receipt by the other parties of written notice of the election
to terminate; or
(j) at the option of the Fund or CSI, if the Fund or CSI respectively,
determines in its sole judgment exercised in good faith, that the Company has
suffered a material adverse change in its business, operations or financial
condition since the date of this Agreement or is the subject of material
adverse publicity which is likely to have a material adverse impact upon the
business and operations of the Fund or the Adviser, such termination to be
effective sixty (60) days' after receipt by the other parties of written notice
of the election to terminate; or
(k) at the option of the Company or the Fund upon receipt of any necessary
regulatory approvals and/or the vote of the contractowners having an interest
in the Account (or any Subaccount) to substitute the shares of another
investment company for the corresponding Designated Portfolio shares of the
Fund in accordance with the terms of the Contracts for which those Designated
Portfolio shares had been selected to serve as the underlying investment media.
The Company will give sixty (60) days' prior written notice to the Fund of the
date of any proposed vote, proposed regulatory approval request or other action
taken to replace the Fund's shares; or
(l) at the option of the Company or the Fund upon a determination by a
majority of the Fund Board, or a majority of the disinterested Fund Board
members, that an
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irreconcilable material conflict exists among the interests of: (1) all
contractowners of variable insurance products of all separate accounts; or (2)
the interests of the Participating Insurance Companies investing in the Fund as
set forth in Article VII of this Agreement; or
(m) at the option of the Fund in the event any of the Contracts are not
issued or sold in accordance with applicable federal and/or state law.
Termination will be effective immediately upon such occurrence without notice.
10.2. Notice Requirement
Except as specified in Section 10.1(m), no termination of this Agreement
will be effective unless and until the party terminating this Agreement gives
prior written notice to all other parties of its intent to terminate, which
notice will set forth the basis for the termination.
10.3. Effect of Termination
In the event of any termination of this Agreement other than pursuant to
subsection (d), (j), (l) or (m) of Section 10.1, CSI and the Adviser will, at
the option of the Company, continue to make available additional shares of the
Fund pursuant to the terms and conditions of this Agreement, for all Contracts
in effect on the effective date of termination of this Agreement (hereinafter
referred to as "Existing Contracts.") Specifically, without limitation, the
owners of the Existing Contracts will be permitted to reallocate investments in
the Designated Portfolios (as in effect on such date), redeem investments in
the Designated Portfolios and/or invest in the Designated Portfolios upon the
making of additional purchase payments under the Existing Contracts.
10.4. Surviving Provisions
Notwithstanding any termination of this Agreement, each party's
obligations under Article VIII to indemnify other parties will survive and not
be affected by any termination of this Agreement. In addition, each party's
obligations under Section 12.6 will survive and not be affected by any
termination of this Agreement. Finally, with respect to Existing Contracts,
all provisions of this Agreement also will survive and not be affected by any
termination of this Agreement.
10.5 Effectuation of Termination
The parties to this Agreement agree to cooperate in effectuating the
termination of this Agreement.
ARTICLE XI. NOTICES
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11.1. Any notice will be deemed duly 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 parties.
If to the Company: If to the Fund, the Adviser and/or CSI:
0 Xxxxxx Xxxxx 000 Xxxxxxxxx Xxxxxx
Xxxx Xxxxx, XX 00000 10th Floor
Attn: General Counsel Xxx Xxxx, XX 00000
Attn: Xxxxxx X. Xxxxx
Senior Vice President
ARTICLE XII. MISCELLANEOUS
12.1. The Fund, the Adviser and CSI acknowledge that the identities of the
customers of the Company or any of its affiliates (collectively the "Company
Protected Parties" for purposes of this Section 12.1), information maintained
regarding those customers, and all computer programs and procedures or other
information developed or used by the Company Protected Parties or any of their
employees or agents in connection with the Company's performance of its duties
under this Agreement are the valuable property of the Company Protected
Parties. The Fund, the Adviser and CSI agree that if they come into possession
of any list or compilation of the identities of or other information about the
Company Protected Parties' customers, or any other information or property of
the Company Protected Parties, other than such information as is publicly
available or as may be independently developed or compiled by the Fund, the
Adviser or CSI from information supplied to them by the Company Protected
Parties' customers who also maintain accounts directly with the Fund, the
Adviser or CSI, the Fund, the Adviser and CSI will hold such information or
property in confidence and refrain from using, disclosing or distributing any
of such information or other property except: (a) with the Company's prior
written consent; or (b) as required by law or judicial process. The Company
acknowledges that the identities of the customers of the Fund, the Adviser, CSI
or any of their affiliates (collectively the "Adviser Protected Parties" for
purposes of this Section 12.1), information maintained regarding those
customers, and all computer programs and procedures or other information
developed or used by the Adviser Protected Parties or any of their employees or
agents in connection with the Fund's, the Adviser's or CSI's performance of
their respective duties under this Agreement are the valuable property of the
Adviser Protected Parties. The Company agrees that if it comes into possession
of any list or compilation of the identities of or other information about the
Adviser Protected Parties' customers, or any other information or property of
the Adviser Protected Parties, other than such information as is publicly
available or as may be independently developed or compiled by the Company from
information supplied to them by the Adviser Protected Parties'
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customers who also maintain accounts directly with the Company, the Company
will hold such information or property in confidence and refrain from using,
disclosing or distributing any of such information or other property except:
(a) with the Fund's, the Adviser's or CSI's prior written consent; or (b) as
required by law or judicial process. Each party acknowledges that any breach
of the agreements in this Section 12.1 would result in immediate and
irreparable harm to the other parties for which there would be no adequate
remedy at law and agree that in the event of such a breach, the other parties
will be entitled to equitable relief by way of temporary and permanent
injunctions, as well as such other relief as any court of competent
jurisdiction deems appropriate.
12.2. 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.
12.3. This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together will constitute one and the same
instrument.
12.4. If any provision of this Agreement will be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the Agreement will
not be affected thereby.
12.5. This Agreement will not be assigned by any party hereto without the prior
written consent of all the parties.
12.6. Each party to this Agreement will maintain all records required by law,
including records detailing the services it provides. Such records will be
preserved, maintained and made available to the extent required by law and in
accordance with the 1940 Act and the rules thereunder. Each party to this
Agreement will cooperate with each other party and all appropriate governmental
authorities (including without limitation the SEC, the NASD and state insurance
regulators) and will 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. Upon
request by the Fund or CSI, the Company agrees to promptly make copies or, if
required, originals of all records pertaining to the performance of services
under this Agreement available to the Fund or CSI, as the case may be. The
Fund, the Adviser and CSI each agree that the Company will have the right to
inspect, audit and copy all records pertaining to the performance of services
under this Agreement pursuant to the requirements of any state insurance
department. Each party also agrees to promptly notify the other parties if it
experiences any difficulty in maintaining the records in an accurate and
complete manner. This provision will survive termination of this Agreement.
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12.7. 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 board 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.
12.8. The parties to this Agreement acknowledge and agree that all liabilities
of the Fund arising, directly or indirectly, under this agreement, will be
satisfied solely out of the assets of the Fund and that no trustee, officer,
agent or holder of shares of beneficial interest of the Fund will be personally
liable for any such liabilities. No Portfolio or series of the Fund will be
liable for the obligations or liabilities of any other Portfolio or series.
12.9. The parties to this Agreement may amend the schedules to this Agreement
from time to time to reflect changes in or relating to the Contracts, the
Accounts or the Designated Portfolios of the Fund or other applicable terms of
this Agreement.
12.10. The rights, remedies and obligations contained in this Agreement are
cumulative and are in addition to any and all rights.
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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be executed in its name and behalf by its duly authorized representative and
its seal to be hereunder affixed hereto as of the date specified below.
XXXXXX INVESTORS LIFE INSURANCE COMPANY
SEAL By: /s/ Xxxx X. Xxxxxxx, Xx.
Name: Xxxx X. Xxxxxxx, Xx.
Title: Marketing Officer
ATTEST: By: /s/ Xxxxx X. Xxxxxx
XXXXXXX, XXXXXX TRUST
SEAL By: /s/ Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: Vice President & Secretary
WARBURG, XXXXXX COUNSELLORS, INC.
SEAL By: /s/ Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: Vice President
COUNSELLORS SECURITIES INC.
SEAL By: /s/ Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: Vice President
ATTEST: By: /s/ Xxxxxxx Xxxxxx
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SCHEDULE 1
PARTICIPATION AGREEMENT
BY AND AMONG
XXXXXX INVESTORS LIFE INSURANCE COMPANY
AND
WARBURG, XXXXXX TRUST
AND
WARBURG, XXXXXX COUNSELLORS, INC.
AND
COUNSELLORS SECURITIES INC.
The following separate accounts of Xxxxxx Investors Life Insurance Company are
permitted in accordance with the provisions of this Agreement to invest in
Designated Portfolios of the Fund shown in Schedule 2:
KILICO Variable Annuity Separate Account -
established May 29, 1981
KILICO Variable Separate Account -
established January 22, 1987
March 10, 1997
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SCHEDULE 2
PARTICIPATION AGREEMENT
BY AND AMONG
XXXXXX INVESTORS LIFE INSURANCE COMPANY
AND
WARBURG, XXXXXX TRUST
AND
WARBURG, XXXXXX COUNSELLORS, INC.
AND
COUNSELLORS SECURITIES INC.
The Separate Account(s) shown on Schedule 1 may invest in the following
Designated Portfolios of the Warburg, Xxxxxx Trust:
Warburg, Xxxxxx Trust International Equity Portfolio
Warburg, Xxxxxx Trust Small Company Value Portfolio
Warburg, Xxxxxx Trust Post-Venture Capital Portfolio
March 10, 1997
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[COUNSELLORS SECURITIES INC. LETTERHEAD]
March 16, 1998
Xxxxxx Investors Life Insurance Company
Xxx Xxxxxx Xxxxx
Xxxx Xxxxx XX 00000
Attn: General Counsel
Re: Participation Agreement dated March 10, 1997 among Xxxxxx Investors Life
Insurance Company, Warburg, Xxxxxx Trust, Warburg Pincus Asset Management, Inc.
(f/k/a Warburg, Xxxxxx Counsellors, Inc.) and Counsellors Securities, Inc. (the
"Agreement")
Dear Sirs:
Reference is made to the Agreement. Schedule 2 to the Agreement is hereby
amended to add the Emerging Markets Portfolio of Warburg, Xxxxxx Trust. Except
as modified herein, the provisions of the Agreement are ratified and affirmed
in all respects.
Very truly yours,
WARBURG, XXXXXX TRUST
/s/ Xxxxxx X. Xxxxx
Vice President & Secretary
WARBURG PINCUS ASSET MANAGEMENT, INC.
/s/ Xxxxxx X. Xxxxx
Senior Vice President
COUNSELLORS SECURITIES INC.
/s/ Xxxxxx X. Xxxxx
Vice President
Agreed and accepted:
XXXXXX INVESTORS LIFE INSURANCE COMPANY
By: /s/ Xxxx X. Xxxxxxx, Xx.
Name: Xxxx X. Xxxxxxx, Xx.
Title: Marketing Officer
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